Capitalism and industrial revolution

The great waves of innovation that the world has seen since the Industrial Revolution have helped lift living standards and better the quality of life the world over. In turn, this success has become a feed stock for higher reliance upon capitalism and the ongoing era of Industrial revolution 4.0. The capitalist system is the most productive mode of production in the history of humankind. In the space of a few centuries the world has been transformed beyond all recognition. Average life expectancies have more than doubled. Technological developments occur at a rate that would have been previously unimaginable. More food, clothing and shelter can be produced using less labour than ever before. It would seem that the material problems of survival have finally been solved. Instead of humankind controlling the fulfilment of its own development, humanity is at the mercy of an economic system which it has itself create.

The Industrial Revolution has four major causes that are discussed about frequently in a learning environment. Capitalism, however, is the most important cause of the Industrial Revolution. Capitalism allowed the new generation of people to gain money and become involved and interested in the idea of investment. The investments allowed inventors and entrepreneurs to build the inventions that rocked the world, such as the blast furnace, railroads, vaccinations and much more. Private investments, which are a form of capitalism, became a huge factor in allowing countries, such as Great Britain, to succeed in industrialization faster than other European countries, such as the Germanic states.Although some could attempt to argue that another major cause, such as the Agriculture Revolution, would be the most important, they would fail to take notice of Great Britain’s capitalist policies and their connections to how fast countries industrialized.

Capitalism, the most important cause of the Industrial Revolution, allowed the brand new generation of inventors and scientists the investments and income needed to develop their new technological advances. The largest advances during the Industrial Revolution, such as the blast furnace, the railways that connected industrializing cities to vast amounts of natural resources, and other inventions were all funded by private investors and national banks (in countries such as Great Britain, which industrialized much faster during the first Industrial Revolution). Capitalism allowed those inventions to be created and developed through loans and funds. Had it not been for the new urge to industrialize and endorse capitalism, these inventions and new technologies would have never been able to become a reality due to the fact that their creators would not have had a source of income to push said inventions into the light of day. These loans from either private investors or, in Great Britain’s case, national banks, finally allowed these great technologies a chance to actually be created and widely used, since railways (funded by capitalists, except in Russia’s case, who believed railways would provoke ‘unneeded travel’) could transport the machinery and technology much farther for much less money.

Another important factor in the race to industrialize would have to be the capitalist ideals endorsed by Great Britain’s national banks. It was far easier to receive a loan from highly industrialized economies (ie. Britain), and these developing nations had high amounts of working class citizens an opportunity to get rich quick by either investing in or endorsing the industrialization process started by capitalist intentions. The commercial farming may have contributed to the production of food, and may have led to new technologies, but, these commercial farms would not have been accepted without some form of capitalist investments and government involvement. Without capitalism’s heavy impact on the pre-Industrial societies, mankind would have been unable to progress forward to become industrial societies, and large working classes allowed fast production of said goods. While Britain had a very large and stable middle class, Russia had less than 2% of their total population in their working class. And, as you can see, Britain industrialized much faster than Russia, and any other European country during the first industrial revolution.

The Multi-dimensional Feed for industrial capitalism and capitalist industry:

• Industrial Revolution created more goods, more choices and cheaper products which became an incentive for the development of capitalism.
• There was an expansion of business with the Industrial Revolution, a change that provided poor people with jobs. Given more purchasing power from having employment, the hitherto poor now had some money with which to become consumers. As a result, small businesses were created to provide these new consumers with products for their homes, etc. Of course, the large businesses profited, too, and capitalism expanded.
• As industrialization occurred, companies got bigger and there came to be much more of a divide between the people who did the work and the people who supervised them and owned the factories where they worked. The rise of these large firms is what really developed the wage labor-based capitalist system.
• The power and influence of the capitalist system grew with the massive increase in the ability to concentrate capital in the hands of a smaller group of people. This became possible during the industrial revolution because of advances in production technology and the ability to mass-produce commonly used consumer items.
• Capitalists mostly controlled the political sphere of the countries undergoing industrialization
• Market expansion and increasing international trade opened the economies more and loosened State control
• Rise of capitalism:-
• Transition from feudalism to capitalism is often viewed as the result of a gradual and rising progress of technology, urbanisation, science and trade .
• Agricultural revolution in Europe post feudalism i.e farm consolidation, labor employment, surplus production etc.
• Monetisation of economy:–
• The introduction of money as a medium of exchange played a great role in the rise of capitalism in Europe.
• Use of money in market, payment of salaries and wages.
• Consequent rise in disposable income and consumerism.
• Renaissance, its resultant scientific and industrial revolution.
• Discovery of new sea routes, foreign lands and improvements in modes of transport and communication.
• Trade routes also were deregulated as governments did not that much power to control and restrict trade.
• Also inventions like the American clipper ship and the steamship allowed easier travel.
• It also became what it was because of the increase in the supply of capital and efficient trade. This created the capital that entrepreneurs could use.
• Through international trade form their colonies European countries accumulated lot of capital which led to rise of capitalism.
• The hundred year war between British and French led to plundering of French towns and lot of accumulated capital to Britain.
• Political revolutions also lead to end of feudalism and kept the means of production in the hands of capitalists.
• Growth of population and towns led to availability of cheap labour and many people were attracted to commerce.
• Need for land, labour and resources.

Some could argue that the Industrial Revolution’s greatest cause would be the Agricultural Revolution, which allowed countries to gain food to begin a demographic boom that would eventually connect in this domino effect to the Industrial Revolution. Although these people may have decent examples and so-called evidence, they would be wrong. While the agricultural revolution’s movements did in fact quote unquote start the Industrial Revolution, the highly commercial farming techniques and technology that led to it as well was in fact caused by the involvement of capitalists and investors. The agricultural revolution was a cause in the revolutions ahead, but, as stated before, without the involvement of capitalism, the new technologies and equipment that made the agrarian societies obsolete were funded and caused by capitalism. One could argue that the revolution’s food production caused by the need of more agriculture due to the demographic boom weighs more than capitalism. However, capitalism was what actually allowed greater amounts of food to be produced in the first place.

Thus, Industrial Revolution has many causes that led up to what it became in history. Some argue, or at least attempt to, that the agriculture revolution, or new technologies such as steam power, were the most important of the group. However, if one were to look behind the causes of the causes, one would see that behind the finances of the agriculture progress and new technologies lies capitalism. For without capitalism, none of these other causes and reasons would have happened during this period of time, and the massive change that appeared would have been postponed or cancelled all together. The countries that accepted capitalism and made it easy for new investors to receive loans, such as Britain, industrialized faster than others, while countries that refused to allow national loans, such as France, and private investments, such as Russia, failed to industrialize as fast and did not succeed as fast as they could have if they would have followed the footsteps — or rather paved highway — left behind by the involvement and contribution of capitalism.

By: Abhishek Sharma