Which factors best explain why England was the first nation to begin to industrialize?

Lesson 1 - Why was Britain the first country to have an Industrial Revolution?

What was the Industrial Revolution? The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, and transport had a profound effect on the socio-economic and cultural conditions starting in the United Kingdom, and then subsequently spreading throughout Europe, North America, and eventually the world. The onset of the Industrial Revolution marked a major turning point in human history. Almost every aspect of daily life was eventually influenced in some way, from where people lived and worked to how people viewed the world and their life expectations.

Starting in the later part of the 18th century there began a transition in parts of Great Britain's previously manual labour and draft-animal based economy towards machine-based manufacturing.

It started with the mechanisation of the textile industries, the development of iron-making techniques and the increased use of refined coal. Trade expansion was enabled by the introduction of canals, improved roads and railways. The introduction of steam power fuelled primarily by coal, wider utilisation of water wheels and powered machinery (mainly in textile manufacturing) underpinned the dramatic increases in production capacity.

Why was Europe first? One question of interest to historians is why the industrial revolution occurred in Europe and not in other parts of the world in the 18th century, particularly China, India, and the Middle East, or at other earlier times like in Classical Antiquity or the Middle Ages. Numerous factors have been suggested, including education, technological changes (especially the Scientific Revolution in Europe), 'modern' government, 'modern' work attitudes and culture. Some historians such as David Landes and the sociologist Max Weber credit the different belief systems in China and Europe with dictating where the revolution occurred. The religion and beliefs of Europe were largely products of Judaeo-Christianity, and Greek thought. Conversely, Chinese society was founded on men like Confucius, Lao Tzu (Taoism), and Buddha (Buddhism). Whereas the Europeans believed that the universe was governed by rational and eternal laws, in the East it was more generally believed that the universe was in constant flux and, for Buddhists and Taoists, not capable of being rationally understood.

Other recent historians like Jared Steel have suggested the physical geography of Europe and the existence of small rival nation states made all the difference. See this interesting extract and fuller version from Jared Steel's bestselling Guns, Germs and Steel and this series of documentary films.

Why Britain?

Economic historians are agreed about very little but on one point there is unanimity, no one reason by itself explains why Britain, a fairly remote group of islands in the north-west corner of Europe, became the world's first industrial nation. We can, however, identify a number of factors that gave Britain an advantage.

Timeline of British Industrial Development

1733: John Kay's 'Flying Shuttle' invented; it increases the speed of textile weaving machines

1767: James Hargreaves's 'Spinning Jenny' invented; it greatly increases the output per person

1769: Richard Arkwright's 'Water Frame'

1779: Samuel Crompton takes out a patent for spinning by 'mule'

1780s: 477 inventors' patents registered (in the 1710s there had been only 38) Value of exports from Britain (mostly manufactured goods) top £10 million for the first time (in the 1700s they had been less than £5 million)

1782: James Watt's rotary steam-engine invented; it enabled concentration of power away from fast-flowing streams and thus aided growth of industrial towns

1783-4: Henry Cort's 'puddling' process allowed coal, rather than charcoal, to be the main fuel used in iron refining

1786: Edmund Cartwright's power loom invented; it promises to increase speed of weaving, but is not widely introduced to textile areas until 1820s

1802: The value of exports of cotton goods exceeds those of woollen ones for the first time

Nine reasons why Britain was first.

Geography: Britain is a small country with many navigable rivers, good mineral deposits (coal, iron etc.) and relatively few huge natural obstacles (mountains) to movement of trade and people. Water power, crucial for technological development, is abundant. Nowhere is very far from the sea.

Diversity: Britain has a diverse climate, enabling good-quality wheat to be grown in the south and east and animals to be nourished in western pastures. Diversity aids growing specialisation in agriculture, while Lancashire's famously mild and wet climate was helpful to the processing of raw cotton.

Earlier economic development: The eighteenth century had seen remarkable advances in both trade and manufacture, resulting in rising incomes and the capacity for many people to consume manufactured goods.

Rising population growth: Britain's population almost doubled in the course of the eighteenth century and the growth was most marked towards the end of the century. More people mean more opportunities for production and consumption.

The profitability of overseas trade and the advantage of empire: Britain had a healthy lead over European competitors in overseas trade, particularly in India and the Americas. Successes in war up to 1763 had extended this advantage. Success in war against revolutionary France helped as every other major European competitor had been economically damaged by war.

The nature of government: After the Glorious Revolution in 1688, Britain had a relatively stable government that was open to change. During the late eighteenth and early nineteenth centuries, governments were less and less likely to uphold apprenticeship regulations and other feudal restrictions on the free movement of labour.

Britain as an inventive society: Britain generated a huge number of innovative ideas during the eighteenth century. The famous industrial innovations - the Water Frame, Power Loom and the rest - were evidence of a much wider commitment to experiment, from which society benefited. Also new institutions, such as the Royal Society of Arts (1754), promoted innovation and diffusion of scientific and technological ideas.

Britain's advantage as a Protestant country: This explanation has its origins in the views of the German sociologist Max Weber who argued that Protestant values and lifestyles were more conducive to thrift, hard work and accumulations of money than were Catholic ones.

Britain as an 'open society': Some social historians, notably Professor Harold Perkin, have laid particular stress upon the unique nature of British society. He sees a relatively liberal society open to talent in which the ablest can rise to wealth, influence and power. This is called social mobility. Also Britain's aristocracy was not a closed system; younger sons often married the heiresses of bankers and overseas traders, while very successful entrepreneurs came from humble backgrounds.

Many observers of modern social science are convinced of the maxim: 'There are three kinds of lies: lies, damned lies, and statistics'. Yet good historical scholarship has always used statistics as the antidote to the ‘damned lies’. This is especially useful with the Industrial Revolution, where wild theories dominate. Below I examine three famous theories of the Revolution and show why they do not tell us the whole story.

Underpinning my analysis is the recent work of Professor Nicholas Crafts, Professor of Economics and Economic History at the University of Warwick. In November the Legatum Institute welcomed Professor Crafts to explore the question: ‘why Britain got there first?’

What do we understand by ‘Britain was first to industrialise’? Professor Crafts is one of the leading scholars unpacking the Industrial Revolution and his work reveals a number of salient points. First, there was no great ‘take-off’ in industrialisation or productivity: in Britain industrial employment increased by just 12% between 1759 and 1851, similarly total factor productivity increased by just 0.4% a year until the 1830s. By 20th century standards such growth was underwhelming.

Second, the ‘great divergence’ had already occurred by the time Britain was industrialising. Real GDP per person was far higher in Britain, the Netherlands and Italy than in China by 1600: the West was far ahead of the rest by the time of the Industrial Revolution.

Third, Crafts shows that industrialisation was concentrated in a limited number of sectors, such as textiles, and largely bypassed the service industries.

Despite these reservations, something remarkable did occur. By the middle of the 19th century Britain accounted for 23% of global industrial production, British workers were the richest in Europe, and comparatively few of them worked on the land. What is clear is that this unique position was not the result of a century of rapid change; Britain’s was a slower, more incremental revolution than previously thought.

How to explain this revolution? Three different historians offer an economic, a social and a genetic explanation, yet, to differing degrees, all three are found wanting.

Most successful is Robert Allen who puts forth a compelling argument in The British Industrial Revolution in Global Perspective. Britain’s success was the result of relative prices and market potential. Allen argues that in Britain wages were high, while capital and energy were cheap. Britain also provided a large market for manufactured products. The result was that it made sense to invest in the spinning jenny in England, while it did not in France.

However, this picture is too simplistic. While British workers were paid more than their French counterparts, even at lower French wages, adopting the jenny would still have been profitable (albeit less so). Similarly, American workers were paid more than their British counterparts, but industrialisation did not take off there.

Joel Mokyr in The Enlightened Economy: an Economic History of Britain 1700-1850 posits that the Enlightenment meant that Britain was best positioned to take advantage of the ideas and equipment of the age. While many European states benefited from the Enlightenment, Britain was alone in possessing an adequate supply of skilled craftsmen who were afforded the freedom to be entrepreneurial. Mokyr’s theory incorporates many of the elements that economists have identified as important for economic growth such as human and physical capital, research and development and effective institutions.

Nevertheless his work is somewhat light on evidence. For every piece of effective government legislation of the period, such as the repealing of the Corn Laws, there is a counterpoint of deleterious action, such as the failure to effectively regulate the railways. Similarly, for every Baconian experimenter such as Josiah Wedgwood who would have encountered Enlightenment ideas, there many, such as Richard Arkwright, who were less likely to have been raised on Enlightenment teaching.

Least successful is Gregory Clark who moves further from the realm of inductive reasoning than Mokyr. Clark in A Farewell to Alms: A Brief Economic History of the World argues that Britain’s Industrial Revolution was a rapid transformation bought about by demographic and genetic changes. The salient point in Clark’s account is that the higher birth rates of the upper classes meant that their offspring formed an increasingly large part of the British population. As they did so they spread their genes and work ethic through a larger swathe of the populace, powering the Industrial Revolution.

Clark’s claim is controversial but thankfully statistics can be used to evaluate it. Clark is correct that some of the upper classes had higher birth rates than other segments of the population; however, this was also the case in many other European countries and in China. So why was Britain’s experience unique? Unfortunately Clark fails to give an answer to this question and his overall thesis, that Britain experienced particularly rapid change around 1800, fails to account for the data assembled by Crafts and outlined above. In this case statistics are clearly the antidote to an unsubstantiated theory.

In all disciplines there is a struggle between facts and theories. For years this was the state of affairs in economics, as mathematical models replaced engagement with facts and data. Historians would be wise to not to repeat this mistake. Crafts and others like him are doing the discipline a great service by providing the evidence with which to examine competing claims. Doing so may result in the dismissal of more theories than in their generation but as Thomas Edison said:

Negative results are just what I want. They’re just as valuable to me as positive results. I can never find the thing that does the job best until I find the ones that don't.

Stephen Clarke is a Research Analyst at the Legatum Institute, London.

The Legatum Institute is currently running the History of Capitalism Programme, a series of lectures which explores the origins and development of a movement of thought and endeavour which has transformed the human condition.