The Causes of the Industrial Revolution in Britain

In this period, there was not only an increase in domestic demand but also an increase in foreign demand of British goods, brought about as a result of stronger trade links forged after the Napoleonic Wars (1793-1815) with France. The increase in trade was seen by many as "the engine which drove industrialisation forward" (More, 1997). However, it was only during the latter stages of the industrial revolution that British colonies became of major importance in terms of exports - most goods exported in the late 18th century were transported to either Europe or North America. Despite, this, the growth in the value of Britain's exports during this period of increased foreign demand should not be underestimated: for example, the value of cotton exports increased massively from a value of £0.8 million in the period between 1784-86, to a value of £15.8 million in 1804-06 (More 1997).

Occurring alongside the changes in industry was a period known as the "Agricultural Revolution". The improvements in farming that were made at this time significantly lowered farmer's long-term costs, thus providing an incentive to increase output which, in itself, effectively lowered prices. This coincided with an increase in population which, through increased demand, would have caused significant price rises had it not been for the balancing effect provided by the increase in agricultural output at the same time. As mentioned earlier, Britain did not fall into a Malthusian trap during this period, and as food prices did not increase greatly, there was no cut in consumer's effective purchasing power, which would have caused a decrease in demand for consumer goods and would have greatly hindered Britain's industrial progress. Additionally, the "Agricultural Revolution" caused an increase in demand for specific farming goods, such as iron ploughs that many farmers used to great effect to increase their total output. Demand also increased for wood, and one can assume that growth in many other industrial sectors remained steady as a result of the increases in demand caused by the increase in agricultural output. However, the role of agriculture was seen as only passive, not decisive due to the fact that industrial growth was helped by the increases in agricultural output but not caused by them.

Supply side factors were also crucial in initiating and sustaining the Industrial Revolution. Whereas demand side factors provided incentives for producers to increase output in response to increased demand, supply factors actually lowered the costs incurred by producers and therefore enabled them to increase output regardless of demand. One of the main cost-reducing factors was the improvement of scientific knowledge and technology, and although not strictly limited to Britain, scientific breakthroughs enabled faster and more cost-effective methods of production. Despite the fact that scientific innovations also occurred in mainland Europe, inventors and scientists could undertake these innovations in Britain because it provided an amiable "climate" to work under in terms of high literacy rates, higher levels of incomes, and also numerous societies devoted to technological innovations. These factors induced technological breakthroughs and were then implemented quickly into industrial practices due to the strong links between science and industry at this time.

Scientific breakthroughs weren't the only factor to induce productive efficiency through lowering of costs. Indeed, many historians regard entrepreneurs as "the heroes of the Industrial Revolution" (More 1997) due to their ability to put the inventions to their most productive use. Evidence shows that 49% of entrepreneurs at this time were dissenters. This is surprising because at the time dissenters formed only 5% of the population. The German sociologist, Max Weber, suggested there was a link "between Protestant ethic and the spirit of capitalism" (lecture notes). It is generally accepted by historians that entrepreneurs at this time, whatever their denomination or beliefs, expressed a willingness to take risks in order to reap vast economic benefits.

Britain was also in a favourable position in terms of factors of production. Supply side factors such as labour and capital gave Britain a great advantage over its European counterparts and were influential in supporting other factors in causing the Industrial Revolution. At this time, Britain was already wealthy and had already started to develop a banking system by the 19th century. This aided the transfer of capital from savers to potential investors and was vitally important in sustaining industrial growth. Due to the population growth experienced at this time, labour was also in strong supply and coal was already readily available after extensive mining for centuries (a fact that would later assist the development of the steam engine).

As shown in the arguments above, there were many crucial factors in instigating the Industrial Revolution, both on the demand side and the supply side. Population growth and the increase in foreign trade were vital in creating a vibrant economy for industry to flourish. This was assisted by an agrarian revolution that occurred at the same time that provided the means for consumers to continue to purchase consumer goods and increased demand for various manufactured goods. On the supply side, technical innovation and the agreeable state of labour and capital, effectively managed by risk-taking entrepreneurs, provided the means for industrial growth to escalate.

Due to the obvious importance of many of the factors, it is difficult to distinguish between supply side and demand side as being the more crucial, with both being intertwined with one another. However, there is much evidence to suggest that demand was the decisive factor as the increases in demand due to population growth and the growth in trade ultimately led to producers being stimulated to innovate and lower which would cause the growth in output so vital to sustaining the Industrial Revolution.

Bibliography:

* Landes, David S. The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present. London: Cambridge University Press, 1969.

* Malthus, T.R. Essay on the Principle of Population, 1798

* More, Charles. The Industrial Age: Economy and Society in Britain 1750 - 1995 Longmans, 2nd Ed, 1997

* Economic History Lecture Notes

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