As the Revolution progressed, the economic changes of the societies were supplemented by drastic changes in social structures and the ultimate breakdown of the family unit. These were the main two social consequences common for all countries that have successfully completed the industrialization. First, for example, Industrial Revolution caused mass urbanization in England. Poor bankrupt and unemployed farmers had no other choice but to move to towns and cities in order to work on the newly established factories. The production capacities of inefficient manual labor in the countryside were easily replaced by the efficient machinery. By producing more with a smaller amount of resources, the factories reached the economies of scale and, thus, cased the manual craftsmen to become out of competition (Impact of the Industrial Revolution, 2009).
As more and more people were moving to towns and cities and the living expenses were increasing, the families had to send their women and children to work in the factories. Since there were no laws that would restrict wealthy factory owners from exploiting the weak social class, women and children worked for up to eighteen hours a day for miserably low wages. Thus, the second social impact of the Industrial Revolution was the ultimate breakdown of the family unit. The family unity was deteriorating. The family members were only sleeping at home and children were uneducated. Additionally, families lived in slums with little or no sanitation that led to high infant mortality rates. About fifty percent of children were dying annually during the Industrial Revolution (Impact of the Industrial Revolution, 2009).
All in all, the result of the Industrial Revolution was, first of all, the advancement of technology and is a synonym of technological revolution. The emergence of railways, steam engines, assembly lines, and other technological advancements were all catalysts of new economic progress in many countries. Since the core principle of capitalism is production, Industrial Revolution made it possible to create all the means to foster the economic development. More precisely, the assembly lines let the factory owners to reach the economy of scales thus accelerating the wealth creation. The emergence of railways and steam engines, for instance, has enhanced the distribution of the manufactured goods. The industry needed cheap and efficient sources of energy and the steam engines were created, the new metals were in need and the answer was iron. Thus, the core of the capitalism – enhanced production – was achieved by means of the technological advancements introduced by Industrial Revolution. This was the catalyst for the rise of capitalism.
From the other side of the world, capitalism was substituted by communism during the Industrial Revolution era. The ideology and economic theory of communism was shaped by Karl Marx. Marx first introduced himself as a theorist of scientific socialism. In collaboration with F. Engels, Karl Marx in 1848 has published The Manifesto of the Communist Party. Before the publication, the term "communism" and "socialism" were equivalent. This work was a response to the events of 1848 in France, Germany and Austria when socialist ideas of Fourier, Kobe, Louis Blanc, Proudhon and Owen were tested in specific revolution context. Those events have shown how far from the practical embodiment were the ideas of social transformation. Marx and Engels proclaimed a new concept, which became the initial base position: "the specter is haunting Europe – the specter of communism" (Marx & Engels, p. 1).
They argue that the developing current ruling regime will creates a gravedigger which will overthrow the regime. Objective laws of economic development creates the material basis of a new society - the socialization of production, and subjective - its gravedigger - the industrial proletariat, when the private capitalist ownership is changed by the social domination, the objective of which is carried out by the industrial proletariat. Marx devotes his entire life to the theoretical ground of this basic thesis (Stearns, 1998).
Marxism did not emerge aside from the pole towards civilization. The sources of Marxism are various: classical political economy of England (Smith and Ricardo), German philosophy of Hegel and Feuerbach's, ideas of the forerunners to the Marxist economic theory Saint-Simon, Fourier and Owen, yet a cornerstone of his economic theory is the doctrine of surplus value. This teaching is set out in his Capital (Stearns, 1998).
Initial point of analysis of so-called production relations of capitalism is commodity production. Goods are the economic cell of the new society as well. However, the concept of goods is different from the neoclassical economic teachings. According to Marx, the workforce is a good itself. You can sell your body, conscience, mind, and even soul. Using the concept of Ricardo, Marx considers the properties of the product and above all their cost, which is determined by socially important factors of production. The cost is not only quantitative but also expressed as the relationship since work is a unity of actual and abstract labor. Actual work creates the consumer value while the abstract work drives the cost. This phenomenon is a reflection of the fact that hired worker is alienated from the means of production under capitalism. The worker is free in legal terms and is bound by the economic terms. The worker sells its product – labor. Labor creates value, but because its value as a commodity is defined as the necessary working time in the form of wages, the legal agreement between capitalist and the worker is based on the law of value. The owner of the workforce received wages - the price of their goods, but the use of internal potency in it - the right buyer, and he uses it without violating any laws by these limits. So there is an additional cost. Legally there is no guide. David Ricardo indicates that income is a deduction from the labor output. He also does not talk about exploitation, though the socialist idea emerges on this ground, yet the view of Karl Marx on capitalism as a society is not a free and equal society, but a regime based on the relationship between the exploiters and exploited (Stearns, 1998).
It is very important to highlight how Karl Marx has analyzed capital in his economic theory. The four volumes are devoted to this. From the standpoint of Marx, the capital needs to be divided into two categories: fixed and variable. Fixed capital is the postponed the real cost of the factors of production, it does not modify in the newly created value of the goods. The variable capital is represented by wages. The cost of goods is a function of the labor force, a source of marginal cost. Meanwhile, the Industrial Revolution intrudes powerfully in the relation of the two forms of capital. The organic building equity is growing as a result of the intrusion. Less labor is required to create consumer value. Historically the building reflects the growth of the organic process of development of industrial, technological revolution. But the outcome of the Industrial Revolution was the emergence of surplus population in the reserve army of labor force and its impact on wages (Stearns, 1998).
Thus, as we can see, the two main differences between capitalism and communism reside in the asset ownership and class division of the society. The idea of capitalism states that the government should not be involved in business and, thus, should not own the production resources while communist government owns and controls all the resources in the society including the labor force. Moreover, a classical capitalist society has three classes – wealthy, middle-class and poor – unlike the communist society where there are no classes meaning that all people are equal (Corney & Richards, 2001).
References
Corney, W. J., & Richards, C. H. (2001). Work goal differences: Post communist versus capitalist economies. International Journal of Management , 18 (3), 294.
Impact of the Industrial Revolution. (2009, September 14). The Industrial Revolution - Impact. Retrieved May 23, 2011, from http://industrialrevolution.sea.ca/impact.html
Marx, K., & Engels, F. (n.d.). The Communist Manifesto. Retrieved May 7, 2011, from MIA: Marxist: http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm
Mokyr, J. (1999). The British Industrial Revolution: An Economic Perspective. Boulder: Westview Press.
Patterson, M. C., & Harmel, R. M. (1992). The revolution occurring in American manufacturing. Industrial Management , 34 (1), 15+.
Stearns, P. N. (1998). The Industrial Revolution in World History. Boulder, CO: Westview Press.
