Economic Theory and Impact of Industrialization

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Economic Theory and Impact of Industrialization
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Social Impact

• Breakdown of traditional social structure
• Aristocracy
• Wealth based primarily on land
• Influence reduced by industrialization
• The Middle Class (bourgeoisie)
• Benefitted the most
• Factory owners, merchants, and bankers
• Upper middle
• Government employees, doctors, lawyers, and
  managers of factories, mines, and shops
• Cotton Lords Factory Owners
• Lower middle
• Factory overseers
• Skilled workers
• The Working Class (proletariat)
• Badly treated poor compensation
• Little improvement in living and working
  conditions
• Work is replaced by machines
• The Luddites
• Breakdown of traditional family

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Social Impact

• New factories
• Required unskilled labor
• Unemployment common
• People lost jobs and homes
• Low wages
• Whole family had to work
• Long hours
• Late 1800s, early 1900s
• Conditions improved

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Social Impact

• Population Growth
• Population tripled between 1750 and 1850
• Result of declining death rates
• Growth of Cities
• Rapid urbanization (the building and movement of
  people to cities) caused problems
• Poor housing
• Lack of sewers and public water supplies
• Pollution
• Disease such as cholera, tuberculosis, and typhoid

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Women and Industrialization

• Before the Industrial Revolution
• Worked with men on the farm or family business
• Motherhood and homemaking not full-time pursuits
• Altered reality
• Men were wage earners and women were homemakers
• Created a sharply defined domestic sphere for
  women
• Change took time
• Working class families, all members had to work
  (early 1800s)
• Before 1870 50 of textile industry is women
• Women made less money than men
• As salaries improved in industry and laws
  restricted the hours women could work more women
  stayed home

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Women and Industrialization

• Around 1900
• Rising standard of living
• Mass consumer society emerges
• Sewing machines, cast-iron stoves freed up time
  for women of all classes
• Medical advances reduced infant mortality and the
  number of women who died in child birth

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Economic Theory

• The Manchester School
• Laissez-faire capitalism
• Adam Smith The Wealth of Nations
• Natural law applied to the world of manufacturing
  and trade
• Supply and demand
• No government interference invisible hand
• Thomas Malthus Essay on the Principle of
  Population
• English clergyman
• Disturbed by population increase
• David Ricardo
• Iron law of wages

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Reforms

• Early 1800s brought some changes and reforms
• Liberals
• Tried to soften hard edge by agreeing to fairer
  labor laws and social welfare measures
• Initiated by Prime Minister Robert Peel (son of
  the cotton lord)
• Sensitive to needs of business and ideas of free
  trade
• Restrictions and tariffs reduced Non-Anglicans
  were allowed in civil and military service
  Catholics received equal rights Parliament
  reduced the number of crimes punishable by death
  Established professional police force (bobbies)
• Trade Unions (collective bargaining)
• Illegal in the early 1800s
• Earned legal status in late 1800s early 1900s
• Gained greater economic and political strength
• The Labour Party in Britain

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Reforms

• Working laws
• 1833 Factory Act
• Limited the number of hours children under age
  nine could work
• Paid inspectors and procedures for enforcement
• 1842 Mines Act
• Women, girls, and boys under 10 forbidden to work
  in mines
• Hurriers
• 1847 Ten Hours Act
• Limited women and children to 10-hour shifts
• Poor laws
• Made unemployment unpleasant

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Reforms

• Socialists
• defined as a centrally planned economy in which
  the government controls all means of production
• Rejected capitalism and denied validity of
  private property
• Economic competition is unfair and leads to
  injustice and inequality

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Reforms

• Marxist socialism
• Karl Marx and Friedrich Engels
• The Communist Manifesto (1848)
• Das Kapital (1867-1894)
• Main argument
• All history was driven by class struggle
• Upper class (controls capital, or the means of
  economic production)
• Lower class (forced to labor for the upper class)
• Age of industrial capitalism
• Struggle between bourgeoisie and proletariat
• Final stage of human history before socialism
• Move to communism
• Economic state of perfect justice, equality, and
  prosperity
• Required revolution, advocated the overthrow of
  capitalism by force is necessary

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Industrialization Spreads

• Belgium 1831
• Greatest industrialization on the continent
• Cottage industries large population ports for
  trade opened markets and provided profits
• Natural resources (coal)
• France
• Industrialized slowly
• Coal deposits, but few iron ore deposits
• Family agriculture
• Investors were cautious banks were not
  investment institutions
• Railroads made improvements, but Chapelier law
  remained in effect to 1864 forbidding strikes and
  unions

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Industrialization Spreads

• Germany
• Agricultural and disunited
• Slowly centers began to emerge
• Ruhr Basin rich in both coal and iron ore
• The Zollverein (tariff union developed by
  Friedrich List)
• Alfred Krupp steel works
• Eastern and Southern Europe
• Little development
• Lacked capital and a middle class
• Governments were uninterested in encouraging
  manufacturing and trade

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Industrialization and Imperialism

• Intimately connected
• Gave Western nations the ability to conquer and
  colonize other parts of the world
• Gave the West greater motivation
• Raw materials
• New markets

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Industrial and Non-Industrial Nations

• Africa, Asia, and Latin America
• Struck deals to exploit local resources
• Monoculture
• Generally damages environment and slows the
  development of local diverse economies
• Exploits local workers
• Non-western nations eventually start to
  industrialize
• Western colonizers see industrialization as a way
  to wealth and power
• Continues even today

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Industrialization and Atlantic Slave Trade

• 1793 invention of cotton gin
• Boosted Englands demand for raw cotton
• Egypt was a large supplier, but also the American
  south
• Prolonged slavery