History 155American Business History

Lecture 6

Overview of the Industrial RevolutionShelley Morrisette

Review of Prior Lectures and Readings:

Whaling IndustryWealth of NationsThe Business of SlaveryAmerican MercantilismFree Trade

Industrial Revolution Images

Objectives for the Lecture:Why was the Industrial Revolution a Revolution?It may appear as an evolution, but it impacts the population in an immediate and revolutionary manner!

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GDP Per Capita History

Source: Brad DeLong

GDP/Per Capita by yearYear GDP/Per

Capita

-1000000 92

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Year GDP/Per Capita

1200 109

1400 109

1500 138

1600 141

1700 160

1800 190

1900 679

1950 1650

1975 3800

2000 6800

Source: Brad DeLong

GDP Per/Capita 2014 1. Qatar$143,427 2. Luxembourg $92,049 3. Singapore$82,762 6. Norway $66,937

10. United States$54,597

89. China $12,010

125.India$5,327

198.Central African Republic

$600Source: WHO

How long does it take to earn an hour of light?

Today: ½ second of work (new bulb)

1950: 8 seconds of work (incandescent)

1880: 15 minutes of work (kerosene lamp)

1800: 6 hours of work (candle)

Source: Matt Ridley

What was the Industrial Revolution?

https://www.youtube.com/watch?v=3Efq-aNBkvc

When did it occur?https://www.youtube.com/watch?v=JhF_zVrZ3RQ

Industrial Revolution Timeline

1793: Cotton Gin

1763: Steam Engine

1837: Morse Code/Telegraph

1786: Steam Boat

1829: Typewriter

1845: Sewing Machine

What were the outcomes of the I.R.?

Answers

Huge migration of citiesFactory system launchedMass production of goodsIndustrial capitalismIncreased standard of living

Expansion of democracyPower of ordinary people risesIncreased leisure timeScience and research stimulatedForeign markets for goods

Why is it important?

AnswersChanged the world – forever!Industrialization destroyed workers’ independenceHuge investments required to operate large businesses – modern capitalismOverproductionMonopoly powerUnemploymentMass produced goods were cheaperIncreased standard of living

What was good about the I.R.?

AnswersCountry and people became wealthierChild mortality decreasedLiteracy increasedLife expectancy increasedOverall health and wellbeing increasedWorkers received more political powerGrowing middle class

What was bad about the I.R.?

AnswersUntil regulation and laws were enacted, businesses created many externalities that included:

Pollution Child – labor Work death/accidents Monopoly profits Political influence/corruption Workers lost independence

When did it end?

AnswersThere is no date certain. Many historians use different dates for different countries:

England (1760 – 1880)USA (1800 – 1908)

Many other countries are industrializing now! China India Vietnam

What does it all mean?

AnswersIndustrialization is good and bad. With regulation the bad can be managed.For industrialization to occur a power source is necessaryEnergy and GDP are perfectly correlatedEnergy must be – cheap, plentiful, reliable, dense, and scalableAll countries of the world want to industrialize because it means more “stuff” for their citizensPeople want stuff – smartphones, jeans, cars, etc.

Next timeImpact of Industrial Revolution

Communication/Transportation/Production/War

EconomicsPoliticsSociety/Culture/Quality of Life

Backlash of Industrial Revolution Romanticism Marxism/Socialism Luddites

Questions?