Factories and You: The Emergence of the Industrial Revolution.

Information below is adapted, in part, from the Giant EHAP Review Guide at HistoryTeacher.net.

The Industrial Revolution: Overview of Era.

Demographic Change.

Prior to the eighteenth century, the levels of populations seemed to flow in cyclical, or wave-like patterns, depending on natural phenomena such as crop failures, plagues, etc.

Around 1730, a new era in Europe's demography began. During the 18th century (which is considered, demographically, to begin in 1730), Europe's population skyrocketed, jumping from 120 to 190 million. Prussia, Sweden, Spain, France, and especially, England experienced tremendous population increases during this period. After this time, the cyclical behavior of the populations stopped, and Europe's population simply continued to increase.

Painting of enclosures The rapid population growth was, according to historians, caused by a decline in mortality rates, as opposed to an increase in birthrates, in all the countries except for England. The decline in mortality rates occurred because Europe began to enjoy a more stable and better food supply due to improvement in the average climate, the opening of more farmland, and an improvement in transportation systems. Disease was still a prevalent issue, but, on the whole, mortality rates declined.

Image: Large Enclosure by Caspar David Friedrich

Economic Growth.

During the 18th century, overall wealth increased, although the growth was not consistent. In the first decades of the century, prices remained stable, due in part to the economic consequences of the War of the Spanish Succession. Significant growth began around 1730 and continued until 1815. This period was characterized by gradual price inflation, which reflected growing demands for goods from a growing population. This inflation stimulated the economy, and, although there were some problems, generally it helped the economy. The growth, however, did not affect all sectors of society in the same way. Though the gradual increase in prices was good for landlords, employers, merchants, and landed peasants, it was very bad for the poor, landless peasants, who could barely afford to live.

Proto-industrialization is the economic development that occurred just prior to the rise of the factory system and may have led to it. Proto-industrialization, a.k.a. the putting out system, was a system in which merchants distributed raw materials to peasants' households. Those peasants would then create the requested items within the timeframe given. The merchant must then arrange for pick up of the finished good, then sell it. The system had it's positives:

increased manufacturing in rural areas
strengthened marketing networks
allowed additional income opportunities for peasants
increased demand for goods (with the peasants making more money, they could spend more money as well)

But it also had it's negatives:

overburdens the merchants
proves to be fiscally wasteful - the amount of money to send the materials, pick up the materials is more than if all were housed together
there is no oversight, more products could possibly be produced if the process could be streamlined and the workers held to a standard of maximum productivity

Changes in Industry.

Though, during the 18th century, most industries remained the same, dramatic change was beginning to occur, especially in the manufacturing of cotton cloth. The changes in industry were meant to increase the productivity of labor through new technologies. This replacement of workers with new tools and machines, which is known as factor substitution, eventually led to the factory.

Increases in performance in industry always depend on the structure of the society. Before Europeans could change the format of industry, they had to face major obstacles and make changes that affected the very structure of European society. Europeans faced many difficulties as they attempted to change the structure of the economy, such as:

Small Market Size - since European countries were cut off from one another for both physical and political reasons, merchants were forced to deal with very limited markets. This slowed the growth of specialized manufacturing and limited the mobility of capital and labor.
Skewed Distribution of Wealth - since the aristocracy held and spent the majority of the income, merchants would cater to their desires and produce small quantities of luxury goods, as opposed to creating an abundance of cheap goods that would be accessible to the public. This negatively effected supply and demand, causing the supply to never really match the demand.
Property Rights/Privileges - these traditional institutions worked against innovation, as rents and tolls often used up capital that would otherwise be available to both would-be consumers (peasants) and the entrepreneurs (merchants).
Guild/Government Regulations - were the root of some of the largest problems for the merchants. As the guild regulations established a standard, traditional procedure for industry, which was not to be changed, they made innovation exceedingly difficult. Government restrictions on economic activity and licensing of monopolies only made it more difficult for merchants.

Laissez-Faire Economics.

Many Europeans began to question and criticize the barriers that prevented further industrialization and innovation. They called for less control of the economy.

Adam Smith was a Scottish philosopher who epitomized the concerns and desires of the age. His novel, An Inquiry into the Nature and Causes of the Wealth of Nations (1776) discussed his philosophy regarding economics. Smith believed that money was not actually wealth, but only represented a portion of it. Real wealth consisted of the added value of manufactured items produced by invested capital. Most importantly, however, he stated that economic progress required that each individual be allowed to pursue his/her self-interest freely without restrictions for this would lead to economic growth. Natural divisions of labor and specialization, he stated, should be encouraged. This philosophy became known as laissez-faire, or "let them alone" economics. Smith also introduced the concept of the invisible hand which stated that if all individuals follow their own self-interest, it would be for the economic good of everyone, since everyone will do what they do best. Government was to step aside and allow the market to regulate itself.

Laissez-faire economics began to catch on, especially in England, and in 1786, France and Britain signed a free-trade treaty. Guilds were growing weaker, and in 1791, the French outlawed them. In the 1790s, the English also began to pass laws against the guilds, and the merchants gained freedom.

Learn More: Click here to read the lecture from Steven Kreis' HistoryGuide.net over the origins of the Industrial Revolution.

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