#32 Industrialisation and Technological Transformation

I use the concept of transformation widely in these blogs. Here this idea will be explained more fully.

Industrialisation during the 19th century historically changed the world for all the people living in France, Holland, the UK and the USA; by the end of the century city living and industrial work had become the new normal. Japan and Germany followed in the 2nd half of the century. At the beginning in 1800, the world’s populations had been predominantly rural: by 1900 one hundred years later the few wealthy independent European and American nations had become mainly urban. The processes of manufacture and transport had vitally altered everyone’s lives. Even the understanding of time itself had been altered.

Harnessing Energy; the key element in Industrialisation

Over these one hundred years, new forms of energy were harnessed to transform the economic basis of societies. For most people, human energy had been the primary source of working on the natural world over millennia, whether it was digging or ploughing the land, killing a wild animal with a spear, or travelling from one place to another. People's relationship with nature has been the elemental part of providing food. Over the 19th century, the relationship between humans and nature was changed time and again.

Harnessing the power of horses to pull a plough or a carriage increased human power. Ploughing with horses increased the volume of land that could be brought into production. Harnessing a horse to a carriage increased the speed of travel. Horsepower was pre-industrialisation. Everyone who could afford a horse kept at least one. By the 1760s, horses were pulling heavy goods like coal in specially designed boats along canals.

Horsepower gave way to all kinds of new energy sources over the 19th century. The steam from burning coal was harnessed in cylinders to create a new form of energy: steam power drove pistons which in turn drove the steam engine and began to take over from horsepower from the 1830s onwards in the industrialising nations. The first engines had been developed to bring coal to the surface in the late 18th century; then, to take the coal to the waterways, where it was transferred to barges and towed by horsepower to the cities.

It was from these beginnings that the railways were constructed. The first railways, from the 1830s onwards, were created by steam-powered pistons which drove an engine, first on wheels along tracks. Railways transformed the travel of people and goods. A journey that might have taken a few days was turned into just a few hours. The railway brought the continent of North America into a single unity.

Steam-powered engines increased the heat that could be applied to metals. Iron production gave way to steel over the century. Shipping that had once been solely made of wood was made of steel by the end of the century. The production of new metals had a deep effect on a wide range of new machines: ploughs, machine tools, and of course armaments and bullets. Machinery became commonplace in factories. Work itself was transformed from home-based to mighty factories employing hundreds of workers.

Charles F. Cheffins - Cheffins's Map of English & Scotch Railways, 1850. (preserved at University of Chicago Digital Preservation Collection (LUNA)) via Wikipedia.

“Railways in 1898” - The British Library - Image taken from page 153 of 'Pitman's Commercial Geography of the World' via Wikipedia.

Electrical power followed close on the heels of steam power. Faraday revealed the principles of electricity in the 1820s and the electric motor in 1831. He announced the discovery of electromagnetic induction in a paper of that year. The electrical telegraph took off after the 1830s. By 1870, Bell had patented the telephone. Once electricity was harnessed, all kinds of new products like tramways and underground railroads became possible. Electric light turned night into day. A whole new world was created.

“The Pathfinder Railway Guide Map, Western Section. (insets) Alaska. Yellowstone Park. Philippine Islands. Hawaiian Islands.” 1902. Via The David Rumsey Map Collection.

Coal, iron, railways, steam engines, steel, electricity - while all standalone technologies - shared an integrative process:

The revolution which [they] wrought which extended to practically all parts of the economic organism was much greater than they suggest, because of the efficiency of steam driven machines and of tools in general which it induced: better plates, rails, and structural material were only a part .... tin canning and refrigeration, hence food preservation, the sewing machine... and other American machinery that in the 80s began to turn boot making into a mechanical mass production industry, self-acting screw machinery.... and a thousand other things that rein to steam were partly or wholly the effects of steel.

- Schumpeter J A The Theory of Economic Development Harvard University Press 1934 pp 373-374

By the end of the century, the skills in steel, electrics had created the first motor cars, and the aeroplane was not far behind.

The Market System: the key element in harnessing Profit

 The recognition in 1834 of the 'market system', or the self-regulating market, was discussed by Karl Polanyi in his famous work, The Great Transformation. Polanyi's work is crucial for these blogs, as he shows that 'self-regulating markets' fundamentally altered every citizen’s life:

The idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surrounding into a wilderness... the self-regulating of the market disorganised industrial life and thus endangered society...

No economy has ever existed that, even in principle was controlled by markets....gain and profit made on exchange never before played an important part in human economy. Though the institution of the market was fairly common since the later Stone Age, its role was no more than incidental to economic life.

-          Karl Polanyi, The Great Transformation, pp. 4, 45

This statement remains as surprising today in the 21st century as it did when first written in 1945. Polanyi argued that the self-regulating market was introduced for the first time in global history by the British in 1834. A large part of The Great Transformation is taken up with justification and explanation.

The self-regulating market is today often taken as the ideal way to run a society, without reflection or an understanding of history.

Adam Smith had written of man’s “propensity to barter, truck and exchange one thing for another". Out of this idea came the concept of ‘economic man’. Other well-known writers of the time took up this concept in the 19th century; Herbert Spencer, Walter Lipmann and Ludwig Heinrich von Mises, all repeated similar phrases. The idea that people have bartered for profit became the axiom of the age and has never been repudiated.

Polanyi’s view was that "the alleged propensity of man to barter, truck and exchange is entirely apocryphal". He regarded ascribing the tendency to act in this way to earlier civilisations as 'subjectivism' (p. 46). He went on to summarise the work of anthropologists to make his argument:

The discovery of recent historical and anthropological research is that man’s economy is submerged in his social relationship. He does not act to safeguard his individual interests in the possession of material goods; he acts to safeguard his social standing. (p.48)

The introduction of market principles in the 1830s emphasised the revolutionary character of the new emerging capitalism, which has remained ever since as an axiom of natural economic behaviour. In previous blogs, readers were introduced to Tawney’s work on the rise of capital: how 'greed' ceased to be disavowed by established religion. And as we move forward in time, so the very basis of how society organised itself was uprooted according to Polanyi's Great Transformation.

Polanyi argued that the two principles of economic behaviour that had determined all previous known society were reciprocity and redistribution:

All large-scale economies... were run with the help of redistribution. The kingdom of Hammurabi in Babylonia, and in particular the new Kingdom of Egypt, were centralised despotisms of a bureaucratic type founded on such an economy.

Karl Polanyi, The Great Transformation, p. 49/52

Redistribution, he argued "enmeshed the economic system in social relationships". He included feudalism: “Broadly, the proposition holds that all economic systems known to us until the end of feudalism were organised on the principle of reciprocity or redistribution”. Such principles were upheld through custom, law, magic, and religion. The self-regulating market in history, as suggested by Adam Smith, as strongly argued by Polanyi did not stand up to examination of the facts!

Polanyi finally secured his argument by examining the Speenhamland system, which was introduced in England in 1795, at the height of the disturbances caused by the French and Haitian Revolutions and abolished in the Reform act of 1832.

No market economy was conceivable that did not include a market for labour; but to establish such a market, especially in England's rural civilisation, implied no less than the wholesale destruction of the traditional fabric of society...the creating of a labour market in England was prevented by the Speenhamland Law. (p 81)

Speenhamland was designed to slow down the proletarianisation of the common people. The idea that people’s work was only 'labour' to be bought and sold according to supply and demand had previously been unheard of. In 1662, the Act of Settlement had laid down rules of the responsibility of the parish to the poor. A paternalistic system towards people had existed since the time of Tudors and Stuarts. In 1795, a time of distress and need, it was laid down that subsidies instead of wages should be granted following a scale dependent on the price of bread so that people could expect a minimum subsistence irrespective of earnings. Speenhamland thus created a law of peoples 'right to live'. Speenhamland was an aid in wages for wives and children.

Speenhamland was abolished in 1832-1834, just as the new middle classes were offered seats in Parliament. Pauperism alongside plenty was to remain the major moral dilemma of all the leading capitalist nations ever since. The Market System became part of the axiom of capitalism; it remained the ‘common sense’ of the economics profession. A national labour market was established throughout the new capitalist world.

Many of the great historians of 19th century industrialisation have attempted to explain why the 'free market economy' ever came to be considered the 'natural' order. The old idea of a ‘just price’ or a ‘fair wage’ was dispensed with first in Britain after 1815, as greed became the only framework. Britain had become the world’s first great power and with it came an ideological racial arrogance. Land became enclosed across the country. Paternalistic legislation which had protected all kinds of people and workplaces was dispensed with. The scene was set for the horrors to come. The first was the Irish famine: an event that, as historians have discovered, could have been severely mitigated as all kinds of food were exported from Ireland to Britain during the famine.

The Irish famine was the first of a range of human disasters that continued for the next 130 years, till 1945: natural disasters that could have been mitigated if the British and other colonial governments had considered it their responsibility. The ancient feudal European Chinese or Indian empires had all accepted their responsibility to their peoples in times of need. The new expanding industrialising and imperial European nations did not accept this responsibility. Ding famines in India in the second half of the 19th century, people were left to die in their millions.

In the 20th and 21st centuries, people still do not understand how leaders in the 1914 war could send young to their deaths in the tens of thousands. Unless this lack of human responsibility in the entire 19th century for other 'lesser' peoples is understood, this too cannot fully be comprehended.

For nearly 100 years, the working people had no system of state to fall back on in hard times, and either little or no system of public education or health. No ancient monarchical or feudal state anywhere in the world had treated its own people so harshly. Wherever you look, however much the splendour of the ancient courts, monarchical systems had an in-principle system with their people. So, we need to ask why the new capital felt such limited empathy with the people who worked in their factories and swept their streets. Was it sheer greed? Did it have anything to do with the use of slaves as free labour? Did the racial hierarchical system so detach those with wealth and power that the people’s lives were of limited value? These are not questions that can be easily answered.

Throughout the 19th century, there was a wider issue that consumed the leaders of the so-called great powers of Europe. Behind the lack of human empathy at home was the belief in racial inferiority abroad. By itself, these beliefs may not have been enough to allow the leading figures to consume all the profit created by the new Industrial system. Behind it was the specifically 19th century ideological framework: laisse faire, free trade, the free marketplace, the ideologues of the time: Malthus and Darwin, the uncontrolled pursuit of material gain. That wider issue was the struggle for world power, namely, how to obtain power and then to keep it, and finally expand it. The same ideological arguments around race and free trade provided the backdrop to world dominance. Perhaps for the first time in history, human responsibility was turned upside down.

The mechanisms of world dominance can be further understood through the systems of finance, banking, and the Gold Standard, which will be discussed in the following blog.

---

Recommended Reading

Industrialisation:

Like so much else that is covered in these blogs, there is a vast literature on industrialisation in Western Universities. Several social sciences and history departments run special courses on economic history. Each nation is so proud of its achievements in this field, that many introductory texts focus on their own country’s economic growth. The various elements that make up this history: steam, waterways, railways, cities, or products such as cutlery or pottery, all have their own specialised histories as well.

See as a good example:

Eric Hobsbaum’s titles: Age of Revolution 1789-1848; Age of Capital, 1848 to 1875; Age of Empire 1875-1914; Age of Extremes, 1914-1991.

New work on the 19th century is appearing all the time; see for instance David Cannadine, Victorious Century: The United Kingdom, 1800-1906, Allen Lane 2018.

Harnessing power:

In these blogs I was reliant on C. Freeman's The Third Kondratieff Wave: Age of Steel, Electrification and Imperialism, Chapter 6, supplied by his son.

See also David Wootton, The Inventions of Science: A New History of the Scientific Revolution, Allen Lane 2015. Wootton takes us back to the origins of science from Hellenistic Greece in 300 BC and the Babylonians, then to the Arabs and Spain, and from there to Europe and into the 19th and 20th centuries.

Global Trade:

See Sandra Halpern, Re-envisaging Global Development, Routledge 2013.

The Market System:

Every textbook will describe the market system, but Karl Polanyi has seen the extraordinary importance of the system in the growth of global industrialisation; see The Great Transformation: The Political and Economic Origins of our Times, Beacon Press, 1944.

Essential are also R.H. Tawney, The Protestant Ethic and the Rise of Capitalism, and E.P.Thompson, The Making of the English Working Class.

For a recent assessment see The Moral Economists: R.H Tawney, Karl Polanyi, E.P.Thompson, and The Critique of Capitalism by Tim Rogan.

Thumnail photograph: “Little spinner in the Mollahan Mills, Newberry, South Carolina”. This work is from the National Child Labor Committee collection at the Library of Congress. According to the library, there are no known copyright restrictions on the use of this work. Image sourced via Wikipedia.

---

Copyright. The copyright of this blog is as follows. It is published Under the Creative Commons license. If anyone wishes to use any of the writing for scholarly or educational purposes they may do so long as they correctly attribute the author and the blog. If anyone wishes to use the material for commercial purposes of any kind, permission must be granted from the author.