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Industrial Revolution—favorable factors Considerable investment funds required, new machines very costly Access to raw materials, textile fiber but mainly iron and coal Government support for economic innovation Available labor force with no other viable options

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slide1

Industrial Revolution—favorable factors

  • Considerable investment funds required, new machines very costly
  • Access to raw materials, textile fiber but mainly iron and coal
  • Government support for economic innovation
  • Available labor force with no other viable options
  • Aggressive risk-taking entrepreneurial spirit
  • Large seam of coal ran from britain to belgium to northern france to ruhr in germany, most industrialization along this line
  • Iron ore also existed in western europe, some places near to the coal deposits
  • Abundant wool, cotton through existing colonial trade
  • Scientific revolution: persuaded people nature could be rationally understood and controlled—outlook attuned to change and interest in technical experiments
  • Commercialization: most of europe already buying things (rather than manufacturing everything themselves at subsistence) or producing for markets through the domestic system
  • Important changes in banking, national banking systems established in england and several others, facilitated nationwide marketing and increased opportunities for manufacture and sale
  • But banking wasn’t all that important—banks rarely lent money to industrial firms, factories seen as risky, dirty
  • Growing role in world trade, increasing system of importing raw materials and exporting manufactured materials, parts of eastern europe, americas and india and SE Asia increased european wealth, commercial experience through trading companies, new tech for shipbuilding and warfare, interest in new products, could encourage domestic production—british cotton reduced indian cotton exports, textiles flourished
slide2

Agricultural revolution: deeper ploughing, calorie rich new world crops (potato), more manuring by livestock, bed and row cultivation (use of seed drill), better harvesting (scythe, threshing block, winnowing machine), increased use of foraging crops, crop rotation using leys, selective breeding and better animal husbandry

  • Rapid population growth: more food, lull in plagues, decreasing mortality—caused workers to seek new even unpleasant jobs, growing markets for inexpensive manufactured goods
  • Once factory industry began, parts of domestic markets became obsolete, so more people sought factory jobs
  • Improvements in communications and transports—canals and roads
  • Specific British Causes:
  • Population growth particularly rapid, freed up labor, magnified by agricultural changes
  • Landlords pried land away from smallholders through enclosure act
  • Planting hedges to enclose field to expensive for small farmers, had to sell out to landlords, agriculture dominated by large estates, but didn’t absorb population growth (elsewhere, peasant dominated farming was able to absorb growth)
  • Hungry workers who needed jobs, large farms more efficient=more food
  • Most urban artisans belonged to guilds, which protected members from tech change, unequal wage rates, threatening wages by hiring too many workers—no guilds in GB, so unusual freedom to bring new workers into new branches of production and innovate
  • Extensive international trade provided capital, markets and vital raw materials like cotton
slide3

Aristocracy more favorable to industry, many landlords participated directly in setting up mines

  • Government favored commercial change, tariff regulations (such as ban on indian cotton exports) spurred new industry, ban on sharing designs and machinery helped british dominance
  • Laws made formation of new companies relatively easy, laws against worker combination constrained protest
  • Better roads and canals facilitated movement of raw materials and finished goods
  • British government less interventionist—not necessarily advantage, but suited first industrial revolution
  • Excellent holdings in coal and iron, often close together, coastal waterways and inland navigable rivers—transport of coal and iron over land very expensive
  • Britain running low on timber supply, so turned to alternative fuels, especially coal, spurred development—adaptation of steam engine for mine pumping to use of coal in smelting iron
  • Good market opportunities and extensive preindustrial manufacturing system
  • Britain tolerated a number of protestant minorities, but not entirely, so these groups sought opportunities in industry, with discipline, frugality and economic drive
  • Political stability, widespread knowledge of science and tech, secular and individualist philosophy, national unity, integrated market, breakdown of economic regulation
  • After 1780 production of industrial goods increased dramatically: improved cotton spinning machinery, puddling process, rotary motion steam engine
  • Mass markets of sales of machine-made cheap goods at low profit-margin better for wealth than higher-profit smaller sales of quality goods
slide4

Course of Industrial revolution—Britain

  • Started with stable but relatively advanced agricultural economy, but with sig industrial sector, especially textiles, mature commercial organization directed toward international trade (early 1700s)
  • Slowly increasing population, methods of production in agriculture and industry
  • Merchants accumulated capital and exploited home and world markets for agriculture produce and domestic manufacturers
  • Large scale investment in agriculture mid-century, improvement in communication
  • Population increase and expansion of world trade, application of new production methods, increased proportion of national income devoted to productive investment, increase in output per capita
  • Volume of international trade doubled 1780-1800, domestic income had increased steadily from 1730, increased demand for colonial produce, european dominance
  • GERMANY
  • Large number of small states, but reduced in 1815, and great size of prussia mitigated atomism
  • But needed customs union for industrialization—competition with industries of belgium and britain discouraged growth in old german industries (linen and iron), dominance of junkers and guild system meant slow growth
  • But abolition of serfdom, guild-regulation of industry, and breakdown of customs barriers came with zollverein 1818-1834 development
  • Coal and iron resources large, but not exploited before 1830
  • Ruhr not developed much because its wealth was unknown and it was close to belgian coal-iron works, upper silesia was isolated—iron smelting relied on charcoal
slide5

Coke smelting and puddling introduced to silesia but not elsewhere till mid 19th c, abundance of timber meant charcoal smelting survived for long time

  • Hills east of the rhine very important for metal goods, provided blast furnaces
  • Early iron industry in central germany suffered from cheaper iron from ruhr, silesia and abroad
  • Linen main industry in 1800, but linen and cereals suffered from competition of cheap british goods, causing distress to handloom linen weavers in 1815
  • Cotton manufacture grew after 1800, increased mechanization in spinning and spindles by 1835
  • Up to 1830, industrial growth explained by zollverein, abolition of serfdom and guilds, immigration of british and belgian artisans and enterprise and state enterprise and patronage
  • However, even in most advanced industrial areas, still largely rural—needed unification for internal market large enough to support specialization
  • A l’imitation de l’angleterre: puddling process introduced by Remy and Hoesch families, who had studied it in england, with the help of englishpuddlers
  • Alfred Krupp made his study trip to england 1838, Prussia sent a locksmith in 1819 who returned and established a plant
  • Coal-mining output began expanding in 1830s, almost doubling in that decade alone, 1840-1870 coal production 7x, especially in ruhr valley, deeper mines were sunk
  • In 1850s, iron production expanded at 14% per year, railroads expanding, lines built and operated by governments involved, alsacelorraine gained in 1870, centers of textile and metallurgy respectively, development of new smelting processes allowed fuller use of phosphorous rich lorraine ore—helped heavy industry
slide6

From 1850s onwards, distinctive features: sheer spread, unusual concentration of heavy industry (coal and iron resources, british competition in textiles) because industrialization took off after railroads—huge demands for coal and iron, german government intervened extensively with its state-based railroad policy, had smaller pre-industrial middle class and less capital than france and britain so government operations helped make up difference—e.g. state backing for investment banks promoted accumulation of investment funds

  • Also center for business combination—many small firms operated in crafts and retail, but stress on capital intensive heavy industry and state backing facilitated big companies and cartels
  • By 1870 gigantic firms like Krupp dominated much of metallurgy and mining, with branches in armaments, ship building, mines, smelting and refining
  • Huge capital demands in these industries encouraged banks to help big business combinations with assured profits
  • Newer industrial seectors like chemicals and electrical equipment dominated by two or three firms, partly because of investment bank backing, e.g. siemens and developed branches abroad
  • Firms in big business also set different prices independent of market forces, combination of big business in cartels (e.g. steel and coal) allocated market quotas for certain products to make sure prices held up
  • By late 19th c, 300 cartels, with extensive market control and political influence
slide7

FRANCE

  • Most populous and richest country in europe in 1700s, but outstripped by britain
  • Strength of guilds, burdensome taxation, restrictive system of commerce and navigation hampered economic growth
  • War and revolution further widened gap
  • (But revolution led to the abolition of guilds, internal trade barriers, and regularized commercial law--new laws favored middle class, banned worker combinations, napoleonic wars showed british superiority, so impetus for change)
  • Demand of metropolitan centers started agriculture revolution after 1750—artificial pastures, root crops, enclosures and animal improvements—slowly spreading from paris regions, but no radical changes till railways
  • Markets had seldom extended beyond provincial borders, only specialization was in wine
  • Even with land exchange of revolution, agricultural practices stayed the same, industry except for road and canal building remained more or less domestic and small scale
  • Coal production was large and growing, but slow adoption of steam engine and continued use of charcoal based smelting (aided by 1819 tariffs that kept charcoal prices up in favor of landowners) and easy access to belgian coal restricted output before 1840
  • Iron manufacture hampered by fuel shortage and administrative caprice, widespread industry but small works
  • Cotton industry grew, but silk and woolen industrial development was very slow, technical backwardness persisted
  • War had benefited england, but france lost colonial holdings without compensation by european markets and had encouraged protected industry behind the continental system
  • A l’anglaise—french textiles bordering channel in north grew, and in alsace with protestant industrialists who had ties with england
  • De Wendelcompany, great iron manufacturing firm, founded by scientist sent to britain to study metallurgy, french government also paid british metallurgist to set up cannon foundry
slide8

After the war, sought to circumvent laws prohibiting tech transfers, intensified study of british industry

  • French bribed metallurgists directly, steel industry took shape under James Jackson, whose grandson set up first Bessemer converter in 1861
  • By 1830, at least 15,000 british workers in france, mainly as skilled tech personnel in textiles and metallurgy—employers offered huge bonuses and double wages to get workers to emigrate to france
  • Recurrent revolutions into 1870 not helpful for industry
  • Perhaps encouraged governments to be more protective of traditional economic groups than elsewhere
  • Fiercely protectionist in tariffs against foreign, particularly british, goods, which favored inefficient, old-fashioned textile and metallurgy firms
  • But more important was lack of natural resources—by 1848, exploiting large percentage of coal resources, but could not keep up with GB, germany, USA—had to import coal, which made costs in metallurgy especially high
  • Ability to compete in heavy industry further weakened by german annexation of alsace-lorraine
  • French population growth less than european growth, less spur to flock to cities
  • French factory cities grew less than elsewhere, labor shortage as workers could stay in countryside if they wished
  • Still, revolution happened: 20% of all manufacturing workers in factory or coal mines 1850, cotton and wool production mechanized, several new metallurgical firms had large factories and advanced techniques
  • Important innovations: jacquard loom for fine cloth, helped mechanize textiles and inspired 21st century circuit board tech
slide9

Outputs grew: coal production increased 13x 1820-1870, iron production 6x, after 1842, government agreed on railroad system and sponsored rapid development

  • Government built rail systems then turned over most lines to private companies on lease, companies provided rolling stock—national system complete in 1860s and active program of local development afterward, boosted heavy industry and transportation
  • Relative lags and greater government intervention than in britain, also concurrent transformation of craft production
  • Craft tradition with export markets in fine furniture and silk cloth, as a way of circumventing british competition, manufacturers worked to expand craft output without revolutionizing tech—furniture makers, e.g. began to standardize design and production, so workers trained quicker and more output, still small shops and mostly manual techniques, but almost mass producing items for middle classes in france and elsewhere
  • Increased its annual per capita economic growth almost as rapidly as britain in its industrialization period
  • More goods to sell and growing urban markets meant traditional small shops not suitable, so innovated distribution system—department stores aimed at high volume sales opened in 1830s
slide10

EFFECTS

  • French revolution had raised issue of class conflict, industrial revolution underlined contrast between rich and poor but had promise of prosperity for all
  • Break down in stratified social hierarchy of ancien regime
  • Political and economic liberalization—economic distinctions instead of juridicial distinctions basis of social roles, laissez faire became public policy
  • Withering away of guild system (by legislation), greater freedom of individual to own or dispose of property, to move around in response to economic opportunity and freeing up of trade
  • Influence of adam smith’s economic liberalism replaced mercantilist ideas, but change was slow
  • Classical economists justified laissez faire but also provided theoretical basis of conflict of interests of landlord, capitalist and workers—marxist economics and theory of class war
  • Social unrest—working class discontent with status and distribution of wealth as awareness of economic and political ideologies grew, social mobility increased but inequality also increased, questioning of existing institutions and ideas, utopian plans for future
  • Urbanization, factories and better communications made working class association easier
  • Civil disorder (fear of machines, result of revolutionary ideas) due to economic discontent led to reaction and repression but also radicals and humanitarians of upper and middle classes to argue for social reform and more active government role to regulate conditions of work in industry