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Great Britain and France were comparable in 1700, both had established commerce, trade and a handicraft industry. Industry however accounted for a small amount of economic activity, with agriculture being the dominating sector. By 1900, there were noticeable differences between Britain and France, due to the nature of each nation's process of industrialisation. Industrialisation can loosely be defined as the expansion of the secondary sector, which comprises of manufacturing and processing. As both Britain and France industrialised, each experienced population growth, changing transport methods and significant political events, all of which influenced the extent of their economic growth.
Agriculture in England was becoming increasingly market based towards the end of the 17th century, as a result agriculture became innovative, benefiting from economies of scale. The pursuit of increasing agricultural productivity and trade was supported by the British aristocrats and landowners, a characteristic that was less common in France and continental Europe at the time. There were a number of major technological innovations such as the improved land draining techniques and the addition of two fodder crops. Mathius (2001) highlights that from 1750, technological progress of agriculture was stimulated by increasing demand for food and different practices introduced from enclosure. Perhaps the most significant force that distinguished Britain's so-called "agricultural revolution" was a parliamentary enclosure movement. The political-economic system in England shifted from consisting of feudalism to a market system. Under feudalism people were bound to land and their lord. Montoux (1962) states that although conditions were poor for labourers, the English labourer was better fed, housed and dressed than any other in Europe. O' Brien (1998) summarised the contrast in France as small plots of land controlled by large numbers of peasants At the end of the 17th century, France had considerably more farmers producing at a subsistence level, leading to high levels of underemployment.
Allen (2004) states that at the start of the 19th century, agricultural labour productivity was one third higher in England than France. Importantly the productivity gains in agriculture freed labour from agriculture to join the industrial workforce.
Both Britain and France had established commerce, trade and a handicraft industry. During the 18th century there was a surge in technological innovations, aiming to labour-save and efficiency. These inventions were complementary between sectors, such as the steam engine being applied to stationary applications and transport applications. The centre of the technological surge was England, with a good environment for entrepreneurs to take risks and work hard (Bruland, 2004). Jacquard's loom was a notable French innovation that was used in textile manufacturing, other French innovations benefited industries such as the steel and aluminium (Cameron and Neal, 2003). France was Britain's greatest threat to being the world's leading economy. France being the larger country both geographically and in terms of population size. However, Price (1990) compares Britain and France in 1780, stating it was clear Britain was leading industrial nation, having 20,000 working mills compared with 900 working mills in France.
Barker (1990) cites Britain's utilisation of natural advantages such as waterways as a reason why it became the first industrial nation. Goods were easy to transport due to it being a narrow island and containing many rivers. Smith (1981, p33) recognised the importance of water transport: "As by means of water-carriage, a more extensive market is opened to every sort of industry than what land-carriage alone can afford". France had a large network of roman roads, which had been well maintained. Britain in comparison had a poor network of roads, many of which had fallen into decay. However the condition of roads in Britain improved during 1750-1790, particularly those linking emerging cities. The growth of transport played a large role in economic development, connecting demand and supply, promoting allocative efficiency and increasing competition.
Coal had become the most in demand fuel in Britain in the 18th century, this was due to not only the demand from growing industry but also because of the shortage of an alternative fuel, wood. Wood became short in supply in Britain, however at the time in France the problem was less serious. French coal resources were discovered in inconvenient locations often far from cities or waterways leading to areas of importance. This meant transport costs were quite high for coal in France. Despite setbacks coal production in France grew from 1,772,800 tons in 1828 to 5,153,000 tons in 1847. Pig iron production grew much faster in Britain, production increasing to 1,600,000 tons between 1828 and 1847. French production of pig iron only grew 300,000 tons in the same period. After the Napoleonic Wars, which ended in 1815, causing national bankruptcy, France lacked skilled labour and capital. This meant France had to import and become dependent on expertise and capital from Britain, however they faced competition from Belgium. Belgium managed to acquire more British expertise and capital than France, mostly due to Belgium enjoying a better political and trading relationship with Britain.
The first intercity railway was developed in Britain in 1830, connecting Manchester and Liverpool. Railways provided fastest distribution of goods. Britain, by 1850, had 10,500km of railway line open while France only had 3,000km open. Political troubles during 1848-52 prevented French railways expanding. In 1870, a change in railway policy in both France and the newly unified Germany meant both countries rail networks became connected, promoting trade. Before the introduction of a rail network, France lacked a reliable form of transport, this resulted in price fluctuations and uncertainty (Price, 1975). A growing rail network benefited the French economy and society, as rural communities were no longer isolated. It had great impact on the coal industry, as it removed the high transport costs that were incurred before. By 1874, coal production reached 15,400,000 tons and by 1914 production was 39,900,000 tons. Price (1975) argues that the introduction of railway in France stimulated its coal production as well as the economy in general. The large increase in the production and use of coal in the latter stages of the 19th century marked the turning point for the French economy.
A characteristic that Britain and France shared at the end of the 17th century and the centuries preceding were that population was static. However during the 18th and 19th centuries, there was a dramatic increase in population size. The benefit of a growing population is an increase in the supply of labour and, from the producer's view, consumers. Britain and France experienced large population growth, but the growth was much larger and faster in Britain. In 1801, France could boast larger towns than Britain. Paris, Marseilles and Lyon each were containing a population size greater than 100,000. During 1801-51, Britain experienced rapid population growth in urban areas. In a single decade, 1821-31, Leeds, Sheffield, Birmingham, Manchester and Liverpool all experienced a population increase of at least 40%. The increasing numbers of people in these British cities was not just from higher birth rates but also from rural-urban migration. France's low levels of economic growth can be attributed to its slow population growth and the slow growth of its towns.
Rural-urban migration is the movement of labour from rural areas into urban areas. Labour was free to move without any implications as productivity in agriculture had increased. Clapham (1968, p232) describes rural-urban migration in France during the 18th and 19th centuries as "leisurely". In 1801, one in fifteen lived in towns in France, by the year 1851 this had only increased to one in ten. The movement of labour from rural areas to towns and cities, assisted the progress of British industry. In France a large amount of the population remained on the land. In1840, 28.6% of the male labour force was employed in agriculture in Britain (Crafts, 1983). The corresponding proportion in France was 66% (Price, 1975). By 1913, France had the largest proportion of labour employed in agriculture among the industrialised nations around 40% (Cameron and Neal, 2003).
In 1789, the French Revolution took place, which had a large impact on the economy. From the revolution, a stronger and efficient central government emerged, which Price (1975, p166) describes as the "professionalisation of bureaucracy". However the revolution offered no change to the economic structure of France. Agriculture was the dominant sector prior to the revolution and after its position was strengthened, as the legal position of the peasant was strengthened. This ultimately prevented an enclosure movement on the same scale as Britain's taking place.
From 1790-1815, France spearheaded the Napoleonic Wars, fighting against many of its neighbours including Britain. Towards the end of the wars, France itself became a battleground. The wars meant France's economic growth suffered, with Floud and Johnson (2004, p457) referring to them as a "thirty-year hiatus in French economic growth". The wars were not only a drain on the French labour force, which could have potentially been producing output. The Wars were also on resources such as raw materials. The wars increased the cost of transport. During the wars, roads were deteriorating as a result of more use, because of the British blockade in the surrounding waters. The Napoleonic wars had a less notable effect on Britain, partly because it left most of the fighting to its continental allies. Britain's trade and growth expanded during the years 1790-1815. Maddison (1982) estimates that in 1820, gross domestic product per head in Britain was 50% higher than France.
Both nations' governments encouraged the growth of industry, however there was considerable difference in the size of the role played. Malthius (2001, p4) describes Britain's industrialisation as "spontaneous" and "not being the result of conscious government policy sponsoring industrial progress". The French government was supportive in adopting British techniques and capital to strengthen its economy after the Napoleonic Wars, such as the use of steam engine. It took a direct role in attempting to encourage the importation of foreign capital and also expertise. Both countries had established mercantilist doctrines in the 17th century. Rich et al (1977, p573) describes the mercantilist ambition as to "increase the wealth of their states at the expense of other states". Both countries had similar protectionist policies, such as tariffs on importation, in their mercantilist doctrines. However, a key difference was that France had strict regulation on the quality of goods produced by its industry (Hansen, 2002). Britain's mercantilist centrepiece was the Navigation Acts of 1651, with the aim of establishing a merchant fleet that could in turn be used by the navy for war.
The shift of the economies' labour and capital from agriculture to industry occurred much earlier in Britain compared to France. Despite this, through most of the 18th and 19th centuries, France was an industrial power second only to Britain. Britain had a natural transport advantage, due to a long narrow coastline and navigable rivers. French industrialisation was slow and characterised by a number of problems that ultimately delayed its industrialisation. Price (1975, p94) referring to Rostow's growth theory suggests that "no single period can be described as that of "take-off" in France's industrial development". However Clapham (1968) argues that France experienced a "take-off" around the year 1895, when its steel production became the fastest growing in the world. It was at the same time that France's railway network became larger than that of Britain. The introduction of railways in France, resurrected its lagging coal production and saw it expand rapidly towards the end of the 19th century. The role of both countries government during their industrial revolutions was quite different. Britain's industrial revolution was driven mostly by entrepreneurs with some support from its government. The French government played a larger role in supporting the industrialisation of its nation, mostly through administrative action during and after the Napoleonic Wars.