The Industrial Revolutions: Transforming Europe
The Industrialization of European Companies
The Two Stages of Industrialization
The industrialization of Europe occurred in two distinct stages: the First and Second Industrial Revolutions. The First Industrial Revolution saw the introduction of machinery, particularly in textiles and metallurgy, replacing manual labor and utilizing steam power. The Second Industrial Revolution expanded upon these advancements.
1. Population Growth and Agricultural Expansion
Demographic Revolution
The Industrial Revolution was preceded by a demographic revolution, a period of significant population growth in 18th-century Europe. The population doubled in a century due to increased food production and advancements in hygiene and medicine. This led to a decrease in mortality and a slight increase in the birth rate, raising life expectancy from 38 to 50 years.
Agricultural Revolution
Increased population led to higher demand and rising agricultural prices. Land privatization (ending the manorial system) and new farming techniques (replacing fallow with herbage and early mechanization) increased and diversified food production.
2. The Age of the Engineer
Technological innovation was key to this transformation. Machines replaced manual labor, increasing production and reducing costs. Entrepreneurs sought efficient production methods, reinvesting profits in facility improvements. Steam engine tracks were in high demand for expanding rail networks. Water and steam powered these engines, with James Watt’s steam engine (1769) revolutionizing energy production. The factory system concentrated workers and machines in large buildings, unlike the old guild system where each worker handled a small part of the process.
The Textile and Metallurgy Industries
Britain, a world power, led the way with the mechanization of the cotton industry (spinning and weaving). Key innovations included: 1. The flying shuttle (John Kay, 1733), 2. Spinning machines (water frame, spinning jenny, mule), and 3. The power loom (1785).
The most important sectors in the First Industrial Revolution were textiles (cotton) and metallurgy (iron and steel). In 1732, Darby’s invention of coke (using coal) for smelting iron increased production and quality.
3. Revolution in Transportation
The railway system evolved from mine carts. In 1829, Stephenson’s steam locomotive revolutionized transportation. Railways used iron rails and flanged wheels to prevent derailment. This facilitated faster and wider distribution of goods, boosting trade.
Increased Trade
The Industrial Revolution ushered in a market economy focused on expanding markets. Increased production, population growth, and improved purchasing power fueled this change. Enhanced transportation boosted both internal and external trade.
4. Industrial Capitalism
Political and Economic Liberalism
Political liberalism emphasized the division of powers, individual rights, and national sovereignty. Economic liberalism (capitalism) empowered the middle class, who invested in businesses for profit. Entrepreneurs without capital received loans with high interest rates.
Liberalism and Capitalism Principles
- The pursuit of profit drives the economy.
- Market forces (supply and demand) balance interests through prices.
- The state should not interfere in the economy (free trade).
Industrial capitalism emerged, with the bourgeoisie owning the means of production and the proletariat working for wages. This system’s lack of planning and continuous production increases led to economic crises due to oversupply, bankruptcies, and unemployment.
Banking and Finance
- Banks provided capital to businesses (loans).
- Banks acted as direct investors (stocks).
- Banks facilitated payments (checks and bills of exchange).
Banks became intermediaries between savers and businesses needing capital. Corporations emerged as single bankers couldn’t meet capital demands. Capital was divided into shares traded on the stock market.
5. The Second Industrial Revolution
The Second Industrial Revolution introduced new energy sources (electricity and oil), the combustion engine (using gasoline), advancements in transport and communication, and the rise of the pharmaceutical industry (particularly in Germany). Companies merged to manage expenses, forming cartels (agreements), trusts (mergers), holdings (financial groups controlling multiple businesses), and monopolies (exclusive market control). Taylorism (scientific management) introduced assembly lines for efficient production. Fordism (standardized mass production) made cars affordable for a wider population.
While Britain led the First Industrial Revolution, the Second Industrial Revolution saw leadership shared among the U.S., Japan, and Germany.
6. The New Industrial Society
The industrial system created a class-based society divided by wealth and origin, replacing the old estate system. The bourgeoisie (owners of industries and businesses) were divided into upper, middle, and petty bourgeoisie. The proletariat (industrial workers) worked for wages in factories, enduring harsh conditions, long hours, and low pay. Employers exploited workers, including women and children.
Early Workers’ Associations
Workers initially resisted machines (Luddism) as they caused job losses, lower wages, and unemployment. ‘Luddites’ destroyed machinery in protest. Growing class consciousness led to the formation of mutual aid societies, providing funds for unemployment, strikes, and illness. Liberal governments initially banned these, but later repealed the laws, allowing the formation of trade unions. Unions advocated for better working hours, higher wages, and child labor regulations.
Marxism and Socialism
Karl Marx and Friedrich Engels critiqued capitalism and advocated for a workers’ revolution, where the proletariat would seize power and create a worker’s state. Abolishing private property would eliminate social classes. Marxists proposed socialist labor parties to achieve revolution through political participation.
Anarchism
Anarchists championed individual freedom, collective property, and rejection of authority. They advocated for revolutionary action but opposed political participation.
Internationalism
Marxists and anarchists believed in a united working-class struggle against capitalism. Marx initiated the International Workingmen’s Association, which dissolved in 1876 due to ideological differences. The Second International, a socialist organization, was founded in 1889 to coordinate socialist party programs and activities.