economic developments

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  • Created on: 07-05-19 09:41

INDUSTRIALISATION

- industrialisation occured in Britain from 1780 into the 19th century, in which industries developed from producing goods on a small scale, to large-scale production through factories

- this time was called the 'Industrial Revolution' by Arnold Toynbee in his text 'Lectures on the Industrial Revolution in England'

- 1780 marks 'the sharp upward increase for industrial production' - Hartwell

- there was a steep rise in imports and exports in the late 1700s, marking an increase in economic activity, with annual growth of industrial output increasing to 3-4% from 2% in this period

- between 1780 and 1812, the rate of economic advance was rapid, especially in the iron, coal and cotton industries, which is associated with the process of industrialisation, and brought far-reaching developments for the nation

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CAUSES OF INDUSTRIALISATION

- David Hume, an eighteenth century philosopher, suggests that greed was the spur of industrial growth

- however, the reality is that various factors played a role in the increased industrial growth of the eighteenth century:

  • development of trade
  • availability of capital
  • access to raw materials
  • improvements in agriculture
  • political stability
  • free movement of people and goods
  • population growth
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CAUSES OF INDUSTRIALISATION

- overseas trading and colonisation, (eg. with the East India Trading Company), meant that there was capital available to borrow at low prices, for investment

- the rising population meant that there was a larger labour force available, along with an increased demand for food, clothing and housing, which led to increased production of manufactured goods, and thereby stimulated agriculture

- political stability facilitated more enlightened ideas, whilst scientific developments saw innovation and invention thrive

- Britain was a relatively liberal society in comparison with many of its neighbours, and was therefore a perfect environment within which new industrial ventures could flourish

- also, Britain was full of natural resources that could be used to create power for machines, such as fast-flowing streams, and coal and iron ore

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POPULATION GROWTH

- the first census to calculate Britain's population was conducted in 1801, and found it to be 10.9 million

- by 1811, this figure had risen to 12.6 million, showing a clear growth in the population

- Dr Richard Price argues than Britain was weak and therefore had a falling population, whereas Arthur Young argued that the population was growing due to 'the flourishing state of our agriculture, our manufactures and commerce and our general wealth'

- there are several reasons for the increased population:

  • agricultural improvements leading to increased food production and low prices
  • a rise in living standards, and therefore increased longevity
  • industrialisation gave people financial independence to start families younger
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THE COTTON INDUSTRY

- 'the basis of industrial wealth in the late 1700s was the steady spread of the technological advances... this was most obvious in the rapid development of the cotton industry' - Plumb

- by 1783, Britain's rapid industrial growth was in full swing, especially in the cotton industry

- traditionally, under the domestic system, or cottage industry, cloth production was done on a small-scale, by means of a spinning wheel and hand-loom

- however, under this system of production, output was slow and lacking in quality control, production was limited, and there was little hope of expanding production

- this all changed, however, as the import of raw cotton increased

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THE COTTON INDUSTRY

- with a growing population, there was increased demand for clothing and textiles, which was met by a succession of technological advancements in cotton manufacturing, and a reorganisation of the workforce

- cotton clothing was prioritised over linen or wool, as it was cheaper, more comfortable, and easier to wash

- cotton manufacturing became fully established in Lancashire and Lanarkshire, due to the fast-flowing rivers there to produce power for machines, and the proximity to the major sea ports of Liverpool and Glasgow

- lots of cotton was imported across from the British West Indies, where British traders had a large influence on production and export

- a canal system within the UK connected cotton factories, ports, and towns, to facilitate the production and redistribution of cotton produce

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THE COTTON INDUSTRY

- in 1769, the development of Arkwright's water frame signalled the start of the factory system of production

- Samuel Crompton produced the 'mule' in 1779, which was a cross between the water frame and the 'Spinning Jenny', produced yarn of great quality, which was strong and fine

- once it could be powered by water, it was acknowledged as the most crucial development in spinning 

- mechanising the spinning process led to great developments, but left the weaving process behind

- in 1789, to solve this issue, Edmund Cartwright designed a power loom which was operated by steam power, which saw industrialisation enter a new phase

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THE IRON AND COAL INDUSTRY

- during the 1780s, technological developments in the manufacture of cotton also boosted the iron industry

- as new cottom mills were built, and massive water wheels were designed to generate the power to run them, demand for iron increased

- output of pig iron increased from 68,000 tonnes in 1788 to 25,000 tonnes in 1804

- iron foundries were built on the edge of coal fields to access their source of fuel cheaply and easily

- the industry was concentrated in the Black Country, South Wales, South Yorkshire and Clydeside, which caused small villages in those areas to develop into large industrial towns with growing populations

- John Wilkinson built large-scale iron works to meet the new increased demand

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TRANSPORT

- the main development in transport was the construction of a network of canals across the country in the 1780s

- this meant that heavy and bulky goods could be transported more cheaply and easily than if done by road or river, and new areas could now be transported to

- industrial centres were linked to sources of raw materials, such as coal fields, and agricultural produce could now be carried by canal to populous cities

- canal companies provided attractive investment opportunities, as businessmen such as Josiah Wedgwood needed canals to transport their output

- canals were regarded as great improvements, but were difficult and expensive to construct, could only follow limited routes, froze over in winter, and were slow to operate, which led to the canal age being superseded by the railway age in the early 1800s

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CHANGES IN POWER

- until the late eighteenth century, the main sources of power had been man, horse, wind, and water

- harnessing water power for machines sped up production, especially in the textile industry, but had a serious limitation in that the manufacturer had to build his factory close to the source of power

- it wasn't until the widespread development of steam power occured that every aspect of manufacturing was revolutionised

- steam power allowed a massive increase in the volume of goods produced in almost every sector, and provided the technology required to create the means of moving the goods all over the country, and the world

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STEAM POWER

- James Watt is closely associated with the development of the steam engine, which enabled a range of machines to be powered by steam power

- he didn't, however, invent the steam engine, which had been originally developed to solve the issue of haulage and flooding in coal mines

- Watt adapted the steam engine to have a separate condenser, which cooled the steam and made it more efficient, and made the idea commercially viable

- he later invented a rotary motion in 1781, which allowed steam power to be used more effectively, and saw the steam engine become fundamental to the production of industrial power

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STEAM POWER

- Watt lacked the organisational ability and relevant resources to expolit his discoveries efficiently

- he found more success when he began a partnership with Matthew Boulton, which saw them achieve a huge technical advance, and by 1800, they had hundreds of engines in operation in Britain

- less than a third of these were in the cotton industry, and were being used in other areas such as tin mines, coal mines, ironworks, breweries, and making canals

- steam power 'extended the range of man's economic activities' - Hill

- steam power allowed for the cheap and plentiful production of iron and coal, along with making developments in transport, and leading to the introduction of the railway network

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JAMES WATT

- Watt was a Scottish innovator, who is often regarded as one of the best of his time

- whilst working on a repair of an early steam engine, he developed ideas for a new, innovative and effective steam engine

- after twenty years of work, and near bankruptcy, he found success through a partnership with Boulton

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AGRICULTURE

- for centuries, agriculture had been the main source of income and employment

- however, by 1800, the percentage of people working on the land had fallen to less than half of the total labour force

- production levels in agriculture were still rising, and by 1800, one farm worker was producing enough to feed 2.5 people, which was an increase from the 1.7 of the previous century

- the increasing population saw the demand for food rise, causing food prices to increase, and therefore, farmers intended to increase production to make the most of the possible profit increase

- enclosure of the land was used to increase crop yields and ensure healthier livestock, hence the surge in enclosures at this time

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AGRICULTURE

- through enclosures, a system of crop rotation could be enforced, meaning that the land could be used nearly all year-round, which the appropriate crops being grown at different times

- root vegetables, such as turnips, were introduced to provide winter feed for cattle, and also served to put goodness into the soil, which made it rich enough to grow wheat or corn

- experimentation in scientific stock-breeding improved the quality of livestock, which produced bigger quantities of meat

- there were also mechanical developments in farming, such as a seed drill, a horse-drawn ***, a light-weight plough, however none of these were enough to revolutionise agriculture

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AGRICULTURE

-  for the agricultural industry and the general population, enclosures were hugely beneficial, as it allowed landowners and farmers to create bigger farms, increase production and boost profits, which provided the growing population with sufficient food

- on the other hand, enclosures emphasised inequality in the countryside, as fewer people now controlled the land, and the smallholding class was pushed into near non-existence

- this meant that landowners now could rent out their land to tenant farmers, who then employed agricultural workers for a miniscule wage

- 'the most disruptive effect of the enclosures on village life was the shutting off of common land where customary grazing rights helped the domestic self-sufficiency of rural households' - Williams and Ramsden

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THE ECONOMIC IMPACT OF THE WAR

- in 1804, after Napoleon had failed to defeat the British at sea, he attempted to destroy them through economic welfare

- Britain wasn't self-sufficient, and so Napoleon knew that he could starve them into surrender by preventing them importing materials and food into the country

- he planned to do this through a domination of the European ports, and in November 1806, issued the Berlin Decrees, which declared Britain to be in a state of blockade, thereby forbidding any European trade with Britain

- the Milan Decrees followed on from this, and threatened that any ships that entered British ports could be seized by the French

- in January 1807, Britain retaliated with Orders in Council, which stated that all countries which excluded British ships would be subjected to a British blockade, and imposed restrictions on neutral ships trading with blockaded ports

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THE ECONOMIC IMPACT OF THE WAR

- the months that followed saw much retaliation back and forth between the two countries, with the stakes increasing each time

- as long as Napoleon prevented French wheat from reaching Britain he was harming his own farmers, and so between 1808 and 1810, sabotaged his own blockade to prevent this

- Napoleon couldn't successfully cut off the entire European coast from British ships, and so trade continued in certain ports

- in 1808, Napoleon marched troops through Spain and Portugal in an attempt to prevent this forbidden trade, however, managed to anger the once-compliant Spaniards through his bullying tactics, which marked the start of the Peninsular War, and began to drain France of men and material

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THE ECONOMIC IMPACT OF THE WAR

- there were certain major flaws with Napoleon's policy:

  • 'Napoleon had no control over Britain's trade with the rest of the world and it was to this Britain increasingly looked' - Brown
  • Napoleon failed to achieve a real economic threat, as he didn't have the naval supremacy to do so, and also because Britain began to direct its economic expansion at non-European markets

- therefore, the British blockade actually inflicted more harm on France than it ever did on Britain

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WAR FINANCE

- wars are very expensive, and it was essential that the government was able to raise the funds for it at a short notice

- Pitt decided to fund the war through raising loans, however, money was borrowed in such huge quantities at the start of the war that the price of government stock fell, and in 1797, the Bank of England had to suspend payments in gold

- by 1815, the National Debt had reached £876 million, from around £28 million at the start of the war

- the Sinking Fund wasn't an effective resolution of the debt during wartime, as the price of borrowing money had risen, but Pitt refused to abandon his policy of reducing the debt

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WAR FINANCE

- in 1798, Pitt introduced income tax, as an alternative to raising loans

- the tax was placed on all incomes over £60, with a maximum rate of 10%

- in 1803, Addington made the tax more efficient

- in 1805, Pitt charged income tax on all incomes over £150 

- by 1806, it had managed to offset some of the high costs of the war, and managed to help the country's economic recovery

- some argued that it allowed too much state interference, but only affected the middle classes, and left the labouring classes as prosperous as before

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CONTINUING INDUSTRIALISATION

- continuing the sustained period of growth in the late eighteenth century, the British economy continued to flourish into the nineteenth century, despite the long and costly wars with France

- the growth in Britain's economy can be measured by looking at the production figures for the three main industries (cotton, iron and coal)

- coal was the primary source of energy for industry, so it makes sense that if coal production was rising, then industry would be expanding

- from 1815 to 1830, coal production rose from 16 million to 30 million tonnes

- around half of the coal produced was used in the iron industry, and from 1815 to 1830, coal production doubled

- methods of producing iron were also becoming more efficient, as, at the start of the period it took 8 tonnes of coal to produce 1 of iron, but by 1830 this was 3.5

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CONTINUING INDUSTRIALISATION

- there was also remarkable growth in the production of cotton between 1815 and 1830, with imports of raw cotton increasing times 2 or 3, and the export of manufacutured cotton also increasing

- by the 1830s, 30% of the industrial workforce was engaged in the cotton industry, 70% of all British exports were textiles, and raw cotton accounted for 1/5 of British imports

- the growth of the export market was also reflected in the development of the shipbuilding industry, with the amount of ships built increasing from 66,700 tonnes in 1820, to 75,000 by 1830

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CONTINUING INDUSTRIALISATION

- the overall increase in production was also due to the continuing development of steam power, with more factories being powered by by steam, meaning an increasing variety of products becoming available to buy and export

- pottery and china were growing in demand, especially among the middle classes, who wished to furnish their new houses in the outskirts

- this age saw the beginning of consumerism

- by 1832, there were new fast-growing industries, services and technologies, all associated with the development of the railway

- further developments in steam power and machine tools caused industrialisation to spread to new parts of the country, making more industries mechanised, and increasing productivity

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CONTINUING INDUSTRIALISATION

- industrialisation was a continuing process, and continued from 1780 till the mid 1900s

- industrialisation affected technical innovation, output and trading

- in this time, trade expanded rapidly through the lifting of sanctions after the Napoleonic Wars, along with Huskisson's free trade measures

- population growth, from 12 million in 1811 to 16.3 million in 1831, carried the industrialisation process forwards

- the rate of growth was higher in industrial areas than in rural areas, as a result of the mass-migration to towns and the incidences of earlier marriages and births in urban areas

- the industrialisation process after 1815 continued to encourage new thought, brought new political pressures, emphasised the distinctions between classes

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THE COTTON INDUSTRY

- the most significant development within the cotton industry was the increasing use of the power loom

- Cartwright's steam-driven, wooden loom of 1789, was clumsy and inefficient

- in 1803 and 1813, William Horrocks made modifications to the loom, and in 1822 Richard Roberts, devised a new, cast-iron power loom 

- this popular model was used extensively in textile factories nationwide, and revolutionised the production of cloth

- the number of power looms in operation rose from 2400 in 1803, to 100,000 within 30 years

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THE IRON INDUSTRY

- in the iron industry, the most significant development was the introduction of the hot-air blast furnace, which was developed by James Beaumont Neilson in 1828

- by heaing the blast of air between the steam engine and the furnace to a specific temperature, this allowed a better quality of iron to be obtained, and raw coal to be used, which made the entire process cheaper and more efficient

- at the time, it was deemed as 'as great an advantage in the iron trade as Arkwright's machinery was in the cotton trade'

- in the Encyclopedia Britannica, it was said to have 'effected an entire revolution in the iron industry of Great Britain'

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THE COAL INDUSTRY

- despite the massive increase in the output of coal, there was limited innovation in the coal mining industry during the early nineteenth century

- coal continued to be cut from the coal seams by manual labour, using pickaxes

- coal mines were small and quite dangerous places, with the biggest cause of deaths in the coal mines being methane gas

- in 1813, Sir Humphrey Davy designed a safety lamp which inserted gauze around the naked flame to prevent explosion

- later, an air pump was devised to aid ventilation in the mines, but little else was done to improve safety

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TRANSPORT

- throughout the post-war years, a series of refinements were made to the steam engine, which served to make it much more efficient, which thereby improved the efficiency of moving coal from mines to foundries, factories, and other markets

- experiments in steam traction eventually developed into experiments in steam locomotion, and by 1812, William Hedley's 'The Puffing Billy' was in operation in a Tyneside colliery

- George Stephenson is widely regarded as the mastermind behind the modern railway system, and was the engineer for the first public railway using steam locomotives, which was the Liverpool to Manchester line, created in 1830

- this marked the beginning of a large-scale railway system in Britain, as the immediate success of the first one prompted many railway companies building railway lines up and down the country

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TRANSPORT

- the development of the railway was one of the most significant of the industrial age, by getting the economy moving, transporting people and goods, increasing levels of employment through the massive need for a large labour force, and boosting the iron and coal industries

- 'make England for all that is produced by steam, the workshop of the world' - Williams and Ramsden

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AGRICULTURE

- by 1812, agriculture was becoming an industry, with large tenant farms and well-organised tenant farmers hiring agricultural workers, to produce goods for a commercial market

- this change was facilitated by the reorganisation of farm land through the Enclosure Acts, which were passed throughout the French War and the 1820s

- enclosure quickened the pace of agricultural change

- rent for enclosed land was charged at a higher rate, as it was more valuable due to the crops in enclosed fields giving a greater yield, and allowed for systems of crop rotation to be put in place

 

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AGRICULTURE

- crop rotation allowed for more mixed farming of arable and livestock on the same land, which, in turn, gave farmers greater security as, if their harvest failed, it would mean that their cattle thrived, so profit was more reliable and available for investment

- agriculture was also stimulated by the war, as with the rising price of wheat, farmers made the most of this by planting even their least fertile land with crops

- the disruption of imports through war, and the rising population, maintained demand for wheat at a high level, yet when the war ended, demand fell leading to a drop in the price of wheat and less economic incentive to cultivate so much land

- furthermore, with the end of the war, trade restrictions ended, so cheap foreign corn was allowed back into the market, causing tenant farmers to observe a fall in their profits, and therefore cut wages and workers to save costs

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AGRICULTURE

- although the demands of landowners and tenant farmers for protection of their corn was partly appeased through the Corn Law, the legislation didn't necessarily protect them from the depression in agriculture that followed the war

- at this time, there were constant price fluctuations, even during good harvests

- landowners who had invested lots of money into paying for enclosures, new farm buildings and drainage systems, suddenly found themselves overwhelmed with debt, which led to many farming bankruptcies during the 1820s

- for agricultural labourers, the situation was even worse, leading to the movement of many labourers to the industrial cities, however due to the growing population, there was never a shortage of labourers in the rural areas

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AGRICULTURE

- as agricultural developments moved from the eighteenth to nineteenth century, progress was very slow, with innovation occuring sporadically in differing regions

- 'relatively small local improvements produced immediate results long before the new technical devices of ploughing, sowing, reaping and threshing were generally adopted' - Briggs

- the invention of the threshing machine, which separated husk from grain, is a key example of this happening, and was first invented by Andrew Meikle at Houston Mill in East Lothian

- Meickle depended solely on local landowners to promote his product, and as a result, wasn't until the 1820s that threshing machines came into common usage

- when the machines were eventually brought onto farms, labourers feared for their livelihoods and proceeded to destroy them, thereby slowing progression

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ANDREW MEIKLE

- Meikle is credited with inventing the threshing machine, however in reality, simply proposed a smarted adaptation of an earlier model from 1734

- his machine was trialled to a group of East Lothian farmers

- it featured in Wright's 'Present State of Agriculture in Scotland', but was still largely ignored

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ECONOMIC POLICIES

- along with developments in industry and agriculture, there were also government policies to increase trade and prosperity

- Liverpool's government focused on laissez faire principles, as they believed that it wasn't the role of Goverment to regulate wages or prices and that they would naturally settle at a level was most efficient according to supply and demand

- however, this approach lacked consistency, as the government intervened occasionally when it suited their interests (eg. to prevent a fall in the price of corn)

- this approach was seen as a general rejection of mercantilism, and saw a clear move towards free trade

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ECONOMIC POLICIES

- the budgets of 1824 and 1825 were significant as they were the first to apply the policy of free trade, which included freeing trade from tariffs and regulations to encourage the expansion of trade, lowering customs duties on raw materials, removing prohibitions on manufactured goods entering Britain, and reducing protective duties

- the most significant policy was the removal of the prohibition of the import of silk goods, which was reduced to simply a 30% duty, however this threatened the continuation of the fragile English silk industry

- on the other hand, raw wool could be exported for the first time, which was beneficial for British business and the economy generally

- these were largely the work of William Huskisson and J F Robinson, who were members of Liverpool's government

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ECONOMIC POLICIES

- preferential duties were established for raw materials from Britain's colonies (eg. silk from India and wool from Australia)

- the Navigation Code was adapted to get rid of the anachronistic restrictions on trading in foreign ships, but maintained that trade within the British Empire should be done on British ships 

- these developments stimulated industry and trade, allowing for lower prices in manufactured goods and an increase in the volume of British exports and shipping

- they also reduced smuggling, which had become 'highly organised big business connived in by society at large' - Hilton

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FREE TRADE VS MERCANTILISM

- mercantilism weakened as an economic policy towards the end of the eighteenth century

- mercantile regulations were being largely ignored (smuggling became big business)

- the adoption of free trade policies took away many such restrictive regulations, and thereby made smuggling unprofitable

- free trade also became more appropriate as Britain's export trade grew, as it became difficult to control through complex tarrifs

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THE IRON AND COAL INDUSTRY

- the growth of the cotton and iron industries depended on coal

- coal replaced wood as a fuel in iron smelting, and was therefore mined in huge quantities to provide fuel to power steam engines in factories

- coal became essential to the continuation of industrialisation, by providing cheap fuel to all manufacturing processes requiring heat

- coal production rose from 7 million tonnes in the 1780s, to 14 million tonnes by 1812

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AGRICULTURE

- by the 1820s, there were various systems of crop rotation in action on farms

- the most popular of these was a variation of the Norfolk system of crop rotation, which was adopted by Thomas Coke of Holkham Hall and soon grew in popularity, and involved the rotation of clover and tulips with barley and wheat

- Coke, on inheriting the Holkham estate in 1776, strongly promoted the idea of rotation so that 'no two white straw crops one after the other'

- different rotations were used on different parts of the estate with varying lengths (eg. every four, five or six years)

- at the time, it was thought that improvement was only for use on large estates, but with time, it had become an important trigger of development and change within agriculture

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ECONOMIC POLICIES

- when the 'commercial upturn' ended in 1825, there was criticism of Huskisson's free trade and the economic policies of Liverpool's government

- banks began to fail, businesses went bankrupt, and the labouring classes found themselves on very low pay or even unemployed

- Liverpool blamed this on the 'spirit of speculation', which caused issues when speculators, who were over-confidant in the buoyant economy, bought assets which later fell in value due to over-subscription or over-production

- after the initial financial crisis was over, the government passed the Bank Act of 1826, which legalised banks other than the Bank of England operating as joint-stock banks

- joint-stock banks could issue notes and had a more sturdy foundation than small, private banks, many of which had quickly fallen under during the crisis

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