An amateur article: "Why the West became the richest".

[philippe]

Hi there guys! I love reading up your history articles, and i saw a few threads on the why and hows the West became rich, I once stated that i once made an small article on it, based on an article in "EOS" and some other research. (acutally this is a summerisation of a bigger article I wrote, which goes more in-depth, but i had to hand that over to my teacher, without the option of ever getting it back )

As someone who can't wait to start his history classes in september at the local university, I'd like to post my first article here. (although I'll have to translate it from Dutch, so my apologies for any language errors beforehand. )

Bear with me.

Any feedback or criticism would be lovely.

Why the West became the Richest.

The industrial revolution was the breakthrough in the development of economics and socuety.
The enormously grown prosperity has changed almost all aspects of society.

What is the cause of the industrial revolution and why did it happen in North-Western Europe? The simple question is: Why did the Brits developed the steammachine and why did this became such a great success?

Researchers specialised on certain "deelrevoluties" (revolutions in a certain field) which were all of value or seem to be for the creation of the right conditions for the industralisation process.

It is the interactivity of different forms of knowledge which according to Joel Mokyr(1) were distinctive for the society which came in the 18th century in Europe. For this process of the accumulation of scientific insights combined with the practice and refinement in the productionprocess, He developed the term "Industrial Enlightment" for what was in his eyes the true breeding ground.

But also of that lay the roots deep within the European past.
The enlightment (18th century) build on the successes of the scientific revolution (16th and 17th century) which wouldn't be possible without the invention of the act of printing (15th century) or the emergence of universities in the middle ages. The importance of human capital also originated from the middle ages because then a society originated that gave a lot of value to the written word and literacy.

Under influence of the "new institutional economy" theory by the American Douglas North(2), the discussion revived. He shown the importance of institutions for economical development: Western-Europe developed from the Middle ages a whole of rules and laws that protected ownership rights and supported the flow of markets.

On search of the origin of that, they came on the institutional fram on which Western-Europe stands which was developed between 900 and 1300:
1: The rights are written down
2: everybody (including the ruler) is subject to it
3: the power of the monarch is shared with the church, the cities and nobility.
4: the power is the subject of negotiations between those involved in parlement.

example: the Magna Charta.

This is in sharp contrast with other societies, which known more absolute monarchs.

If they compare this with China they come to the conclusion it could very well be that China would come as first in the industrial revolution which would mean the uniqueness of Western-europe would be less valuable compared to other regions.

it could be that the "verburgerlijking" (I'll try to translate this: the rise of the middle class) of society and the stronger position of women in Europe could be the two decisive factors. (the "verburgerlijking" came due to the fact that the richer citizens had more children they could support then the poor and that these children with their education could shape society better).




(1) http://www.history.northwestern.edu/faculty/mokyr.htm
(2) http://en.wikipedia.org/wiki/Douglass_North

 

[BCLG100]

I think that you are perhaps over exagerrating the development of things. For instance between 900-1300 you'd be fairly hard pressed to find something you could identify as a Parliament. Taking England as an example:

The Magna Carta whilst granting habeus corpus etc and subjecting the king but it was hardly new, Henry I delivered the charter of liberties over 100 years earlier. The only difference was that the Magna Carta was enforced upon the king by barons and for this reason was later anulled by both the King and the Pope within a couple of years. Probably more important is Henry III reissuing it in 1225 as an Adult but still it was hardly a glowing recomendation for parliament, sure it stipulated that there should be a group of people to make sure that the king kept to the agreement and allowed Habeus Corpus etc but earlier on you can argue that this was little different than the later Privy Council. Further just because there was something written down doesn't mean that was the be all and end all (in England anyway) where common law superseeded Roman law.

I also don't think that you can say that outside Western Europe was Absolute Monarchs because look at late seventeenth century France with the Absolutist rule there. However i do agree that an Absolutist monarch/leader in places like China do encourage a certain lack of knowledge and information to keep society in check. e.g. the near industrial revolution in Song China.

Perhaps you could also comment in your article on the numerous different powers jostling for position within Europe pushing technological/military/philosophical ideas forward?

 

[philippe]

I think that you are perhaps over exagerrating the development of things. For instance between 900-1300 you'd be fairly hard pressed to find something you could identify as a Parliament.

You are right here, on the Parliament issue, But i'd like to point out the importance of written law and priviliges which gave a greater assurance to the guarantee of rights: Due to the giving of "city rights" as in Stadslucht maakt vrij, the greater autonomy given or obtained from cities spurred development in the Middle ages. Here is an wiki article on what I mean: http://en.wikipedia.org/wiki/City_rights_in_the_Low_Countries
These beffroys were common in Northern-West Europe, in countries like the lowlands and England. No wonder they even gained additional influence and wealth compared to more centralised governments.

Taking England as an example:

The Magna Carta whilst granting habeus corpus etc and subjecting the king but it was hardly new, Henry I delivered the charter of liberties over 100 years earlier. The only difference was that the Magna Carta was enforced upon the king by barons and for this reason was later anulled by both the King and the Pope within a couple of years. Probably more important is Henry III reissuing it in 1225 as an Adult but still it was hardly a glowing recomendation for parliament, sure it stipulated that there should be a group of people to make sure that the king kept to the agreement and allowed Habeus Corpus etc but earlier on you can argue that this was little different than the later Privy Council. Further just because there was something written down doesn't mean that was the be all and end all (in England anyway) where common law superseeded Roman law.

Interesting, but the Magna Carta did had an influence on how power was distributed and that's the point: the more decentralised power became, the more development could spur. you could of course always say that the many unstable small feodal counties were bad for development but that is becuase of it's instability due to wars. In England such wars were less common, and becuase of that stability there was no halt in development.

I also don't think that you can say that outside Western Europe was Absolute Monarchs because look at late seventeenth century France with the Absolutist rule there.

I understand what you mean, but before the absolutist rule, the feodal system in france was absolutely not in favor of the King of France.

However i do agree that an Absolutist monarch/leader in places like China do encourage a certain lack of knowledge and information to keep society in check. e.g. the near industrial revolution in Song China.

Let me also comment on the laws here:
Due to the protection of the rights on ownership and business and the different handling on them, companies had actually the change to survive a few generations. What i mean is: when the founder of a company died, the company could still exist if one of the sons took over, or another person. In Middle-eastern law it was required to abandon the company and split up the assets among the family members, which is of course bad for the development of bigger companies to excercise more power.

Now, I am not an expert on how the Chinese handled this of course, and i will place some additional comment on this matter after some research (and trust me, i won't rely on wiki alone )

Perhaps you could also comment in your article on the numerous different powers jostling for position within Europe pushing technological/military/philosophical ideas forward?

i'd like to point out that almost every struggle in Medieval Europe is in the end a struggle amongst classes and the power distribution amongst them. even the clashes of protestants and catholics can be reduced to this.

I'd like to write up some more about this, but I will make sure I'll do some additional research upon this and reread some of my sources. My memory is lacking some essential intel atm (with the exams and all )

 

[BCLG100]

You are right here, on the Parliament issue, But i'd like to point out the importance of written law and priviliges which gave a greater assurance to the guarantee of rights: Due to the giving of "city rights" as in Stadslucht maakt vrij, the greater autonomy given or obtained from cities spurred development in the Middle ages. Here is an wiki article on what I mean: http://en.wikipedia.org/wiki/City_rights_in_the_Low_Countries
These beffroys were common in Northern-West Europe, in countries like the lowlands and England. No wonder they even gained additional influence and wealth compared to more centralised governments.

Hmm but then the growth of beuracracy/military improvements meant that the power of city states were in decline by the beginning of the Renaissance, sure there were some still about- Geneva etc but they were hardly a patch on the trading empires established by the Venetians/Genoese. City power was destroyed in England as the power of the monarchy grew whilst until the industrial revolution the main city (and only real city in England was London). Your article also states that city rights was a Low countries phenomenan, England was far different in the regard many were encouraged to stay in the farms.

Interesting, but the Magna Carta did had an influence on how power was distributed and that's the point: the more decentralised power became, the more development could spur. you could of course always say that the many unstable small feodal counties were bad for development but that is becuase of it's instability due to wars. In England such wars were less common, and becuase of that stability there was no halt in development.

But following the Magna Carta we had numerous rebellions and revolutions- Simon Demontfort, War of the Roses etc. It was possibly the centralised power of either the Monarch/Parliament which allowed England to quickly establish itself with only a brief period where the two were on a level playing field.

I understand what you mean, but before the absolutist rule, the feodal system in france was absolutely not in favor of the King of France.

Right but then France was arguably in one of its Golden Ages's under the Sun King, he was absolutist but also the country was reaching a peak, absolutism wasnt neccesarily to the detriment to improvement.

Let me also comment on the laws here:
Due to the protection of the rights on ownership and business and the different handling on them, companies had actually the change to survive a few generations. What i mean is: when the founder of a company died, the company could still exist if one of the sons took over, or another person. In Middle-eastern law it was required to abandon the company and split up the assets among the family members, which is of course bad for the development of bigger companies to excercise more power.

Now, I am not an expert on how the Chinese handled this of course, and i will place some additional comment on this matter after some research (and trust me, i won't rely on wiki alone )

Perhaps more important was the founding of the VOC, the English East India Company, Dutch West India company etc? The first corporations.

i'd like to point out that almost every struggle in Medieval Europe is in the end a struggle amongst classes and the power distribution amongst them. even the clashes of protestants and catholics can be reduced to this.

Thats a very marxist interpretation of events i was referring to the struggle between countries accelerating the need for change. Bigger weapons/more money etc.

 

[philippe]

Hmm but then the growth of beuracracy/military improvements meant that the power of city states were in decline by the beginning of the Renaissance, sure there were some still about- Geneva etc but they were hardly a patch on the trading empires established by the Venetians/Genoese. City power was destroyed in England as the power of the monarchy grew whilst until the industrial revolution the main city (and only real city in England was London). Your article also states that city rights was a Low countries phenomenan, England was far different in the regard many were encouraged to stay in the farms.

You are right here, I made the mistake of equating the city rights to the situation in England. My bad

But following the Magna Carta we had numerous rebellions and revolutions- Simon Demontfort, War of the Roses etc. It was possibly the centralised power of either the Monarch/Parliament which allowed England to quickly establish itself with only a brief period where the two were on a level playing field.

The thing is, that the parliament still had an enormously important role in contrast to other nations. The distribution and the negotiation of the distribution of power is still an enormous factor. Maybe I can put the link here and the agricultural development and the increasingly bigger standard of the english peasants in regard to other countries. I once read an article about this. Time to do some rereading in this matter

Right but then France was arguably in one of its Golden Ages's under the Sun King, he was absolutist but also the country was reaching a peak, absolutism wasnt neccesarily to the detriment to improvement

.

And then the absolutist kingdom went down the drain due to it's bancruptcy. It was an over bloated "Golden age" as the many Protestant struggles in the cities of France (such as Montpellier) prove.

Perhaps more important was the founding of the VOC, the English East India Company, Dutch West India company etc? The first corporations.

And the laws in the Netherlands enabled those companies, also I'd like to refer to moneylending and banking firms such as the Medici's and the rothschildt's in later times. The laws enabled those banks becuase they excercised so much influence and eventually the kings became subject to the banks, even though they struggled a lot against it. A lot of power was shifted to the rich citizenry due to the banking system.

Thats a very marxist interpretation of events i was referring to the struggle between countries accelerating the need for change. Bigger weapons/more money etc.

Why, thank you!

i'd like to comment that the struggle between "nations" is a far more recent events than most would like to believe. In fact, the power gained from more centralised governments is due to certain developments (such as the colonies) and the high cost procuring these weapons. (such as the making of canons); Don't forget it's the wealth of it's citizenry (and the subsequent taxing) that enabled countries to expand. to put in Civ terms: if you don't have any towns in your cityplot and didn't build any universities, expect to expand slower and research less then other civs

 

[~Corsair#01~]

I think the Industrial Revolution owed a great deal to agricultural advances and the creation of stable modern financial systems, both of which were pioneered in the Netherlands and then refined and introduced on a far larger scale in England and Scotland.

With the new financial systems, and also improved transport networks, farmers were able to invest in new and improved machinery with loans and distribute their goods all over the country. The "Industrial Revolution" was only the the visible sign of much larger changes in society, the final stage in the progress from medieval to modern.
The financial and agriculture revolutions which preceded it and which created the manpower, financial means and market for factory goods were at least as important.

EDIT- I haven't read Douglas North, but from what your article says on the "new institutional economy" he seems to have the right idea. A sensible system of laws and a stable and financially reliable government were key to the advances in finance which ultimately allowed Britain and the Dutch to industrialise more quickly than France. It's also a key reason why Britain was able to win the naval conflicts with France. The Royal Navy was better organised, better supplied and wasn't just a load of embezzling aristocrats.

 

[Cheezy the Wiz]

If they compare this with China they come to the conclusion it could very well be that China would come as first in the industrial revolution which would mean the uniqueness of Western-europe would be less valuable compared to other regions.

Another reason is that advances in technology made farming in Europe more productive, since you could make plowing fields progressively more efficient. To date, no mechanized method of rice cultivation exists, and it is grown with the same methods and efficiency as it was for the last two thousand years.

Because of the mechanization capability of European agriculture, a surplus workforce was created since both more food was being created, and you needed less people to do it, and those surplus populations moved to the cities for work, creating the engine by which the industrial revolution would be driven. Such developments are next to impossible in China and most of Orient.

it could be that the "verburgerlijking" (I'll try to translate this: the rise of the middle class) of society and the stronger position of women in Europe could be the two decisive factors. (the "verburgerlijking" came due to the fact that the richer citizens had more children they could support then the poor and that these children with their education could shape society better).

(1) http://www.history.northwestern.edu/faculty/mokyr.htm
(2) http://en.wikipedia.org/wiki/Douglass_North

It's also important to note that yes, while there were more and more educated children of wealthy families, that there was also a high demand for their expertise, which maintained the drive to expand the educational institutions into what became eventually the compulsory public school system. When that demand does not exist, the need for an educated populace fails, as it has in Egypt today. During the Nasser era, there was a great push to create a mass of well-educated citizens, and an educated and capable populace. However, industrialization never came to Egypt, because it maintained its position in the world as a net raw materials exporter (very similar to the Latin American situation), rather than a processed materials exporter, since Egypt by and large lacks heavy industry. Because of this, there is very little demand for the college degrees obtained under Nasser's educational programs, and you have people with Bachelor's and Master's degrees driving taxi cabs for a living. Western Europe, in particular Britain and Belgium, had this demand as well the supply, and the capability to export processed goods, rather than raw materials (though the latter can partially be attributed to fate) and that's why they succeeded in being "the richest," and Latin America and most of Asia and Africa have not, though I don't deny the capability of any of those places today to become producers, rather than consumers.

 

[philippe]

Another reason is that advances in technology made farming in Europe more productive, since you could make plowing fields progressively more efficient. To date, no mechanized method of rice cultivation exists, and it is grown with the same methods and efficiency as it was for the last two thousand years.

Because of the mechanization capability of European agriculture, a surplus workforce was created since both more food was being created, and you needed less people to do it, and those surplus populations moved to the cities for work, creating the engine by which the industrial revolution would be driven. Such developments are next to impossible in China and most of Orient.

You are absolutely right, agricultural developments such as the use of manure and cycling between two crops and a period of rest were very influential.

It's also important to note that yes, while there were more and more educated children of wealthy families, that there was also a high demand for their expertise, which maintained the drive to expand the educational institutions into what became eventually the compulsory public school system. When that demand does not exist, the need for an educated populace fails, as it has in Egypt today. During the Nasser era, there was a great push to create a mass of well-educated citizens, and an educated and capable populace. However, industrialization never came to Egypt, because it maintained its position in the world as a net raw materials exporter (very similar to the Latin American situation), rather than a processed materials exporter, since Egypt by and large lacks heavy industry. Because of this, there is very little demand for the college degrees obtained under Nasser's educational programs, and you have people with Bachelor's and Master's degrees driving taxi cabs for a living. Western Europe, in particular Britain and Belgium, had this demand as well the supply, and the capability to export processed goods, rather than raw materials (though the latter can partially be attributed to fate) and that's why they succeeded in being "the richest," and Latin America and most of Asia and Africa have not, though I don't deny the capability of any of those places today to become producers, rather than consumers

Interesting situation, do you have any clue on the "why" in this?

 

[ibn sina]

I wrote a similar though considerably longer article on why the industrial revolution occured in England and not in any other western nation. You might find it helpful so I'll post it.

Spoiler :

Why England was the Cradle of the Industrial Revolution

In the late 18th century what is now known as the industrial revolution started in Great Britain. In the first half of the 19th century it would spread to the rest of North-western Europe and its offshoots. It would prove to be of huge importance as it vastly increased production and wealth, permanently changing society. But why did the industrial revolution start in Great Britain and not in any other major nation?
To answer that question one needs to know what was needed for the development of the industrial revolution and see how Great Britain (though it was mostly an English phenomena Scotland was involved as well hence Great Britain instead of just England) could satisfy those needs better than any other nation. But before any of that can be answered a working definition of the industrial revolution is needed.
What is an Industrial Revolution?

It might seem like a simple question but appearance can be deceptive. The first thing you think about is most likely machines, technological innovations fuelled the revolution. But new technological innovations had been coming for some time without triggering widespread industrialization. The new machines that came (Newcomen’s and Watt’s Steam engines, Spinning Jenny etc.) were certainly very important for the industrial revolution but they were not by themselves sufficient for the revolution.
A very interesting definition comes from the Nobel Prize winning economist Robert Lucas, Jr , economic growth per capita. According to Lucas there had been no society that had experienced sustained per capita growth up to the late 18th century. There had been increased production but it had been used to increase the number of people not the living standard. The industrial revolution according to Lucas would be the sustained per capita economic growth. It is an attractive idea; a rapid increase in individual production seems like a very defining feature of the revolution. The other parts follow naturally from it; it is hard to increase productivity significantly without innovations, technological and other. Increased agricultural productivity leads to increased urbanization and increased factory productivity raises wages there which gives further incentives for urbanization while it builds up capital to be invested. However Lucas’ theory has a flaw; in Western Europe the GDP/capita had already started to grow as early as the 17th century. But if one argues that the industrial revolution perhaps was not so much revolutionary as gradual, as some historians do . The industrial revolution would be a continuation of the commercial revolution that first set off the GDP/capita growth in some European economies.
But even if the industrial revolution was a continuation of the commercial it still had the defining feature of mechanization. The industrial revolution started the time of increasing individual productivity with the aid of machines and factories, almost completely disengaging the economic output of a nation with the amount of productive land it had.

Why Great Britain?

So what is needed for a sustained per capita economic growth?
If one looks at modern economics one thing emerges as incredibly important, a free economy. The freedom of the economy is amazingly well correlated to the GDP/capita of any nation ; definitely well enough to imply causation rather than mere correlation. The economies that start to rise from poverty are also distinguished by their rising economic freedom (the Asiatic tigers etc.). There is no reason to believe that people were fundamentally different in their psychology 200 years ago. That economic freedom is the key to wealth should be true then as well as it is now (Economic freedom meaning: Rule of law, low taxes, low tariffs, little regulation, little corruption and strong property rights).
So let us survey the economic freedom of 18th century Great Britain.

England and later Great Britain was one of the most liberal countries in Europe and the world. As early as the 13th century with the Magna Carta England had some kind of constitutional system; the king too was bound by certain laws and people had in theory some inalienable rights. Most importantly habeas corpus (latin: that you have the body) which safeguards the individual from arbitrary state action. Of course during the middle ages the laws were not very “enlightened” and the rights of Magna Carta applied to nobles.
However in the 17th century the individual rights against arbitrary state action were being extended to all people. The English civil war was a lot about whether England should be a constitutional monarchy or more of an absolute one (as was the trend in Europe at the time with France, Sweden, Russia and Prussia). After the glorious revolution in 1688 and the bill of rights in 1689 England was firmly established as a constitutional monarchy. The monarch could not, levy taxes, suspend laws, make royal appointments or maintain a standing during peacetime without the parliaments permission. Furthermore it established the subject’s (or perhaps citizen would be the better word?) right to petition the monarch, to bear arms (actually only for protestant subjects) and freedom from fines and forfeitures without trial (yes it said a lot of other things too but these are the relevant tenets) .
In the beginning of the 18th century Great Britain had a strong protection of private property and individual rights. Your property could not be seized on the monarchs whim and you could not be thrown in prison without due trial. Without this security people would not dare to invest heavily in anything which is needed for economic growth and the very capital intensive factories of the industrial revolution. Furthermore well established property rights makes investment easier as you can take loans on your property. According to the economist Hernando De Soto a lack of well defined and recognizable property rights is one of the largest causes of third world poverty as it hinders investment.
During the 18th century no major nation had such strong property rights and rule of law as Great Britain. France had an absolute monarchy even though Louis XIV never said, “L’état, c’est moi” (the government it is I) it was in many ways true. Anything like the revocation of the edict of Nantes (1685) declaring Protestantism illegal would not have been possible in England/Britain post glorious revolution. Prussia and Russia were also absolute monarchies during the 18th century without any developed individual rights. Russia was still quite feudal with millions of serfs and in Frederic William’s Prussia tall males could simply be seized for military service, no habeas corpus there .

Strong rights of private property and rule of law are undoubtedly very important for economic freedom hence growth, but they are not the only components. Free trade is regarded as a very important part of economic freedom and has been shown to stimulate growth . In the 18th century the dominant economic system was mercantilism which favoured protectionism. Protectionism is devastating enough now with our fairly large domestic markets (or continental markets as with the EU protectionism) but in the 18th century markets were much, much smaller due to protectionism. If you wanted to transport goods from Konigsberg to Aachen you would have to pay up to 30 different customs, few products were produced cheaply enough to remain competitive after such a battering. France and Russia which you might think would have large domestic markets were actually divided up by tariffs too . If one could only produce for a small market, a factory might never become viable as the production from that would simply make supply much larger than demand. Furthermore lots of people will produce things that at a much lower price could be imported if it weren’t for tariffs, preventing the economy from specialising. For example the British tariffs and quotas for import grain (known as the Corn Laws 1815-1846) drove up the price of grain, making more people work with farming and not on the comparative advantages of Britain (i.e. manufacture), the high food prices also caused malnourishment and starvation among the poor .
Still Britain had the ideological background to fight for free trade with men such as Richard Cobden, David Ricardo and Adam Smith. And during the 19th century it distinguished itself with its free trade, not participating in the trade wars that erupted between the great powers (One power raised tariffs so the other country raised tariffs to counter) and its custom free domestic market.
Although the powers of Europe started to liberalise their trade in the 19th century, they did so later and to a lesser extent than Great Britain. Prussia/Germany for example had “zollverein” (German customs union) which removed all tariffs within Germany but they still maintained tariffs against other nations and it was not until 1834 that it was enacted.
It has been argued by some people that high tariffs are actually good for developing industries to protect them. But statistics does not back it up , nations with free trade show on average a higher per capita growth; even though some nations might prosper in spite of its protectionist policies. Furthermore not even the theory holds up . It is better for a nation to focus on its comparative advantages and import other things .

The liberalism of Great Britain gave incentives for investing in the new industrial enterprises as people knew that they would not be seized or overtly taxed. They knew that if they worked hard it would make a difference. The liberal system in Britain was present already in the late 17th century which helped build up the capital (including human capital) and financial innovations such as the joint-stock venture (which evolved into the corporation) that would be needed for the expensive factories.
Furthermore they also knew that they had a large market in Great Britain and its colonies and the nations that did not erect trade barriers. Thanks to their relatively low tariffs they could focus on what they could do well and import the rest. The free market was set loose in Great Britain.
Economical liberalism is the most important factor for economic growth as statistics convincingly show but there were also other factors favouring Britain’s industrialization especially the actual mechanization.

External factors favouring Great Britain

War is never a good thing for economic growth and prosperity. It is very costly even for the winner, it does not produce anything of value and marauding armies can devastate a country. Furthermore it often comes with more government power and protectionism which we have seen is not good for economic growth (for example in 1812 Napoleon invaded Russia to prevent trade and that killed over a million people).
While Great Britain did not stay out of wars (arguably though they were less belligerent than other nations; had more a balance of power agenda than one of expansion), Britain itself by virtue of the English Channel and a strong navy was never invaded. Russia, France and Prussia were all (partially) occupied once or several times during the 19th century. After the Napoleonic wars practically the whole continent was devastated by over twenty years of war. Though Britain was of course affected the isles themselves had never hosted enemy troops and Britain’s causalities were smaller than those of any other Great power .

Britain’s geography was favourable in more ways than the previously mentioned isolation. England had many fast navigable rivers for transport and the country is fairly small with a rather flat topography making road building easy and road transport relatively easy and in the 18th and 19th century both the canals and roads were further developed . Cheap transport was convenient as the coal and iron that England had large reserves of needed to be transported to the factories and their steam machines and iron smelters. A factory might never be economically viable if transport costs are too high. But Britain also had the good fortune to have the coal and iron deposits close to each other so transportation was not that long (expensive).

To get workers for the new factories in the industrial cities workers had to be released from agriculture. There were two main factors that stimulated this release in Britain.
The first one was the agricultural revolution which consisted of the enclosure movement and new agricultural innovations. Farmers used to have scattered holdings with common land were their livestock could graze. With the enclosure movement the commons disappeared and the farms were “centralized” into one plot of land. Small farmers lost out on this as the farms they got were often smaller than their previous scattered lands and they could no longer use commons; so many moved into the cities to become industrial workers. Furthermore it did make agriculture more efficient , lowering prices, which was also good for city workers.
The 18th century was a time of much new innovation in agriculture; like crop rotation, planting seeds in rows and new crops like potatoes. This also increased agricultural output lowering prices
Second, the earliest industries in England were based on weaving and spinning with inventions like “Spinning Jenny. The factory spinning and weaving was vastly more efficient than the homemade that many farmers had as income on the side. With this income gone due to competition another incentive for moving into town was provided.

While liberalism is certainly very important for the industrial revolution England also had factors favouring the actual mechanization. For example the United States was probably more liberal than Great Britain. But it was war torn due to the independence war and the war of 1812 (they even got their capital torched). Furthermore the U.S. had a rather low population density and a less developed transport system making transport more expensive (The U.S. really came into its own with the advent of good railroads) and farming was more profitable, in the U.S. there was no lack of land.



Conclusion

Liberalism is the single most important factor for industrialization and growth and Great Britain was one of the most liberal countries in the late 18th and early 19th century. And probably the most significant reason why Britain was first in Europe as that was their most distinguishing factor in Europe.
Cheap transport and abundant resources were also important and Britain had many good rivers and canals and the country was also endowed with large coal and iron deposits. But so were many other nations.
Through the agricultural revolution and free trade agricultural food prices decreased promoting urbanization.
And thanks to the powerful Royal Navy and the English Channel the British Isles were protected from foreign armies and Britain’s commercial interests were protected.
Though some other nations may have possessed some of these factors none save Britain had them all in the late 18th century. That is why Great Britain was the cradle of the industrial revolution.

 

[philippe]

I wrote a similar though considerably longer article on why the industrial revolution occured in England and not in any other western nation. You might find it helpful so I'll post it.

Spoiler :

Why England was the Cradle of the Industrial Revolution

In the late 18th century what is now known as the industrial revolution started in Great Britain. In the first half of the 19th century it would spread to the rest of North-western Europe and its offshoots. It would prove to be of huge importance as it vastly increased production and wealth, permanently changing society. But why did the industrial revolution start in Great Britain and not in any other major nation?
To answer that question one needs to know what was needed for the development of the industrial revolution and see how Great Britain (though it was mostly an English phenomena Scotland was involved as well hence Great Britain instead of just England) could satisfy those needs better than any other nation. But before any of that can be answered a working definition of the industrial revolution is needed.
What is an Industrial Revolution?

It might seem like a simple question but appearance can be deceptive. The first thing you think about is most likely machines, technological innovations fuelled the revolution. But new technological innovations had been coming for some time without triggering widespread industrialization. The new machines that came (Newcomen’s and Watt’s Steam engines, Spinning Jenny etc.) were certainly very important for the industrial revolution but they were not by themselves sufficient for the revolution.
A very interesting definition comes from the Nobel Prize winning economist Robert Lucas, Jr , economic growth per capita. According to Lucas there had been no society that had experienced sustained per capita growth up to the late 18th century. There had been increased production but it had been used to increase the number of people not the living standard. The industrial revolution according to Lucas would be the sustained per capita economic growth. It is an attractive idea; a rapid increase in individual production seems like a very defining feature of the revolution. The other parts follow naturally from it; it is hard to increase productivity significantly without innovations, technological and other. Increased agricultural productivity leads to increased urbanization and increased factory productivity raises wages there which gives further incentives for urbanization while it builds up capital to be invested. However Lucas’ theory has a flaw; in Western Europe the GDP/capita had already started to grow as early as the 17th century. But if one argues that the industrial revolution perhaps was not so much revolutionary as gradual, as some historians do . The industrial revolution would be a continuation of the commercial revolution that first set off the GDP/capita growth in some European economies.
But even if the industrial revolution was a continuation of the commercial it still had the defining feature of mechanization. The industrial revolution started the time of increasing individual productivity with the aid of machines and factories, almost completely disengaging the economic output of a nation with the amount of productive land it had.

Why Great Britain?

So what is needed for a sustained per capita economic growth?
If one looks at modern economics one thing emerges as incredibly important, a free economy. The freedom of the economy is amazingly well correlated to the GDP/capita of any nation ; definitely well enough to imply causation rather than mere correlation. The economies that start to rise from poverty are also distinguished by their rising economic freedom (the Asiatic tigers etc.). There is no reason to believe that people were fundamentally different in their psychology 200 years ago. That economic freedom is the key to wealth should be true then as well as it is now (Economic freedom meaning: Rule of law, low taxes, low tariffs, little regulation, little corruption and strong property rights).
So let us survey the economic freedom of 18th century Great Britain.

England and later Great Britain was one of the most liberal countries in Europe and the world. As early as the 13th century with the Magna Carta England had some kind of constitutional system; the king too was bound by certain laws and people had in theory some inalienable rights. Most importantly habeas corpus (latin: that you have the body) which safeguards the individual from arbitrary state action. Of course during the middle ages the laws were not very “enlightened” and the rights of Magna Carta applied to nobles.
However in the 17th century the individual rights against arbitrary state action were being extended to all people. The English civil war was a lot about whether England should be a constitutional monarchy or more of an absolute one (as was the trend in Europe at the time with France, Sweden, Russia and Prussia). After the glorious revolution in 1688 and the bill of rights in 1689 England was firmly established as a constitutional monarchy. The monarch could not, levy taxes, suspend laws, make royal appointments or maintain a standing during peacetime without the parliaments permission. Furthermore it established the subject’s (or perhaps citizen would be the better word?) right to petition the monarch, to bear arms (actually only for protestant subjects) and freedom from fines and forfeitures without trial (yes it said a lot of other things too but these are the relevant tenets) .
In the beginning of the 18th century Great Britain had a strong protection of private property and individual rights. Your property could not be seized on the monarchs whim and you could not be thrown in prison without due trial. Without this security people would not dare to invest heavily in anything which is needed for economic growth and the very capital intensive factories of the industrial revolution. Furthermore well established property rights makes investment easier as you can take loans on your property. According to the economist Hernando De Soto a lack of well defined and recognizable property rights is one of the largest causes of third world poverty as it hinders investment.
During the 18th century no major nation had such strong property rights and rule of law as Great Britain. France had an absolute monarchy even though Louis XIV never said, “L’état, c’est moi” (the government it is I) it was in many ways true. Anything like the revocation of the edict of Nantes (1685) declaring Protestantism illegal would not have been possible in England/Britain post glorious revolution. Prussia and Russia were also absolute monarchies during the 18th century without any developed individual rights. Russia was still quite feudal with millions of serfs and in Frederic William’s Prussia tall males could simply be seized for military service, no habeas corpus there .

Strong rights of private property and rule of law are undoubtedly very important for economic freedom hence growth, but they are not the only components. Free trade is regarded as a very important part of economic freedom and has been shown to stimulate growth . In the 18th century the dominant economic system was mercantilism which favoured protectionism. Protectionism is devastating enough now with our fairly large domestic markets (or continental markets as with the EU protectionism) but in the 18th century markets were much, much smaller due to protectionism. If you wanted to transport goods from Konigsberg to Aachen you would have to pay up to 30 different customs, few products were produced cheaply enough to remain competitive after such a battering. France and Russia which you might think would have large domestic markets were actually divided up by tariffs too . If one could only produce for a small market, a factory might never become viable as the production from that would simply make supply much larger than demand. Furthermore lots of people will produce things that at a much lower price could be imported if it weren’t for tariffs, preventing the economy from specialising. For example the British tariffs and quotas for import grain (known as the Corn Laws 1815-1846) drove up the price of grain, making more people work with farming and not on the comparative advantages of Britain (i.e. manufacture), the high food prices also caused malnourishment and starvation among the poor .
Still Britain had the ideological background to fight for free trade with men such as Richard Cobden, David Ricardo and Adam Smith. And during the 19th century it distinguished itself with its free trade, not participating in the trade wars that erupted between the great powers (One power raised tariffs so the other country raised tariffs to counter) and its custom free domestic market.
Although the powers of Europe started to liberalise their trade in the 19th century, they did so later and to a lesser extent than Great Britain. Prussia/Germany for example had “zollverein” (German customs union) which removed all tariffs within Germany but they still maintained tariffs against other nations and it was not until 1834 that it was enacted.
It has been argued by some people that high tariffs are actually good for developing industries to protect them. But statistics does not back it up , nations with free trade show on average a higher per capita growth; even though some nations might prosper in spite of its protectionist policies. Furthermore not even the theory holds up . It is better for a nation to focus on its comparative advantages and import other things .

The liberalism of Great Britain gave incentives for investing in the new industrial enterprises as people knew that they would not be seized or overtly taxed. They knew that if they worked hard it would make a difference. The liberal system in Britain was present already in the late 17th century which helped build up the capital (including human capital) and financial innovations such as the joint-stock venture (which evolved into the corporation) that would be needed for the expensive factories.
Furthermore they also knew that they had a large market in Great Britain and its colonies and the nations that did not erect trade barriers. Thanks to their relatively low tariffs they could focus on what they could do well and import the rest. The free market was set loose in Great Britain.
Economical liberalism is the most important factor for economic growth as statistics convincingly show but there were also other factors favouring Britain’s industrialization especially the actual mechanization.

External factors favouring Great Britain

War is never a good thing for economic growth and prosperity. It is very costly even for the winner, it does not produce anything of value and marauding armies can devastate a country. Furthermore it often comes with more government power and protectionism which we have seen is not good for economic growth (for example in 1812 Napoleon invaded Russia to prevent trade and that killed over a million people).
While Great Britain did not stay out of wars (arguably though they were less belligerent than other nations; had more a balance of power agenda than one of expansion), Britain itself by virtue of the English Channel and a strong navy was never invaded. Russia, France and Prussia were all (partially) occupied once or several times during the 19th century. After the Napoleonic wars practically the whole continent was devastated by over twenty years of war. Though Britain was of course affected the isles themselves had never hosted enemy troops and Britain’s causalities were smaller than those of any other Great power .

Britain’s geography was favourable in more ways than the previously mentioned isolation. England had many fast navigable rivers for transport and the country is fairly small with a rather flat topography making road building easy and road transport relatively easy and in the 18th and 19th century both the canals and roads were further developed . Cheap transport was convenient as the coal and iron that England had large reserves of needed to be transported to the factories and their steam machines and iron smelters. A factory might never be economically viable if transport costs are too high. But Britain also had the good fortune to have the coal and iron deposits close to each other so transportation was not that long (expensive).

To get workers for the new factories in the industrial cities workers had to be released from agriculture. There were two main factors that stimulated this release in Britain.
The first one was the agricultural revolution which consisted of the enclosure movement and new agricultural innovations. Farmers used to have scattered holdings with common land were their livestock could graze. With the enclosure movement the commons disappeared and the farms were “centralized” into one plot of land. Small farmers lost out on this as the farms they got were often smaller than their previous scattered lands and they could no longer use commons; so many moved into the cities to become industrial workers. Furthermore it did make agriculture more efficient , lowering prices, which was also good for city workers.
The 18th century was a time of much new innovation in agriculture; like crop rotation, planting seeds in rows and new crops like potatoes. This also increased agricultural output lowering prices
Second, the earliest industries in England were based on weaving and spinning with inventions like “Spinning Jenny. The factory spinning and weaving was vastly more efficient than the homemade that many farmers had as income on the side. With this income gone due to competition another incentive for moving into town was provided.

While liberalism is certainly very important for the industrial revolution England also had factors favouring the actual mechanization. For example the United States was probably more liberal than Great Britain. But it was war torn due to the independence war and the war of 1812 (they even got their capital torched). Furthermore the U.S. had a rather low population density and a less developed transport system making transport more expensive (The U.S. really came into its own with the advent of good railroads) and farming was more profitable, in the U.S. there was no lack of land.



Conclusion

Liberalism is the single most important factor for industrialization and growth and Great Britain was one of the most liberal countries in the late 18th and early 19th century. And probably the most significant reason why Britain was first in Europe as that was their most distinguishing factor in Europe.
Cheap transport and abundant resources were also important and Britain had many good rivers and canals and the country was also endowed with large coal and iron deposits. But so were many other nations.
Through the agricultural revolution and free trade agricultural food prices decreased promoting urbanization.
And thanks to the powerful Royal Navy and the English Channel the British Isles were protected from foreign armies and Britain’s commercial interests were protected.
Though some other nations may have possessed some of these factors none save Britain had them all in the late 18th century. That is why Great Britain was the cradle of the industrial revolution.

that was an interesting read and i'm glad you have put the effort to post this.

and somehow it feels good that my (very small summarised) article is a bit in the same trend as your more indepth, coherent and interesting article.

 

[ibn sina]

that was an interesting read and i'm glad you have put the effort to post this.

and somehow it feels good that my (very small summarised) article is a bit in the same trend as your more indepth, coherent and interesting article.

Ohh You're making me blush. I actually thought that you made a very fine summary which made me think I could have been somewhat more economical in word use.

 

[elgado]

If you want to expand your bibliography and drop some nice-sounding academic sources, you might want to take a look at this essay. It's a long read, but it does take a nice look at the correlation between rule of law [or lack thereof] and economic development.

(Spain, for example, thought it could dig itself out of the economic black whole it made by being even more absolutist. The result? Bankruptcies in 1575, 1596, 1607, 1627, 1467, and 1653; six times in less than 80 years! )



Veel success!

 

[Arwon]

I think it's an overgeneralisation to say absolute monarchs were an obstacle to modernisation. Obviously there's the case of enlightened despotism or absolutism in some cases, but even non-modernising absolute monarchs still played a role. The creation of a centralised, administrative monarchy was in many cases essential, either as a source of modernisation in itself (against reactionary nobles and guild-dominated cities and so forth), or as a target for reformers to attack. It's interesting to note that as the modern state developed, and the idea of the "state" took hold, many times under reforming and power-grabbing monarchs,m so to did modern processes of protest and revolt. Without the tradition of a strong, centralised state established by the Bourbons in France, would the revolutionaries have been able to attack and take over that apparatus?

 

[neutrino]

(Spain, for example, thought it could dig itself out of the economic black whole it made by being even more absolutist. The result? Bankruptcies in 1575, 1596, 1607, 1627, 1467, and 1653; six times in less than 80 years! )

Not to mention that her political configuration (culminated with Charles V who was also the Habsburg emperor) was not much of help, insofar as Spain herself was concerned. Instead of using the plunders from the Americas to develop Spain, much of the money went elsewhere. Spain had a surplus in the number of clergymen. (A society needs men of diverse trades to take off ... lol.) In sum, while the wealth was there, the Spanish/Habsburg Empire lacked the necessary administration to make use of it. (Something the Dutch, the English, and the French eventually had.)