Chapter 12 Chapter 1 Development Chapter 2 Industrial Revolution 3

3 The traditional view has been initially to look at the history of the British Industrial Revolution in terms of the cotton industry, and rightly so.The cotton industry was the first to be revolutionized, and in other industries we seldom see so many revolutions driven by private entrepreneurs.As late as the 1830s, the cotton textile industry was the only British industry dominated by factories or "manufacturers" (the name comes from pre-industrial enterprises most commonly produced with cumbersome power machinery).At first (1780-1815), it was mainly used in the mechanization of spinning, carding and some auxiliary work. After 1815, the weaving industry gradually began to be mechanized.In people's minds, the "factory" mentioned in the new "Factory Act" definitely referred to textile mills before the 1860s, mainly cotton mills.Before the 1840s, factory production in other textile industries developed slowly, and other manufacturing industries were even more insignificant.The steam engine was first applied in mining, and by 1815, the steam engine had been applied to many other industries, but, despite this, the number of steam engines used in other industries was not large except for mining.In 1830, "industry" and "factory" in the modern sense almost exclusively referred to the British cotton industry.

In saying this, it is not intended to underestimate the forces leading to technological innovation in industry in other fields of production of consumer goods, especially in other textile industries (textiles account for a large and often dominant share of the commodities available for sale in the hands of all countries : In Silesia in 1800, textiles accounted for 74 percent of the value of total output), innovations in food and wine, ceramics, and the production of household goods flourished, spurred by rapid urban growth.But far fewer men were employed in these fields than in the cotton industry: in 1833 the number of persons directly employed in or dependent on the cotton industry amounted to 1.5 million, a number unmatched by any other industry.Second, these industries have had much less social-changing influence: brewing, which is in many respects the more advanced industry, is much more technologically advanced and mechanized than other industries, and it has undoubtedly had an impact on cotton textiles. The industry had been revolutionized before, but it had had little impact on the surrounding economic life, as evidenced by the Guinness brewery in Dublin, whose establishment had no impact on Dublin or the rest of the Irish economy. what effect.Yet the demands arising from the cotton industry - more buildings and activities in this new field of industry, improvements in machinery, chemistry, industrial lighting, shipping, and many other activities - were sufficient Explain most of the causes of economic growth in Great Britain before the 1830s.Thirdly, the cotton textile industry has achieved such a huge development, and its proportion in Britain's foreign trade is so large that it dominates the operation of the entire British economy.British raw cotton imports rose from 11 million pounds in 1785 to 588 million pounds in 1850.Cotton production increased from 40 million yards to 2.025 billion yards.From 1816-1848, the annual export value of British cotton textiles accounted for 40%-50% of the total export value.The rise and fall of the cotton textile industry is related to the rise and fall of the entire British economy.Changes in the price of cotton textiles determined the balance of the national trade, rivaled only by agriculture, which was clearly in decline.

Yet, although the cotton industry and the cotton-dominated industrial economy developed at such a rate as to make a joke of what the most imaginative mind could have imagined under any previous circumstances, it did not develop smoothly.By the 1830s and early 1840s some important problems in the growth process had arisen, not to mention revolutionary upheavals unprecedented in modern British history.During that period, the growth rate of British national income was significantly lower, and may even have declined, which indicated the first major setbacks in the industrial capitalist economy.This first general crisis of capitalism, however, was not an exclusively British phenomenon.

The most serious consequences of this crisis are social: the new economic transformations generate misery and dissatisfaction, elements of social revolution.Indeed, a spontaneous social revolution broke out among the urban poor and working poor, which produced the Revolution of 1848 on the Continent and the Chartist Movement in England.The dissatisfaction of the masses is not limited to the working poor, small businessmen, petty bourgeoisie who cannot adapt to the new situation, certain sectors of the economy are also victims of the industrial revolution and its development.Simple-minded workers believed that the machines had caused their misery, so they smashed the machines in rebellion against the new system.Surprisingly, however, a large number of local businessmen and farmers also deeply sympathized with the Luddite movement of their laborers, because they saw themselves as a small group of ruthless, self-interested innovators. victim of.Exploitation of workers, keeping their incomes subsistence, allowing the rich to accumulate profits to finance industrialization (and their own luxuries), provoked a revolt from the proletarians.However, on the other hand, the transfer of national income from the poor to the rich, from consumption to investment, has also aroused resistance from small entrepreneurs.The big bankers, the tight-knit group of domestic and foreign "bondholders" who pocket all the tax revenue (see Chapter 4)—about 8 percent of the national The image is even more unpopular among such people as the farmer, the small farmer, than among the laborers, because these people know all about money and debt, and are therefore deeply indignant at the disadvantage they find themselves in.After the Napoleonic Wars, the rich were doing well, they raised all the loans they needed, they enforced deflation, they imposed monetary orthodoxy on the economy; The little ones are demanding looser borrowing and fiscal unorthodoxies. (Protest movements of all farm owners and small entrepreneurs, from British radicalism after the Napoleonic Wars to Populism in the United States, can be organized by their demands for fiscal unorthodox: they Both are "money maniacs".) So, both the workers and the disaffected petty bourgeoisie who are about to be reduced to nothing have a common grievance.These grievances made them gradually unite in the "radicalism", "democracy" or "republican" mass movement. From 1815 to 1848, the Radicals in Britain, the Republicans in France and the United States The most thorny movement of all is the Jacksonian Democrats.

But, from the capitalist's point of view, these social problems are all about economic progress, and only certain dire contingencies will overthrow the social order.On the other hand, they seem to have seen that there is something inherently flawed in the economic process that threatens its fundamental driver—profit.Because, if the return rate of capital drops to zero, then the economy that only produces for profit will inevitably decline and enter a "stagnation state", which is a situation that economists have foreseen and worried about. Three of the most conspicuous of these flaws are the boom-and-bust business cycle, the tendency for the rate of profit to fall, and (equally the same thing) the reduction of profitable investment opportunities.The first of these flaws is not considered serious, and only those who criticize capitalism investigate cyclical changes as an intrinsic part of the capitalist development process, as capitalism Inherent paradoxical symptoms. (Before 1825, the Swiss Simonde de Sismondi and the conservative, rustic Malthus were the first to argue on this point. The emerging socialists borrowed their Crisis theory serves as the basic principle of its own critique of capitalism.) Periodic economic crises lead to unemployment, production decline, business bankruptcy, etc., which are well known.Periodic economic crises in the eighteenth century generally reflected some sort of agricultural disaster (harvest failure, etc.) main cause of economic depression.In England, at least since 1793, periodic economic crises in the small manufacturing sector and in the financial sector are also well known.After the Napoleonic Wars, from 1825-1826, 1836-1837, 1839-1842, 1846-1848, dramatic changes in this periodic cycle of prosperity and collapse clearly dominated the economic life of a country in peacetime. The 1830s are the pivotal decade of the period covered in this book, when it was only vaguely recognized that economic crises were a regular and cyclical phenomenon, at least in the areas of trade and finance.However, industrialists still generally believe that the cause of the economic crisis is either a special mistake (such as excessive speculation in US stocks) or because external forces interfere with the smooth operation of the capitalist economy. any fundamental difficulties of the capitalist system.

It is not the same case with falling profit margins, as the cotton industry can illustrate very clearly.At first, the industry reaped huge benefits. Mechanization greatly increased the productivity of workers (i.e. lowered the unit cost of production), and since the labor force consisted mainly of women and children, they were paid abysmal wages by any measure. of. (In 1835, Baynes [E. Baines] estimated that the average weekly wage of all textile workers was 10 shillings, with two weeks of unpaid holidays a year, while the average wage of handloom weavers was 10 shillings per week. Seven shillings on Saturday.) In 1833, of the 12,000 workers in the Glasgow cotton mills, only 2,000 earned an average weekly wage of more than 11 shillings.In Manchester's 131 cotton mills the average wages were less than twelve shillings, and in only twenty-one were more than twelve shillings.The construction cost of cotton mills was relatively cheap. In 1846, it only cost about 11,000 pounds to build a complete weaving mill with 410 machines (including land and building costs).Most importantly, however, the price of textile raw materials—the main cost of the cotton industry—fell sharply as cotton farming expanded rapidly in the southern United States after Eli Whitney invented the cotton gin in 1793.Entrepreneurs have benefited from the fact that profits rise with rising prices (that is, they sell their product at a higher price than they made it, which is the general tendency), plus what we just said Based on this, then we can understand why cotton textile manufacturers feel particularly good.

After 1815, these advantages appear to be more and more offset by diminishing marginal profits.First, the Industrial Revolution and competition caused regular and substantial price reductions in products that, in many ways, were not the cost of production.Second, after 1815, the overall price situation was falling rather than rising. That is to say, producers never enjoyed the extra profits brought about by rising prices that they had enjoyed before, but suffered damage due to a slight drop in prices. .For example, in 1784, a pound of fine yarn was sold for 10 shillings and 11 pence, and its raw material price was 2 shillings (a profit of 8 shillings and 11 pence per pound); in 1812, a pound of fine yarn was sold for 2 shillings. shillings and 6pence, and raw material cost 1shilling 6pence (profit 1shilling); and in 1832, it was sold at 11.25pence, raw material cost 7.5pence, deducting other expenses, per Pounds are only a 4p profit.Of course, this is the case here and there in British industry, but the situation is not too pessimistic, as all walks of life are developing.A historian who admired the cotton textile industry wrote downplayingly in 1835: "The profits are still large enough to accumulate a large amount of capital in the cotton textile manufacturing industry." Growing rapidly while declining.The most urgent task is to continue to accelerate production significantly.However, the reduction in profit margins appears to have to be contained, or at least slowed down.And this can only be achieved by reducing costs.Of all costs, the most compressible is wages.McCulloch (Scottish Economist) estimates that the total annual wage bill is three times the cost of raw materials.

The direct exploitation of wages, the substitution of cheap machine operators for highly paid skilled workers, and the competition of machines can effectively compress wages. In 1795, the average weekly wages of the handloom weavers in Bolton was 33 shillings. The last method was used to reduce wage expenses. By 1815, the average weekly wages of weavers were reduced to 14 shillings. Between 1829 and 1834, it was further reduced to 5 shillings and 6 pence (to be precise, the net income was 4 shillings and 1.5 pence).Indeed, cash wages continued to decline in the period following the Napoleonic Wars.But there was a biological limit to this reduction in wages, otherwise the workers would starve, and there were already half a million weavers starving.Only when the cost of living falls in tandem can the fall in wages not lead to starvation.Cotton manufacturers share the view that the rise in the cost of living is artificially inflated by the monopolists of the land interests.After the Napoleonic Wars, the situation was made worse by the heavy protective duties imposed by a landowner-dominated Parliament to shield British farming operations—the Corn Laws.In addition, these practices have other side effects, enough to threaten the actual growth of British exports.For if the rest of the world, which had not yet industrialized, could not sell its agricultural products because of British protection, what would they have to buy the industrial products which only Britain could (and must) provide?Therefore, the Manchester business community became the center of opposition to the entire landownership system, especially the "Corn Law". .However, the Corn Laws were not repealed until 1846, and the repeal of the Corn Laws did not cause an immediate drop in the cost of living.Before the age of railroads and steamships, it is doubtful whether the importation of grain, even duty-free, would have greatly reduced the cost of living.

The British cotton textile industry is under such great pressure to mechanize (that is, reduce costs by saving labor), rationalize, expand production and sales, and make up for the loss of marginal profits by means of small profits but quick turnover. The success of the cotton textile industry It was won by surprise.As we have seen, production and export had actually increased substantially, so that after 1815 jobs that were still manual or only semi-mechanized began to be mechanized on a large scale, notably weaving. Industry.These occupations were mechanized primarily through the general use of existing machines or slightly improved ones, rather than through further technical revolutions.Despite increasing pressure for technological innovation (39 new patents in areas such as cotton spinning between 1800 and 1820, 51 in the 1820s, 86 in the 1830s, and 156 in the 1840s.) However, technically speaking, the British cotton textile industry had stabilized by the 1830s.On the other hand, in the post-Napoleonic war period, although production per capita increased, the increase was not revolutionary, and a really large increase did not occur until the second half of the nineteenth century.

There is a similar pressure on the rate of interest on capital, which contemporary theory tends to compare to profit.We shall, however, reserve this question for the next stage of industrial development, that of building up the capital industries.