The Relationship between Capitalism and the Industrial Revolution

TheRelationship between Capitalism and the Industrial Revolution

TheRelationship between Capitalism and the Industrial Revolution

Thehistory of mankind is characterized by several phases of development.Each phase of development arises as a result of various conditionsset by the preceding phase. Political ideologies and theories ofeconomic development are dependent on each other. For instance, therise of capitalism that was a political ideology influenced the riseof the industrial revolution. Industrial revolution refers to thetransition of manufacturing processes in the period between the 17thand the 18thcentury (Zmolek,2013).The industrial revolution saw the rise of industries and companies.Capitalism, on the other hand, refers to a political ideology thatcharacterized by the individual ownership of production. Capitalismsaw the collapse of feudalism after the political unification and thedomination English nations. The relationship between capitalism andindustrialization is a historical one characterized by one causing orsupporting the other and vice versa. This essay seeks to analyze therelationship between capitalism and the industrial revolution.

Capitalismas a process began after the protestant reformation that led to thesplit of the church into the English and the Roman Catholic Church. After the protestant reformation, capitalism became the doctrine thatwas respected by the merchants who sought to create a single marketin the country. The English king established an internal law orpolicing that provided freedom to the entrepreneurs (Appleby,2010).The result of the king’s orders were the growth of trade, high taxpayment, rise of wealthy individuals. The increase in wealthinfluenced the politics of the day because in the 16thand the 17thcentury, economic activities became the main source of the king’srevenue. The effects of economic activities on the governmentinfluenced the king to pass the laws and acts that sought to expandeconomic production. The expansion policies directly influenced therise of industries. Industries flourished, production increased andtrade grew tremendously adding to the revenue that was collected bythe government. In return, there was great economic success ofindividuals owning or controlling the industries.

Theagricultural revolution took place as a result of the land enclosuresystem. Land enclosure was an ideology of capitalism that sought toexpand agricultural activities to provide food for the urbanpopulation. The agricultural revolution allowed the people to gainmoney and become involved in more investment activities. Theinvestments allowed the entrepreneurs to come up with inventions thatrocked the world. For instance, the railroads, vaccinations, blastfurnace among others arose as a result of the agriculturalrevolution. Private investments, a major feature of capitalism,became a stepping stone to industrialization especially to countrieslike the Great Britain, who succeeded faster than the other Europeancountries in the industrial revolution (Grassby,1999). Agricultural production was able to increase food production,which in turn supplied food to the growing urban populations. Thetowns expanded significantly from reliable and consistent foodproduction that was brought about by agricultural and industrialrevolution.

Capitalismcontributed greatly to the development of brand new scientists and ageneration of inventors. More investments were put in place tosupport the scientific and technological advances. The keydevelopments during the industrial revolution that include the blastfurnace and the railway connecting the rising industries to naturalresources among other invention were financed by private individualsor organizations. Capitalism allowed the creation and nurturing ofinventors through provision of loans and funding (Outman,Outman, &amp May, 2003). The desire to industrialize arose in order to endorse capitalism.Capitalism, therefore, supported the inventions on new technologiesthrough funding that transformed mere ideas into the light ofreality. Grants from national banks, especially in Great Britainallowed the great technologies to be widely used. For instance, therailway that was funded by capitalists helped in transporting themachinery and technology to distant places with minimal costs. Thisgrowth had a significant impact on the economy of nations thatbenefited from industrial revolution. Capitalism continued to gainmore influence as people sought to better their lives throughengaging in trade.

Animportant factor behind the industrial revolution was the capitalismideals endorsed by the banks in Great Britain. The banks made iteasier to receive the loans in a highly industrialized economyleading to the rise of a large group of the working class (Zmolek,2013).The working class citizens sought to become rich quickly and thusinvested highly in the industrialization process as required by thecapitalist ideals. The commercialization of farming was endorsed bythe capitalist government through the national banks. Withoutcapitalism, the mechanical ideas in the agricultural sector would notrealize the great achievements. The stable middle class explain whythere is a difference in the range of industrialization betweenBritain and Russia who took the socialist ideology.

TheIndustrial revolution is highly linked to the agricultural revolutionthat allowed countries to gain enough food. The link between foodproduction and man’s participation in other economic activities isevident in the whole existence of mankind. However, the agriculturalrevolution was a direct impact of capitalism. The highlycommercialized farming techniques and the agricultural technologywere direct impacts of capitalist investments. Without capitalism,the agricultural revolution could have existed because the equipmentsmade and used by the agrarian societies were directly endorsed orfunded by capitalists. Capitalism, in fact, allowed high productionof food for the demographic booms. Capitalism, therefore, promotedthe agricultural revolution that ushered in the first industrialrevolution in human history (Outman,Outman, &amp May, 2003).

Therise of capitalist industries like coal and iron industries created ahigh demand for skilled labor. However, there was scarcity of laborsupply and the costs of production were rising. The capitalist choseto focus on the introduction of labor saving machinery. Additionally,the capitalists linked profit making to technological innovation andnoted that if profit was promised by new manufacturing techniques,investments needed to increase (Zmolek,2013). The case of England is an ideal example. England saw possibility ofunification of national market, export possibilities due to thegovernment’s participation in the reduction of costs of production.The link between domestic and international economy in Englandbrought about rivalry that incited further technological innovationsand expansions. Indeed the capitalist desire to strengthen thecountries economically and the desire to amass more profitscontributed widely to the industrial revolution. The rise of theindustries relied on capitalism and vice versa (Foster,1974).

Therelationship between capitalism is evident in the remarkableexpansion of industries and railways. The industrial revolution ledto high production of commodities and revolutionized transportationand increased trading activities among nations as well as investmentsabroad especially in USA. The strengthening of the railways increasedthe tendency to attain the capitalist ideals of forming a nationalsingle market and opening all parts of the country for development.The countries that did not industrialize as a result of developmentsin transportation were integrated into the capitalist system throughexportation of raw materials and foodstuffs. Through the industrialrevolution, therefore, Britain managed to spread the capitalist ideasbeyond her boundaries (Lloyd-Jones,1998). Therelationship between capitalism later became that of influencing orenhancing the other. The Industrial revolution influenced thecapitalist economy that later influenced the politics of Britain andthe outside world through political expansion.

Thegrowth of capitalism relied on the industrial revolution to a largerextent. The power and influence of the capitalist systems grewbecause of the ability to increase wealth. The wealth grew as aresult of the capitalist system to concentrate wealth in the hands ofsmaller groups. The rise of a strong middle class empowered thecapitalist government through the payment of taxes (Outman,Outman, &amp May, 2003).The ability to feed the large population was a great advantage tocapitalism. As the businesses grew and provided new consumer productsboth at homes in rural and urban areas, capitalism expanded and asthe large businesses increased their profits, capitalism got hershare. Capitalism, therefore, focused on ensuring the survival andgrowth of both smaller and bigger industries in order to strengthenher ideals (Appleby,2010).For instance, it was only under capitalist system that monetaryincentives and support were channeled to the technological sector tofacilitate the growth of industries.

Capitalismwas the foundation of the industrial revolution. The Industrialrevolution on the other hand promoted the development and expansionof capitalism. The relation between the two characterized the mutualrelationship between the concepts. Whereas capitalism emphasized inacquisition of wealth and the rise of wealthy people, the industrialrevolution brought about the rise of wealthy classes in the society.Industrialization led to the differentiation between the two groupsof people that include the ones that work and those that supervisetheir work. Capitalism as defined by Marx consist of two classes ofpeople the Haves and the Have not’s where the haves oppresses thehave not’s or the workers. The characteristics of capitalism as weknow today became distinct with the development of industrialization.One can therefore, argue that industrialization shaped capitalism(Zmolek,2013).

Conclusively,it is actually possible to establish the relationship between thecapitalist states and the industrial revolution because the twoinfluenced each other. The causes of the industrial revolution thatranges from agricultural finances to new technologies were productsof capitalist ideology. None of the factors behind the industrialrevolution could have achieved greater success without capitalism.Countries that accepted capitalism made it easy for investors andinnovators to advance technologically. For instance, Britainindustrialized faster as a result of capitalism, while othercountries like Russia that failed to institutionalized capitalismfailed to industrialize. Capitalism paved way for the industrialrevolution by setting ideals for the development whileindustrialization helped capitalist system achieve her ideals. Assuch, one cannot talk of one of these concepts independently withoutacknowledging the contribution or the effects of the other.Ultimately, capitalism and industrial revolution are interrelatedboth in concept and effect.


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Grassby,R.&nbsp(1999). TheIdea Of Capitalism Before The Industrial Revolution.Lanham, Md.: Rowman &amp Littlefield.

Lloyd-Jones,R. and Lewis, J.M. (1998).&nbspBritishIndustrial Capitalism Since The Industrial Revolution.London: UCL Press.

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