Age of discovery-events leading up to the Industrial Revolution, commenting on the following: currency, colonialism, recession, globilism, financial market, management theories and approaches, relationship between the past and present, economy, technology, revolution and people that contributed to the revolution.
This paper presents an overview of the factors within the so-called ‘Age of Discovery’ which engendered the industrial revolution in Britain. Although the industrial ‘revolution’ itself is usually periodised in the period 1750-1850, this is by no means a universally agreed principle. Some authorities, such as Berg, propose that what she terms the age of ‘manufactures’ in fact ranged from 1700-1820. (1) As Berg herself explains, ‘…industrial growth took place over the whole of the eighteenth century, not just the last quarter of it. There was a substantial growth in the whole range of traditional industries as well as the most obviously exciting cases of cotton and iron.’ (2) If this position is accepted, the age of discovery was contemporaneous with the industrial revolution. Whatever its precise chronological context, it is argued here that the provenance of the industrialization in Britain lays in a diffuse range of developments, many of which are far outside the timeframe of industrialization itself. The ideological framework was shaped during the Reformation and early modern period, which also saw the necessary financial and commercial developments take place. This in turn led to colonial expansion, technological growth, and was re-negotiated after foreign revolutions and cyclical recessions, all of which helped drive Britain’s impetus towards industrial expansion and self-sufficiency.
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The ideological and economic framework was arguably created by successive developments in sociology and financial infrastructure: the so called ‘elective’ or protestant affinity with the idea of capitalism, and the financial ‘revolution’ which followed on the Glorious Revolution of 1688. The supposed pre-disposition of early modern English society towards particular forms of commercial development was proposed by figures such as R.H.Tawney and Max Weber as an ‘elective affinity’ between the protestant ‘asceticism’ and the spirit of capitalism. (3). Although this remains little more than a much-discussed theory, the economic individualism which became institutionalized in Britain during the late seventeenth century is much more tangible. It is also, arguably, profoundly constructive of the industrial revolution. The foundation of the Bank of England, the East India Company, and the proliferation of other large joint-stock ventures such as the South Sea Company, gave Britain both the incentive and the financial power to push out into expanding markets, looking for new commodities and raw materials. As Carruthers explains, ‘Improvements in the system of public borrowing were important in explaining the growing financial strength of the English state…dramatic enough to be called a “Financial Revolution.” England was able to borrow more money…at lower rates of interest. The borrowing was mostly from domestic sources…thanks to the development of trade and commerce, there was in England a growing pool of available capital.’ (4) The setting up of a large sinking fund was partly justified on the grounds of the continuing need to fund military conflict with European and imperial rivals: ‘…improvements in revenues allowed for increased borrowing, and together they underwrote higher expenditures and a successful war effort.’ (5) Unfortunately, the British realized that even victorious campaigns were ruinously expensive, as Colley relates: ‘…the Seven Years War was the most dramatically successful war the British ever fought. They conquered Canada…they assumed for themselves the reputation of being the most aggressive, the most affluent, and the most swiftly expanding power in the world…yet the euphoria soon soured…there was the hard, unpleasant fact of the National Debt which led inexorably to the rise in taxation.’ (6) However, fiscal control by the British government was itself to be a factor in industrialisation.
Britain’s overseas military successes factored in the related developments of colonialism and slavery: both had prominent roles in the capital formation which financed the industrial revolution. Simply put, capital generated in the colonies had been steadily accumulating in Britain since the late seventeenth century, and much of it went into joint-stock companies, investment houses, or often directly into the enterprise and fixed capital itself. Much of it also went back overseas: however, when it did so, it often did so to finance orders for British-manufactured goods which further fanned domestic industrialization. The ‘triangular trade’ in British manufacturing output, African slaves, and West Indian produce ultimately concluded in the accretion of private capital reserves back in the UK, all seeking dividends through land or other investment. As Williams points out, ‘…the industrial expansion required finance. What man in the first three-quarters of the eighteenth century was better able to afford the ready capital than a West Indian sugar planter or a Liverpool slave trader?’ (7)
Many of the best known names of Britain’s industrial and commercial scene were the net beneficiaries of capital generated overseas, from either colonial or plantation sources. As Williams again indicates, ‘…It was the capital accumulated from the West Indian trade that financed James Watt and the steam engine.’ Engineering luminaries such as Boulton and Watt received advances from established plantation interests, as did the architects of the Great Western Railway: one of the leading banking families to transfer capital from their slave owning activities directly into financial services were the Barclays, precursors to the modern day Barclays bank. (8.) The American War of Independence, the eventual abolition of British slavery, and increased competition form South America eventually meant that these forms of revenue fell into decline. However, as Bayly reports, they were soon replaced, not only by new forms of income from other territories, but by massive new markets for raw materials and Britain’s industrial output: ‘…by 1815 the nation could celebrate an astonishing, indeed providential, recovery of fortunes.’ (9)
It has to be recognised however that the capital accumulating in Britain’s investment houses and stock market did not find its way into a managerially static or vernacular economic arena. The eighteenth century also saw the emergence of a range of management theories and theories of the firm, which were implicit in the rationalization of the commercial and manufacturing enterprise. As Williams puts it, ‘…laissez-faire became a practice in the new industry long before it penetrated the text books as orthodox economic theory.’ (10) Adam Smith, Thomas Malthus , Robert Torrens and others fashioned the discipline of economics from the remnants of the former ideas of political arithmetic, producing a technical and predictive framework which combined with new technology to give the UK a new form of economic staple. Classical economics has continued to be re-worked and refined ever since. As Cohen and Cyert point out, ‘For the purposes of the classical theory, the profit maximization assumption may be perfectly adequate. It is clear however, that as one asks a different set of questions…the profit maximization assumption is neither necessary nor sufficient…’ (11) It nevertheless continues to pervade contemporary economic thought.
New ideas about the economy were not the only intellectual developments creating change in the age of discovery and industrialisation: they were accompanied by new political ideas with profound implications for British expansion. In Marxist parlance, England’s own ‘bourgeois revolution’ – the middle classes wresting power from monarchical or aristocratic control – had already passed in the form of the English Civil War. In the eighteenth century the American and French Revolutions helped determine the character of British growth by shaping domestic political institutions and providing a further impetus for overseas expansion. There was a sense in which the social, economic and political processes bound up with industrialisation had to break down the protocols associated with monarchical and aristocratic control before the transformation could really be achieved. Capitalism had to supplant mercantilism, tariffs and protectionism had to be removed, markets had to be open to competition, and the vested interests who opposed it had to be pushed aside. As Williams expresses it, Adam Smith’s economic tour de force in the Wealth of Nations was ‘ …the philosophical antecedent of the American Revolution. Both were twin products of the same cause, the brake applied by the mercantile system on the development of the productive power of England and her colonies.’ Consequently, he adds, ‘Adam Smith’s role was to berate intellectually “the mean and malignant expedients” of a system which the armies of George Washington dealt a mortal wound on the battlefields of America.’ (12) After the loss of the American colonies, the British government seized upon the idea that, in future, administration needed to be more focused on the needs of the market a the necessary accompaniment to industrial expansion. British goods needed markets, and British government needed expertise to obtain and retain those markets. As Bayly observes, ‘The disasters of the American Civil War had produced an interlocking network of parliamentary committees with their own experts; so administrations also had to know more and be better prepared.’ (13)
Britain’s industrial progress was, however, not uniform or linear in nature. As Bayly reports, ‘…deepened by cyclical depressions operating in a more integrated world economy and by the continuing splutter of local wars which often marked the advance of settler capitalism into indigenous societies.’ (14) Britain’s technological and managerial expertise could not insulate it from seemingly inevitable financial crises and recession which, as Hilton reports, plagued it throughout its period of supposed industrial might. ‘There had been monetary and commercial disorders in the eighteenth century…1788, 1793, 1797…but nothing to compare with the crises of 1825-6, 1837-9, 1847-8, 1857, and 1866.’ Perhaps more important than the empirical details of these crises was their impact upon economic and social thinking, and in particular the way in which blame was apportioned for such disasters. A Hilton again explains, ‘…contemporary analysis concentrated on two…types of explanation….monetary mismanagement by government or Bank of England, and human avarice and greed.’ (15) The deep and pernicious nature of these crises eventually prompted the creation of the economic governance which still prevails today. In the 1770’s, the Bank of England note replaced the private bank notes which had circulated previously. (16). However, a more unified financial system meant that financial crises were themselves more pervasive and all-embracing. Limited liability legislation, as well as regulation of monopolies, mergers, and competition, helped protect individuals from the worst effects of economic downturns. What the industrial revolution and associated market creation implied for the UK business community was a increasingly close relationship with a globalizing economy. The enormous wealth created by this – for some individuals – meant that the economy was now vulnerable to upheavals far beyond the control of the London stock market or government.
This, arguably, encapsulates the single clearest link between the society which shaped the industrial revolution and contemporary social conditions: i.e., the individuals whose contributions are most important to industrialization were those with the least stake in its benefits. Academic debates as to whether or not a genuine ‘class consciousness’ was engendered by the industrial revolution are, ultimately, inconclusive. Few can realistically deny, however, that industrialisation demanded a massive influx of skilled, semi-skilled, but overwhelmingly unskilled labour, whom technological production could deprive of a skilled wage. As Gray points out, ‘Industrial change was associated with crises of gender and class relations, and struggles over factory regulation can be seen in the context of a gendered class consciousness.’ (17). In other words, both men and women realized that their livelihoods and earning power in an industrial context depended upon whether or not their work was defined as skilled. De-skilling was, it may be argued, the necessary precursor to the enormous industrial profits generated in the factory system: significant surplus value, the disparity between the amount spent to produce an item, and the amount it sold for – could only be maintained at a realistic level if costs were low and margins were wide. It was therefore no accident that unskilled female and child labour were highly significant in populating the new factory system which remains the emblematic representation of the industrial revolution in Britain. The same processes of de-skilling, and an essentially exploitative relationship, arguably feature in the new globalization taking place in the contemporary economy. It is interesting to speculate on whether these common relations of production, the taproot of collectivized and organized labour movements, will produce a new variant on the trade unionism thrown up by the domestic British industrial revolution. The same may be asked of official intervention in the manufacturing process. As Gray points out, ‘Attempts to regulate factory employment can be traced back, almost to the beginnings of factory production itself. The restructuring of labour markets and employment relations during….indutrialisation was accompanied by a series of overlapping debates about protective labour laws, the poor laws and statutory or customary controls over wages, prices, and commercial practice.’ (18) This historical process is arguably on-going, as successive waves of de-skilled labour are moved around the globalizing economy to meet fluctuating demand, often in uncontrolled conditions. The practices of child and female labour may have stopped in the domestic economy, but they have by no means been eliminated from the global arena. This is notwithstanding the appearance of ‘Third Way’ economics, and the supposed elimination of class difference.
1.) Berg, M., (1994), The Age of Manufactures, 1700-1820, Routledge, London, p.2.
2.) Ibid., p.281.
3.) Robertson, H.M., (1933), Aspects of the Rise of Economic Liberalism: A Criticism of Max Weber and His School, Cambridge University Press, Cambridge, p.208.
4.) Carruthers, B.G., (1996), City of Capital: Politics and Markets in the English Financial Revolution, Princeton University Press, NJ, p.71.
5.) Ibid., p.69.
6.) Colley, L., (1992), Britons: Forging the Nation, 1707-1837, Pimlico, London. p.101
7.) Williams, E., (1964), Capitalism and Slavery, Andre Deutsch, London. p.98.
8.) Ibid., pp.101-105.
9.) Bayly, C.A., (1989), Imperial Meridian: The British Empire and the World, 1780-1830, Longman, London, p.3.
10.) Williams, op.cit., p.106.
11.) Cohen, K.J., and Cyert, R.M., (1965), Theory of the Firm: Resource Allocation in a Market Economy , Prentice Hall, Englewood Cliffs, N.J.
12.) Williams, op.cit., p.107.
13.) Bayly, op.cit., p.161.
14. ) Bayly, C.A., (1989), Imperial Meridian: The British Empire and the World, 1780-1830, Longman, London, p.238.
15.) Hilton, B., (1988), The Age of Atonement: the influence of Evangelicalism on Social and Economic Thought, 1783-1865, Clarendon Press, Oxford, p.125.
16.) Bayly, op.cit., p.116.
17.) Gray, R.Q., (1996), The Factory Question and Industrial England, 1830-1860, Cambridge University Press, Canbridge, p.24.
18.) ibid., p.21.
Bayly, C.A., (1989), Imperial Meridian: The British Empire and the World, 1780-1830, Longman, London.
Berg, M., (1994), The Age of Manufactures, 1700-1820, Routledge, London.
Carruthers, B.G., (1996), City of Capital: Politics and Markets in the English Financial Revolution, Princeton University Press, NJ.
Cohen, K.J., and Cyert, R.M., (1965), Theory of the Firm: Resource Allocation in a Market Economy , Prentice Hall, Englewood Cliffs, N.J.
Colley, L., (1992), Britons: Forging the Nation, 1707-1837, Pimlico, London.
Gray, R.Q., (1996), The Factory Question and Industrial England, 1830-1860, Cambridge University Press, Canbridge.
Hilton, B., (1988), The Age of Atonement: the influence of Evangelicalism on Social and Economic Thought, 1783-1865, Clarendon Press, Oxford.
Jennings, H., (1985), Pandemonium: the Coming of the Machine as Seen by Contemporary Observers, Picador, London.
Robertson, H.M., (1933), Aspects of the Rise of Economic Liberalism: A Criticism of Max Weber and His School, Cambridge University Press, Cambridge.
Williams, E., (1964), Capitalism and Slavery, Andre Deutsch, London.
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