National Review: The Miracle of Industrialization

Marian Tupy:

“Then, beginning in the mid 18th century, many people’s standard of living skyrocketed. What brought about this dramatic improvement, and why?

Our story has to begin with income, for, as Oxford economist Paul Collier has noted, economic “growth is not a cure-all, but lack of growth is a kill-all.” The history of economic growth, as Angus Maddison and his team at the University of Groningen found, resembles a hockey stick. For thousands of years, growth was negligible. This period is represented by the shaft of the stick. Toward the end of the 18th century, however, economic growth started to accelerate, first in Great Britain and then in the rest of the world. The blade represents this sharp upward turn.” …

Whatever its exact causes, the Industrial Revolution, which started in the mid 18th century, brought widespread changes, including new fuels, such as coal and petroleum; new motive power, such as the steam engine and the internal-combustion engine; new machines, such as the spinning jenny and the power loom; and the factory system, which reorganized work and required much greater division of labor and specialization of function. These changes increased the use of natural resources and enabled the mass production of manufactured goods.

“Whatever its exact causes …”

Is that the best the brain trust over at National Review can manage in the “capitalism vs. socialism” debate on the causes of the Industrial Revolution? Why not consult the vast academic literature on the issue? Is there a reason why the answer to the question is left floating in the air?

Just a few observations:

• The roots of England’s economic takeoff go back to the time of King Henry VII who was the first to experiment with industrial policy by transforming England from an exporter of raw wool into a competitor with the city states of northern Italy and the Low Countries in value added manufacturing of cloth.
• King Henry VIII and his son and successor King Edward VI and his daughter Queen Elizabeth I brought Protestantism to England which was also brought to Scotland in this era. The monasteries were closed and the wealth of the Catholic Church was expropriated and the Catholic calendar with all its feast days were abolished. Scotland became a Reformed nation and England became embroiled in religious controversy over Anglicanism vs. Puritanism. The important thing here is though is that Britain became heavily influenced by Calvinism. The same was true of the Netherlands which pioneered the Dutch model adopted by England after the Glorious Revolution during the reign of King William III and Queen Mary.
• Queen Elizabeth I authorized pirates like Sir Francis Drake to challenge Spain’s claim to sovereignty over the New World. It was Elizabethean men like Richard Hakluyt, Sir Humphrey Gilbert and Sir Walter Raleigh who dreamed the British Empire in time of Elizabeth and James. Raleigh was later thrown in the Tower of London and executed.
• In the time of King James I during which England and Scotland were united under the Stuart dynasty, the colonization of both Ulster in Ireland by Protestant settlers, Virginia and Massachusetts began. The plantation model was exported from Ulster to Virginia.
• In the time of King Charles I (this was before he lost his head in the English Civil War) and Oliver Cromwell (whose Western Design brought Jamaica into the emerging British Empire), the British foothold in the New World continued to expand through the planting of colonies in the West Indies and North America. The British West Indies sprouted from Barbados, which became England’s most profitable colony, which imported the sugar industry from Brazil via the Dutch who were fighting for their independence from Habsburg Spain at the time.
• In the time of King Charles II during the Restoration, England began to dominate the Trans-Atlantic Slave Trade. The Royal Society was founded. The economic takeoff that eventually led to the Industrial Revolution in the 18th century, but which first brought about the Glorious Revolution began around this time. Britain became a modern nation with a modern economy before it became industrialized and long before Adam Smith wrote The Wealth of Nations.
• England and later Great Britain spent all of the 17th and 18th centuries fighting with its Dutch and French rivals for control over the world’s trade routes before emerging triumphant. The great naval buildup that led to the Britannia that ruled the waves began in earnest under the Stuarts. King James II in particular was an ardent supporter of the Royal Navy.
• The Navigation Acts were passed under Cromwell to keep the Dutch out of the trade between England and its fledgling colonies. This was mercantalism, however, not free-market capitalism. The Dutch were also muscled out of India.
• It goes without saying that the British East India Company took over India in the 18th century which became a massive captive market for British exports.
• By the late 18th century, the American colonies from Canada through the 13 American colonies that revolted in 1776 to the British West Indies which stuck by the Mother Country were thriving. Great Britain had become the metropole at the center of one of the greatest empires in world history.
• Just think of all the trade that was going on between Britain and the American colonies, the West Indies, the slave trade with Africa, the trade with India under the British East India Company, etc. Contrast that with, say, what was to later become Germany after the Thirty Years’ War which had no such overseas colonies.
• In the time of King William III and Queen Mary, England adopted all the modern financial institutions pioneered by the Dutch. Issac Newton was becoming the world’s most famous scientist due to his work in physics and optics. Modern science was created in England.
• As the world’s dominant naval, trading and commercial empire due to the power of the Royal Navy, England had developed a consumer society BEFORE the Industrial Revolution. It consumed tobacco from Virginia, rice from Carolina, the timber and foodstuffs of New England and Pennsylvania, sugar from the British West Indies, tea from the East Indies, calicoes from India, porcelain from China, etc.
• Deforestation in England and abundant coal supplies led to the English turning to coal as a source of energy under the Stuarts. Coal production was rising before the Glorious Revolution and soared as technology like the steam engine developed to pump water out of England’s coal mines. The fens in the east of England were also drained. The Dutch had developed the technology and it was England and the Netherlands which developed the first modern economies by draining land and creating a more productive agriculture than their European neighbors. In the case of the Dutch, they imported grain across the Baltic from all the serfs in Poland east of the Elbe.
• One of the major reasons that spurred population growth and industrialization in the 18th century was the disappearance of the Black Death and improved sanitation in filthy cities like London was burned to the ground in the Great Fire of London in 1666.
• London had already become a metropolis by 1700 and the largest city in Europe and one of the largest cities since the end of the Roman Empire long before the Industrial Revolution began in earnest. The cause wasn’t the scribblings of Adam Smith (or his free-market successors) which were published three quarters of a century later in 1776.

If you want to know more about the true causes of the Industrial Revolution, I would recommend checking out Friedrich List’s The National System of Political Economy who goes over all this and more in much greater detail and refutes the free-market theorists who attribute the industrial development of England solely to abstract economic arguments made long after it had begun to industrialize and in hindsight as well. It is truly hilarious that these people think they can just drop the context.

Britannia prepares to receive the crown of empire from Neptune

I’m of predominantly English ancestry myself. I spent much of last year exploring how my family ended up here in the New World and where they came from and how it ended up that I was able to write this response to this silly article in between cutting the grass here in northern Missouri.