The Industrial Revolution – II
Rashed Rahman

Despite this expansion of the cotton industry and the cotton-dominated industrial economy, its progress was far from smooth. By the 1830s and early 1840s it produced major problems of growth and revolutionary unrest unparalleled in any other period of recent British history. The first general stumbling of the industrial capitalist economy is reflected in a marked slowing down in growth, perhaps even a decline, in the British national income at this period. Its most serious consequences were social: the transition to the new economy created misery and discontent, the materials of social revolution. Social revolution in the form of spontaneous risings of the urban and industrial poor did break out and fed into the 1848 revolution on the Continent and the Chartist movement in Britain. Nor was discontent confined to the labouring poor. Small and inadaptable businessmen, petty-bourgeois, special sections of the economy were also the victims of the Industrial Revolution (IR) and its ramifications. Labourers reacted to the new system by smashing the machines they thought responsible for their troubles. A surprisingly large body of local businessmen and farmers sympathised profoundly with these Luddite activities because they too saw themselves as victims of a diabolical minority of selfish innovators. The exploitation of labour that kept its incomes at subsistence level, thus enabling the rich to accumulate the profits that financed industrialisation (and their own ample comforts), antagonised the proletarian. Another aspect of this diversion of national income from the poor to the rich, from consumption to investment also antagonised the small entrepreneur. The great financiers, the tight community of home and foreign ‘fundholders’ who received something like eight percent of the entire national income were even more unpopular among small businessmen, farmers and the like for these knew enough about money and credit to feel a personal rage at their disadvantage. Labour and the disgruntled petty-bourgeois on the verge of toppling over into the unpropertied abyss therefore shared common discontents. These united them in the mass movements of ‘radicalism’, ‘democracy’ or ‘republicanism’ of which the British Radicals, the French Republicans and the American Jacksonian Democrats were the most formidable between 1815 and 1848.
From the point of view of the capitalists, however, these social problems were relevant to the progress of the economy only if, by some horrible accident, they were to overthrow the social order. There also appeared to be certain inherent flaws of the economic process that threatened its fundamental motive-force: profit. For if the rate of return on capital fell to nothing, an economy in which production was for profit alone must slow down into that ‘stationary state’ that the economists envisaged and dreaded. The three most obvious of these flaws were the trade cycle of boom and slump, the tendency of the rate of profit to decline, and (what amounted to the same thing) the shortage of profitable investment opportunities. The first of these was not regarded as serious except by the critics of capitalism, who were the first to investigate it and consider it an integral part of the capitalist economic process and a symptom of its inherent contradictions. Simond de Sismondi and Malthus were the first to argue along these lines, even before 1825. The new socialists made their crisis-theory into a keystone of their critique of capitalism. Periodic crises of the economy leading to unemployment, falls in production, bankruptcies, etc., were well known. In the 18th century they generally reflected some agrarian catastrophe (harvest failures, etc.). On the European Continent agrarian disturbances remained the primary cause of the most widespread depressions until 1848. Periodic crises in the small manufacturing and financial sectors of the economy were also familiar, in Britain at least from 1793. After the Napoleonic Wars the periodic drama of boom and bust – in 1825-26, 1836-7, 1839-42 and 1846-48 – dominated the economic life of a country at peace. By the 1830s, it was beginning to be recognised that they were regular periodic phenomena, at least in trade and finance, but they were still not universally believed to reflect any fundamental difficulties of the system.
Not so the falling rate of profit, which the cotton industry illustrated very clearly. Initially this industry benefited from immense advantages. Mechanisation greatly increased the productivity (i.e. reduced the cost per unit produced) of its labour, which was in any case abominably paid since it consisted largely of women and children. The building of factories was relatively cheap. But above all the major cost, raw material, was drastically cut by the rapid expansion of cotton cultivation in the Southern US. After 1815 these advantages appeared increasingly offset by the narrowing margin of profit. Of course the situation was not too tragic. As the total sales soared upwards, so did the total profits even at their diminishing rate. All that was needed therefore was continued and astronomical expansion. Nevertheless, it seemed that the shrinking profit-margins had to be arrested or at least slowed down. This could only be done by cutting costs. Of all the costs wages were the most compressible.
They could be compressed by direct wage-cutting, by the substitution of dearer skilled workers by cheaper machine-tenders, and by the competition of the machine. But there was a physiological limit to such reductions unless the labourers were actually to starve, as of course the 500,000 handloom weavers did. Only if the cost of living fell could wages also fall beyond that point. The cotton manufacturers believed that it was kept artificially high by the monopoly of the landed interest, made even worse by the heavy protective tariffs a Parliament of landlords had wrapped around British farming after the wars – the Corn Laws. These moreover had the additional disadvantage of threatening the essential growth of British exports. For if the rest of the not yet industrialised world was prevented from selling its agrarian products, how was it to pay for the manufactured goods that Britain alone could supply? The Corn Laws were not abolished till 1846, but their abolition did not immediately lead to a fall in the cost of living, and it is doubtful whether before the age of railways and steamers even free food-imports would have greatly lowered it.
The industry therefore was under immense pressure to mechanise (i.e. to lower costs by labour-saving), rationalise and expand its production and sales, this making up by the mass of small profits per unit for the fall in the margins. Its success was variable. The actual rise in production and exports was gigantic. So, after 1815, was the mechanisation of hitherto manual or partly-mechanised occupations, notably weaving. This took the form chiefly of the general adoption of existing or slightly improved machinery rather than further technological revolution. Though the pressure for technical innovation increased significantly, the British cotton industry was technologically stabilised by the 1830s. The really substantial speed-up of operations was to occur in the second half of the 19th century.
No industrial economy can develop beyond a certain point unless it possesses adequate capital-goods capacity. Even today the most reliable single index of any country’s industrial potential is the quantity of its iron and steel production. Under conditions of private enterprise the extremely costly capital investment necessary for this development is not likely to be undertaken. The industrialisation of cotton or other consumer goods was helped by the already existing mass market for these. For heavy iron and steel equipment, no such market existed. It only comes into existence in the course of an industrial revolution. Very few businessmen were therefore willing to lock up their money in the very heavy investments required by even quite modest ironworks. These disadvantages applied particularly to metallurgy, especially iron.
Fortunately they applied less to mining, chiefly of coal. Coal had the advantage of being not merely the major source of industrial power in the 19th century, but also a major form of domestic fuel, thanks to the relative shortage of forests in Britain. The growth of cities, especially London, had caused coal mining to expand rapidly since the late 16th century. By the early 18th century it was substantially a primitive modern industry, even employing the earliest steam engines for pumping. Coal mining’s capacity was already immense. In 1800 Britain produced 10 million tons of coal or 90 percent of the world output.
This immense industry, though not expanding fast enough for really massive industrialisation on the modern scale, was sufficiently large to stimulate the basic invention that was to transform the capital goods industries: the railway. The mines not only required steam engines in large quantities and of great power, they also required efficient means of transporting the great quantities of coal from coalface to shaft and especially from pithead to the point of shipment. The ‘tramway’ or ‘railway’ along which trucks ran was an obvious answer. To pull these trucks by stationary engines was useful. From there to pulling these trucks by moving engines was practical. Finally, the costs of overland transport of bulk goods were so high that the use of these engines for long-term haulage proved profitable. Technologically therefore, the railway is the child of the mine, especially the northern English coalmine.
No innovation of the IR has fired the imagination as much as the railway. Hardly had they been proved technically feasible and profitable in England around 1825-30 before plans to build them were made over most of the West. The first short lines were opened in the US in 1827, in France 1828 and 1835, in Germany and Belgium 1835 and Russia 1837. No other invention revealed the power and speed of the new age as dramatically. From an economic point of view, its vast expanse was its chief advantage. Its capacity to open up countries hitherto cut off by high transport costs from the world market, the vast increase in the speed and bulk of overland communication it brought for men and goods, were of major importance. The immense appetite of the railways for iron and steel, coal, heavy machinery, labour and capital investment was critical at this stage. It provided that massive demand that was needed if the capital goods industries were to be transformed as profoundly as the cotton industry had been. In the first two decades of the railways (1830-50) the output of iron in Britain nearly quadrupled from 680,000 to 2,250,000 tons. The output of coal also trebled in this period from 15 million tons to 49 million tons. This dramatic rise was due primarily to the railways since on average each mile of line required 300 tons of iron merely for track. The industrial advances that for the first time made the mass production of steel possible followed naturally in the next decades.
The impetus for industrialisation dictated the mobilisation and redeployment of economic resources, the adaptation of the economy, and the society required to maintain the new revolutionary course. The first and most crucial factor that had to be mobilised and redeployed was labour, since an industrial economy meant a sharp decline in the agricultural (i.e. rural) and a sharp rise in the non-agricultural (i.e. urban) population. It also implies a rapid general increase in population. This required an equivalent ruse in the supply of food, mainly from home agriculture – i.e. an ‘agricultural revolution’. The rapid growth of towns and non-agricultural settlements in Britain had long stimulated agriculture, which was so inefficient in its pre-industrial forms that quite small improvements produced disproportionately large results. Such agricultural changes had preceded the IR and made possible the first stages of rapid population increases and the impetus continued. The vast increase in output that enabled British farming in the 1830s to supply 98 percent of the grain for a population between 2-3 times the mid-18th century size was achieved by general adoption of methods pioneered in the earlier 18th century, by rationalisation and expansion of the cultivated area. All these were achieved by social rather than technological transformation, by the liquidation of medieval communal cultivation with its open field and common pasture (the ‘enclosure movement’), of self-sufficient peasant farming, and of traditional commercial attitudes towards the land. Thanks to the preparatory evolution of the 16th-18th centuries, this uniquely radical solution of the agrarian problem, which made Britain a country of a few large landowners, a moderate number of commercial tenant farmers and a great number of hired labourers, was achieved with a minimum of class struggle despite intermittent resistance by the unhappy rural poor and traditionalist country gentry.
In terms of economic productivity this social transformation was a huge success; in terms of human suffering a tragedy, deepened by the agricultural depression after 1815, which reduced the rural poor to destitution. From the point of view of industrialisation these were desirable consequences for an industrial economy needs labour, and where else but from the former non-industrial sector was it to come from? Men must be attracted into the new occupations or forced into them. Economic and social hardship was the most effective whip.
To acquire a sufficient number of workers was one thing. To acquire sufficient labour of the right qualifications and skills was another. All labour had to learn how to work in a manner suited to industry, i.e. in a rhythm of regular unbroken daily work that is entirely different from the seasonal ups and downs of the farm, or the self-controlled patchiness of the independent craftsman. Employers then (and even now) constantly complained about the ‘laziness’ of labour. The answer was found in a draconic labour discipline (fines, a ‘Master and Servant’ code mobilising the law on the side of the employer, etc.), but above all in the practice of paying labour so little that it would have to work steadily all through the week in order to make a minimum income. In the factories, where the problem of labour discipline was more urgent, it was found more convenient to employ the cheaper women and children. Out of the total workers in the English cotton mills in 1834-47, ¼ were adult men, over ½ women and girls and the rest boys below the age of 18. Another common method of ensuring labour discipline was sub-contracting. In the cotton industry, about 2/3 of the boys and 1/3 of the girls were in the direct employ of ‘operatives’ and hence more closely watched. Outside the factories, such arrangements were even more widespread.
Besides such problems of labour supply, those of capital supply were relatively unimportant. There was no shortage of immediately investible capital in Britain, unlike most other European countries. But those who controlled most of it in the 18th century – landlords, merchants, shippers, financiers, etc. – were reluctant to invest it in the new industries, which therefore had often to be started by small savings or loans and developed by the ploughing back of profits. Local capital shortages made the early industrialists harder, thriftier and more grasping, and their workers correspondingly more exploited.
In this rather haphazard, unplanned and empirical way, the first major industrial economy was built. By modern standards it was small and archaic, by the standards of 1848 it was monumental, though also shocking, for its cities were uglier, its proletariat worse off than elsewhere. But it harnessed the power of a million horse-power in its steam engines, turned out two million yards of cotton cloth per year on 17 million mechanical spindles, mined almost 50 million tons of coal, and traded Pounds 170 million worth of goods in a year. Its trade was twice that of its nearest competitor France. Its cotton consumption was twice that of the US, four times the French. It produced more than half the total pig-iron of the developed capitalist world. It was, in fact, the ‘workshop of the world’. This world knew that the IR launched in Britain was transforming the world. Nothing could stand in its way.
(Concluded)