In the latter part of the eighteenth and the first half of the nineteenth century, Britain underwent what historians have called an ‘industrial revolution’ with factories pouring out goods, chimneys polluting the air, escalating exports and productivity spiralling upwards. This was an epic drama, of Telford, the Stephensons and the Darbys, Macadam, Brunel and Wedgwood, a revolution not simply of inventions and economic growth but of the spirit of enterprise within an unbridled market economy. This is, however, misleading. Industrial change was not something that occurred simply after 1780 but took place throughout the eighteenth century. There was substantial growth in a whole range of traditional industries as well as in the obviously ‘revolutionary’ cases of textiles, iron and coal. Technical change was not necessarily mechanisation but the wider use of hand working and the division of labour. Changes were the result of the conjunction of old and new processes. Steam power did not replace waterpower at a stroke. Work organisation varied: the ‘dark satanic mills’ were not all conquering. In 1850, factories coexisted with domestic production, artisan workshops, large-scale mining, and metal production. Change also varied across industries and regions.
Why did economic change occur in Britain between 1780 and 1850? Answering this question usually focuses on why industries like cotton, iron and coal expanded and what influence the spread of steam power had. These areas were important but undue emphasis on them neglects the broader economic experiences of Britain. Similarly, the question ‘Why did the industrial revolution take place in Britain rather than France or Germany?’ misses the crucial point that economic change did not occur in Britain as a whole. Growth was regional and industrialisation took place in particular locations like Lancashire, the Central Lowlands of Scotland and South Wales and around Belfast. Explaining the industrial revolution is a very difficult undertaking since economic change had an effect, however small, on all aspects of society. Some circumstances that were present in Britain made change possible and, in that sense, can be said to be causal. Others held back progress but change occurred despite them. This section will look at the importance of certain ‘key’ factors in explaining growth in the economy.
If it is possible to identify a single cause for the industrial revolution, then a strong case can be made for population increase. Between 1780 and 1850, the population of England and Wales increased from over seven million to nearly eighteen million. This led to mounting demand for goods like food and housing. Nevertheless, the increase in demand for other goods – more manufactured goods or more efficient means of communication – did not necessarily follow from population expansion. The problem is one of timing. When did population growth occur? When did economic growth occur? Did they correspond? Although historians broadly accept population growth from the mid-eighteenth century, they do not agree when the economy began to grow.
If population growth stimulated demand, you would expect economic and population growth to coincide. However, they did not. Accelerated economic growth was concentrated in the last quarter of the eighteenth century while the maximum rate of population growth on mainland Britain was not achieved until after 1810.
Population began to expand after 1750 and some historians argue that this provided the final ingredient necessary to trigger off industrialisation. Berg and Craft have shown that the origins of higher growth rates went back to the early decades of the century. In this scenario, population growth came after the beginnings of economic growth.
The impact of population growth causes problems for historians who argue for economic growth from the 1780s and those who see growth as something that began earlier in the century. It had favourable effects on economic growth in three important respects:
1. Population growth provided Britain with an abundant and cheap supply of labour.
2. Population growth stimulated investment in industry and agriculture by its effects on demand for goods and services.
3. Urbanisation made it profitable to create or improve services. For example, the building of the canal from the Bridgewater coalmines at Worsley to Manchester took advantage of the growing demand for domestic coal.
The role of population growth in the origins of Britain’s industrial revolution was far from straightforward.
Britain was a relatively wealthy country in the mid-eighteenth century with a well-established system of banking. This enabled people to build up savings and provided them with capital to invest. Between 1750 and 1770, there was growing investment in roads, canals, and buildings and in enclosing land. This process continued after 1780 through to the 1850s with continued investment in transport and enclosure and in the expansion of the textile and iron industries, and after 1830 in the development of railways.
The annual rate of domestic investment rose from about £13 million in the 1780s to over £40 million by the 1830s.
The ratio of gross investment to the gross national product rose from 6 per cent in the 1770s to 12 per cent by the 1790s at which level, it remained until 1850.
Widespread capital investment was largely confined to a small, though important part of the economy. Capital investment rose in farming, communications and textiles, especially cotton and in iron and steel. Other areas of the economy were often undercapitalised relative to these industries.
Capital investment in farming was largely on enclosures, drainage and buildings. Landowners ploughed back about 6 per cent of their total income into the land. This rose to about 16 per cent during the French wars when high wheat prices encouraged investment in enclosure. Investment fell back after 1815 with the onset of depression and did not revive until the 1840s. In the 1780s, a third of all investment was in farming. By 1850, this had fallen to an eighth. By contrast, there was a rapid growth of investment in industry and communications. Annual investment in industry and trade rose from £2 million in the 1780s to £17 million by 1850. Between 1780 and 1830, there was an annual investment of £1.5 million on canals and roads and for the improvement of docks and harbours. These figures were dwarfed by investment in railways that peaked at £15 million per year in the 1840s, some 28 per cent of all investment. The increase in the availability of capital to invest allowed economic growth to occur.
Britain was already a well-established trading nation. Colonies were important sources of raw materials as well as markets for manufactured goods. London was a major centre for the re-export trade. The slave trade played a major role in the development of Liverpool and Bristol and its profits provided an important source of capital for early industrialisation. By the 1780s, the export trade was expanding annually by 2.6 per cent. Cotton production depended on international trade and was responsible for half the increase in the value of exports between 1780 and 1830. Cotton accounted for just over half Britain’s exports by 1830 and three-quarters of all exports were associated with textiles. This represented a narrow trading base and helps to explain why the British economy underwent depression in the 1830s and early 1840s. British factories were over-producing for European and global markets already saturated with textile goods. The result was some changes in the goods exported with iron exports growing from 6 per cent in the 1810s to 20 per cent by 1850 and the growing importance of coal exports. In the 1780s, Europe was a major market for British goods and this remained the case in 1850. However, there were important changes in the destination of British goods.
The United States increasingly became a focus for exports of manufactured goods and for raw cotton. This process was helped by the opening up of the Latin American markets in the early nineteenth century.
India was a huge market for cotton goods. Similar possibilities exited in the Middle East and South America. Britain increasingly shifted trade towards less developed economies that provided growing imports of tropical products to Britain and other industrialised countries like Germany and France.
Overseas trade has been highlighted by some historians as a primary cause of economic growth. The growth of export industries at a faster rate than other industries was closely linked to foreign trade.
To what extent was the growth in trade between 1780 and 1850 central to Britain’s economic development?
It stimulated a domestic demand for the products of British industry.
International trade gave access to raw materials that both widened the range and cheapened the products of British industries.
It provided purchasing power for countries to buy British goods since trade is a two-way process.
Profits from trade were used to finance industrial expansion and agricultural improvement.It was a major cause of the growth of large towns and industrial centres.
The role of British trade must, however, be put into perspective. Changes in the pattern of British trade between 1780 and 1850 – the export or re-export of manufactured goods in return for imports of foodstuffs and raw materials – were relatively small and the industrial developments from the 1780s consolidated already existing trends. Exports may have helped textiles and iron to expand but they made little impact on the unmodernised, traditional manufacturing sectors.
By 1750, Britain was already a highly mobile society. Travel may have been slow and, on occasions dangerous but it was not uncommon. Within a hundred years, the British landscape was scarred by canals and railways and traversed by improved roads and the movement of goods and people quickened dramatically. Turnpike roads and the emergence of a sophisticated coaching industry, canals with their barges carrying the raw materials and manufactured goods of the industrial revolution, new harbours and the railways were symbolic of ‘progress’ as much as factories and enclosed fields.There were 800 market towns in England and Wales in the 1780s. This reflected the intensity of production and the ability of particular areas to specialise in particular products. These products were then moved to markets across the country often using the turnpike roads. In 1767, 16,000 sheep and 14,000 cattle passed through the Birdlip Hill Turnpike in Gloucester en route from south Wales to London. Imports of coal into London from the north-east rose from one million to three million tons per year between 1720 and 1790.
Britain’s road system in the mid-eighteenth century was extensive but under-funded. Just over £1 million was spent annually. This was, however, insufficient to maintain the road system necessary to growing trade and manufactures. Turnpike roads, the first was established in 1663, grew slowly in the first half of the eighteenth century. An average of eight were established each year. From the 1750s, this went up to about forty a year and from the 1790s, to nearly sixty. By the mid-1830s, there were 1,116 turnpike trusts in England and Wales managing slightly more than a sixth of all roads, some 22,000 miles. Parallel to this organisational development, there were improvements in the quality of road building associated particularly with Thomas Telford and John Loudon Macadam. What contribution did turnpike and parish roads make to improved communication in Britain between 1780 and 1850? Spending on parish roads did not increase markedly though there was a significant growth in spending by turnpike trusts. This reached a peak of £1.5 million per year in the 1820s. The problem was that improvements to the road system were patchy and dependent on private initiatives. Despite this, there were significant reductions in journey times between the main centres of population. In the 1780s, it took ten days to travel from London to Edinburgh; by the 1830s, 45 hours. This led to a dramatic increase in the number of passengers carried by a rapidly expanding coaching industry. The road system transported all kinds of industrial material and manufactured goods. There was a significant growth of carrier firms after 1780. In London, for example, there were 353 firms in 1790 but 735 in the mid-1820s and a five-fold increase in the number of carriers in Birmingham between 1790 and 1830. These firms were, however, unable to compete with the canals or the railways and concentrated on providing short distance carriage of goods from canals and railway stations to local communities.
The major problem facing early industrialists was the cost of carrying heavy, bulky goods like coal or iron ore. The solution was to use water, rivers, coastal transport and from the 1760s, canals. The first phase of canal development took place in the 1760s and early 1770s beginning with the construction of the Bridgewater canal. The second phase, in the 1790s, has rightly been called ‘canal mania’ with the completion of several important canals and the setting-up of fifty-one new schemes. By 1820, the canal network was largely completed linking all the major centres of industrial production and population.
Canals dramatically enhanced the efficiency of the whole economy by making a cheap system of transport available for goods and passengers. The price of raw materials like coal, timber, iron, wood and cotton tumbled. The needs of farming, whether for manure or for access to markets for grain, cheese and butter, were easily satisfied where farmers had access to canals.
Canals were a means of overcoming the fuel crisis that threatened to limit industrial growth by making cheap, abundant coal supplies available.
The building of canals created massive employment and spending power at a time when growing industries were looking for mass markets.
It is difficult to exaggerate the importance of canals to Britain’s industrial development between 1780 and 1830.
From 1830, railways were the epoch-making transport innovation. Between 1830 and 1850, 7,000 miles of track was laid with railway ‘manias’ in the 1830s and between 1844 and 1847 when investment was at its peak. Their economic importance lay in their ability to handle both major types of traffic – people and goods – that no other single mode of transport had previously been able. They offered lower costs and greater speed attracting passengers, mail and high-value goods. Mail went to new railways in six months and coaches running in direct competition lost out. However, canals were able, by cutting their rates and improving their services, to continue to carry goods for several years. In 1840, the volume of traffic carried by canal from Liverpool to Manchester was more than twice that carried by railway. The Victorians had no hesitation in assuming a direct link between railways and economic growth though historians are today far less convinced. There was increased demand for coal and iron. In the 1840s, 30 per cent of brick production went into railways and between 1830 and 1845, some 740 million bricks were used in railway construction. Towns grew up round established engineering centres at Swindon, Crewe, Rugby and Doncaster. Food could be transported more cheaply and arrived fresher. There is, however, no doubting their social and cultural impact of railways. This is clearly supported by the statistics. 64,000 passengers were in 1843 but 174,000 in 1848 with an increase in the third-class element from 19,000 to 86,000 in the same period. The Great Exhibition of 1851 reinforced this increased mobility of population.
Between 1780 and 1850, great output was achieved by the transport industry, as in manufacturing industry, by applying a rapidly increasing labour force to existing modes of production as well as using new techniques and applying steam-driven machinery. Historians have emphasised the importance of canals and railways that respectively in the eighteenth and nineteenth centuries in reducing transport costs. However, coastal and river traffic and carriage of goods and people by road remained important and the horse was the main means of transport well beyond 1850.
British society in the eighteenth and nineteenth century was profoundly conservative. How was a society with highly traditional structures able to generate changes in so many areas of economic life? First, by 1780, British society was capitalist in character and organisation. Its aristocracy was remarkably ‘open’, allowing the newly rich and talented to ‘climb’. The most successful merchants, professional and businessmen in each generation were funnelled off into landed society. Success brought wealth and the ultimate proof of success in business was the ability to leave it. In France, where social climbing was discouraged there was political and social discontent and ultimately political revolution. In Britain, where social climbing was not obstructed, there was an industrial revolution.
Secondly, Britain was already a highly market-oriented society. Imports, whether smuggled or not, were quickly moved to market. Domestic goods, both agricultural and manufactured, were bought and sold directly at the network of markets or through middlemen, who acted as a channel between producer and consumer. Until 1830, the key to economic growth was the growing home demand for consumer goods. Growing consumption influenced trade and economic growth. Possessing and using domestic goods enhanced social status or displayed social rank. Lower food prices after 1780 may well have stimulated a consumer boom: people had more disposable income. There was a dramatic increase in the number of permanent shops in major urban centres and many of the characteristics of modern advertising emerged with circulars, showrooms and elaborate window displays. Changing patterns of consumption created an environment in which manufacturers could exploit known and growing demand.
Finally, entrepreneurial skill and ‘enterprise’ played a major role in the development of the late eighteenth and early nineteenth century economy. Entrepreneurs did three things:
They organised production.
They brought together capital (their own or others’) and labour.
They selected the geographical site for operations, the technologies to be used, bargained for raw materials and found markets for their products.
They often combined the roles of financiers, capitalists, work managers, merchants and salesmen. Three main explanations for the place of entrepreneurs in leading economic change have been identified by historians:
There was a change in the ways people viewed social status from one where it was the result of birth to one where it related to what individuals achieved. Status was based on what you did, not who you were. This was a reflection of the openness and mobility of British society.
Nonconformity seems to have been a crucial experience for many of the first-generation entrepreneurs encouraging a set of values outwardly favourable to economic enterprise.
Entrepreneurs were able effectively to exploit advances in technology and industrial organisation. Most entrepreneurs were not pioneers of major innovations or inventions but realised how best to utilise them. James Watt would not have been successful but for the entrepreneurial skills of Matthew Boulton. This allowed them to manufacture and market goods effectively within a highly competitive consumer society.
British society did not prevent entrepreneurs from using their talents and motivation.
There was no blueprint for the ‘industrial revolution’. Population growth stimulated demand that entrepreneurs were able to satisfy. Developments in transport led to reductions in the cost of production making manufactured good cheaper. Investment in industry often brought good returns. The state made little attempt to control growth. Foreign trade brought raw materials and profits that could be invested in enterprise. The social structure was adaptable and relatively flexible. Each of these factors helped create an environment in which change could occur.