11. The revolution goes global
The industrial revolution may have begun in Britain, but it did not stay there forever. Once Britain had become the “workshop of the world”, dominating global manufacturing exports during the 1800s, it was only natural for other countries to want to join in. Although Britain tried to protect the secrets of its technological breakthroughs, industry spread, first to America and parts of Europe, and eventually on to most of the rest of the world. This global turn may have knocked Britain off its Victorian perch, but it ensured the industrial revolution became irreversible, not just a British eccentricity. It has brought prosperity — as well as a fair share of problems — to people across the world, and it has very likely made Britain a lot richer than it would otherwise have been.
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The graphic below shows how Britain’s industrial prosperity spread to a few other nations from the 1800s onwards. It shows GDP per capita moving to the right, and population moving upwards for Britain, the USA, France, Germany and the Netherlands.
The USA saw the most dramatic changes during the 1800s. Its GDP per capita doubled between 1830 and 1880, and it became the first country to overtake Britain’s living standards around 1880. Its population also exploded, rising from under 7 million in 1800 to 78 million by 1900. In a century, America went from small, newly formed nation to the richest country in the history of the world.
This blog is no place for a detailed explanation of the initial American economic miracle, but it was primarily enabled by first adopting and then improving upon the breakthroughs of the British Industrial Revolution. The American economy added textiles, steel, machinery to its considerable natural resources — coal, oil, cotton, grain, land — and grew rapidly. There is no doubt that the vast expansion of American territory (the USA expanded its territory by more than 4 times between 1790 and 1900) and the flow of immigrants (both the willing and the enslaved) also contributed to the USA’s extraordinary growth in the 1800s, but it could not have got so prosperous without the switch to industry.
Meanwhile, Germany and France also began to follow the British industrial model during the 1800s, but saw much less dramatic economic changes. Both areas (Germany wasn’t unified until 1871; the chart uses today’s borders) began the 1800s with larger populations and lower living standards than Britain and America, with most people still concentrated in the rural economy. While their growth in GDP per capita was far less dramatic than Britain and America’s during the 1800s — in fact, they did not catch Britain until around 1970 — it still enriched them compared to most of the rest of the world. The Netherlands, which had been the world’s richest country per person before the industrial revolution, followed the slower-but-still-transformative pattern of Germany and France.
Of course, many other nations have since undergone — or are still undergoing — similar economic transformations. Japan, for example, made a deliberate national effort to switch from an isolationist, agrarian society to a more industrial one in the decades following the Meiji Restoration of 1868. Russia’s state-led industrialisation after the Communist Revolution raised living standards, albeit not as much or as sustainably as in some other countries. More recently, China’s extraordinary economic growth over the last four decades has followed a familiar industry-led model. As the chart below from Our World in Data makes clear, the biggest global increase in living standards has occurred in the last 70 years, not in the years after the spread of the industrial revolution.
The spread of industrial ideas and technologies would have happened through different means. Britain tried to protect its breakthroughs by forbidding the export of technical blueprints and of machines themselves, but good ideas are not that easy to contain. Some individuals would have taken their own technical expertise and knowledge abroad: Samuel Slater is known as the Father of the American Industrial Revolution for bringing his memorised knowledge of textiles technologies to New England. There would have been plenty of efforts to copy or come up with alternative methods of producing machinery. And ultimately, Britain did not have a monopoly on industrial ingenuity, and many of the industrial breakthroughs of the later 1800s and 1900s — electricity, cars, oil, flight — were made in other countries, particularly Germany and the USA. Once the concepts, institutions and markets of the industrial economy had spread, other nations stole a march on new technologies.
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In Britain, the decades after 1900 are sometimes described in terms of decline, the period where Britain was caught and overtaken by other nations. This is true if you’re worried about fighting wars or maintaining empires — Britain ceased to be the world’s most economically powerful nation sometime before 1900. But in terms of living standards, how ordinary people experienced the world, there was no decline (aside from a few tumultuous years in the 1920s). In fact, the spread of industry and prosperity around the world was probably good for the average Briton, in the long term at least.
This was a crucial change brought by the industrial economy — it was no longer a zero-sum game, like the land-based economy that had gone before. In an industrial economy, the sources of prosperity — technologies and ideas, financial capital, people’s skills — were no longer limited by the availability of land. In fact, growth could lead to even faster growth in future — with more financial returns to re-invest, more incentive to innovate, bigger markets to buy goods.
And this meant that, if other nations industrialised and grew too, that could be a good thing for your own country. If other nations got richer, that meant more people to buy your goods, more people to buy goods from. It also meant a bigger pool of ideas and innovations to copy and adopt, and it meant you could specialise in the things you were best at and trade for other things you needed.
Of course, there are limits to how good the spread of industrialisation can be, and that is mainly down to competition. Competition is, on the whole, a good thing, especially for consumers — it helps to keep prices down, quality high and to drive continual improvements. However, it can become a pretty significant problem for countries if they lose competitiveness in too many industries. If you lose competitiveness in a global marketplace, the consequences can be severe. And economic success can, by raising wages, sometimes lead directly to a loss of competitiveness.
But the overall effect of the industrial revolution’s world tour was a positive one. Without it, the revolution may have fizzled out altogether, as Britain hit the limits of its breakthroughs in textiles, steam and metals. Globalisation may not be a popular word around the world today, but in the grand sweep of economic history, globalisation is good.