Chapter 21 - Industrial Europe

Traditional Economy:

• Mid 18th Century 89% of Europeans still farmed for a living
• Human Capital (Labor) drove the economy dominated by agriculture

Changes:

• Overseas trade created a greater demand for goods and manufacturing labor
• Agricultural revolution freed labor from traditional agriculture and increased food production (permissive cause to the Industrial revolution)

NOTE: Both the Agricultural and Industrial Revolutions were "revolutionary in consequence, rather than development"

Farming Families:

• Open-field System: farming through a communal enterprise to protect and ensure the long-term viability of the village

1. The village implemented all agricultural decisions in a cooperative manner, while each individual held strips of land and rights pertaining to the land
2. Effective system to support communal subsistence farming (safer)
3. Limited the number of people who could be survive from output
4. Conservative system:

• No desire for change
• Products were perishable, encouraged subsistence farming
• Feudal Taxes / serfdom discouraged the entrepreneurial spirit
• Failed Risk could spell doom to the entire village

• Growth in Open Field System was through the intensification rather than innovation

1. ie. Clear more land, sow more seed
2. Impact of intensification and the Open Field System was violent economic cycles in which over population / famine in one generation would lead to surplus in the next (see Malthus)

• Discouraged any attempt to innovate and individual capital investment

Cottage Industry:

• Initially o supplement income families engaged in spinning and weaving through the Putting-Out System
• As the economic cycles worsened spinning and weaving became a necessary component of life

Putting-Out System:

• Entrepreneur purchased raw material
• Raw material was "put out" into the homes
• People worked in their homes
• Finished goods were returned, workers paid (piecemeal) and products sold at a profit

Evaluation of the Putting-Out System:

Advantages (Efficiencies)

Disadvantages (Inefficiencies)

- Required only a small amount of capital to begin - Low skill and common tools required in homes - Fit traditional gender roles (men wove, women spun) - Low wages (non-guild members) - Supported the Open Field System - Could enter the profession at a younger age - Reduced marriage age and encouraged more children (workers)

- Low and inconsistent quality of goods - Poor workmanship easily ruined raw materials - Work force was unsupervised, thus unreliable - Output was limited to available labor - Embezzlement of raw materials by workers - Arbitrary wage cuts by Entrepreneur - No standardization of products - Totally dependent upon intensification of labor for increased output - No innovation - Difficult for the production to be responsive to the overall economy and shifts in the market place

• Despite the inefficiencies the Putting-out System (cottage industry) dominated production in Europe by the 1750's.

Change: The Agricultural Revolution

• The continual growth of population and intensification of the traditional economy could work only so long (eventually you would run out of resources)

1. England and Holland were the first to experience a need to change their economy

• The Agricultural Revolution was one of technique combined with investment of capital and a commercial attitude

Enclosures: the end of the Open-Field System

Problems with the Open Field System:

• Discouraged private investment
• Prevented innovation
• Prevented agriculture from being responsive to market conditions (focus was on subsistence)

Consolidation: Enclosing land in the hands of individuals was a precondition for the Agricultural Revolution

• Poor families were fast to sell out and gain wage employment on the consolidated farms
• Middling sorts (those who did well in the traditional econ.) refused to sell out and were crushed in direct competition
• The process of enclosure often elicited a violent response (esp. from the middling sorts)
• 19th Century govts. supported enclosure (19th Cent. English Parliament passed legislation)

Impacts:

• The process of enclosing required massive labor
• Made investment profitable
• Encouraged large farm owners to innovate
• Encouraged large farm owners to be responsive to market conditions
• Led to the development of regional agriculture based upon comparative advantage

Innovation:

• Fodder Crops: crops which were primarily used to restore nutrients to the soil

1. Clover and turnip restored nutrients, fed livestock and produced better manure
2. Viscount Charles "Turnip" Townsend popularized the turnip in England

• Four Crop Rotation: replaced the three field system due to use of fodder crops

1. wheat - turnip - barley - clover

• Meadow Floating: flooding of pastures to produce an early spring grass for livestock

1. more livestock meant more manure (fertilizer)

Impact on agriculture:

• More food produced with less human labor
• Greater convertibility b/w grains and livestock depending on market conditions
• Began the process of regional agriculture based on soil and climate conditions

example:

1. in 1700 farmers produced enough food for 1.7 people
2. in 1800 farmers produced enough food for 2.5 people

Impact on society:

• More people
• More demand for all goods (including manufactured)
• More discretionary spending
• More landless rural poor (potential to become urban landless poor)

Industrial Revolution:

NOTE: "Revolution in Consequence rather than development"

Demographic Shifts:

1750 1800 1850

80 % rural 60% urban

Southern England Northern England

12 Banks (Egn.) 300 Banks (Eng.)

100 % pop. increase of England

1000% pop. increase of Manchester

Productivity of a single woman increased by 200X

5 million lbs of raw 588 million lbs of raw

cotton imported from NA cotton imported from NA

Coal production increased by 10 times

Iron production increased by 15 times

0 miles of Railroad in GB 7500 Miles

• The story of the IR is that of the replacement of animal / human labor with hydraulic and mineral energy
• Ingenuity rather than genius was the key

1. Major innovators were people responding to problems with invention

• IR: a sustained period of economic growth, brought about by the application of mineral energy and technical innovations to the process of manufacturing between 1750 and 1850

Britain first:

1. Water: access to oceans and internal waterways gave GB a transportation advantage

• Small standing army and large navy / shipping industry positioned them to take advantage of waterways
• Canal system supported by the Navigation Acts

Impact of transportation:

• tied regions together more closely
• lower price of commercial transportation drove more commercial activity

2. Economic infrastructure:

• Generations of colonization resulted in the cultivation of foreign markets for raw materials and sale of goods
• Shipping ability key to foreign market access
• Capital resources to invest in production

1. Bank of England became a model to create a stable banking system

3. Minerals and metals

• Coal: one miner could produce the energy of 20 horses

1. Capital industry, dominated by the wealthy
2. conditions were BAD (pg. 682)
3. Thomas Newcomen began use of steam powered engine to pump water
4. Demand for coal skyrocketed when it became essential to iron production

• Iron:

1. Coke (pure form coal) used to smelt iron (pig iron – raw, with impurities)
2. Henry Cort: “puddling and rolling” of iron lowered the cost of production and increased the quality

• cannoning

“Cotton is King”

• Replaced wool as the key textile
• As population rose (agricultural revolution) demand increased, cottage industry could not keep pace with demand (esp. in harvest season)

• To increase production John Kay invented the Flying Shuttle, which decreased the amount of time to weave

1. Problem: not enough thread to weave

• To increase production of thread John Hargraves to develop the Jenny

1. Problem: Jenny produced weak thread

• To produce higher strength thread Robert Awkwright developed the water frame
• Samual Cromptom developed the “Mule”, which combined the work of the water frame and the Jenny

Impact: innovations led to the develop of the factory as center of production

First cotton factory was built by Robert Awkwright in Cromptom

Advantages (reasons for) factories:

Needed the space to house the increasingly large machinery

• Needed to house and protect expensive machinery
• Usually required water power
• Secrecy – “safe-boxes” were the first factories
• Keep the machines in constant use
• Supervise work force
• Ensure quality of product
• Prevent embezzlement

Impact of the Factory:

• Changed the nature of work
• Changed the physical location (home / regional) of work
• Machinery reversed existing gender roles in production (men became weavers)
• Increased the demands on commercial transportation (raw material + finish goods)

The Iron Horse (railroads)

• As the IR focused on productive capacities the supply of raw materials became an increasing problem (coal and cotton)
• Transportation was a major problem (canal system became encumbered with the typical problems of any monopolistic system)

1. Transportation became a key to creating economies of scale

Railroads:

• Richard Trevithick: attempted to apply Watt’s steam engine to carriages, limited success
• George Stevenson: innovated steam locomotion with regards to traction and pressure

1. Considered the father of the modern railroad
2. Developed the “Rocket”, could haul three times its weight at 30 mph

The First Railroads

• 1830 Manchester to Liverpool was opened

1. Designed to move commercial goods, quickly caught on as a mode of human transportation
2. Funding: private bills passed parliament allowing entrepreneurs to raise monies through selling joint stock

• Massing investment: paid high returns

Impacts:

• Decreased the price of coal (think of the impact of half priced oil!!!)
• Increased the demand for iron and steel (massive industrial growth)
• Railroads were massive consumers of building materials and labor
• Leading employer
• Created a new concept of time, space and speed

1. Railroad time (standardization)
2. shrank the size of the country
3. Increased the rate (speed) trade could be conducted

• Increased personal travel

1. Safer
2. Travel for pleasure began, in 1851 6 million people travel to London to view the Crystal Palace exhibition

• Helped create a sense of nationalism as individuals worldview (travel and trade) expanded beyond their region

Entrepreneurs and Managers

• innovation was constant – everyone was trying to innovate

Industrialists:

• successful industrialists accomplished “economies of scale” (increased output resulting in decreasing unit cost)

1. Measured profit in fractions of cents

Entrepreneur – raised capital, understand production techniques and market their goods

Manager – organization, tried to maximize output from mechanized and human capital

• Attempted to increase output

1. Specialization
2. Had to educate the work force
3. Taught work ethic
4. Standards of quality
5. Thwart embezzlement

Josiah Wedgwood	Robert Owen
- innovated – made a better product - introduced specialization into the manufacturing process - standardization of quality - marketing genius: sold to leading aristocratic families and then marketed “replicas”	- rose to the position of manager by the age of 19 - strove to increased the quality of workers lives to increase production - created higher quality of life in company town - limited child labor, improved schools - “paternalistic socialism”

• Owen and others began to agitate for reform in response to increasingly harsh industrial conditions

Reforms:

The Factory Act of 1833: prohibited child labor under 9, provided two hours of daily education, created the 12 hour workday

1. The Ten Hours Act of 1847: set the ten hour work day
2. The Mines Act 1842: prohibited women and children from working underground

Edwin Chadwick, Report on the Sanitary Condition of the Laboring Population in Britain (1842)

• Painted a horrible picture of daily life
• Key factor in shifting social reform to the role of government (welfare state)

The Public Health Act of 1848: established boards of health and medical examiners office

• Vaccination Act of 1853 and the Contagious Diseases Act of 1864: attempted to control epidemics in urban areas

Urbanization:

• Push / pull factors led to the rise of cities
• Rise of urban population (migration) and lower marriage ages + higher birth rates in families

Industrialization on the Continent:

• 1851 The Crystal Palace exhibition in London served as a model of industrial possibility for all of Europe

1. demonstrated the “British miracle” of industrialization

• Much of the continent was able to steal British innovation despite protective attempts by the government
• Accelerated the process of industrialization on the continent
• British competitive advantage forced continental govts. To become more involved in the development of industry

France:

• Industrialization keyed to domestic market (avoid competition with the British), but slowed by two factors:

1. Slow population growth: less population pressure meant that France could continue to embrace traditional agricultural techniques
2. French Revolution:
3. Napoleon’s Continental System failed and destroyed French foreign markets
4. Politics of the revolution strengthened peasant right’s to land, preventing enclosure and the agricultural revolution
5. Destruction of guild system in manufacturing
6. Economy remained largely regional

Stages of Progress:

• French challenges were developing effective transportation and raising capital
• Govt. stepped in to lead the development of railway system, ironworks and coalmines

1. Railways drove French industrialization

• French industrialize at a slower rate and focused more on quality goods, rather than mass produced goods (Britain)

Germany

• Political division stood in the way of industrialization (300 states prior to 1815, 30 states after 1815)

1. Germany was an agriculturally rich and diverse land, west – free farmers, east - serfdom
2. Linens and metal goods were traditional products, could not compete with British goods
3. Had to protect and develop domestic markets and resources

Zollverein: German customs union created to promote effective trade and industrial development (agreed upon taxes and shared profits while protecting domestic industry)

• Prussian led, froze rival Austria-Hungary out
• Helped Prussian industry move goods across northern Germany and promoted the integration of the Rhineland (industrial heart of Germany)
• Precursor to German political unification?
• Intro. Of RR dropped the costs of industrial goods (achieved economies of scale)
• Germans became known for high quality metal goods

Dissent:

• Friedrich Engels: went to England to learn about industrialization, worked in a Manchester cotton mill

1. Wrote: The Condition of the Working Class in England 1845
2. Condemned working and living conditions

The lands that Time Forgot:

• Rest of Europe developed “pockets” of industrialization, but failed to reach economies of scale and largely remained pre-industrial societies.
• Why?
• Regional problems:

1. poor resources – Naples / Poland
2. poor transportation – Spain / Austria-Hungary

• Common problems:

1. agricultural structure perpetuated impoverished peasantry (sharecropping / serfdom)

• prevented a surplus labor force from forming

1. Tariffs protected traditional economies, stifled innovation

Long Term Results:

• Became exporters of raw materials and consumers of finished goods
• Dual system: Areas where traditional economy and industrialization existed side by side

1. Prevented industrialization from reaching economies of scale and farmers from developing enough wealth to access industrial goods