Factors that Caused the Industrial Revolution

There have been a lot of critical events in human history. However, when it comes to shaping the modern world, the industrial revolution is without much doubt one of the most crucial pieces of history. Why did such an event originate in Europe, and more specifically Britain? The Indians dominated the cotton textile and were considered far more advanced than their European counterparts before the revolution. The Chinese invented paper, gunpowder etc and western countries had high demand for Chinese goods like tea in the 1700s. There were nations and empires that were richer and more prosperous than Europe, yet they did not seem to have experienced such rapid development. The aim of this essay is to understand what made Europe or, to be more precise, Britain, standout. In this essay, I am going to focus on comparing the economic, political and cultural background of Europe and other countries at the time of the event. To make the analysing easier, I would use Britain and China as the primary points of comparison, though from time to time I would still make reference to other countries. I am going to first briefly introduce the history of the industrial revolution. Then I am going to proceed to explain several factors that I think could be the answer to the question. I believe there is no one single reason that on its own would be sufficient to trigger the whole industrial revolution. Instead, I believe it is a combination of factors that led to the event. Whilst there exist counter arguments to the main arguments, I will explain how they remain insufficient as rebuttals.

The industrial revolution happened in the 18^th century and, in short, it transformed the economy from agricultural to a more industrialised and urban model. There were various significant breakthroughs in important technologies which marked the beginning of the revolution. Examples would be the invention of steam engine by James Watt, which vastly changed the way in which production took place. People no longer had to rely on natural energy sources or animals to drive machinery. The industrial revolution had brought Europe out of the era of stagnation, where there was essentially no growth in real GDP, into an era of sustained economic growth. As a result of the advancements in production technology, Britain’s cotton and textile company grew exponentially. According to research done by economist Gregory Clark, the cotton industry rose from being about 0% of GNP in 1760 to about 8% of GNP by 1812. The extensive use of machinery in production vastly boosted productivity and, hence, standards of living. The industrial revolution was indeed a remarkable event. Now, I am going to start looking into why it happened in Britain, but not anywhere else.

First, further to economist Robert Allen’s (2006) extensive research on the high labour costs and low energy prices in the UK, I am going to elaborate on how they provided firms with incentives to innovated, contributing to the start of the Industrial Revolution. I am going to provide my ow Wages in Britain were exceptionally high at the dawn of the industrial revolution compared to that of other parts of Europe and, more so, Asia. There were different contributing factors to the significant wage difference. First, it is due to the huge population and labour abundance in some rich Asian countries. The Chinese population expanded rapidly during the Qing dynasty when Qianlong Emperor ruled the country. In only 25 years’ time, the population grew by almost 100 million. This greatly increased the supply of labour and therefore led to lower wages. In India, population was estimated to be 160 million in 1700s whereas that of England was only 5 million. It would be difficult to directly compare the wages between two countries due to uncertain exchange rates and purchasing power of the respective currencies. However, there were studies that compared wages in cities in Europe and India in terms of grams of silver per day and a huge disparity was shown. For example, an unskilled labour in London would earn 9.7 grams of silver per day while that in Paris would earn around 6.7. In India, an unskilled labour in the same time would earn only around 1.4 grams of silver. Moreover, the same study has shown that the average Chinese wage was only 39% of English wage in 1550-1649. It is clear that, on average, British workers earn quite a lot more than workers from other parts of the world. In other words, the labour costs in Britain were high. Also, with low wages in India, textile imported from India to Britain was cheaper than domestic ones. Therefore, domestic producers had to look for ways to lower their prices in order to remain competitive. Entrepreneurs would have the incentives to look for ways to cut costs. Further to the general tendency to avoid paying for high wages, machines have become the close substitute for labours. Therefore, companies would look for ways to incorporate more machineries and technologies in production instead of hiring more workers. The low energy prices, therefore, acts in an interdisciplinary manner with the high labour costs. As energy is needed to fuel machines, wood was the main source of energy prior to industrialisation. However, due to scarcity, the demand and price of wood soon started to rise. Subsequently, the shortage in wood encouraged the exploitation of coal. It was abundant and much more efficient compared to other sources of energy. Coal could be used to power steam engines and steam engines could, in turn, be used for coal mining. These sorts of circular effect nurtured the rapid growth of industrialisation. The figure below shows the energy price in different parts of the world in the 1700s and it clearly shows that Britain, to her advantage, had significantly more affordable energy.

Quoting Phyllis Deane, “The most important achievement of the industrial revolution was that it converted the British economy from a wood-and-water basis to a coal-and-iron basis”. In other words, the British economy has advanced from primitive to modernised methodology. With more efficient machines and capital, firms could hire less labour and therefore lower their production costs.

However, there are more and more debates to whether or not coal was actually vital in the revolution process. Deirdre McCloseky is one of the critics who tend to undermine the importance of coal. She argues that, in the United States, wood was used as the main fuel until the 19^th century. Yet, it still experienced an industrial revolution. This, indeed, would only be sufficient to argue that coal was not a necessary condition for an industrial revolution to happen. However, it dismisses the respective rates of industrial growth in the two countries: McCloseky fails to prove that, without the exploitation of coal, Britain would still be able to experience the same level of growth. Not to mention that the US could have experienced even stronger growth had they started to adopt coal in their production. Her other argument was that, even though China also had an abundance of coal, that did not lead to an Industrial Revolution. This argument overlooks the fact that the abundant sources of coal were located in northern China where it was less developed and weather conditions were not favourable. Therefore, the Chinese were not able to utilise coal in their production as much as the British did. Also, the Chinese government was very strict about coal mining in the private sector. This is because unlike Britain, the coal mining sites were often very dry thus explosion occured fairly frequently. Therefore, coal could not have been the main source of energy back then. Furthermore, as aforementioned, wages in China were low, firms would simply hire more labour instead of investing on machineries had they wanted to expand production. Therefore, it is evident that McCloseky’s criticisms are problematic.

The second reason is the differing extents of importance of science in Europe/Britain and other parts of the world. The Scientific Revolution took place during the 15^th century in Europe prior to the Industrial Revolution. Prior to the Scientific Revolution, “science” was dominated by Aristotelian philosophy – in fact, it was referred as natural philosophy rather than science. Scholasticism dominated and shaped university teaching, which encouraged the acquiring of knowledge through reasoning and deduction. While this school of thought promotes logical reasoning, it falls short of the empirical input required in scientific progress and is dismissive of the pragmatic applications of scientific ideas. However, scientists like Sir Isaac Newton did not confine to these restrictions. He established the laws of motion and implemented mathematics in natural philosophy, becoming one of the seminal figures of the revolution. Before that, maths was only a tool for measurement. Newton used it to explain causes and effects of natural phenomena. For example, Newton’s experiments with white light and calculations led to the discovery of the colour spectrum — this could not have been made possible by mere logical deduction. Also, scientists/philosophers like Galileo Galilei and Francis Bacon allowed modern scientific method to develop and led to the rise of empiricism: Setting hypothesis, repeating experiments to test them, modifying hypothesis and drawing conclusions started to become the way science was taught and perceived. There was rapid knowledge accumulation and developments in different fields of science like Physics, Chemistry etc. Why wasn’t there a Chinese Newton? The answer could boil down to the education system in China. In the Qing dynasty the main aim of education was to prepare students for the Imperial Examination, which was an exam that the government used to select civil servants. The main syllabus of the exam were old Confucian literatures (main school of thought in China concerning moral philosophy) and students were required to learn them by heart. Other knowledge would either be considered irrelevant or simply dismissed since people were pre-occupied with learning classics. Back in Qing China, one of the best ways to escape poverty was to become a civil servant and work in the government. Therefore, the system had directed a lot of intelligent people to studying and learning the Imperial Examination, implying that there were less talents working in the field of science. Furthermore, due to conflicts with the Catholic Church, emperor Qianlong banished missionary in 1742 CE. At that time, since the borders of China had been closed since Ming Dynasty, missionaries were one of the only bridges between China and the West. This means that the fruit of industrial revolution – new technologies – were not able to flow into China. Furthermore, there was a wave of literacy inquisitions during that time in China, meaning intellectuals could be prosecuted for their speeches or their literary publications. The lack of freedom of speech stopped the Chinese people from making statements that would be considered as dissenting — scientific results can sometime challenge traditional beliefs and may be misperceived as betrayal. On the other hand, the significance of the study of science and the presence of freedom of speech had provided Europe with more favourable conditions for scientific development and, hence, the industrial revolution to take place.

Some may argue that inventions like the steam engine were irrelevant to the new ideas (ie Newtons’ Laws etc) that rose from the scientific revolution. While this may be true, it is not the actual scientific theories that mattered. Agreeing with Justin Lin (1995), the chief economist of the World Bank, what mattered more was that more mathematical hypothesis were proposed and more planned experiments were carried out. Instead, in other agriculture empires, inventions relied on experience and spontaneity from ingenious individuals (Lin, 1995, p.284). This indeed could be successful in some cases (gunpowder and paper were invented in China). However, the lack of structured planning undermines the possibility of a persistent and sustained growth in knowledge and technology, which are the exact characteristics of the Industrial Revolution.

Last but not least, the competition both among countries in Europe and within the local economies among firms (due to the presence of free market which China lacked) of European countries nurtured the Industrial Revolution in Europe. During an interview with The Washington Post, economist Joel Mokyr talked about how each European countries are to some extent worried about one another. There were many powerful nations in Europe that were on par with Britain, for example France and Spain. On the contrary, China was the most dominant country in Asia and she faced little to no competition, both in economic and cultural terms, in the continent. In Europe, countries are in constant rivalry for colonies or, more generally, for supremacy , hence they were constantly trying to improve their military power and weapons. For example, during the Anglo Dutch Wars in the 17^th and 18^th century, the two countries had to build new warships in order to stay ahead of the other country. This could be done in various ways, increasing firepower, enhancing mobility etc. Technological improvement was vital. Meanwhile in China, there were not any nations or empires nearby powerful enough to challenge its dominance position in Asia. The only other nation that was as developed as China would perhaps be Japan, however there were not many conflicts among the two countries prior to the Sino-Japanese Wars. Apart from military terms, firms in Britain would also have the incentive to compete with firms from other European countries. As briefly mentioned in the previous paragraph, Europe was open to international trade, meaning that consumers had a lot more options to choose from, and the goods with low price and high quality would attract most consumers. For example, France was known for its silk weaving

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