to syllabus

The Industrial Revolution

Focus:  The organizational basis of industrial capitalism

Lecture Outline:

I.  Terms: industry, industrial revolution, industrial capitalism, and laissez-faire (mostly review from earlier lectures).   Main points—reorganization of production in order to increase profit is what led to new machines, etc....and the principle of “rationalizing” production to maximize profit had all sorts of social implications.

II.  England as the cradle of the industrial revolution and industrial capitalism (all reviewing points made in earlier lectures)

a)      politics and the state  (representation of property owners' interests) 

b)      ideology (property rights as central to conceptions of rights)  

c)      agricultural development  (creation of agricultural surplus) 

d) infrastructure (road and canal systems, ports and ships)

III.  The first stage of the industrial revolution:  consumable goods production

a)      the textile industry as model for the process of early industrialization  (importance of market for woolens) 

b)      from manufactory to factory—factory system as means of reducing costs, increasing control over labor process and work time, and thus increasing  profits   

c) profit, rationalization, and machines—labor costs are key variable for capitalists; problem is how to reduce labor costs and increase control over labor process and labor time (reduce skill levels through mechanization, use women and children instead of men, etc.)

IV.  Second stage:  capital goods production

a)      the problem of investment  (the investment slump of the early 1800s)

b)      mining and steam power—towards the creation of a new power source and a new industry  

c) railroad industry as model for second stage of industrialization

   d) economic multipliers (e.g., railroads) and the spread of industrial growth


V.                 Organization and rationalization:  standardization, productivity, and skills

What ultimately drives this system, and moves it through new advances in technology and organization, is the search for profit. 

This led to re-organization of actually production techniques, introduction of new machines, development of new business practices (including the new idea of “marketing” in the late 1800s)

It also led to the development of new forms of enterprise organization—e.g., corporations, cartels, etc. 

Therefore same issues, motives, and dynamics that drove new “discoveries” in industry in early 1800s are there in 2004 (for instance, in companies deciding to close down factories in the US and move production to Asia).

A key development in mass production in the mid-1800s was the creation of “standardized” parts.  Manufacturing, especially of machines, was still limited by dependence upon skilled laborers (metal workers), who cut dyes, made bolts, and were responsible for other aspects of machine building--and who could command high wages. For industrialists, the “answer” to the question, "How do we further reduce labor costs and also increase productivity?" was to perfect machines that could manufacture identical (standardized) parts, from bolts and screws to large engine parts, etc.  An early successful example was the gun-making industry...

VI.  The spread of industrialization

a)      1750s-1820s (England, Belgium). Growth of industry largely in context of private ownership and market forces.   

b)      1830s-1870s (France, USA, Germany).  Growth of industry through private/market forces with elements of state assistance/subsidy.

The French revolution may have slowed the process in France, but strengthening the small landholding peasantry and thus limiting the growth of national markets (a matter of debate among historians).  But when France did begin industrializing rapidly in 1850s-1870s, it was in context of state support and subsidies for industry (we will discuss this later).

In  the USA, industrialization process relatively limited until era of Civil War.  It was policies of Lincoln administration and the North’s victory in the Civil War that really “jump-started” industrialization in the USA.  “Myth” is that this was entirely result of free-market capitalism, but the state played a critical role, e.g., by subsidizing railroad construction, creating state-funded universities to provide people with technical skills, etc.

In German states, esp in the northern states, some early industrialization in first half of 1800s.  But real “take off” not until 1860s-1880s.  State played key role in supporting industrialization in Prussia, then in united German Empire (formed 1871).  (We will discuss this later)

    c) 1870s-1900 (Russia).  Again, government (this time, Tsarist government) as key supporter of industrialization.

VI.  Human beings as a form of capital

Problem of securing, training, and disciplining the labor supply (especially "teaching" industrial  work time)

VI.              Role of technology: 

In first stages of industrial revolution, technologies relatively simple.  Real key was organizational change.

Second stage (heavy industry, late 1800s), technologies become more complex.  E.G., in steel industry, chemical industries, then in electronics.  Actual scale of production  becomes larger—factories with thousands of workers. 

Emphasis on mass production make possible shift not only mass production of “heavy industrial goods” (machinery), but also by end of 1800s early stages of “consumer”-aimed industrial mass production--many of the basic commercial technologies you know today (telephones, automobiles, electricity, etc).

VII.           Industrialization, World Markets, and Imperialism

As we will discuss later, the industrializing countries needed raw materials from the non-European world (rubber, copper, etc).  Also, by the late 1800s, they needed to expand markets not only for goods, but also for capital (investments).  In these ways, the process of industrialization would involve the European powers and the USA in the affairs of peoples in Asia, Africa, and Latin America to a greater extent than ever before in history.