This article delineates the history of industrialisation.
This article delineates the history of industrialisation.
Most pre-industrial economies had standards of living not much above subsistence, among that the majority of the population were focused on producing their means of survival. For example, in medieval Europe, as much as 80% of the labour force was employed in subsistence agriculture. [2]
Some pre-industrial economies, such as classical Athens, had trade and commerce as significant factors, so native Greeks could enjoy wealth far beyond a sustenance standard of living through the use of slavery. [3] Famines were frequent in most pre-industrial societies, although some, such as the Netherlands and England of the 17th and 18th centuries, the Italian city-states of the 15th century, the medieval Islamic Caliphate, and the ancient Greek and Roman civilisations were able to escape the famine cycle through increasing trade and commercialisation of the agricultural sector.[ citation needed ] It is estimated that during the 17th century, Netherlands imported nearly 70% of its grain supply; and in the 5th century BC Athens imported three-quarters of its total food supply.[ citation needed ]
In his 1728 work on the economy of England, A Plan of the English Commerce, Daniel Defoe describes how England developed from being a raw wool producer to the manufacture of finished woolen textiles. Defoe writes that Tudor monarchs, especially Henry VII of England and Elizabeth I, implemented policies that today would be described as protectionist, such as imposing high tariffs on the importation of finished woolen goods, imposing high taxes on raw wool exports leaving England, bringing in artisans skilled in wool textile manufacturing from the Low Countries, awarding selective government-granted monopoly rights in geographic areas of England deemed suitable for textile industrial production, and granting government-sponsored industrial espionage to develop the early English textile industry. [4]
Industrialisation through innovation in manufacturing processes first started with the Industrial Revolution in the north-west and Midlands of England in the 18th century. [5] It spread to Europe and North America in the 19th century.
The United Kingdom was the first country in the world to industrialise. [6] In the 18th and 19th centuries, the UK experienced a massive increase in agricultural productivity known as the British Agricultural Revolution, which enabled an unprecedented population growth, freeing a significant percentage of the workforce from farming, and helping to drive the Industrial Revolution.
Due to the limited amount of arable land and the overwhelming efficiency of mechanised farming, the increased population could not be dedicated to agriculture. New agricultural techniques allowed a single peasant to feed more workers than previously; however, these techniques also increased the demand for machines and other hardware, which had traditionally been provided by the urban artisans. Artisans, collectively called bourgeoisie, employed rural exodus workers to increase their output and meet the country's needs.
British industrialisation involved significant changes in the way that work was performed. The process of creating a good was divided into simple tasks, each one of them being gradually mechanised in order to boost productivity and thus increase income. The new machines helped to improve the productivity of each worker. However, industrialisation also involved the exploitation of new forms of energy. In the pre-industrial economy, most machinery was powered by human muscle, by animals, by wood-burning or by water-power. With industrialisation these sources of fuel were replaced with coal, which could deliver significantly more energy than the alternatives. Much of the new technology that accompanied the industrial revolution was for machines which could be powered by coal. One outcome of this was an increase in the overall amount of energy consumed within the economy, a trend which has continued in all industrialised nations to the present-day. [7]
The accumulation of capital allowed investments in the scientific conception and application of new technologies, enabling the industrialisation process to continue to evolve. The industrialisation process formed a class of industrial workers who had more money to spend than their agricultural cousins. They spent this on items such as tobacco and sugar, creating new mass markets that stimulated more investment as merchants sought to exploit them. [8]
The mechanisation of production spread to the countries surrounding England geographically in Europe such as France and to British settler colonies, helping to make those areas the wealthiest, and shaping what is now known as the Western world.
Some economic historians argue that the possession of so-called 'exploitation colonies' eased the accumulation of capital to the countries that possessed them, speeding up their development. [9] The consequence was that the subject country integrated a bigger economic system in a subaltern position, emulating the countryside, which demands manufactured goods and offers raw materials, while the colonial power stressed its urban posture, providing goods and importing food. A classical example of this mechanism is said to be the triangular trade, which involved England, southern United States and western Africa. Some have stressed the importance of natural or financial resources that Britain received from its many overseas colonies or that profits from the British slave trade between Africa and the Caribbean helped fuel industrial investment. [10]
While these arguments still find some favour with historians of the colonies, most historians of the British Industrial Revolution do not consider that colonial possessions formed a significant role in the country's industrialisation. Whilst not denying that Britain could profit from these arrangements, they believe that industrialisation would have proceeded with or without the colonies. [11]
The Industrial Revolution spread southwards and eastwards from its origins in Northwest Europe.
After the Convention of Kanagawa issued by Commodore Matthew C. Perry forced Japan to open the ports of Shimoda and Hakodate to American trade, the Japanese government realised that drastic reforms were necessary to stave off Western influence. The Tokugawa shogunate abolished the feudal system. The government instituted military reforms to modernise the Japanese army and also constructed the base for industrialisation. In the 1870s, the Meiji government vigorously promoted technological and industrial development that eventually changed Japan to a powerful modern country.
In a similar way, Russia which suffered during the Allied intervention in the Russian Civil War. The Soviet Union's centrally controlled economy decided to invest a big part of its resources to enhance its industrial production and infrastructures to assure its survival, thus becoming a world superpower. [12] During the Cold War, the other Warsaw Pact countries, organised under the Comecon framework, followed the same developing scheme, albeit with a less emphasis on heavy industry.
Southern European countries such as Spain or Italy industrialised moderately during the late 19th and early 20th centuries, and then experienced economic booms after the Second World War, caused by a healthy integration of the European economy. [13] [14]
A similar state-led developing programme was pursued in virtually all the Third World countries during the Cold War, including the socialist ones, but especially in Sub-Saharan Africa after the decolonisation period.[ citation needed ] The primary scope of those projects was to achieve self-sufficiency through the local production of previously imported goods, the mechanisation of agriculture and the spread of education and health care. However, all those experiences failed bitterly[ citation needed ] due to a lack of realism[ citation needed ]: most countries did not have a pre-industrial bourgeoisie able to carry on a capitalistic development or even a stable and peaceful state. Those aborted experiences left huge debts toward western countries and fuelled public corruption.[ citation needed ]
Oil-rich countries saw similar failures in their economic choices. An EIA report stated that OPEC member nations were projected to earn a net amount of $1.251 trillion in 2008 from their oil exports. [15] Because oil is both important and expensive, regions that had big reserves of oil had huge liquidity incomes. However, this was rarely followed by economic development. Experience shows that local elites were unable to re-invest the petrodollars obtained through oil export, and currency is wasted in luxury goods. [16]
This is particularly evident in the Persian Gulf states, where the per capita income is comparable to those of western nations, but where no industrialisation has started. Apart from two little countries (Bahrain and the United Arab Emirates), the Persian Gulf states have not diversified their economies, and no replacement for the upcoming end of oil reserves is envisaged. [17]
Apart from Japan, where industrialisation began in the late 19th century, a different pattern of industrialisation followed in East Asia. One of the fastest rates of industrialisation occurred in the late 20th century across four places known as the Asian tigers (Hong Kong, Singapore, South Korea and Taiwan), thanks to the existence of stable governments and well structured societies, strategic locations, heavy foreign investments, a low cost skilled and motivated workforce, a competitive exchange rate, and low custom duties.[ citation needed ]
In the case of South Korea, the largest of the four Asian tigers, a very fast-paced industrialisation took place as it quickly moved away from the manufacturing of value-added goods in the 1950s and 60s into the more advanced steel, shipbuilding and automotive industry in the 1970s and 80s, focusing on the high-tech and service industry in the 1990s and 2000s. As a result, South Korea became a major economic power.
This starting model was afterwards successfully copied in other larger Eastern and Southern Asian countries. The success of this phenomenon led to a huge wave of offshoring – i.e., Western factories or Tertiary Sector corporations choosing to move their activities to countries where the workforce was less expensive and less collectively organised.
China and India, while roughly following this development pattern, made adaptations in line with their own histories and cultures, their major size and importance in the world, and the geo-political ambitions of their governments, etc..
Meanwhile, India's government is investing in economic sectors such as bioengineering, nuclear technology, pharmaceutics, informatics, and technologically oriented higher education, exceeding its needs, with the goal of creating several specialisation poles able to conquer foreign markets.
Both China and India have also started to make significant investments in other developing countries, making them significant players in today's world economy.
Despite this trend being artificially influenced by the oil price increases since 2003, the phenomenon is not entirely new nor totally speculative (for instance see: Maquiladora).
The Industrial Revolution, sometimes divided into the First Industrial Revolution and Second Industrial Revolution, was a period of global transition of the human economy towards more widespread, efficient and stable manufacturing processes that succeeded the Agricultural Revolution. Beginning in Great Britain, the Industrial Revolution spread to continental Europe and the United States, from around 1760 to about 1820–1840. This transition included going from hand production methods to machines; new chemical manufacturing and iron production processes; the increasing use of water power and steam power; the development of machine tools; and the rise of the mechanised factory system. Output greatly increased, and the result was an unprecedented rise in population and the rate of population growth. The textile industry was the first to use modern production methods, and textiles became the dominant industry in terms of employment, value of output, and capital invested.
The economy of Paraguay is a market economy that is highly dependent on agriculture products. In recent years, Paraguay's economy has grown as a result of increased agricultural exports, especially soybeans. Paraguay has the economic advantages of a young population and vast hydroelectric power. Its disadvantages include the few available mineral resources, and political instability. The government welcomes foreign investment.
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and policy that taxes foreign products to encourage or safeguard domestic industry. Protective tariffs are among the most widely used instruments of protectionism, along with import quotas and export quotas and other non-tariff barriers to trade.
The economy of Mozambique is $14.396 billion by gross domestic product as of 2018, and has developed since the end of the Mozambican Civil War (1977–1992). In 1987, the government embarked on a series of macroeconomic reforms, which were designed to stabilize the economy. These steps, combined with donor assistance and with political stability since the multi-party elections in 1994, have led to dramatic improvements in the country's growth rate. Inflation was brought to single digits during the late 1990s, although it returned to double digits in 2000–02. Fiscal reforms, including the introduction of a value-added tax and reform of the customs service, have improved the government's revenue collection abilities.
The economy of Bangladesh is a major developing mixed economy. As the second-largest economy in South Asia, Bangladesh's economy is the 35th largest in the world in nominal terms, and 25th largest by purchasing power parity. Bangladesh is seen by various financial institutions as one of the Next Eleven. It has been transitioning from being a frontier market into an emerging market. Bangladesh is a member of the South Asian Free Trade Area and the World Trade Organization. In fiscal year 2021–2022, Bangladesh registered a GDP growth rate of 7.2% after the global pandemic. Bangladesh is one of the fastest growing economies in the world.
Import substitution industrialization (ISI) is a trade and economic policy that advocates replacing foreign imports with domestic production. It is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products. The term primarily refers to 20th-century development economics policies, but it has been advocated since the 18th century by economists such as Friedrich List and Alexander Hamilton.
Industrialisation (UK) or industrialization (US) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive reorganisation of an economy for the purpose of manufacturing. Industrialisation is associated with increase of polluting industries heavily dependent on fossil fuels. With the increasing focus on sustainable development and green industrial policy practices, industrialisation increasingly includes technological leapfrogging, with direct investment in more advanced, cleaner technologies.
Around 500 BC, the Mahajanapadas minted punch-marked silver coins. The period was marked by intensive trade activity and urban development. By 300 BC, the Maurya Empire had united most of the Indian subcontinent except Tamilakam, which was ruled by the Three Crowned Kings.The resulting political unity and military security allowed for a common economic system and enhanced trade and commerce, with increased agricultural productivity.
The economic history of Brazil covers various economic events and traces the changes in the Brazilian economy over the course of the history of Brazil. Portugal, which first colonized the area in the 16th century, enforced a colonial pact with Brazil, an imperial mercantile policy, which drove development for the subsequent three centuries. Independence was achieved in 1822. Slavery was fully abolished in 1888. Important structural transformations began in the 1930s, when important steps were taken to change Brazil into a modern, industrialized economy.
Since the colonial era, the economic history of Mexico has been characterized by resource extraction, agriculture, and a relatively underdeveloped industrial sector. Economic elites in the colonial period were predominantly Spanish-born, active as transatlantic merchants and mine owners, and diversifying their investments with the landed estates. The largest population sector was indigenous subsistence farmers, which predominantly inhabited the center and south.
Trade is a key factor of the economy of China. In the three decades following the dump of the Communist Chinese state in 1949, China's trade institutions at first developed into a partially modern but somewhat inefficient system. The drive to modernize the economy that began in 1978 required a sharp acceleration in commodity flows and greatly improved efficiency in economic transactions. In the ensuing years economic reforms were adopted by the government to develop a socialist market economy. This type of economy combined central planning with market mechanisms. The changes resulted in the decentralization and expansion of domestic and foreign trade institutions, as well as a greatly enlarged role for free market in the distribution of goods, and a prominent role for foreign trade and investment in economic development.
The Mexican miracle is a term used to refer to the country's inward-looking development strategy that produced sustained economic growth. It is considered to be a golden age in Mexico's economy in which the Mexican economy grew 6.8% each year. It was a stabilizing economic plan which caused an average growth of 6.8% and industrial production to increase by 8% with inflation staying at only 2.5%. Beginning roughly in the 1940s, the Mexican government would begin to roll out the economic plan that they would call "the Mexican miracle," which would spark an economic boom beginning in 1954 spanning some 15 years and would last until 1970. In Mexico, the Spanish economic term used is "Desarrollo estabilizador" or "Stabilizing Development."
This article covers the Economic history of Europe from about 1000 AD to the present. For the context, see History of Europe.
The economy of the Empire of Brazil (1822–1889) was centered on the export of raw materials when the country became independent in 1822. The domestic market was small, due to lack of credit and the almost complete self-sustainability of the cities, villages and farms that dedicated themselves to food production and cattle herding. During the first half of the 19th century, the Imperial Government invested heavily in the improvement of roads while retaining an excellent system of ports. The former facilitated better commercial exchange and communication between the country's distant regions; the latter did the same for foreign trade.
The United Kingdom, where the Industrial Revolution began in the late 18th century, has a long history of manufacturing, which contributed to Britain's early economic growth. During the second half of the 20th century, there was a steady decline in the importance of manufacturing and the economy of the United Kingdom shifted toward services. Manufacturing, however, remains important for overseas trade and accounted for 44% of goods exports in 2014. In June 2010, manufacturing in the United Kingdom accounted for 8.2% of the workforce and 12% of the country's national output. The East Midlands and West Midlands were the regions with the highest proportion of employees in manufacturing. London had the lowest at 2.8%.
The history of cotton can be traced from its domestication, through the important role it played in the history of India, the British Empire, and the United States, to its continuing importance as a crop and commodity.
The economic history of the United Kingdom relates the economic development in the British state from the absorption of Wales into the Kingdom of England after 1535 to the modern United Kingdom of Great Britain and Northern Ireland of the early 21st century.
Deindustrialisation refers to the process of social and economic change caused by the removal or reduction of industrial activity and employment in a country or region, especially heavy industry or manufacturing industry. Deindustrialisation is common to all mature Western economies, as international trade, social changes, and urbanisation have changed the financial demographics after World War II. Phenomena such as the mechanisation of labour render industrial societies obsolete, and lead to the de-establishment of industrial communities.
The economic de-industrialisation of India refers to a period of studied reduction in industrial based activities within the Indian economy from 1757 to 1947.
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