The Industrial Revolutions
THE INDUSTRIAL REVOLUTIONS
Patrick Karl O'Brien
Throughout history men and women manufactured commodities for use or for trade and sale. No society (family, village, urban, regional, or national) has operated without producing some range and levels of industrial output.
Industrialization refers to economic change that is recent and different in scale and scope from the manufacture of artefacts. As a socioeconomic process, industrialization includes the rapid transformation in the significance of manufacturing activities in relation to all other forms of production and work undertaken within national (or local) economies. Following the seminal work of Simon Kuznets, economists, historians, and sociologists have measured and compared industrialization in statistical form as it appeared in national accounts and evolved historically for a large number of countries. Their data shows that as industrialization proceeds, shares of workforces employed in and national outputs emanating from primary forms of production (agriculture, forestry, fishing, and mining) decline, while shares of employment and output that is classified as industrial increase.
Output and employment emanating from the third macro sector of national production, services, can go up or down in relative terms. Services include all forms of noncommodity output that are sold (and/or supplied) either to consumers (for instance, health care) or utilized as "inputs" (e.g. distribution, legal advice, accountancy, etc.) in order to sustain both manufacturing and primary forms of production. Clearly, when industry grows more rapidly than other forms of commodity output then the allocation of services changes toward manufacturing and away from farming, fishing, forestry, and mining. Indeed macroeconomic analyses now emphasize the considerable degree of overlap between services and industry. Trends in the shares of services sold directly to consumers are, however, difficult to explain. As development proceeds, final service output becomes a more important component of national product and employment but it can also increase in preindustrial economies as well, due to population growth, urbanization, and the slow growth of jobs in manufacturing. Thus, there is no exclusive correlation between industrialization and the service sector.
For sustained development there is no substitute for industrialization, which can also be measured as the reallocation of a nation's stock of capital (embodied in the form of buildings, machines, equipment, tools, infrastructure, communications, and distribution networks) away from primary and toward industrial production. Macro data, available for the foreign trade of nations, allows observers to track the progress of industrialization over the long run in the form of predictable shifts in the composition of a country's exports and imports. Sales of domestically produced manufactured exports normally grow in significance and purchases of foreign manufactures diminish as a share of total imports.
Thus economic data has been classified in heuristic ways and disaggregated into numerous activities and functions in order to expose the extent, pattern, and pace of industrialization over time across regions and among European and other countries. These essentially taxonomic exercises help to define and to make concrete a process that has proceeded on a global scale for nearly three centuries. They expose national variations from more general or regional patterns and contribute to the understanding of major economic variables that historically have fostered or restrained industrialization in Europe and other parts of the world.
Industrialization has been a highly important process for the welfare of mankind because the reallocation of labor, capital, and other national resources toward industry has usually been accompanied by technological and organizational change, which has led to higher levels of output per hour, rising living standards, population growth, urbanization, cultural changes, and shifts in the balance of power among nations. Thus, industrialization can also be defined in social, cultural, and political terms. For example, Parsonian sociology depicts the rise of industrial societies in terms of a set of interconnected characteristics, hegemonic values, and legal systems represented as functional for the development of modern industry. How, when, and why particular societies moved from preindustrial to industrial norms, motivations, status family systems, and modern institutions that characterize industrial society is not, however, explained in Parsonian models.
Other sociological taxonomies elaborate on the type of changes required in individual behavior and social institutions for modern industry to succeed. They contrast "traditionalistic patterns of action" that are defined as ascriptive, multidimensional, communitarian, familial, and authoritarian with the types of individualistic, achievement orientated, mobile, entrepreneurial attitudes and behavior that somehow became more dominant in national or local cultures as industrialization took hold. This approach to industrialization depends on the vocabularies and concepts drawn from sociology, psychology, and cultural anthropology and analyses, inspired by Max Weber, that continue to be preoccupied with value systems (derived ultimately from religions) that have "motivated" the "drive to industrialize" in different national and cultural settings.
Alas the historical record is not clear on whether social changes precede or accompany industrialization. Until recently, sociological approaches to industrialization have, moreover, been more concerned with its disruptive, dislocative, and potentially negative consequences for families, communities, villages, and regions, than with its nature, origins, and positive effects on living standards. Read as a social process, industrialization often leads to differentiation flowing from the division of labor, class formation, and uneven regional development. As industry diffuses from country to country, it becomes associated with diminishing returns, deindustrialization, unemployment, and the economic decline of some nations. The inspiration for writing in a pessimistic way about industrialization is often derived from Marx.
Fortunately, sociological understanding of industrialization is now changing to combine several schools of theory with historical inquiry and a more process-centered global perspective. Modern research has exposed how complex, multifaceted, and variable the process of industrialization has become since Marx, Comte, Durkheim, and other canonical social scientists wrote their critiques. There seem to be numerous paths to an industrial society and no foreseeable end of capitalism. Several social sciences, as well as national historical narratives, are recognized as relevant, indeed as necessary, for the analysis of the process as a whole. Alas a "general theory" of industrialization at anything other than a meta level, focusing on structural changes in output employment and the allocation of resources (pace Kuznets) and obvious changes concerned with the "modernization" of societies (pace Parsons) still seems unattainable.
Vantage points on the industrial revolution vary. In the discussion that follows, emphasis is placed on issues of European versus global perspective and on related questions of causation. Many studies of industrialization emphasize technological change or measurements of economic growth. From the standpoint of social history, discussions of industrialization must include its impact on social culture and class tension and on gender and family life (including characteristic reductions in women's work roles and the removal of work from the family setting), as well as changes in work and leisure life. From whatever vantage point, discussion of industrialization is complicated by significant regional variations and also by the protracted quality of change. Industrialization was a revolutionary process (though some economic historians have disputed this point), but it stretched over many decades and might have also varied its shape in some crucial respects.
THE HISTORICAL PROCESSES AND STAGES
"Modern industry" (i.e. industrial activity concentrated in particular regions and towns, organized in factories, firms, and corporations, and using machinery and inanimate forms of energy) evolved gradually over the past five centuries. It appeared in some European economies before others. Industrialization, considered as a long-term process, has occupied generations of economic and social historians who have analyzed major forces that carried the growth of different national industrial sectors forward from one stage to another. In general their writings concentrate on the epoch that opens with the beginnings of the British industrial revolution in the mid-eighteenth century and closes with the end of the long boom after World War II (1948–73).
Nevertheless, a considerable literature has also been concerned with "preconditions" for industrialization that appeared in some regions of Europe over the centuries between the Renaissance and the first industrial revolution, while "late industrialization" characteristic of Russia, Eastern Europe, and the Balkans has generated another distinctive body of writing. For example, North and Thomas provide a succinct reminder about private initiatives and enterprise as structural preconditions for industrialization. The accumulation of capital in industry, the acquisition of skills needed for manufacturing, the diffusion of improved forms of organization for industrial production, and the funds needed for research and development into the scientific knowledge and technologies that raised productivity all required sustained private investment. That investment emerged as a response to incentives in the form of predictable material gains for the investors and entrepreneurs involved. It required politically enforced rules to mitigate the risks of instability, breakdown, and failure that often occurred during the buildup of modern industry. Such incentives, together with insurance against avoidable risks, rested in large part on institutions and laws for the conduct of all forms of economic activity (including industry) that were put in place and enforced more or less efficiently by some European governments and by private voluntary associations between the late Middle Ages and the era of the French Revolution, 1789–1815.
Once efficient institutions and legal systems were in place, protoindustrialization developed in many regions across the European continent. When it emerged after 1750, mechanized industry did not spread randomly across the map but located within established protoindustrial regions. Insights can be gained into industrialization by explaining the circumstances that led modern manufactures to grow and decay in some places before others, provided it is realized that there is no linear progression from proto to modern forms of industry.
Linear progression is too often the leitmotiv in writing about long-run economic development, an approach derived from Marx and scholars from the German Historical School, who explored the origins of European capitalism over several centuries from the High Middle Ages through to the nineteenth century. Rostow adhered to the basic position taken by that famous school, namely, that European economies had evolved in comparable ways but at different speeds through well-demarcated stages of growth. In the early modern period an evolutionary accumulation of capital and knowledge carried them to the point of discontinuity, or "take-off," from which they industrialized at a speed and on a scale that took societies forward into "self-sustained" and irreversible growth. Critiques of Rostow's famous model are convincing; particularly Gerschenkron's essays, which represent European industrialization as a process of "unity in diversity." Unlike Rostow (and Kuznets) he is more interested in explaining variations than similarities across nations. Gerschenkron expected that the study of carefully delineated contrasts in the methods used by now affluent societies to build up modern industry could help to explain the time they took to converge toward the highest attainable (i.e. British) levels of industrialization and per capita income.
European industrialization might, at the cost of simplification, be represented as a homogeneous macroeconomic process, but differentiation in the composition of output, great diversity in methods of production, and variety in the modes and styles of organization actually characterized the development of European industry between the French Revolution and World War I. Viable alternatives to mass-mechanized production prospered not only in numerous regions on the mainland but also within Britain, the leading industrial economy of that period. They survived because technology only provided substitutes for handicraft skills within a constrained (if ever widening) range of industrial production and because markets, particularly the quality end of consumer and capital goods markets, required flexible adaptations to changes in demand. Mass, large-scale factory-based industrial production never became necessary and efficient for all manufactured artefacts. Considerable segments of traditional industry survived. Sharp discontinuities with more handicraft and proto forms of production never emerged. Instead, while industry became the dominant sector in economy after economy, change and expansion within industry continued to represent a process of continuous adaptation and redesign. New technologies, tools, forms of power, and modes of organization extended the range of skill required and qualities of products available. No American (or British) paradigm for industrialization based on large-scale corporate forms of organization producing homogenized products for sale on mass markets emerged across the industrial regions of Europe until after World War I. Even then that particular model only prevailed for five decades or so before Asian comparative advantages in small-batch, flexible, and differentiated production appeared in the late twentieth century.
PAST TENDENCIES, PRESENT TRENDS, AND FUTURE PROSPECTS DURING THE FIRST, SECOND, AND THIRD INDUSTRIAL REVOLUTIONS
After the onset of the first industrial revolution in Britain (c. 1750), global industrial output took more than a century to double. Between the mid-nineteenth century and World War I it quadrupled. Over forty years dominated by depression and war, 1913–1953, output trebled and then trebled again over the two decades that followed to the peak of the long boom in 1973. Thereafter, the annual rate of growth of global industrial output declined but it still remained rapid by historical standards. However, there are dramatic regional differences in this output.
Although industrial production in third world countries probably doubled over the two centuries after 1750, down to World War I, total output per capita may well have declined in both relative and in absolute terms as the population of Africa, Asia, and South America purchased a rising share of the manufactured goods they consumed in the form of imports from the industrializing countries of Europe and North America. Over the long run the share of world industrial output emanating from production located in Third World economies declined from around 70 percent, 1750–1800, down to the 10 percent range around 1950. It began to rise again during the last quarter of the twentieth century. Historically, for two centuries from 1750 onward, industrialization (particularly if it is measured as industrial output per capita) was essentially confined to Europe and its settlements overseas in North America (Bairoch, pp. 269–333).
Thus, until recently, discussions about the course and causes of industrialization have been overwhelmingly concerned with the scale, efficiency, and development of modern (i.e. technologically advanced) industries within Europe and North America. For a long time, indeed for roughly two centuries before 1900, Britain remained the world's leading industrial economy (conspicuously so when measured in terms of industrial output per capita) before it was superseded by the United States around 1900–1914 as a result of the "second industrial revolution," and then by other European economies and by Japan as the twentieth century progressed. European and North American industries attempted to converge toward and to surpass the standards of labor productivity, technological advance, and organizational efficiency displayed by many (but not all) British industries. After 1900–1914 (and during the second industrial revolution) the standards set for convergence shifted to the United States and to league tables, which ranked national industries and industrial sectors in terms of a battery of productivity indicators purporting to tell businessmen and governments how well or badly a particular economy was performing within global industry as a whole. Britain's relative decline, the rise of America, Germany, Russia, Sweden, Switzerland, Belgium, Italy, latterly Japan, and the newly industrializing countries of East Asia, can be traced and analyzed in relation to a range of indicators of industrial power and efficiency.
What stands out for most of the twentieth century is the overwhelming size of American industry and its persistent dominance, measured in terms of manufactured output per head of population, but less so in terms of productivity (i.e. manufactured output per man hour of labor employed in industry). That particular advantage, which the United States certainly retained for longer than would have been the case without two global wars (1914–1918 and 1939–1945), diminished during the long boom when productivity growth in several European economies exceeded that of the lead country. The history of this phase of "convergence" exposed how interactions between technological opportunities, social capabilities, scale economies, initial natural endowments, and underemployed labor operated as key variables behind the accelerated rate of industrialization achieved by European economies, and Japan, during and since the long boom, 1948–1973. Since 1950, within the developed market economies of Europe and North America industrialization has proceeded by exploiting and adopting the potential for productivity gains already embodied and clearly functioning in the technologies, organizational forms, and institutions of the lead (or leading) industrial economies.
Attempts to represent that process in terms of a rather bland conceptual vocabulary of convergence drawn from economics and sociology carry less conviction when transposed to the Asian and Latin American cultures of newly industrializing countries. For these so-called late industrializers, the roles their governments play and the strategies and organizational structures adopted by their firms, as well as distinctive processes of industrialization that have emerged, may represent a "new paradigm," or perhaps a "third industrial revolution." That paradigm embodies the adaptation to the opportunities provided by new technologies and to competitive challenges arising from the diffusion of industry to more and more locations and countries around the world. A new revolution in information technologies, high speed transportation, biochemicals, genetic engineering, robotics, and computerized control systems, as well as the relocation, diffusion, and integration of industries on a global scale, confront earlier (European and American) as well as late (Asian) industrialists.
For economic and social historians, who take a very long-run view, there may be little that seems novel in the current phase of restructuring, reorganization, and relocation of industry, or indeed in the rediscovery of sources of industrial innovation and of efficiency gains among the skills and motivations of workers on factory floors. It all seems reminiscent of the phase of regional economies and protoindustrialization in Europe between 1492 and 1756.
INDUSTRY'S LINKS TO AGRICULTURE, TRANSPORT, AND FINANCE
Although industry is usually represented as the "key sector" behind the long-run development of national economies, the history of when, where, how, and with what effect industrialization emerged to play that "leading role" depended on support from other sectors. Before nations industrialize, their resources are usually heavily concentrated within and upon agriculture. In the absence of inflows of foreign resources, the primary sector is called upon to supply much of the labor, capital, raw materials, and markets that industry requires for long-term growth. These connections have been formally modeled by economists but the basic linkages can be understood and their significance measured by comparing the experiences of particular countries (cases) during the early stages of industrialization when agriculture could nurture or constrain the development of towns and industries.
Forward and backward linkages between industry and transport are almost as important to appreciate. Demand for transportation widens and deepens when industries purchase inputs and sell final outputs over wider spaces. The coordination of specialized, regionally concentrated but spatially dispersed centers and sites for industrial production depended on the services supplied by an extended, and increasingly efficient, network of transportation. Industrialization has been accompanied and actively promoted by a long series of innovations in transportation (surfaced roads, canals, railed ways, steam, oil, and jet propelled engines), which lowered the costs, and speeded up and regularized the delivery of the final outputs and the inputs required for the expansion of manufacturing industry. Transportation declined in price and grew more rapidly than commodity production. It not only provided a final output, travel, but investment in transportation networks is connected through backward linkages to several major industries, including iron and steel, engineering, and construction. Without rapid and continuous technological changes in transportation, industrialization on a regional, national, and global scale would have been severely constrained.
No set of institutions supporting industrial firms (particularly smaller firms) are as important as banks and other financial intermediaries. They collect savings and provide the loans that industrialists borrow as threshold capital, as well as the credits required to sustain the day-to-day operations of manufacturing enterprises. Industrial entrepreneurs and firms do not emerge and function unless they can be provided with ready and sustained access to finance. Unfortunately, the framework of rules and regulations promulgated by governments in order to avoid inflation and maintain the international value of currencies has operated to repress the emergence and distort the necessary activities of financial intermediaries. Regulating the money supplies and the national exchange rates, while providing for access to loans that are helpful for industry, presents governments with difficult choices as they try to balance the competing claims for industrial growth with price and balance of payments stability.
Monetary and fiscal policies cover an important subset of a whole range of connections between the state and the industrialization of national economies. Famously for Russia and Eastern Europe, the creation of modern industrial sectors was actually planned and executed by their central governments. For most other European economies, states undertook a less comprehensive and dictatorial role. They financed and set up certain sections of industrial production, and subsidized others, but in general provided infrastructures of communications, energy supplies, education and training, information and technical advice, and security in order to promote private investment in and to support the private management of national industries.
Debates about connections between governments and industry have tended to become suffused with ideological preconceptions about the effectiveness of private compared to political initiatives and management for the promotion of modern industry. Thus, histories of industrialized economies have been written purporting to demonstrate the benign, as well as the malign, effects of state "interference" with the operation of market forces and private enterprise. Late (Cold War) industrialization also became a confusing battleground of claims and counterclaims for market failures versus bureaucratic ineptitude behind the performance of different countries in the late twentieth century. Fortunately, a more balanced view has emerged which seeks to analyze the kind of governmental strategies for industrialization that have proved either helpful, neutral, or hindrance for long-term industrial development; and to expose structural and historical conditions that have in large measure predetermined successes and failures in national economic policies. The intellectual discourse about the role of the state moved from mere ideology into the realism of empirically based histories, analyses, and theories.
THE INTERNATIONAL CONTEXT
Generalizations can also be drawn from a wide range of historical accounts of paths or patterns of industrial growth about the links between domestic industry and the international economy. While endogenous (internal) intersectoral connections matter, no country has ever industrialized without rather considerable recourse to assistance from societies beyond its borders. The buildup of national industrial sectors can often be traced to the stimulus of profits obtainable from the sale of manufactures on world markets; it also came from successful attempts to escape from the constraints of small or slowly growing home markets. In nearly every case some proportion of the inputs of raw materials, capital, skilled labor, professional knowhow, and technology required to establish and sustain industries emanated (at least in the initial stages) from places beyond national frontiers. International flows of commodities (exports and imports), services (transportation, distribution, insurance, and other commercial assistance), and the factors of production (capital, credit, technology, and useful knowledge) have always been integral to the spread of industrialization around Europe and to the rest of the world, even before Britain emerged as the first industrial nation in the late eighteenth century.
The significance of trade and commerce across countries for the timing, pace, and pattern of industrialization can be captured by looking at a country's balance of payments accounts. International migrations of capital and labor have also been analyzed in order to reveal the pull and the push of foreign and domestic markets, as well as political and other forces involved in the diffusion of industrialization during the past three centuries and also (but alas, without much help from hard data) for several centuries before.
Between 1846 and 1914 globalization and industrialization went hand in hand, at least among European economies and European offshoots overseas in the Americas and Australasia. Dramatic declines in the costs of transportation integrated commodity markets and stimulated trade and specialization. Massive migrations of labor, followed by capital, reallocated resources efficiently across frontiers and sectors of national economies. In the absence of governmental impediments to trade or to labor and capital flows, underemployed and cheap labor moved out of the countryside toward the cities into employment in industry and related urban services. Alas, between 1914 and 1948, this benign process of globalization was restrained by tariffs, by immigration controls, and by two World Wars. It picked up again during the long boom, 1948–1973. At the end of the twentieth century, the diffusion of industrialization through trade, capital, and labor flows across frontiers was endangered by the resurgence of a "new protectionism."
Debate about the significance of "endogenous" versus "exogenous" forces in the industrialization of otherwise sovereign and ostensibly autonomous countries has persisted and covers the entire spectrum of national "cases" from Britain (site of the first industrial revolution) to the "Asian tigers" industrializing at far greater speed in the late twentieth century. Some commentators see commodity trade as the "handmaiden" rather than as the "engine" of growth, but the role of exports and imports probably varied from place to place and also depended from cycle to cycle on the underlying buoyancy of the world economy as a whole and upon the freedom of international economic relations.
Everywhere industrialization required high and increasing levels of investment not simply in buildings, machinery, inventories, and other assets that supported manufacturing activity, but, on a greater scale, in the infrastructural facilities needed for the transmission of energy, for urbanization, housing, transport and distribution networks, and public services that accompanied the buildup of modern industries. Internally generated savings could be inadequate, particularly when businessmen and governments wished to finance a rapid development of modern industry. Furthermore, the import content of local industrialization (particularly the machinery, but also raw materials, intermediate inputs, and the recruitment of foreign professional and skilled labor) had to be funded in the form of foreign exchange, which also became scarce and expensive when countries began to industrialize at any speed.
Loans and credit from abroad then became necessary to fill these two gaps, particularly in the early phases of industrialization, when local investors and financial intermediaries regarded industrial enterprises as risky, and/or when balance of payments constraints dominated the allocation of investable funds for industrial development.
Foreign capital often became available at prices that governments and local businessmen found excessive and on terms they regarded as constrictive of national autonomy and as potentially prohibitive for longer-term industrial development. Before the era of decolonization (which occurred rapidly after World War II) an "imperial component" surely entered into payments made for inflows of metropolitan and foreign capital. Thereafter, bargains continued to be struck between investors and borrowers from more or less dependent, but nominally sovereign, economies, that the debtors have persistently regarded as intrusive and "exploitative." Yet most countries continued to rely heavily on international capital markets and in the twentieth century numerous industrializing economies in Eastern Europe (as well as the Third World) accumulated levels of foreign debt that reached crisis proportions in relation to their capacities to earn the foreign currency required to satisfy contractual obligations to creditors from overseas.
Long-term growth in output and productivity in manufacturing continues to rest upon the discovery, improvement, and development of scientific and technological knowledge that can be profitably applied to industrial production. Most industrialized and industrializing countries (and to some extent this observation applies even to first industrial nations) borrowed, emulated, adapted, and built upon manufactured products and industrial techniques initially developed outside their frontiers. Although there are certain competitive advantages to be reaped from being the locus of inventions and as a "first mover" in new product lines, industrialization as a global process depends more on adaptation, improvement, and further development of technically and commercially viable industrial technologies moved from place to place and across countries. Thus it is the diffusion rather than the "discovery" of industrial technology that is at the "core" of industrialization.
Over the last half of the twentieth century multinational corporations (MNCs) assumed a leading role in facilitating the movement of investable funds and managing the transfer of industrial technologies around the world. These corporations and conglomerates were usually privately owned companies that were centrally controlled by an executive located in and recruited from a single country (overwhelmingly the United States, but including Britain, France, Germany, Switzerland, the Netherlands, and Japan). Multinational corporations produced and sold manufactured goods on a global scale, but in origin such organizations were not new. In form, structure, and purpose their antecedents can be traced back to Dutch, English, and French corporations trading with the Americas and Asia in the sixteenth and seventeenth centuries.
An impressive list of European and American corporations, making and trading in industrial commodities well beyond the frontiers of their own "national markets," certainly appeared well before 1914. Their range and reach spread between the wars. They soon encompassed the globe and assumed control over a large share of transnational trade, capital flows, and technology transfers before the end of the long boom, 1948–1973. American multinationals diffused modern technologies, new products, good managerial practices, and improved forms of industrial organization and thereby contributed positively to the recovery of European industries from World War II.
Yet the role of American, European, and Japanese multinational corporations in the development of industry in Asia, Africa, and Eastern Europe remains controversial. They stand accused of diffusing inappropriate products, exporting obsolete technologies, and recommending hierarchical, or culturally biased, managerial systems to underdeveloped countries. They are said to underinvest in the training they provide in order to upgrade local workforces. They are perceived to exploit cheap labor around the globe and retain monopoly rights over modern technologies and best-selling product lines. Even in developed countries of Europe and North America multinationals are regarded by some as unpatriotic agencies of deindustrialization and unemployment.
EUROPE'S INDUSTRIAL REVOLUTIONS
In earlier centuries Europe derived from Asia and the Middle East a considerable body of technological, scientific, and agrarian knowledge, which it adapted and embodied in commodities, artefacts, machines, and commercial practices, crops, and agrarian techniques, associated with the industrialization of the continent that occurred at an accelerated pace after 1750. Just as there has been considerable investigation into the extra-European origins and contributions of Asia, Africa, and the Americas to European industrialization as it evolved before 1815, so too the nature and antecedents of the British industrial revolution have been vigorously debated in interpretations of that famous transition to industrial society.
A key question for this illuminating discourse is why the Netherlands did not evolve into the first industrial nation. All the preconditions seemed to be in place: well functioning (competitive) factor and commodity markets, a productive agriculture, high levels of urbanization, a skilled workforce, good internal order, merchants poised to mature into industrial entrepreneurs, and so on. Yet during the eighteenth century the Netherlands entered into relative and perhaps into absolute economic decline and its interest as a case for students of industrialization resides more in the discourse of the rise and relative decline of a commercial and protoindustrial economy.
Nevertheless, that discourse remains as interesting to contemplate as Britain's protracted but still seminal discontinuity in global economic history. Thanks largely to the research and analysis of economists (who have encapsulated its major features and key variables in statistical form) modern conceptions of the first industrial revolution can now distinguish general from unique characteristics and allow us to clarify and to weigh the really significant determinants at work, which include: a productive agriculture, the slow accumulation of stocks of skilled labor, and military success in the competition for international commerce with its leading European rivals, including Holland, France, Portugal, and Spain.
National and particular contrasts in the pace and pattern of industrialization, as and when it occurred on the European mainland, are now perceived to be more analytically interesting than traditional accounts, based essentially on a British paradigm emulated in a chronological sequence (through a process of technological diffusion) by Belgium, France, Switzerland, Germany, Holland, Italy, Austria, Russia, and Iberia. For example, France, a much larger and more populous country than Britain, probably achieved higher rates of industrial growth down to the time of the Revolution and Napoleonic Wars, which then disrupted and delayed the industrialization of Britain's main rival, as well as other regions of western Europe such as Spain for some three to four decades. Less favorable natural endowments, a constricting heritage of agrarian property rights, and a persistent lack of military success in mercantilist competition with British commerce and industry for access to global markets in the Americas, Africa, and Asia seem to be the central components of modern explanations for France's different path.
Europe's "Mediterranean economies" (Italy, Spain, Portugal) also lost ground to British industry and commerce in the competition for international markets during the seventeenth and eighteenth centuries. Nevertheless, (and central to any understanding of their "failure" to undertake the structural changes required for industrialization over long stretches of the nineteenth and twentieth centuries) there was a lack of support from low-productivity agricultures; inadequate rates of investment in education and skill; and governmental policies that protected the cultivation of grain and failed to reform a constricting system of property rights and tenurial contracts within the agrarian economy. Agrarian preconditions, natural resources, and governments were not helpful in Italy or the Iberian Peninsula.
By contrast (and along with the Nordic countries) Germany included within its frontiers a range of skills and accessible supplies of coal and minerals, as well as concentrations of protoindustrialization within several regions that were economically integrated early in the nineteenth century and eventually politically united into a large and growing national market. Although modern industrialization cannot (in contrast to Russia) be presented as organized, managed, and funded by the state, in several ways the German process can be plausibly depicted as "stimulated" from above. That promotion by the state included: the very important project for the establishment of a railway system, the formation of the Zollverein (a customs union), the unification of currencies and prudential monetary policies, selective protection, and, to an outstanding degree for the times, public investment in education.
Like Japan later in the century, Germany started to industrialize from a basis of literacy, commercial sophistication, and technological know-how that added up to an accumulation of social capabilities that far exceeded anything available within, say, the Russian empire. By the 1860s German industrialists could call upon skills, professional management, scientific knowledge, as well as an infrastructure of transportation, financial intermediation, and public services that could not be taken for granted except within a few large cities and the western regions of the Habsburg empire to the east.
Recent and more optimistic interpretations of industrialization within that empire before its dismemberment in 1918 are surely a necessary corrective to the older history of stagnation. Nevertheless, regional variations remained pronounced and the kind of acceleration and diversification of industrial production achieved by Germany did not occur. After a good start in the eighteenth century, the Habsburg state seems to have failed to build up the efficient framework of laws and institutions required to promote a more impressive widespread process of industrialization over the succeeding century.
Within the spectrum of European powers, Russian industrialization started from a position of the greatest backwardness. Before the Revolution of 1917 the Romanov regime had, however, introduced a range of institutional reforms that facilitated the more efficient operation of that empire's labor and capital and commodity markets. In 1861, in the name of freedom, the tsar emancipated the workforce from serfdom, which thereafter allowed agriculture to make a more positive contribution to the growth of modern urban industry. Russian agricultural output increased at rather impressive rates. From a low base, industrial production responded and grew steadily from the 1840s down to World War I. With a substantial measure of assistance from overseas investment, from foreign managers, engineers, and technologies, a more diversified and capital-intensive structure of industrial production emerged in Russia between 1880 and 1914. At every stage the tsarist state, in partnership with foreign and local enterprise, attempted to force the pace of industrialization in order to overcome the empire's backwardness and geopolitical weakness.
That drive intensified under the Bolsheviks, who took over the ownership and control of the Russian economy in 1917. The new Communist regime erected the political and institutional structures required for a new style "command economy"; and in the face of an entirely hostile international political and economic order, succeeded in increasing the labor participation rate and the share of the country's resources devoted to fixed capital formation, particularly in heavy industry, to an extraordinary degree. Between 1917 and 1989 the domestic product of the Soviet Union multiplied by a factor of ten and its per capita product five times. Its record for state-inspired and driven industrialization is impressive but not that extraordinary and it might, counterfactually, have been achieved by a less authoritarian regime. The achievement is, moreover, one of "extensive growth" and owed very little to technological and organizational changes, which enabled rival economies to raise the productivities of labor and capital deployed to produce industrial output. The strategy and concomitant organizational and command structures meant that productivity gains became steadily more difficult to obtain. By the early 1980s, the Soviet economy had clearly run into sharply diminishing returns and by 2000 the Russian state was attempting to move the system toward some version of capitalism that could raise industrial productivity to levels that might gradually converge towards Western European and American standards.
EUROPEAN INDUSTRIALIZATION IN A LONG-RUN GLOBAL SETTING
Since Paleolithic times people have been engaged in making artefacts for use, decoration, and exchange. Supplies of industrial commodities increased in volume, range, and sophistification when settled agricultures emerged and generated the surpluses of food and raw materials required to support towns, specialization, trade, and the order associated with a succession of "empires" or "civilizations," which rose, flourished, and declined in Europe, the Middle East, Africa, Asia, and in Mesoamerica between the onset of the Neolithic era and the industrial revolution. Global historians periodize and divide this epoch of some five millennia from Sumerian civilization to the Middle Ages into a succession of ancient empires and have been preoccupied with the political, military, and cultural factors in their rise and decline.
For historians of industry (who tend to periodize in terms of the millennia before and the centuries after the industrial revolution in the eighteenth century), the interest in ancient civilizations resides in understanding the range, amount, design, and above all the costs or values in exchange of the manufactured artefacts these empires bequeathed to posterity. Archaeologists have collected and arranged a great deal of the evidence required to appreciate the evolving variety and volume of industrial production that originated from urban sites that seem to have been spatially concentrated and specialized in manufacturing as far back as the Sumerian Empire, which flourished in the Tigris and Euphrates Valley between 3800 and 2000 b.c.e.
They have classified and recorded the durable artefacts these empires produced and exchanged or acquired from other civilizations. The lists are long, variegated, and increasingly sophisticated, and testify to the existence of long-distance trade in manufactures within and across Asia, Europe, and Africa long before the heyday of the empires of Greece and Rome. Although diffusion of industrial products and the knowledge involved in their design and manufacture clearly occurred for millennia before the industrial revolution, it is impossible for historians to offer even conjectures about the amount of trade in manufactures or to begin to measure the volume of industrial production on national, let alone global, scales much before the beginning of the eighteenth century.
Yet industrial production and trade in industrial goods must have been important. Thus depictions of the industrial revolution in Europe as an unpredictable, sudden, and rapid transition from national or regional economies based overwhelmingly on agriculture to industrial economies are now regarded as simplifications. Not only were significant volumes of industrial products manufactured and traded in many parts of the world long before the industrial revolution, but machinery, some of it driven by windmills and waterwheels, had been used for centuries. Examples of concentrations of labor under the roofs of workshops and factories or within the walls of yards and organized in order to collaborate in the making of particular products can be found in numerous towns and cities of many empires and states in Europe, the Middle East, India, and China, as far back as Sumeria. Workmen, specialized and proficient in defined and evolving ranges of skills, crafts, techniques, or processes required to manufacture industrial goods, had formed a recognizable part of national and urban workforces in most ancient civilizations.
In short, features of industrialization that have transformed the potential for rapid economic growth over the past three centuries (including the manufacture of expanded ranges of useful artefacts, trade in industrial commodities, mechanical engineering, inanimate forms of energy, specialization, factories, and spatial concentration of industrial activity) can be found in archaeological and historical records that go back in many parts of the world to Neolithic times. Furthermore, and although such impressions cannot be validated with reference to hard statistical evidence, narrative histories of "rapid" and "impressive" growth in industrial production and trade that accompanied the rise of cities, towns, and regions in the Middle East, Europe, Asia, and Mesoamerica also convince us that the question of what may be new about "European" industrialization of the past three centuries has remained heuristic to contemplate.
That is why essential contrasts between the recent past and previous epochs can only reside in the pace, pattern, and the global diffusion and integration of industrialization. For example, since the late seventeenth century the volume and range of industrial commodities used, consumed, and enjoyed by masses of people in nearly every part of the world has increased at a rate that must simply be unprecedented in history. Before the modern era, upswings in the amount and variety of manufactured goods made for the affluent populations of particular empires and cities may well have been equally rapid but remained geographically confined, and the consumption of manufactures, even within favored sites and places, was restricted to minorities of their population with the money or the power to appropriate something more than the food, shelter, and clothing required for subsistance.
Furthermore, nearly all the towns and polities that contained significant concentrations of industrial activity remained vulnerable to political and natural disasters (including breakdowns of internal order, warfare, plague, disease, and natural disasters of every kind). Industry and trade could be destroyed and permanently depressed by exogenous shocks. Declines (serious and absolute), as well as dramatic accounts of the rapid rise of industry and commerce, seem to be omnipresent features of the histories of industrialized, commerical, urbanized societies right down to the sixteenth century. Short of a nuclear holocaust, nationwide vulnerability to political and natural disasters that afflicted the very survival of urban industry and commerce for past millennia seems to have been replaced by those altogether less catastrophic problems of shocks and relative economic decline that have punctuated the history of industrialization since the eighteenth century.
Thus, something akin to a major discontinuity seems to separate the history of industrialization considered as a global phenomenon from the growth of pockets of industrial activity as they appeared and disappeared around the world for millennia. That is why a distinguished succession of famous scholars from economics, history, sociology, and anthropology began to investigate the origins and to reflect on the positive and negative outcomes of the industrial revolution even before the first example of that famous transition had run its course in Britain and diffused onto the European mainland over the century after 1750.
Students are well advised to read these classical analyses of modern industrialization, referenced in the bibliography to this essay, before they turn to the more recent attempts to depict and explain the grand themes. Canonical texts are always instructive; they expose how many seminal concepts, insights, and approaches to the study of industrialization are included in the writings of the classics, but also how repetitious and circular many of the discussions that attempt to explain and to generalize about the long-run pace and pattern of modern industrialization in various parts of the world have now become. Nearly three centuries of empirical investigation and reflection by a succession of the very best minds in history and the social sciences have not produced any kind of general theory of industrialization.
As the leading sector in modern economic growth, accompanied by structural change, the process is, however, well understood. Sensible taxonomies and vocabularies defining the inputs and the intersectoral connections required to generate accelerated rates of industrial production have also been formulated and refined. Although the mechanisms through which these inputs' impact on growth are now understood, the sense in which they are separable and quantifiable components of a discernable historical process of sustained industrial development remains elusive. Net capital formation, the recruitment of better-skilled and more highly motivated labor, improved management, more efficient technology, optimal scale, and rational organization, aggressive marketing, and closer integration into a competitive international economy, an enhanced framework of supportive governmental policies, and so forth, will all be included in any discussion of the "preconditions," "requirements," or "proximate determinants" for industrial growth. Yet how, when, and why they all interacted and generated sustained industrial growth remain key questions for historians and social scientists pondering the very large fact that, after roughly three centuries of industrialization, the highest levels of industrial output per capita remain concentrated in roughly twenty to thirty national economies and support satisfactory standards of living for but a minority of the world's population.
Although several newly industrializing countries in the late twentieth century clearly entered the "club" of industrialized market economies and their levels of industrial productivity began to approach standards set by the leading industrial powers in Europe, North America, and Japan, there is no statistical evidence for any sustained worldwide process of convergence in levels of real wages or output per worker employed in manufacturing industry. On the contrary, divergence between an admittedly larger group of national economies that can be represented as industrialized and economically successful and those that are still "underdeveloped" may be increasing.
Given that a great deal has been revealed about the process of industrialization and the proximate factors required to promote it, the frequently posed question of why the whole world is still not industrialized deserves to remain high on the intellectual agenda; particularly as the industries of "follower countries" would seem to possess competitive advantages as and when they attempt to catch up. For example, countries with small and/or less efficient industrial sectors emulate and adapt the technologies and modes of organization that are demonstrably successful elsewhere in the world economy. They can borrow the funds and hire the technicians and managers required to establish modern industry on established international capital and labor markets. Their workers are cheap. Their natural resources are often underexploited. Their governments remain keen to promote and to subsidize the development and diversification of national industry. With misgivings they even welcome the plants and branches of multinational corporations. And yet, these advantages have not been enough.
It is now more than two to three centuries since Britain passed through the first industrial revolution, yet convergence has been slow, painful, and geographically constrained. Except at a rather banal level of generality, there is no short explanation of why many more countries are not industrialized. Students can and will be told that the small selection of national economies that followed Britain's lead (and particularly the twenty or so cases that eventually surpassed Britain's standards of industrial productivity) possessed or quickly built up something referred to as the "social capability" required to industrialize. Manifestly most other countries (which include within their borders the majority of the world's population) did not and have not acquired the requisite social capabilities.
Social capability is, however, little more than a portmanteau category that refers to cultures, values, family systems, political and legal institutions, religions, motivations, education, and skills embodied in national populations that, in combination, operated to inhibit or to facilitate the development of modern and efficient industrial sectors. Obviously at any point in time they appear as a heritage of national and/or local histories. Social capabilities can be pushed in required directions by governments, by other institutions, such as churches, schools, and industrial firms, and altered by material incentives to invest, develop, and work in industry. As a result of this link to the particular historical context, there is no substitute for studying successful cases of industrialization country by country and contrasting them with cases that came later to the endeavor and found greater difficulty in converging toward the macroeconomic structures and productivity levels of leading industrial powers. That is, there is no substitute for history.
At a global level the general models (largely from economics and sociology) that claim to account for the limited spread of modern industrialization are schematic and taxonomic. Yet, even working inductively from individual case studies it is difficult to expect a functioning general model of industrialization. That pessimistic reflection is strengthened, moreover, by the observation that difficulties for the formulation of any general theory of industrialization have been compounded because the international context within which regions and countries industrialized has changed profoundly since the eighteenth century. This has occurred first of all because the knowledge base and range of technologies used to manufacture industrial commodities has evolved at an accelerated rate since British industry pioneered the development of steam power, coke smelting, and mechanical engineering to raise the productivity of labor employed in the production of consumer goods, machinery, and transportation.
Secondly, the geopolitical parameters for industrial development based on trade, imports of investable funds from abroad, for the diffusion of technology, and for the hire of skilled and professional manpower on international labor markets has also changed dramatically. For example, a liberal international order from 1846 to 1914 succeeded the aggressive and war-prone mercantilism of previous centuries. Neomercantilism and the era of global warfare reappeared from 1914 through 1948. Thereafter, American hegemony, decolonization, and the rise of multinational enterprise reduced the obstacles to the spread and relocation of modern industry around the globe. Since 1989 the collapse of command economies, committed to forcing the pace of industrialization in Russia, Eastern Europe, and China, has severely further reduced the powers of states to control the geographical spread of industry.
Capitalism, assisted by positive help and incentives from governments, has triumphed as a so-called end to history. States everywhere seem committed to free enterprise, but it remains difficult to prescribe the right mix of policies for all national cases. Unless the current wave of protectionism intensifies, long-established trends in the interdependence and integration of industry on a global scale look set to continue, and industries will become ever more cosmopolitan and dispersed in their locations. Although the range of technologies now available to late industrializers provides opportunities for unprecedented rates of structural change and rates of increase in labor productivities, perhaps no particular illumination can be derived from labeling industrialization as it proceeded at the end of the millennium as qualitatively different, or as a third or fourth industrial revolution.
For more than three centuries modern industry has adapted to opportunities provided by flows of new knowledge. Telematics, biotechnologies, robotics, and other novel technologies are just the latest wave requiring industries to restructure, to relocate, and to readapt to possibilities to satisfy mankind's seemingly insatiable demands for manufactured commodities. In this current phase of technological development, knowledge, human skills, capacities for coordination, and flexible responses to volatile, global markets seem to carry the kind of competitive advantages required during an earlier phase of industrialization, before that process became synonymous with large-scale corporations, fixed capital, and mass production. Nowadays success involves new and different political and social capabilities that are already shifting the concentrations of industrial activity away from Europe and North America and back to Asia.
Theoretical and General Studies of Industrialization
Frank, Andre Gunder. ReOrient: Global Economy in the Asian Age. Berkeley, Calif., 1998.
Gerschenkron, Alexander. Economic Backwardness in Historical Perspective. Cambridge, Mass., 1962.
Jones, Eric L. Growth Recurring: Economic Change in World History. Oxford, 1988.
Kuznets, Simon. Modern Economic Growth: Rate, Structure, and Spread. New Haven, Conn., 1966.
Landes, David. The Wealth and Poverty of Nations. London, 1998.
Maddison, Angus. Dynamic Forces in Capitalist Development. Oxford, 1991.
Mokyr, Joel. Lever of Riches: Technological Creativity and Economic Progress. Oxford, 1990.
North, Douglas C., and Robert P. Thomas. The Rise of the Western World: A New Economic History. Cambridge U.K., 1973.
Parsons, Talcott. Structure and Process in Modern Societies. Glencoe, Ill., 1960.
Pomeranz, Kenneth. The Great Divergence: Europe, China, and the Making of the Modern World Economy. Princeton, N.J., 2000.
Rostow, Walt. The Stages of Economic Growth. 2d ed. Cambridge, U.K., 1971.
Stearns, Peter N. The Industrial Revolution in World History. Boulder, Colo., 1998.
Weber, Max. General Economic History. New York, 1961.
Industrial Revolutions in a European Context
These works include bibliographies providing extensive reference to national case studies in English and other European languages.
Aldcroft, Derek H., and Anthony Sutcliffe, eds. Europe in the International Economy 1500–2000. Cheltenham, U.K., 1999.
Braudel, Fernand. Civilization and Capitalism 15th–18th Century. 3 vols. London, 1982–1984.
Cipolla, Carlo, ed. The Fontana Economic History of Europe. Vols. 1–6. London, 1972–1976.
Goodman, Jordan, and Katrina Honeyman. Gainful Pursuits: The Making of Industrial Europe, 1600–1914. London, 1988.
O'Brien, Patrick K., ed. The Industrial Revolution in Europe. Vols. 4 and 5 of The Industrial Revolutions. Edited by Roy A. Church and Anthony E. Wrigley. Oxford, 1994.
Pollard, Sidney. Peaceful Conquest: The Industrialization of Europe 1760–1970. Oxford, 1981.
Postan, M. M., and H. J. Habakkuk, eds. The Cambridge Economic History of Europe. Vol. 4–7. Cambridge, U.K., 1966–1978.
Sylla, Richard, and Gianni Toniolo, eds. Patterns of European Industrialization: The Nineteenth Century. London, 1991.
Teich, Mikulás, and Roy Porter, eds. The Industrial Revolution in National Context: Europe and the USA. Cambridge, U.K., 1996.