The Oxford University Press did a wonderful thing when it introduced the “Very Short Introduction” series in 1995. As of 2024, there are over 600 volumes in the series covering everything from Accounting to Zionism. Each is just over one hundred pages long and is usually authored by an established authority in the field. The volume on the Industrial Revolution, published in 2007, was written by New York University’s Richard Allen, the leading proponent of the factor model explanation of the British Industrial Revolution (i.e. Britain’s successful handicraft industry led to high wages, which incentivized owners to capitalize on labor saving machinery that used cheap coal as an energy source)..
Allen begins by noting that the Industrial Revolution was the result of a confluence of several other economic revolutions that slowly took shape in the wake of the Age of Discovery in the sixteenth and seventeenth centuries. “The Industrial Revolution was Britain’s path breaking response to the challenges of the first globalization launched by the voyages of Vasco de Gama and Christopher Columbus,” Allen writes. Empire, tariffs, factor weaknesses with labor costs and strengths with energy costs, would combine in unanticipated ways to create something unprecedented. In short, Allen writes, “The Industrial Revolution was the result of economic change as well as the cause of it.”
Allen stresses that while technological change was perhaps the most important element in creating the British Industrial Revolution, it was far from the only revolution that mattered. To start, in the 1690s the British established the Bank of England and the funded national debt, kicking off a financial revolution that would underpin economic progress for the next several centuries. Next, a demographic revolution unfolded along with the technological one. For well over a century (1650-1750) the British population held steady at roughly 6.5 million people, before almost quadrupling to 21 million by 1850. That demographic revolution was accompanied by an urban revolution. For most of British history the percentage of the population in towns of over 5,000 people was roughly 5 percent. By 1750 it had grown to almost 25 percent and reached 50 percent by 1850. These population revolutions, in turn, were supported by an agricultural revolution (better seed selection, soil preparation, crop rotation, and land enclosure) that allowed fewer and fewer laborers to support more and more workers. The emergence of the new Atlantic economy resulted in a commercial revolution that dramatically increased trade, especially in British-made handicrafts, which drove up domestic wages. This commercial revolution was supported by a transportation revolution as more efficient sailing vessels and better constructed canals and roads facilitated the faster and cheaper shipment of goods across thousands of miles. The increasingly efficient exploitation of cheap coal resulted in an energy revolution. Finally, there was a scientific revolution that seeked to explain the physical mysteries of the universe via reason and careful observation and experimentation. In some cases, such as the discovery of atmospheric pressure, it resulted in something commercially tangible, the steam engine, a critical invention that Allen calls “science in action,” although it didn’t begin to significantly affect aggregate labor productivity until after 1840.
The upshot of all of these revolutions was that British manufacturing exploded and the rest of the world didn’t know what hit it. Output per British worker doubled between 1770 and 1850, as did income per head. British GDP grew at a sustained 2 percent a year for a century. The net result was that the British share of global manufacturing grew from 2 percent in 1750 (when China and India accounted for half of global production) to 23 percent in 1880 (by which time China and India had dropped to just 10 percent).
Explaining how and why it all came together in Britain in the mid-eighteenth century isn’t so easy. “While the background factors [i.e. the combined revolutions] sustained institutions, practices, and culture that supported technological innovation and business investment,” Allen writes, “they were not sufficient on their own to explain the Industrial Revolution.” Rather, he says, “It was the evolution of the international economy and the imperial and military policies of the governments of Europe that created the peculiar incentives that triggered the Industrial Revolution.” As the British empire expanded globally, so did the market for British-made goods, which fueled the growth of domestic manufacturing, which led to higher wages and greater urbanization.
Allen’s core argument, which many leading scholars reject, is that demand drove many of the “revolutions” that made up the Industrial Revolution. For instance, the growth of cities required several breakthroughs in order to sustain unprecedented urbanization. One was the agricultural revolution (“Agriculture was revolutionized by the growth of empire,” Allen says). The other was the technological revolution of steam-powered textile machinery to solve Britain’s high labor cost problem (“Britain’s pre-industrial economic growth led to rising real wages in Britain”). Britain’s wages were so high that even highly inefficient and poorly designed machines could be profitable (“Early spinning machines were profitable to use in Britain but not abroad, and that is why the Industrial Revolution was British”).
The British relentlessly improved their technology and fuel efficiency until they buried the competition under an avalanche of high quality, low cost, machine-manufactured cotton textile products. A key to British success was continuous technological and organizational improvement. In the cotton mills, the number of workers required per 1,000 spindles dropped from 2,500 in 1760 to 90 in 1780, and then just 16 by 1820. The situation with Thomas Newcomen’s steam engine was much the same, albeit over a longer period of time. The steam engine was a groundbreaking macro invention that Allen says established the “technological trajectory” of the entire Industrial Revolution. At first, it was incredibly inefficient. Shortly after it was invented in 1712 it required 44 pounds of coal per horse-power hour. Collective tinkering dropped the fuel requirement to 30 pounds by 1769. John Smeaton’s work dropped it further to 17 pounds. Then Thomas Watt’s separate condenser resulted in a fuel consumption of 9 pounds per horsepower hour in 1776. By 1847, pounds of coal per horsepower hour had dropped to three, a 93 percent decrease in coal requirements since the technology was first developed. “This was collective invention on a grand scale,” Allen writes, “and it created the most efficient pumping technology ever seen.” The commercial impact was astounding. In 1750, Britain produced less than one percent of the world’s cotton textiles; by 1880 it was producing 30 percent.
Ceramics is perhaps an even better example of a British industry revolutionized by the Industrial Enlightenment. Scientific entrepreneurs like John Dwight, William Cookworthy, Josiah Wedgewood, and John Spode drove a system of collective invention that developed methods fundamentally different from those used in China and embraced an obsessive form of quality control.
“The Revolution wears the two faces of Dr Jekyll and Mr Hide,” Allen says. The above describes the “benevolent face of the Industrial Revolution,” but there was certainly a dark side, too. How the Industrial Revolution affected the standard of living of the working class is, according to the author, “one of the most debated issues of the period” – and one of the most controversial. One thing is clear, he says: real incomes increased after 1850 (i.e. after the first Industrial Revolution). But what about during it, from 1750 to 1850? That’s murkier and more contentious, he says. In Allen’s opinion, real wages grew little, if at all, during most of the Industrial Revolution. The average worker’s consumption per person was estimated to be 63 percent of the national average in 1767. It dropped to 46 percent by 1846. Moreover, there is little evidence that overall worker health improved during this period either. “While English workers enjoyed a high standard of living at the start of the Industrial Revolution,” he writes, “it was a long time before they realized substantial gains.”
On balance, Allen argues that the Industrial Revolution eventually politically empowered the working class, but it took a century. Parliament in the eighteenth and nineteenth centuries was dominated by the land-owning aristocracy, which made up less than 2 percent of the population but possessed the power to craft domestic and foreign policy in its favor. One classic case is the Corn Laws, passed in 1815, which were “one of the great acts of aristocratic self interest,” according to the author. The Corn Laws kept tariffs on grain high (English wheat was twice as expensive as Dutch wheat throughout the first half of the nineteenth century), thus artificially inflating food prices to the exclusive benefit of the land-owning class. The burgeoning middle class recognized that they needed electoral reform. Even after the Reform Bills of 1832 increased the eligible voting population by over 60 percent, the percentage of adult males eligible to vote was still only 20 percent. According to Allen, the eventual repeal of the Corn Laws in 1846 was a great victory for the manufacturing interests of Britain..
Prior to the Industrial Revolution, Parliament had a long tradition of being pro-consumer. For instance, the British government passed laws to control speculation and prevent price gouging and hoarding. However, Parliament also aggressively defended property rights. For instance, the Protection of Stocking Frames Act of 1788 made the destruction of textile machinery punishable by exile to Australia. Evidently that wasn’t enough of a deterrent because it was upgraded to capital punishment in 1812. The Combinations Act of 1799 and 1800 prohibited trade unions and collective bargaining. The Seditious Meetings Act of 1817 outlawed political meetings of more than fifty people. Meanwhile, the highly influential population theories of Thomas Malthus discouraged active poor relief, believing it just exacerbated the problem by encouraging the indigent to reproduce. The so-called New Poor Law of 1834 stipulated that able bodied indigent receive assistance only through a workhouse.
By the mid-eighteenth century policy reforms were turning in the workers’ favor. The Factory Act of 1833 improved child labor hours and conditions. Free trade in manufactured goods was enabled by the abolition of the Navigation Acts in 1849. Finally in 1867, in the same year that Karl Marx published Capital, workers in Britain were given the vote, an event so epic that Allen argues it marks the end of the First Industrial Revolution.
The Industrial Revolution, of course, did not stop there. Indeed, it continues to this day. Allen suggests that by the late nineteenth century other countries – namely Germany and the United States – were able to surpass Britain industrially by following the “standard model” of economic development. This model included four core components. First, create a unified national market by developing a robust transportation system while removing internal barriers to commerce. Second, establish a banking system to promote investment and government funded debt. Third, erect trade tariffs to aggressively defend domestic manufacturing industries. And, finally, institute a system of mass public education. Allen says the standard model was tried all around the world in the late nineteenth and early twentieth centuries, sometimes successfully (Japan), but often not (Mexico, Russia, Egypt).
By the second half of the twentieth century, the standard model of economic development had given way to the so-called Washington Consensus, a combination of stabilization (to increase investment), liberalization (to abolish tariffs and increase trade), and privatization (to increase competition). Success stories of this approach are less obvious. Chile, perhaps?
The early twenty-first century witnessed the explosive industrial growth of “market socialism,” as defined by China and, to a lesser extent, Vietnam. Under market socialism investment planning, infrastructure, and education remains tightly under central government control, while government-supported enterprises compete on the open market. The results have been astounding. In just one jaw-dropping example, Chinese steel production grew from 15 of total global production to over 50 percent in just 13 years (2000 to 2013).
In closing, if you’re looking for a crisp, yet comprehensive overview of the Industrial Revolution, this slender volume is a great place to start. I’ve read most of the major scholars covering this subject (Mokyr, Allen, White, Pomeranz, etc) and this is a fantastic summary.
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