Industrial Revolution · EPILOGUE ·
Impact of the Industrial Revolution
Chapter 12 of The Industrial Revolution, 1750–1914: “Who Won and Who Lost”
By 1900 Europe and the United States made about 85 per cent of the world’s manufactured goods, while China’s share fell to about six per cent and India’s to under two. By 1914 the City of London had invested about £4 billion abroad, real wages had risen since about 1850, and organised labour had become a political force.
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The map above is the world of The industrial world, August 1914 — The industrial world goes to war.
Every state on the map that year: The world in 1914 · Europe in 1914.
Part of IB History: The Industrial Revolution →
SHORT EXPLANATION
Britain industrialized first where high wages, cheap coal, Atlantic trade and a culture of invention came together. Continental Europe, the United States and Japan followed, borrowing machines while developing institutions of their own. By 1914 industrial countries dominated production, finance and armed force. Their populations had grown, and after about 1850 real wages—pay measured by what it could buy—had risen.
The City of London, the capital’s financial district and the Wall Street of its day, had lent about £4 billion abroad, around two-fifths of world foreign investment. The first industrial countries had become the world’s workshop, banker and strongest military powers. But their gains tell only part of the story.
Enslaved people of African descent grew cotton for the first factories. Hand weavers from Lancashire to Bengal lost their trades, while colonized peoples supplied raw materials on terms set by others. In the famine of 1876–78 around Madras, millions died as grain continued to reach buyers who could pay. Memorials on the map mark many of these losses.
Workers sought a share of industrial wealth through organization. Socialist parties founded the Second International in Paris in 1889. The arrows trace another response to the changing world: some 50 million Europeans left home, and over a million Indians traveled under indenture, contracts binding laborers to employers for years in return for passage. A further cost was just emerging. In Stockholm in 1896, Swedish chemist Svante Arrhenius calculated that coal burning could warm the planet, a consequence later generations would inherit.
The full story
In 1750 Europe and the United States made less than a quarter of the world’s manufactured goods, according to Paul Bairoch’s estimates; China and India together made about 57 per cent. By 1900 the position had been transformed. Europe and the United States made about 85 per cent, while China’s share had fallen to about six per cent and India’s to under two. Industrial production had concentrated in a small group of countries.
Britain’s lead also gave it power as a lender. By 1914 the City of London, its financial district, had invested about £4 billion abroad in railways, mines and loans to foreign governments. Industrial profits helped finance loans, railways and fleets that extended the country’s reach. Within industrial countries the benefits spread slowly but widely after 1850: real wages, measured by what pay could buy, rose as working hours fell. The Panama Canal, opened in August 1914, was the last great work of this confident world.
Workers had organized to obtain a share of those gains. British unions grew from the skilled trades of the 1850s; the dock strike of 1889 organized unskilled workers, and by 1914 unions had about four million members. In Germany Chancellor Otto von Bismarck banned the Marxist Social Democratic Party from 1878 to 1890. By 1912 it had become the largest party in the Reichstag, the elected national parliament.
The movement crossed borders. In 1889 socialist parties from about twenty countries founded the Second International in Paris. It called for an eight-hour day and made 1 May an international workers’ day. Governments used repression, but they also adopted reforms. Bismarck’s Germany introduced state insurance against sickness, accidents and old age in the 1880s. Britain introduced old-age pensions in 1908 and national insurance in 1911, paying sick and unemployed workers from contributions by workers, employers and the state. Industrial capitalism survived its critics partly by accepting some of their demands.
The account looks harsher outside the industrial core. Colonies and economies opened by force or treaty supplied cotton, jute for sacks, rubber, tin and grain on terms set by others. A functioning market did not ensure that everyone could afford food. During the 1876–78 famine in southern and western India, centered on Madras, about 5.5 to 10 million people died while grain continued to move to market and abroad.
Poverty and cheaper steamship passages helped drive migration. Some 50 million Europeans left for the Americas and Australia, while over a million Indians left under indenture, bound to plantation work for years. Another consequence crossed borders without a ship. Coal freed industry from the limits of the land; in Stockholm in 1896 the Swedish chemist Svante Arrhenius calculated that doubling atmospheric carbon dioxide would warm the earth by several degrees. The fuel that enriched industrial countries was also beginning to change the planet.
FULL EXPLANATION
Winners and losers inside the industrial countries
The distribution of industrial gains changed over time. In 1955 economist Simon Kuznets proposed that inequality would first rise as some regions and sectors advanced ahead of others, then fall as workers entered better-paid jobs and acquired political power. British evidence partly fits: real wages, adjusted for living costs, grew slowly before 1850 and much faster afterward. Average heights, an indicator of childhood nutrition and health, began to rise again among those born after mid-century. Wages tell us less about who owned property. Thomas Piketty’s reconstructions suggest that around 1910 the richest one per cent held about two-thirds of Britain’s private wealth, a greater concentration than ever. Women’s experience varied with class and place: mill wages gave many young women an income of their own, while law and custom kept married women dependent. The middle classes of clerks, engineers, teachers and shopkeepers grew faster than any other group. Most workers gained broadly, but late; concentrated property would be only partly redistributed by twentieth-century wars and taxes.
Famine, markets and empire: a contested link
A drought destroys crops, but it does not by itself explain who dies. In Late Victorian Holocausts (2001), historian Mike Davis connected the famines of 1876–79 and 1896–1902 in India, China and Brazil with El Niño droughts. El Niño is a periodic warming of the Pacific that weakens monsoon rains. He argued that colonial and market policies deprived peasants of reserves and that governments refused adequate relief. The Indian case supplies evidence for that argument. Lord Lytton, the British viceroy, kept relief minimal; the official Sir Richard Temple set a ration below laborers’ needs; and grain continued to be exported. Death estimates for the 1876–78 Indian famine range from the official 5.5 million, now considered an undercount, to Davis’s upper figure of about 10 million. Economic historians Cormac Ó Gráda and Tirthankar Roy accept the disaster’s scale while criticizing Davis’s highest estimates and framing. They point to famines in pre-colonial India and to the Famine Codes adopted after 1880, which told officials when to declare famine and open relief works and reduced later mortality. Economists Robin Burgess and Dave Donaldson found that by the early twentieth century railways reduced drought’s effect on death rates by carrying grain into stricken districts. The dispute concerns responsibility; all sides agree that policy choices shaped who died.
Coal, carbon and the long bill
Industrial pollution could be seen and breathed. Britain mined about 287 million tons of coal in 1913, its all-time peak; London’s winter fogs killed hundreds in bad weeks. The Alkali Act of 1863 became one of the world’s first laws against industrial air pollution. In Japan the Ashio copper mine poisoned the Watarase valley. The effect on the atmosphere as a whole was less visible. Swedish geologist Arvid Högbom estimated in 1894 that coal burning was beginning to match natural sources of carbon dioxide. Using his figures, chemist Svante Arrhenius calculated in 1896 that doubling atmospheric carbon dioxide would raise temperatures about five to six degrees, an estimate later revised downward. Ancient air trapped in polar ice shows carbon dioxide rising from about 280 parts per million before industrialization to about 300 by 1914; it passed 400 in the 2010s. In 2002 atmospheric chemist Paul Crutzen proposed that a new age of earth’s history, the Anthropocene or human age, began in the late eighteenth century with engineer James Watt’s steam engine. The effects of the energy revolution extend beyond the lives of those who first used it.
Key places on the map
On this day
Why it happened
Coal-powered productivity. Coal-powered machinery multiplied what each worker could produce. Britain mined about 287 million tons in 1913, its all-time peak, exporting about a third to fuel other countries’ ships and factories. Coal, capital and skills gave countries the means to build industrial wealth; countries without them, or prevented from using them, fell behind. Access to energy helped establish the divergence.
Diffusion through states and markets. Countries that followed Britain did more than import its machines. Germany, the United States and Japan protected young industries, built railways and educated engineers. German investment banks supplied long-term industrial loans, while Japan’s Meiji government, the modernizing regime that took power in 1868, built model factories. By 1914 several industrial countries competed for markets, resources and colonies. Their success depended on adapting borrowed methods to local conditions.
Empire and unequal exchange. Colonial rule and unequal treaties placed much of Asia and Africa in the position of supplying raw materials and buying manufactures. The treaties forced weaker states to accept low tariffs, or import taxes. Guaranteed returns for foreign investors and forced labor, including in the Congo Free State, King Leopold II of Belgium’s private colony, also directed gains toward industrial powers. Tan and blue on the 1914 map show the system’s reach. Political power helped determine who benefited from the technology.
Workers and voters organised. Early industrial Britain’s losers organized to change their circumstances. Luddites smashed machines; Chartists demanded votes for working men; trade unionists and socialists built movements that helped win the vote, legal unions and early welfare laws. Similar movements spread across Europe, the United States and Japan. Their pressure helps explain why incomes became more equal after mid-century, although wealth did not. Reform came from below as well as from governments.
THE TURNING POINT
The City of London, 1914. By 1914 Britain was no longer simply the workshop of the world. Germany and the United States made more goods, but investors in the City of London, the capital’s financial district, held about £4 billion abroad, from Argentine railways to South African mines. Britain earned more from lending, shipping and insurance than it needed to pay for imports. Its industrial lead had helped make it the world’s banker. In August 1914 the interconnected powers went to war, turning their industrial capacity toward destruction.
What it changed
An industrial war. The First World War drew on steel, chemicals, railways and factories across whole economies. This was total war, using a nation’s economic resources for fighting; machine guns, heavy artillery and poison gas appeared on a scale the American Civil War had only foreshadowed. Estimates of military deaths range from about 9 to 11 million. The industrial powers had traded more with one another in 1913 than ever before. Interdependence alone had not kept the peace.
Catching up, slowly. Only in the late twentieth century did the Great Divergence between the industrial West and the rest begin to narrow. After 1945 many former colonies sought to industrialize behind tariffs, or import taxes. From the 1950s Japan, followed by South Korea, Taiwan and finally China, combined state guidance, protection and exports, as earlier latecomers such as Germany had done. Their success shows that later policy could alter conditions behind the nineteenth-century gap, including capital, technology and the power to set tariffs.
The carbon century. Coal and later oil powered the twentieth century. Atmospheric carbon dioxide rose from about 280 parts per million before industrialization to about 300 by 1914 and passed 400 in the 2010s. Arvid Högbom and Svante Arrhenius were among the first scientists to connect coal burning with a warmer planet. They worked in the industrial world on this map; the costs they glimpsed are now global.
DISCUSSION QUESTION — Who gained most from the Industrial Revolution by 1914, and was the price worth paying?
Owners of capital and populations of the industrial core gained most clearly by 1914. They were richer, healthier and more numerous than any earlier society, and working classes had begun to share in the gains after 1850. Others paid without benefiting: enslaved people who grew cotton for the first mills, handworkers from Lancashire to Bengal who lost their trades, colonized suppliers, and those who died in famine or forced labor. Was the price worth paying? Evidence alone cannot settle that judgment, especially when those who paid and those who gained were mostly different people, often separated by continents and generations. Two considerations matter. Slavery, empire and minimal famine relief were political choices rather than inevitable features of industrial technology. The gains eventually spread far beyond the first industrial countries. Industrialization was a transformation worth having, achieved at a price far higher than necessary and paid by the wrong people.
An interesting fact
Arrhenius was not alarmed by his calculation. At the coal-burning rates of his day, he expected a doubling of carbon dioxide to take something like three thousand years. In Worlds in the Making (1908), he suggested that warming might bring milder, steadier weather and richer harvests to colder parts of the earth, including Sweden. He did not foresee the twentieth century’s growth in coal and oil use. Carbon dioxide has risen by about half in little more than a century and a half. Arrhenius got the direction right, but industry grew much faster than he anticipated, and his timetable was badly wrong.
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