Evolution of Industry and the Rise of Modern Capitalism

The Industrial Revolution (1760–1870)

The Industrial Revolution was a period of profound economic and social changes occurring between 1760 and 1870.

Key Factors of Industrialization

• Demographic Revolution: The population increased as nutrition and hygiene improved. Public health advancements, such as vaccines, led to fewer deaths from epidemics, which in turn increased demand.
• Agricultural Revolution: New farming techniques were introduced, such as the transition from laying land fallow to the four-field system. Changes in land ownership occurred, and the number of livestock increased.
• Other Factors: Britain possessed extensive domestic markets, a new capitalist mentality, and an abundance of iron and coal.

The First Industrial Revolution

This era marked the transition from the workshop to the factory. The introduction of the first machines, powered by hydraulic energy, led to the division of labour.

Leading Industries

• Textile Industry: Centered in British colonies with cotton, spinning, and weaving. This growth increased activity in the agricultural and iron sectors.
• Iron Industry: Iron production moved from Sweden to Britain. The invention of the blast furnace and new types of furnaces significantly increased iron manufacturing.

Economic Liberalism

Adam Smith, author of The Wealth of Nations, argued that the Old Regime was an obstacle to progress. He believed the economy adjusts itself through the law of supply and demand and was in favor of the division of labour.

The Transport Revolution

Navigation and Railways

• Navigation: British production increased. Previously, travel was dangerous, but the development of new canals, steamboats, and clipper ships transformed trade.
• Trains: The steam engine and the use of iron to build railways and trains led to new intercontinental railways that were fast and safe.

Impact of Transport

Trade costs were reduced, leading to specialization in the world economy. This stimulated the metallurgy and mining sectors and improved nutrition.

The Second Industrial Revolution

New energy sources emerged, specifically electricity and petroleum. New industries included the iron and steel, chemical, and electrical sectors.

Large Companies and Modern Banking

The creation of corporations allowed capital to be divided into shares traded on the stock market. This era saw the rise of the shareholder and the birth of financial capitalism.

New Systems of Production

• Taylorism: Each worker specialized in a specific task.
• Assembly Line: Facilitated mass production.

Corporate Groups

• Cartel: Companies in the same line of business.
• Holding Company: A company that controls others.
• Trust: An association of companies covering all stages of manufacturing.

Global Spread of the Industrial Revolution

• Europe: Belgium, France, Germany, and Sweden.
• USA: Characterized by extensive agricultural production, abundant natural resources, specialized production, a large domestic market, and innovation.
• Japan: During the Meiji period, feudalism ended, and the state controlled industrialization.
• Russia: Industrialization began in the 19th century.

Social Effects and Urbanization

The population grew as the gap between births and deaths widened. Migration led to urbanization in Europe and significant transoceanic migration.

The Class System

A new social hierarchy emerged based on judicial equality, though women faced inequality:

1. Bourgeoisie
2. Middle Class
3. Lower Class

Early Labour Movements

• Luddism: The act of destroying machines.
• Chartism: Demanded labour rights.
• Trade Unions: Mutual aid societies that used strikes as a means of pressure.

Political Ideologies

• Marxism: Karl Marx and Friedrich Engels wrote the Communist Manifesto. They focused on the class struggle between the bourgeoisie (oppressors) and the workers (oppressed), advocating for a proletariat dictatorship.
• Anarchism: Led by Proudhon and Bakunin, this movement opposed the state, favoring voluntary associations instead.
• Utopian Socialism: Characterized by optimism, altruism, collectivism, and justice, similar to the ideals of the Enlightenment.