• Most products people in the industrialized nations use today are turned out swiftly by the process of mass production, by people working by using power-driven machines. People of ancient and medieval times had no such products. They had to spend long, tedious hours of hand labor even on simple objects. The energy, or power, they employed in work came almost wholly from their own and animals’ muscles. The Industrial Revolution is the name given to the movement in which machines changed people’s way of life as well as their methods of manufacturing.

  • The Industrial Revolution was the transition to new manufacturing processes in the period from about 1760 to sometime between 1820 and 1840. (The precise start and end of the Industrial Revolution is debatable.) This transition included going from hand production methods to machines, new chemical manufacturing and iron production processes, improved efficiency of water power, the increasing use of steam power, and the development of machine tools. It also included the change from wood and other bio-fuels to coal.
  • Textiles were the dominant industry of the Industrial Revolution in terms of employment, value of output and capital invested; the textile industry was also the first to use modern production methods.
  • About the time of the American Revolution, the people of England began to use machines to make cloth and steam engines to run the machines. A little later they invented locomotives. Productivity began a spectacular climb. By 1850 most Englishmen were laboring in industrial towns and Great Britain had become the workshop of the world. From Britain the Industrial Revolution spread gradually throughout Europe and to the United States.
  • The First Industrial Revolution evolved into the Second Industrial Revolution in the transition years between 1840 and 1870, when technological and economic progress continued with the increasing adoption of transport steam (steam-powered railways, boats and ships), the large-scale manufacture of machine tools and the increasing use of machinery in steam powered factories.

Was ‘Industrial Revolution’ a Revolution or Evolution?

  • Revolution is seen as ‘immediate’. Evolution is seen as ‘taking a more extensive period of time’. Some historians have argued that the economic and social changes occurred gradually and the term revolution is a misnomer.
  • In the short span between the accession of George III (1760) and the death of his son William IV (1837) the face of England changed dramatically. Roads, railways, rivers and canals sprung up across the land, country hamlets became populous towns, factories replaced farms and chimney stacks dwarfed church spires, as technological innovations drove rapid economic growth. The structure of British society was changed forever, with mass migration from country to towns and cities.
  • Yet, despite significant economic and social changes in this period, the popular notion that these developments were rapid and ‘revolutionary’ has been questioned by many, suggesting certain industrial developments in the eighteenth century were the result of a culmination of gradual changes.
  • The Industrial Revolution came gradually. It happened in a short span of time, however, when measured against the centuries people had worked entirely by hand. Until John Kay invented the flying shuttle in 1733 and James Hargreaves the spinning jenny 31 years later, the making of yarn and the weaving of cloth had been much the same for thousands of years. By 1800 a host of new and faster processes were in use in both manufacture and transportation.
  • This relatively sudden change in the way people live deserves to be called a revolution. It differs from a political revolution in its greater effects on the lives of people and in not coming to an end. Instead, the Industrial Revolution grew more powerful each year as new inventions and manufacturing processes added to the efficiency of machines and increased productivity.
  • So we can say that, Industrial Revolution was Revolutionary in that when it started it radically changed the lives of those immediately affected by it – especially, then, in England.  As time went by it became Evolutionary in that new methods of production and treatment of workers came to the fore. Along with that newer and larger markets kept opening up over a lengthy period of time.  

What Changes Led to Industrial Revolution?

Expanding Commerce Affects Industry

  • Commerce and industry have always been closely related. Sometimes one is ahead and sometimes the other, but the one behind is always trying to catch up. Beginning in about 1400, world commerce grew and changed so greatly that the term “commercial revolution”  is used to describe the economic progress of the next three and a half centuries.
  • Many factors helped bring about this revolution in trade. The Crusades opened up the riches of the East to Western Europe. America was discovered, and European nations began to acquire rich colonies there and elsewhere. New trade routes were opened. The strong central governments which replaced the feudal system began to protect and help their merchants. Trading firms, such as the British East India Company, were chartered by governments. Larger ships were built, and flourishing cities grew up.
  • With the expansion of trade, more money was needed. Large-scale commerce could not be carried on by barter, as much of the earlier trade had been. Gold and silver from the New World helped meet this need. Banks and credit systems developed. By the end of the 17th century Europe had a large accumulation of capital. Money had to be available before machinery and steam engines could come into wide use for they were costly to manufacture and install.
  • By 1750 large quantities of goods were being exchanged among the European nations, and there was a demand for more goods than were being produced. England was the leading commercial nation, and the manufacture of cloth was its leading industry.

Organizing Production: From Cottage Industry to Factory System

  • Several systems of making goods had grown up by the time of the Industrial Revolution. In medieval times, families produced most of the food, clothing, and other articles they used, as they had done for centuries. In the cities merchandise was made in shops much like those of the medieval craftsmen, and manufacturing was strictly regulated by the guilds and by the government. The goods made in these shops, though of good quality, were limited and costly.
  • The merchants needed cheaper items, as well as larger quantities, for their growing trade. As early as the 15th century they already had begun to go outside the cities, beyond the reach of the hampering regulations, and to establish another system of producing goods. Cloth merchants, for instance, would buy raw wool from the sheep owners, have it spun into yarn by farmers’ wives, and take it to country weavers to be made into textiles. These country weavers could manufacture the cloth more cheaply than city craftsmen could because they got part of their living from their gardens or small farms.
  • The merchants would then collect the cloth and give it out again to finishers and dyers. Thus they controlled cloth making from start to finish. Similar methods of organizing and controlling the process of manufacture came to prevail in other industries.
  • This system is termed as cottage industry, for most of the workers belonged to the class of farm laborers known as cotters and carried on the work in their cottages. This system of industry had several advantages over older systems. It gave the merchant a large supply of manufactured articles at a low price. It also enabled him to order the particular kinds of items that he needed for his markets. It provided employment for every member of a craft worker’s family and gave jobs to skilled workers who had no capital to start businesses for themselves.
  • A few merchants who had enough capital had gone a step further. They brought workers together under one roof and supplied them with spinning wheels and looms or with the implements of other trades (Factory System). These establishments were factories which was precursor to Industrial Revolution.

Why did the Industrial Revolution Start in England?

  • By the end of the 19th century, the island of Great Britain controlled the largest empire in the history of the world (one quarter of the world’s land mass). How did this little island come to rule an empire? How did Great Britain acquire so much military and economic power in the world? The answer, of course, is that it had an enormous commercial and technological head start over the rest of the world because the Industrial Revolution started in England.
  • But why did the Industrial Revolution occur first in England and not somewhere else in the world? What qualities – political, economic, cultural, geographical, or ecological – did Britain possess that predisposed it towards early industrialisation? Or to put the question another way: what was missing in other countries so that their industrialisation was either delayed until the second half of the nineteenth century, or indeed had failed to occur by the century’s end at all?
  • Following are the major factors responsible: (Many points may be overlapping)

1. The Agricultural Revolution

  • Agriculture occupied a prominent position in the English way of life. Not only was its importance rooted in the subsistence of the population, but agriculture was an indispensable source of raw materials for the textile industry. Wool and cotton production for the manufacture of cloth increased in each successive year, as did the yield of food crops.
  • The improved yield of the agricultural sector can be attributed to the enclosure movement and to improved techniques and practices developed during this period. (The Enclosure Movement was a push in the 18th and 19th centuries to take land that had formerly been owned in common by all members of a village, or at least available to the public for grazing animals and change it to privately owned land, usually with walls, fences or hedges around it.)
  • A common practice in early agriculture was to allow the land to lie fallow after it had been exhausted through cultivation. Later it was discovered that the cultivation of clover and other legumes would help to restore the fertility of the soil without leaving it fallow.
  • The improved yields also increased the amount of food available to sustain livestock through the winter. This increased the size of herds for meat and allowed farmers to begin with larger herds than they had previously.
  • Other advances in agriculture included the use of sturdier farm implements fashioned from metal, control of insects, improved irrigation and farming methods, developing new crops and the use of horsepower in the fields to replace oxen as a source of power. These changes which have occurred in agriculture made it possible to feed all of the people that were attracted to the industrial centrers as factory workers. By providing enough food to sustain an adequate work force, England was preparing the way for expansion of the economy and industry.
  • In 18th century England, the enclosure of common village fields into individual landholdings, or the division of unproductive land into private property was the first significant change to occur. This concentrated the ownership of the land into the hands of a few, and made it possible to institute improved farming techniques on a wider scale.

2. Population Growth and British Empire

  • The upshot of Britain’s success in the global economy was the expansion of rural manufacturing industries and rapid urbanisation. East Anglia was the centre of the woollen cloth industry, and its products were exported through London where a quarter of the jobs depended on the port. As a result, the population of London exploded from 50,000 in 1500 to 200,000 in 1600 and half a million in 1700.
  • In the eighteenth century, the expansion of trade with the American colonies and India doubled London’s population again and led to even more rapid growth in provincial and Scottish cities.
  • Growing population resulted in more people from the countryside being freed up to work for wages in the new cities,— and eventually increased demand for products such as clothing.
  • This expansion depended on vigorous imperialism, which expanded British possessions abroad, the Royal Navy, which defeated competing naval and mercantile powers, and the Navigation Acts, which excluded foreigners from the colonial trades. The British Empire was designed to stimulate the British economy–and it did. Colonies worked as a source of raw material as well as market for finished goods.

3. Financial Innovations

  • Financial institutions such as central banks, stock markets, and joint stock companies encouraged people to take risks with investments, trade, and new technologies.

4. The Enlightenment and the Scientific Revolution

  • It encouraged scholars and craftspeople to apply new scientific thinking to mechanical and technological challenges. In the centuries before the Industrial Revolution, Europeans gradually incorporated science and reason into their world view. These intellectual shifts made English culture, in particular, highly receptive to new mechanical and financial ideas.

5. Navigable Rivers and Canals

  • Rivers and Canal in Great Britain quickened the pace and cheapened the cost of transportation of raw materials and finished products. Adam Smith, the first modern economist, believed this was a key reason for England’s early success. In 1776, in his famous book An Inquiry into the Nature and Causes of the Wealth of Nations, he wrote that “Good roads, canals, and navigable rivers, by diminishing the expense of carriage, put the remote parts of the country more nearly upon a level with those in the neighbourhood of the town. They are upon that account the greatest of all improvements”.

6. Coal and Iron

  • Coal and Iron deposits were plentiful in Great Britain and proved essential to the development of all new machines made of iron or steel and powered by coal—such as the steam-powered machinery in textile factories, and the locomotive.
  • As London grew after 1500, the price of wood fuels rose and by the end of the sixteenth century, charcoal and firewood were twice the price of coal per unit of energy. With that premium, consumers began to substitute coal for wood. The coal burning house was invented. It then paid to mine coal in Northumberland and ship it down the coast to London. The coal trade began. On the coal fields, Britain had the cheapest energy in the world.

7. Government Policies

  • Government policies in England toward property and commerce encouraged innovation and the spread of global trade. The government created patent laws that allowed inventors to benefit financially from the “intellectual property” of their inventions. The British government also encouraged global trade by expanding the Navy to protect trade and granting monopolies or other financial incentives to companies so they would explore the world to find resources.

8. World Trade

  • World trade gradually increased in the centuries before the Industrial Revolution and provided European countries access to raw materials and a market for goods. It also increased wealth that could then be loaned by banks to finance more industrial expansion in an upward spiral of economic growth. By 1500, Europe had a technological supremacy over the rest of the world in shipbuilding, navigation, and metallurgy (metal working). In successive years, European countries would use these advantages to dominate world trade with Asia, Africa, and the Americas. Britain led other European countries.
  • The greater liberalization of trade from a large merchant base allowed Britain to produce and utilize emerging scientific and technological developments more effectively than European countries with stronger monarchies.
  • Success in international trade created Britain’s high wage, cheap energy economy, and it was the spring board for the Industrial Revolution. High wages and cheap energy created a demand for technology that substituted capital and energy for labour. These incentives operated in many industries.

9. Impact of “High Wage Economy and Cheap Energy”:

  • The success of R&D programs in “eighteenth century Britain” depended on the high wage economy. In the seventeenth and eighteenth centuries, the growth of a manufacturing, commercial economy increased the demand for literacy, numeracy and trade skills. These were acquired through privately purchased education and apprenticeships. The high wage economy not only created a demand for these skills, but also gave parents the income to purchase them. As a result, the British population was highly skilled, and those skills were necessary for the high tech revolution to unfold.
  • High wages and cheap energy of the British economy caused many famous invention of the Industrial Revolution. These inventions also substituted capital and energy for labour. The steam engine increased the use of capital and coal to raise output per worker. The cotton mill used machines to raise labour productivity in spinning and weaving. New technologies of iron making substituted cheap coal for expensive charcoal and mechanised production to increase output per worker.

10. The Cottage Industry

  • It served as a transition from a rural to an industrial economy. Like the later industrial factories, the cottage industry relied on wage labor, cloth production, tools and rudimentary machines, and a market to buy and sell raw materials (cotton) and finished products (clothes).
  • The damp, mild weather conditions of the North West of England provided ideal conditions for the spinning of cotton, providing a natural starting point for the birth of the textiles industry.

11. Political, Societal and Geographical Factors:

  • The stable political situation in Britain from around 1688 (after Glorious Revolution), and British society’s greater receptiveness to change (when compared with other European countries) can also be said to be factors favouring the Industrial Revolution. In large part due to the Enclosure movement, the peasantry was destroyed as significant source of resistance to industrialization, and the landed upper classes developed commercial interests that made them pioneers in removing obstacles to the growth of capitalism. England had relatively secure property rights
  • Unlike Germany or Italy, England was not politically fragmented. Also England was one of the earliest in abolishing slavery which had positive social and economic impact.
  • The island geography (an island separated from the rest of mainland Europe) also provided favourable protection from predation on a national scale. Since it was away from European continent, it did not indulge in useless war of the European continent which gave it relative political and economic stability. Any conflict resulted in most British warfare being conducted overseas, reducing the devastating effects of territorial conquest that affected much of Europe.

12. Napoleonic Wars

  • Blockade by Napoleon against British trade and any British import pushed Britain for further innovation to be self-reliance.
  • Britain emerged from the Napoleonic Wars as the only European nation not ravaged by financial plunder and economic collapse, and possessing the only merchant fleet of any useful size (European merchant fleets having been destroyed during the war by the Royal Navy)

13. Protestant Work Ethics:

  • British advance was also due to the presence of an entrepreneurial class which believed in progress, technology and hard work. The existence of this class is often linked to the Protestant work ethic and the particular status of dissenting Protestant sects. Reinforcement of confidence in the rule of law, which followed establishment of the constitutional monarchy in Britain and the emergence of a stable financial market there based on the management of the national debt by the Bank of England, contributed to the capacity for, and interest in, private financial investment in industrial ventures.
  • Dissenters found themselves barred or discouraged from almost all public offices, as well as education at England’s Universities (Oxford and Cambridge). When the membership in the official Anglican church became mandatory, they thereupon became active in banking, manufacturing and education.
  • The Unitarians (Unitarianism is the Christian doctrine that stresses individual freedom of belief), in particular, were very involved in education, by running Dissenting Academies, where, in contrast to the Universities of Oxford and Cambridge, much attention was given to mathematics and the sciences—areas of scholarship vital to the development of manufacturing technologies.


Q. “Whoever says Industrial Revolution, says cotton”. Comment. [IAS: 2000]

  • (See previous years paper for solution)

Q. “Protestantism contributed substantially to the rise of capitalism.” Comment. [IAS: 1994]

  • (See previous hears solved paper for answer)

Q.  What do you mean by Mercantilism? Discuss its main features. Also give causes of rise of Mercantilism.  [UPSC 2000]

  • The ‘Commercial Revolution’ which took place between 1450 and 1750 brought a revolutionary change in the economy of Europe. Many countries of Europe encouraged the intervention of state in commercial activities for the increase of national wealth and power. This gave birth to ‘Mercantilism’ which played a vital role for the economic prosperity of a country.
  • Mercantilism was an economic theory and practice, dominant in Europe from the 16th to the 18th century, that promoted governmental regulation of a nation’s economy for the purpose of augmenting state power at the expense of rival national powers. It was the economic counterpart of political absolutism or absolute monarchies. Mercantilism includes a national economic policy aimed at accumulating monetary reserves through a positive balance of trade, especially of finished goods. Mercantilism means-“Governmental regulation of economic affairs, especially, trade and industry”.
  • Adam Smith, the ‘Father of Economics’ had first used the word ‘Mercantilism’ in his famous book ‘Wealth of Nations’. The exponents of Mercantilism opined that Commerce is the key to progress of every country and it can be achieved at the cost of the interest of other country.
  • High tariffs, especially on manufactured goods, are an almost universal feature of mercantilist policy. Other policies have included
    • forbidding colonies to trade with other nations;
    • monopolizing markets with staple ports;
    • banning the export of gold and silver, even for payments;
    • forbidding trade to be carried in foreign ships;
    • subsidies on exports;
    • promoting manufacturing through research or direct subsidies;
    • limiting wages;
    • maximizing the use of domestic resources; and
    • restricting domestic consumption through non-tariff barriers to trade.

Causes of the Rise of Mercantilism:

  • Mercantilism grew due to several reasons. At first, the Renaissance did not accept the religious doctrine of Medieval Europe. It explained ‘Materialism’ as one of the mediums of human happiness. So, everybody dreamt to lead a happy and prosperous life. This gave birth to Mercantilism.
  • Secondly, the Fall of Feudalism was another cause for the rise of Mercantilism. With the fall of feudalism, the fate of agriculture was doomed. This encouraged the small-scale industries. The towns and guilds wanted the increase of these industries. They wanted to export the surplus of these productions. This led to the rise of Mercantilism.
  • Thirdly, the Reformation Movement encouraged the merchants. The results of the Reformation Movement carried on by Martin Luther in Germany and Henry VIII in England were far reaching. They condemned the unnecessary intervention of Pope in Political and Economic affairs except religion. Martin Luther opposed the Pope so much so that he was issued ‘Bull of excommunication’ by the Pope. However, Luther did not bend before it. In a similar vein Henry VIII of England did not obey Pope and brought reformation in the Church of England. All these activities encouraged the merchants to take up their business independently. This encouraged Mercantilism.
  • Fourthly, the Guilds and Banking System gave great impetus for the growth of Mercantilism. The guilds acted as distribution centres and exported the surplus to outside countries. This encouraged the international trade which was well-regulated by the banking system.
  • Fifthly, the Geographical Discoveries encouraged Mercantilism. The sea voyage of Columbus, Vascodagama, Magellan and others encouraged Mercantilism.
  • Sixthly, Political Patronage established Mercantilism on sound footing. The kings wanted to reduce the power of the feudal Lords and Barons. So, they encouraged the merchants for trade. Henry, ‘the Navigator’ of Portugal and Henry VIII and Queen Elizabeth of England patronised sailors. Their patronage established Mercantilism on sound footing.
  • At last, Scientific Invention and Discoveries helped a lot in the growth of Mercantilism. The telescope invented by Galileo helped the merchants in their journey. The Mariner’s Compass also helped the merchants a lot to determine direction inside the deep sea. These inventions made merchants confident for maritime trade which galvanised Merchantilism.

The characteristics of Mercantilism:

Foreign Trade

  • At first, the merchants put emphasis on foreign trade. They knew that gold and silver are not plentily available in many countries. They wanted to procure gold and silver from other countries by sailing their own products to them. This was infact, one of the great characteristics of Mercantilism.

Emphasis on Money

  • Money was another feature of Mercantilism. The merchants had understood that for the development of trade, money is needed. So, they discarded ‘barter’. So money economy galavanised Mercantilism.

Profit and Interest

  • Moon, a notable economist had advised to charge interest on principal when money was lent. It increased the amount of money inside a country. On the other hand, it also inspired a trader to work hard for the repayment of money what he had borrowed and also encouraged him to be rich. Thus, profit and benefit became two sides of Mercantilism.


  • Mercantilism put emphasis on population. Devenant had opined that the real power of a country is its population. The presence of more population helps in the growth of industry which leads to more production.

Medium of Production

  • The exponents of Mercantilism put emphasis on ‘land’ and ‘labour’. So, Mercantilism delivered a message that a country should be economically prosperous. By this, a country should be self-sufficient in production.

Regulation of Trade and Commerce

  • The merchants of Europe had devised means to regulate trade and commerce of a country. Every European Country framed laws to regulate its trade and commerce. By these laws, it was not possible to import goods from outside countries. This helped in exporting the surplus of the country.

Encouragement to Capitalism

  • Mercantilism was meant to encourage capitalism. The capitalists invested their capital and made mercantilism more mobile. It was difficult on the part of Mercantilism to thrive without capital. This helped in the growth of trade and commerce.

The Golden Principles

  • The ‘Golden Principles’ of Mercantilism contained its chief characteristics. Those principles were self-dependency, industry, mine, commerce, naval power, colony, unity etc.

Criticism of Mercantilism:

  • The first school to completely reject mercantilism was the physiocrats, who developed their theories in France. Their theories also had several important problems, and the replacement of mercantilism did not come until Adam Smith published The Wealth of Nations in 1776. This book outlines the basics of what is today known as classical economics. Smith spent a considerable portion of the book rebutting the arguments of the mercantilists. Adam Smith and David Hume were the founding fathers of anti-mercantilist thought. Hume famously noted the impossibility of the mercantilists’ goal of a constant positive balance of trade.
  • The importance placed on bullion was also a central target, even if many mercantilists had themselves begun to de-emphasize the importance of gold and silver. Adam Smith noted that at the core of the mercantile system was the “popular folly of confusing wealth with money”, that bullion was just the same as any other commodity, and that there was no reason to give it special treatment.
  • Mercantilist regulations were steadily removed over the course of the 18th century in Britain, and during the 19th century the British government fully embraced free trade and Smith’s laissez-faire economics. On the continent, the process was somewhat different. In France, economic control remained in the hands of the royal family, and mercantilism continued until the French Revolution. In Germany mercantilism remained an important ideology in the 19th and early 20th centuries.
  • In modern economic theory, trade is not a zero-sum game of cutthroat competition, because both sides can benefit.

Favourable Eurasia compared to America: A Biologist’s View

  • Evolutionary Biologist Jared Diamond explained why the entire continent of Eurasia evolved to be so technologically advanced. Diamond argues that the largest of continents, Eurasia was also blessed with the largest domesticated animals in the world—such as horses, donkeys, pigs, and cows. These animals served as beasts of burden in agriculture and also as a much-needed food source. And so the health of Eurasian populations improved. These animals also brought epidemic diseases that killed millions of Eurasians over thousands of years. But, after the plague ran its course through the population, surviving Eurasians then had antibodies to these illnesses, which made them and their ancestors resistant to them. So these plagues became a horrifying stroke of good luck for invading Eurasians later on.
  • People from the Americas had no medium to large domesticated animals. As a result, they did not experience devastating animal-based plagues and diseases. So, unlike Europeans, the Americans did not then have the anti-bodies to resist the European illnesses. So, when Europeans invaded the Americas after 1492, people from the Americas were highly susceptible to Eurasian deadly viruses and diseases. But no plagues went the other direction from the Americas to Europe. The depopulation of the Americas made it easy for Europeans to conquer.
  • In short, Diamond, contrary to many historians, sees the Industrial Revolution as an inevitable result of geography and evolutionary biology that played out not only in a burst of activity, but over many thousands of years.


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