The Industrial Revolution and Its Consequences

 

Was there an industrial “revolution”?

 

 

In Chapter 13, it may be recalled, we hesitated to speak of the economy following the great discoveries as a "commercial revolution," in spite of the antiquity of the term. Economic institutions had  not been  fundamentally changed. An increasing number of people became interested in making money, and the amount of specie available in Europe was vastly increased. But the system of early modern capi- talism evolved from late medieval capitalism in a normal manner. The lives of relatively few men and women were changed. It could equally well be said that the factory system of the Industrial Revolution did not suddenly displace the domestic or putting-out system; that coal had for a long time gradually been replacing water and wind as a source of energy; that the steam engine of James Watt was only an improvement in detail over New- comen's steam engine, which had been in use from the beginning of the eighteenth century; and that capital had been slowly accumulating for generations and had always been put to effective use as soon as it was available. Thus, it might be argued, there was no real Industrial Revolution, only a gradual growth of the economy of Western Europe, of which the so- called Industrial Revolution is but one phase. When, it may also be asked, was the Industrial Revolution supposed to end, and when did it begin? Is it not still in process? While admitting the force of such arguments, it may surely be urged that there has been an extraordinary change in the tempo of industrialization since, say, the middle of the eighteenth century, and that the consequences for the whole of mankind have been more momentous than any conceivable political revolution. There are few men and women in the world whose lives have been untouched by it, and there will be fewer still by the end of the twentieth century. Political revolutions have fol- lowed in its wake, and they are still far from being at an end. Only the Neolithic Revolution, which marked the beginning of true history, has had greater consequences. But it remains difficult to answer when, if ever, the Industrial Revolution came to an end, even if one may suggest a period during which it may be said to have begun. Indeed, it is still continuing, and at an increasing tempo. The best that the his- torian can do is point to phases marked by certain crucial developments, even though there is no general agreement on how to choose these phases. Arbitrarily, one might suggest that the development of an efficient steam engine by James Watt in 1765 is as good a point to begin as any, just as the most recent phase may well have begun with the first successful exploding of an atomic bomb. One might choose as an intermediate date of critical importance the perfection of the Gilchrist-Thomas process for the manufacture of steel (1878), or the manufacture of the first carbon filament lamp by Thomas Edison in 1883. All such efforts to discover phases have an arbitrariness about them, and the present historian has little option 

but to select phases which represent to him an intensification of the revolution, and especially of its social consequences in the countries it penetrated most deeply. For the first phase the emphasis will be almost exclusively on Great Britain, which was without doubt the industrial pioneer in the eighteenth and nineteenth centuries, although the British were by no means the only inventors. For later phases more attention will be paid to other industrial countries, especially the United States, which pioneered in using the mass production techniques characteristic of the modern period. 

 

 

Problems presented by the increase of population 

 

 

Ever since the Black Death in the fourteenth century the population of Europe has been in- creasing. By the eighteenth century the increase clearly presented a challenge to European skill and inventiveness, which, if it had not been met by a creative response, would have doomed Europe to eventual strangulation. When population increases, only two possibilities are open. Either the food supply must be increased to feed the extra mouths, or the population must decrease through famine, war, or other causes until the existing resources are sufficient to feed it. We have already noted, in Chapter 15, how the English clergyman Thomas Malthus became alarmed at the increase of population in Eng- land and declared that widespread starvation would result from the fact that population increased in geometrical progression, whereas foodstuffs increased only in arithmetical progression. What Malthus did not see was that Britain in a century and a half would become a country which imported three fourths of her food, and yet could continue to live, and indeed improve her standard of living, by importing from countries with a surplus of food. He did not sense the possibility that by specializing in manufacturing Britain could pay for her food imports and still have something to spare by exporting the products of her industry. Britain, in short, experienced, as did the rest of industrial Europe, both an agricultural and an industrial revolu- tion. But it is essential to understand that an agricultural revolution, by itself, would not have solved the problem. The leaders of the unde- veloped countries today understand this fact very well. Hence their insistence on the need of their countries to industrialize—a development which creates further serious economic problems for the rest of the industrialized world, which wishes to sell its products to them. In a rural economy with an increasing population and a backward agricultural technology, the workers, for want of an alternative, continue to labor on the land. But it is not always possible to increase agricultural output merely by an increased expenditure of labor. It is more likely that the output will remain virtually stationary. Since there are more mouths to feed, the standard of living will decrease for all. In India in recent centuries the increase of population has had this calamitous result, whereas in earlier times, when the death rate was higher, pilgrims and travelers to India frequently noted the prosperity and well-being of the people, even in rural areas. Elsewhere the increase has resulted in a growing demand for more land. But if the land is worked by the same primitive methods as before, and especially if marginal land is brought under cultivation, the problem is in no way solved. Its solution is merely postponed, while the new land is being brought under cultivation. If, on the other hand, the surplus population leaves the rural sector of the economy and tries to make a living in the city, the problem of unemployment and underemployment is transferred to the city, unless there is a great increase in manufacture. If there is a marked improvement in agricultural methods, then it is possible that the problem of feeding the surplus population will be solved. But scientific agriculture uses fewer, not more laborers on the land, Industrialization therefore remains a necessity if there is not to be widespread urban unemployment. In eighteenth-century Europe two revolutions took place. When new methods of agriculture were introduced, and new mechanical inventions were put to use in rural areas, the surplus population turned to the cities for its livelihood.

In time, in spite of temporary dislocations, work was found for these workers in 

Industry. No industrial revolution could have succeeded without the concomitant advances in agriculture, since there would have been no surplus food available to feed the new industrial population. An agricultural revolution by itself would have created widespread underemployment and unemployment in the cities. It should therefore be understood, when studying the rest of this chapter, that the two revolutions proceeded together, and there is no clearcut distinction in time between them. Indeed, in industrial countries today both revolutions continue, and as yet no end is to be seen for either of them. 

 

The agricultural revolution

CONSOLIDATION OF AGRICULTURAL UNITS

In eighteenth and nineteenth-century England it is probably true that technical inventions in agriculture were less important as a factor in solving the agricultural problem than the consolidation of agricultural estates into more economical units. Reference has already been made in an earlier chapter to the decay of the medieval manorial system in early modern times under the impact of the enclosure move- ment. The manorial village produced only a small surplus for sale in the market. Much of the land was waste and insufficiently used. The small cultivator usually worked strips of land separated from one another, requiring him to spend too much time in unproductive walking, and he would have been unable to make efficient use of a horse or an ox even if he had been able to afford their upkeep. We have seen how the landowners, anxious to make money from the sale of wool, enclosed as much of their manorial land as was feasible and turned it into sheep runs. By the eighteenth century enclosures were being made more often for the purpose of improving agricultural production for food rather than wool. In the nineteenth century, when wool began to be imported cheaply from the Antipodes, almost all enclosures were made, and were permitted by Parliament, for the sake of increasing the production of  food. 

In contrast to France, there was an increasing tendency to farm large acreages. The small farmer of earlier times often preferred to sell his freehold and become a larger farmer by renting his land from a big landowner, who, in turn, preferred to rent his land for a substantial sum of money. A small farmer who did not wish to rent might well find himself frozen out of his land by act of Parliament, or compelled to sell for a relatively small sum. By the late nineteenth century the process of consolidation had progressed so far that it became the norm for English farms to be large and relatively efficient, and it was estimated that half the land in the country was owned by 2,250 landowners, although the bulk of this land was worked not by the owners but by tenants. Thus English agriculture became what it has largely remained, a rural industry, employing landless laborers who work for wages and obey the instructions of owners or managers. This development has resulted in a greatly increased efficiency and a far higher production than would have been possible under the old subsistence farming. It made possible the spread of efficient farm methods and management, the early introduction of new tools, and later of machinery and fertilizer. In England, unlike most agricultural countries, little resistance was offered to new methods, for there were no real peasants. The landowners and farm managers adopted business methods themselves, and by the force of their example persuaded others to do the same. 

 

IMPROVED AGRICULTURAL PRACTICES

 

Although Jethro Tull, who invented in the early eighteenth century a horse-drawn hoe and a seed drill, is usually credited with being one of the great agricultural pioneers, the new type of farming sponsored by him in a. best-selling book was not very new and was rejected by many as damaging to the land. More lasting and valuable was the general improvement in farming carried out in the county of Norfolk, and associated with the name of Viscount (Turnip) Townshend, its chief publicizer. The system, known as the Norfolk system, was based on a scientific knowledge of the rotation of crops, especially the introduction of turnips into the rotation, the use of nitrogen-fixing leguminous plants, and the extensive use of marls and 

manures. These innovations finally did away with the three-field system inherited from the Middle Ages, under which one field in three was left fallow every year. The system required the use of livestock to eat the turnips, and clover (leguminous crop) for hay, thus increasing the English supply of meat. Livestock was greatly improved by selective breeding, a development influenced by Robert Bakewell, a Leicestershire farmer who, without any knowledge of the principles involved, chose desirable characteristics in his male and female animals and mated them, quickly succeeding in improving the breed and culling out the unprofitable animals.Before the end of the eighteenth century a steel plow had been invented, and in the early nineteenth century inventions of new machines for farming followed one another rapidly, many of them contributed by the young United States, whose extensive lands and favorable homesteading laws provided the incentive for the discovery of any device that would save scarce labor and permit the effective cultivation of huge acreages. It may be added that improved agricultural methods were not confined to Britain, and many ideas were taken from continental practice by the British, especially from the Netherlands and parts of France. Most of the earlier mechanical inventions, however, were British. The unique combination of improved methods and machines was imitated widely abroad, and it was customary, in the early nineteenth century, for would-be progressive farmers to visit England and return to their own countries to publicize the new methods among their own people. As time went on, most of the old hand tools gave way to horse-drawn machines, and finally, in the twentieth century, to tractors. These permitted huge areas to be brought under cultivation, and gradually displaced first the horses and oxen and finally most of the laborers from the farm. Thus the latter were freed to join the workers in urban industry. 

Agricultural chemistry—Von Liebig Per haps the most crucial invention of all was the work of the German chemist Justus von Liebig, who discovered about 1840 the chemical composition of plants by

reducing them to ash and analyzing the ash. He also did important work in tracing the nutrition process in plants. Al though he was able, with the techniques available to him, only to point to the major chemical constituents of potash, nitrogen, and phosphorus, and it was left to later investigators to discover the importance of the mineral trace elements and the crucial role of humus in plant nutrition (the latter had of course always been known but never clearly understood), the work of von Liebig provided the basis for modern agriculture. It made possible a tremendous increase in yields through the use of chemical fertilizer, especially in lands which did not lend them- selves to intensive cultivation along traditional lines. Moreover, with the development of monoculture, which permits the extensive use of specialized machinery, and with the gradual replacement of the horse by the tractor in the twentieth century, yields would rapidly have dropped if chemical fertilizer had not taken the place of the organic manures previously used. There would have been no possibility of feeding the vast urban population in industrial countries if methods had not been devised to increase the food supply, with an ever smaller population actively employed on the land.

 Britain, unlike the undeveloped nations of the present time, was fortunate in that both the improvement of agricultural methods and the growth of industry took place slowly. She was able to adjust herself and her institutions gradually, without the dislocations experienced in countries outside Western civilization, in which, with rare exceptions, the entire economy of the country and its social system have been based on agriculture. Her favorable situation enabled her to gain a head start in the process of industrialization, and she had the advantage of export markets less readily available to latecomers in the race. Thus, although her economic situation in the long run was such that she could not hope to retain her early lead, she did experience a full century of prosperity, and during this period every invention could be put to immediate use, either in agriculture or in industry, without causing any major social strains beyond those natural in a period of economic growth. 

 

The industrial revolution-early period

 

INCENTIVES TO INDUSTRIALIZATION

The market When Britain started to industrialize, there was a serious shortage of manufactured products at prices sufficiently low to be bought by any but the well-to-do. The increase in the quantity of goods turned out by the new machinery, at far lower prices than had been feasible under the old system, immediately created new markets both at home and abroad. This was especially demonstrated during the Napoleonic wars. When Napoleon imposed his continental blockade, shutting off British exports from all the countries he controlled, the French manufacturers were totally unable to take advantage of the new European market. The peoples and governments of continental Europe insisted on continuing to import from Britain, where goods were cheaper. When they organized widespread smuggling, even Napoleon recognized that he could not forbid all imports and expect to enforce his prohibition. Before the end of the war he had permitted limited importation of certain specified products. Britain indeed increased her sales to the continent of Europe during the war, as well as creating new markets in the Americas. The urban workers in British industry, though still extremely poor and ill paid, nevertheless earned a money wage higher than under the previous domestic system Indeed, it was for the sake of improved income that they agreed to work in the factories. From the beginning they were able to buy some of the textiles they now made in the factories. As their wages rose during the century, they were increasingly able to purchase some of the general products of the new industry. Thus industrialization tended to create its own new markets—a process that was spectacularly demonstrated by Henry Ford in a later era, when, his workers drove up to his factories in mass- produced Ford automobiles.

The accumulation of capital for investment    By the eighteenth century in England much capital had been accumulated that could be put     to work

 in profitable enterprises. Interest rates were low for most ot the century, and there was a shortage of ways in which money could be put to good use. In the early modern period, as we have seen, money could be made in commerce and trade, but the openings were limited     for want of goods to transport. The domestic     or putting-out system in the textile industry tied     up appreciable amounts of capital, but there was   a limit to expansion in this field since most of the workers were already as fully occupied as they could be, unless they could be persuaded to become full-time specialists, devoting their entire work week to the production of textiles. Expenses were high for the entrepreneur, who had to distribute the raw material and collect the finished product in two separate journeys, and who was not paid until he could sell the finished product. The output of the home workers was limited by their hand methods. They could afford only the simplest tools and machines, the spinning wheel and the hand loom. Many of the entrepreneurs had acquired some wealth, but they knew better than anyone else how inefficiently their capital was employed. Like any merchant, they were anxious to use it more profitably, to produce more goods and lower the costs of production if a way could be found.

The large landowners grew wealthy from their ownership of rents, and many earned money also from the exploitation of the mineral deposits under their land, especially coal. Their money was available for profitable enterprises other than improving the yield from agriculture and increasing their holdings of land. British lords, though it was socially disreputable for them to enter directly into trading and industrial operations, could lend their money in such a way that it would yield a financial profit. In the eighteenth century the duke of Bridge- water, a coal owner, became the greatest financial supporter of improved transportation in England, and he is especially noted for his canals. The duke of Newcastle was the greatest coal owner in the country, and many times over a millionaire.

In addition to these sources of outside capital it was also possible for the small businessman to accumulate capital by the simple process of spending little, and plowing back all his profits into his business. The social structure of Britain peculiarly favored such accumulation since the small businessman, who might be a skilled worker endowed with the spirit of enterprise, belonged to the social class which spent little. He was far beneath the upper bourgeois and the noble lord, by whom he would be looked on as a parvenu and upstart if he spent money on the kind of luxuries that appealed to his betters. He could enjoy a modest comfort in his home, but he would hardly dare to engage in what Thorstein Veblen later called "conspicuous consumption." Thus the most natural thin him to do with his money was to use it to expand his business, and let his son aspire to a higher social station with the aid of the money that he would bequeath to him. Probably only in the third generation would any descendant of his aspire to higher education, with the social prestige that accompanied it in the eighteenth and nineteenth centuries.

 

Model of Newcomen's steam engine  in the Hunterian Museum of the University of Glasgow, where Watt worked and invented improvements to the engine which may be fairly said to have ushered

in the age of steam.

A very few of these men—Arkwright was one of them—purchased land and set themselves up as landowners. For the most part they barely altered their old standard of living, and made no attempt to rise out of their social class, contenting themselves with the satisfaction of owning and operating a successful and expanding business.

Availability of technical knowledge There would have been no industrial revolution without the necessary technical knowledge and ability, and the possibility of spreading the knowledge throughout the country. Since the seventeenth century there had been a prodigious growth in science. Scientific societies were interested in practical as well as theoretical science, and their members had access to all the latest information. But, by the middle of the eighteenth century, science was not yet much studied in the universities. The English universities, in particular, were very conservative and still devoted themselves largely to traditional subjects. This was less true of the Scottish universities. Both Edinburgh and Glasgow gave much attention to science and the principles of engineering. Indeed, the invention of the first effective steam engine came as a result of the interest of the University of Glasgow in the principles involved in an earlier steam engine, which was demonstrated to students at the university. The demonstration model needed repair, and the university called in an instrument maker to do the job. The result was that the instrument maker, James Watt, noted at first hand the weakness in this model and set himself to devise a more efficient engine. In his work he was aided by the university scientists.

But, in the early period of the Industrial Revolution, the majority of technical improvements came from men who were engaged in working with machines and who tried to improve them in the interests of greater efficiency. The English law was highly favorable to inventors. Patents were granted by the government, which granted monopolies to the inventors and effectively prevented competition for a stated period. The inventor was not compelled to license his invention; as a rule, once he had been granted a patent he made it his business to find some capitalist who would assume the financial risk of exploiting it. Both were then protected for the life of the patent. But sometimes the inventor was prevented from making as much progress as he could have wished by the existence of another patent that he could have used in the improvement of his own inventions. James Watt's patents prevented others from making similar steam engines in his day, but he himself was also hindered by other patents owned by competitors. Only when the patents had expired or been revoked, as sometimes happened, by Parliament, could the pool of knowledge be enlarged. Richard Arkwright, who was at least as much a businessman as an inventor, took out several patents for machines which he had perfected, but which relied heavily on inventions made by others which had not been patented. After he had enjoyed a monopoly for a considerable period Parliament revoked his patents, thereby opening up the field to others. 

Some inventors, however, scorned to take out patents, relying upon their own ingenuity to keep ahead of competition. Josiah Wedgwood, the great potter, refused to be ridden by "fears of other people copying my works." Manufacturers sometimes banded together to buy up patents in their field and share them among themselves. Sir Humphry Davy, who invented a miners' safety lamp, refused to patent it on the ground that its use would save men's lives. Even when a patent granted a monopoly to a particular inventor, it was at least possible for other manufacturers to buy their machines from him; and the possession of the patent meant that the inventor had at his disposal a valuable piece of property which made it easy for him to obtain capital for its exploitation. In the early Industrial Revolution every manufacturer was well aware of what machines were available and what had been invented by others. There was no textile manufacturer who was unaware of the possibility of using power looms as soon as they were available. If he continued to use the hand loom, it was entirely by his own choice. 

Encouragement by the state The state had every reason to approve of this particular "revolution." Its needs were insatiable in war. As a relatively small country, Britain could not put into the field as many troops as her continental rivals. But she could supply her allies, who did the bulk of the fighting, with money and the armaments and clothing that money could buy. Britain fought the Seven Years War (1756- 1763) in the middle of the century, and gave  financial aid to Frederick the Great, her continental ally. At the end of the century she had to fight the French revolutionary armies and later the armies of Napoleon. As Napoleon recognized, it was the industry of Britain, that "nation of shopkeepers," which defeated him in the end as much as the wide-open spaces of Russia. 

Virtually isolated at times during the wars, Britain would have experienced the greatest difficulty in winning them without her growing industry. In 1797 she was truly isolated and experienced severe economic and financial difficulties. The Bank of England had to suspend gold payments, since the government had borrowed more money than it was able to repay from taxes. But once the war was over and the immediate depression that followed the war had passed, British industry was in a very strong position, and the government recognized fully how much the country owed to its industry. Thereafter, through the nineteenth century, every aid and encouragement was given to industry, and the interests of manufacturers were always taken into consideration. When they desired free trade and the abolition of the navigation laws, the government complied with their wishes. Subject only to humanitarian interests, for which there were spokesmen outside industry who were represented in Parliament, the government of Britain in the nineteenth century was largely run in the interests of the middle classes, manufacturers and traders, and all the laws favored their steady expansion. 

 

KEYS TO INDUSTRIAL PROGRESS 

The steam engine Underlying all the other industrial accomplishments of the period was the more efficient use of wind and water, followed by the use of steam. The principle of the water wheel had been known for centuries, as had that of the windmill. But as long as industry had to rely on water and wind, industry had to be located where these were available. The direct force of wind could be used only where energy did not have to be continuous and constant. The use of water for driving machines required the factory to be located close to a river or stream. Steam engines could, on the contrary, be used wherever there was fuel, and the fuel could be brought to the factory by land or water transportation. It was thus more economical to locate a factory close to the source of fuel, but not absolutely essential as long as the cost of transportation could be included in the price of the product. British industry therefore naturally came to be located in the general area where fuel was available, but it did not have to be in the same towns as the coal mines. North and central England therefore became the main industrial areas, leaving the more rural south and east, which were far from the mines, to continue growing their former agricultural products. London became the center of specialized manufacturing and the locus of all the commercial and financial services that were needed to make the most effective use of the industries of the north. 

A steam engine had been invented as early as the beginning of the eighteenth century by an ironmonger named Thomas Newcomen. It made use of steam to drive a piston within a cylinder. The piston, in turn, was attached to a beam connected with an atmospheric water pump. The contraption was used to pump water from the coal mines. But too much fuel was used in the double process of driving the piston up by steam and then letting it cool and fall back again. The waste of fuel was not trouble- some as long as the machine was used solely in the mines, where fuel was easily and cheaply available. But it could not be used elsewhere until some process had been invented which would not waste the steam. This was the work of James Watt, who invented a separate condenser which could be kept cool, while the cylinder itself would be kept hot. The immediate result of his invention (1765) was a saving of about three quarters of the cost of fuel. For many years Watt strove to improve his engine and develop new and improved models for other uses. The financial resources of his backers were severely strained by his efforts, but at last, after many years, the partnership began to prosper and supply steam engines to the whole country, protected by Watt's patents. From here it was a relatively small step to Robert Fulton's steam engine in a Hudson river craft (1807), George Stephenson's steam locomotive (1814), and 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

their numerous descendants, improved by the inventions of hundreds of other men, French and American as well as English.  

 The textile industry The major manufac- turing industry of Britain throughout the eight- eenth century, as it is in almost all economically underdeveloped countries in our own time, was the textile industry. Here the crucial invention was the flying shuttle, invented by John Kay in 1733. This device saved the weaver from having to throw the shuttle from side to side by hand, a necessity which had greatly limited the work he could do in a day. But the thread used by the weaver had to be produced more cheaply and efficiently if the weaver were to benefit fully from this improvement. The spinning jenny, invented by James Hargreaves about 1765, permitted many threads to be spun at once; in 1769 and 1775 Richard Arkwright invented, or at least patented, a water frame and carding machine, which permitted power other than human to be used for making thread; and in 1784 Edmund Cartwright, a clergyman, invented a power loom, which could be powered by horses, water power, or steam. These inventions, with numerous other improvements, formed the basis for the textile industry of modern times even though electricity has almost wholly replaced the older forms of power. 

The demand for cotton to feed the new English mills and take advantage of the possibilities of power weaving led directly to the key American invention of the cotton gin by Eli Whitney (1793). The gin could clean so much more cotton in a day than had been possible by hand picking that it had untold consequences, social as well as economic, in the country of its origin. Cotton, especially the American short-staple cotton which was most suitable for the gin, suddenly became a crop that yielded tremendous profits. In 1810 almost sixty times as much cotton was grown in America as had been grown a bare twenty years before, and Negro  

slavery had taken a new lease on life in America. Thereafter the British were assured of adequate raw material for their looms. 

Metallurgy—from cast and wrought iron to steel By the beginning of the nineteenth century the most important problems in the leading manufacturing industry were on the way to solution, and the major source of energy for the century had already been harnessed to man's use. Coal was now used for the making of steam, and steam was to be the prime mover in industry until its partial replacement by oil and electricity in modern times. But the science of metallurgy had not yet solved its key problem, how to make use of iron in its most effective form. For many centuries iron had been used for numerous purposes, but as a material it had so many defects that its uses were limited until these defects could be eradicated. In the Middle Ages a method had been devised for smelting some of the impurities from the iron ore, and cast iron had resulted. Previously only beaten, or wrought, iron had been technically possible. Until the eighteenth century only charcoal could be used for smelting the iron. Coal in its natural state made a fire that was not hot enough to smelt out most of the impurities, and it added other impurities, especially sulphur. The supply of charcoal in England was severely limited by the fact that there were few native resources of wood, and most of the charcoal used had to be imported. 

Early in the nineteenth century came the crucial invention. An ironmonger named Abraham Darby reduced coal to coke by burning off the gas and using a very high chimney. Thereafter cast iron could be effectively made, but two other major inventions were necessary to perfect wrought iron—a new style of furnace, which prevented contact between the ore and the fuel, and a high-speed steam hammer. The iron thereafter was stirred or "puddled" when it came from the furnace. This removed some of the impurities in the ore, and more impurities were removed by the hammering. Steel, however, remained difficult and expensive to make. To the wrought iron had to be added specific amounts of carbon, which was expensive as a raw material and involved a second process. This problem was in fact not solved until the middle of the nineteenth century, with the Bessemer process (1856), which produced by a new method a heat blast far higher than any hitherto known and was able partly to eliminate the iron-ore impurities, especially the phosphates. But the Bessemer process remained only fairly satisfactory for ores which contained a large percentage of phosphates. The problem was now fully solved until two further inventions had been made. The first, the Siemens-Martin method (1866), involved the use of an "open hearth," and was an entirely new method of making steel. Though the process took far longer than the Bessemer method and required a huge expenditure of coke, which was economical only if very large quantities of steel were to be made, all the impurities in the ore could be burned off by the method. The second invention was made by two English chemists, Gilchrist and Thomas, whose chemical knowledge suggested to them that the offending phosphorus could be persuaded to combine with magnesium limestone, with which the blast furnace could be lined (1878). Although the lining of the furnaces had to be replaced from time to time under the Gilchrist-Thomas process, the lining itself could be put to good use afterward, especially in the preparation of phosphate fertilizer. The two methods of Siemens-Martin and Gilchrist-Thomas  remain the  fundamental processes for making steel, though greatly refined in subsequent years. The Western world now had its key material, and entered into the age of steel.

Though steel itself has been purified and refined with other metals for every kind of specialized use, and though other metals have been brought into use which have lightness, ductility, and other virtues denied to steel, it will surely be long before steel ceases to be the metal most used in Western civilization. 

Transportation It may safely be said that without the improvement of transportation no industrial revolution would have been possible. Every new industry required contributions from other industries. Machines had to be transported from one part of the country to another; fuel and raw materials had to be used in areas far  from their place of origin. Iron ore and coal were rarely to be found in juxtaposition. Both were heavy, but more coal was used than iron ore, and it therefore became customary to transport the ore to the coal, whenever possible by boat—as the ore of the Mesabi range in Minnesota is carried by Great Lakes steamers to the coal fields of Pennsylvania and elsewhere, and ore from Newfoundland is transported by boat to the easternmost tip of Cape Breton Island in Nova Scotia, where the oldest coal fields of Canada are. The Welsh mines supply the fuel for ore brought into the country from abroad through the ports of Cardiff and Swansea. 

Long before the rise of the steel industry the transportation of coal to the cities which consumed it presented many problems. From the middle of the eighteenth century there was a prodigious growth of canal building, initiated by the successful enterprise of the duke of Bridgewater, who hired an engineer named James Brindley in 1761 to construct a canal from his collieries at Worsley in Lancashire to the growing city of Manchester. The canal, which was only a few miles long, nevertheless greatly reduced the price of coal in Manchester. The coal could be loaded directly into flat barges which could be pulled by a single horse, or even by a man who walked along the towpath, which was constructed by the side of the canal. The Bridgewater canal, as it is still called, is notable for the fact that it carried water in an aqueduct over a river. Thus there were no technical obstacles to joining all the major rivers in England by canal. Britain soon had a network of canals in all parts of the country, as the industrial areas of the United States also had by the early nineteenth century.But canal transport was slow and suited only for carrying heavy and bulky materials; in any case it had to be supplemented by roads for delivery to the customer's door. By the middle of the eighteenth century the English roads were still suited only for pack horses and very primitive wheeled transport. The engineering of roads and bridges in Britain was greatly improved by Thomas Telford, and their surfacing both by Telford and by John McAdam, whose name has passed into the language for the surfacing which he designed. The roads thereupon became usable by horse-drawn wagons and coaches, making the transportation even of heavy goods possible from canalbank or seaport to the purchasers' warehouses. 

Most important of all nineteenth-century improvements in transportation was the steam train, which revolutionized the economy of every Western country and, later, of those countries opened up by Westerners. Parallel with the steam train came the steamboat, even though the flying clippers, which used wind for motive power across the Atlantic, continued to be profitable for a long time owing to their low cost of operation. Even by the end of the century there was far more world tonnage in sail than in steam. The key invention for the satisfactory operation of the steamship was the screw propeller (1836), which displaced the earlier paddle wheel for long voyages. Thus communications by the mid- nineteenth century had been revolutionized, laying the groundwork for both domestic and foreign trade. In Canada and the United States the new transportation permitted colonization and settlement by immigrants from Europe, who poured into the Americas from about 1840 until the first World War in ever increasing numbers. In several years between 1900 and the war more than a million immigrants entered the United States. Few of these would have been able to make the journey if there had been no cheap transatlantic transport; and few of the earlier immigrants would have been able to cross the continent without the transcontinental railroads.

 

SOCIAL AND ECONOMIC CONSEQUENCES OF

THE EARLY INDUSTRIAL REVOLUTION

Growth of towns  The early Industrial Revolution brought in its train numerous problems, not all of which have even yet been solved. Here we shall deal only with those effects of the Revolution which were already conspicuous before the middle of the nineteenth century, leaving the continuing effects for the end of our discussion of the Industrial Revolution as a whole. In the early years the major social change was the growth of towns and cities at the expense of the countryside. The reader should be careful not to idealize the life of the rural  

worker in the days before the Industrial Revolution. Economic necessity drove him as inexorably as it drove the early urban factory worker. In the country he was seriously underemployed, and he lived in an economy where money had become a necessity, even though some of his wants could be supplied from the small plot of land which he almost certainly rented and did not own. To supplement his tiny income, he and his family worked in the manufacture of textiles. The putter-out, who provided the worker with his raw material and paid for the finished product, was a hard taskmaster. The worker had no redress if he received too little for his product, for he had no other market. He and his family were compelled to work long hours for their subsistence, even if the number of hours was more under his control than in a factory. Rural housing was usually atrocious—dark, in- sanitary, and ill-lighted—as rural life itself, for the landless worker, had for centuries been boring, ill-paid, with few amenities or means of entertainment. The communal life of the medieval manor was centuries in the past by the time of the Industrial Revolution. Even the drab, hideous towns of the early Industrial Revolution, with their  dark back-to-back houses and their cobbled streets, appeared as an improvement to the workers who left their rural cottages to find employment in the factories. Although these factories had themselves few amenities, the owners had at least to provide conditions under which prolonged work was possible. It should be emphasized that the vast majority of the early factory workers chose theii new occupation willingly, and were not at firs) driven to it by economic necessity. When, however, the putter-out found that he could compete with the factories only by cutting the price he paid to the domestic worker to such an extent that the latter could no longer make ends meet, then the domestic system was indeed doomed, in spite of futile efforts on the part of domestic workers to hold up the use of machines by destroying them. The displaced worker found in the towns such amenities as the public house, where he could buy a cheap glass of beer and enjoy the .warmth of companionship. Wages were as low in the factories as the employer could keep them, but the earnings of the whole family were as a rule higher than they had been in the country. But now the worker had to buy his food instead of raising it, and at times, as in the famine years of the 1840's, before the 

 

protective duties on foreign grain were repealed, he suffered grave hardship. When the British Parliament investigated conditions in the factories in the 1840's, the representatives were shocked and Parliament passed legislation in 1847 which limited the hours of work. But conditions were already improving as a result of efforts by the workers themselves through the action of trade unions, which had been legal since 1825—although the terms under which they had received legal recognition were such as virtually to prevent effective strike action. 

It was in the mines rather than in the factories that the investigators found the worst abuses. Until legislation forbade it, children were employed underground from the age of six; girls worked alongside men in circumstances which deeply shocked the members of Parliament. The mines were dangerous and the work hard and backbreaking. Children crawled along the narrow passages between the coal seams pushing coal wagons; women carried baskets of coal on their shoulders; and, in spite of various inventions that had minimized the risks, explosions were common. Miners, nevertheless, developed an attachment to their dangerous calling that was unique in Britain. Sons followed their fathers into the pits, and few thought of leaving for easier work. Constant legislation throughout the nineteenth century and efforts by the unions succeeded in making improvements in the mines, but mining remained one of the prices to be paid for industrial progress.

 

Role of the skilled worker With the gradual mechanization of industry it might be thought that the skilled worker would have found his skill superfluous. Until the coming of mass production, this in fact was far from being true. The nature of the skills changed—as indeed they changed even during the era of mass production—but new jobs were constantly being created as industry expanded. Some skilled workers rose out of their social class by founding plants of their own or entering into partner- ships with businessmen who had capital but no skill. Many of the new tasks could be performed by women and children with little or no skill, and there was thus an increasing demand for unskilled labor. But the man who acquired skill could still command a much higher wage than the unskilled, and his services were always in demand. In the early years there was great demand in European countries for skilled English workers who teach them how to use the new machines. For a time the government forbade emigration, but later came to realize that the British industrial lead was so commanding that it need fear little from foreign competition in 

export markets. Thereafter the laws were relaxed, and the British manufacturer was glad of the opportunity to sell his machines abroad.

 

Changes in financial organization The demand for capital and the desire of investors to buy themselves into a business without risking their whole fortune led to the revival of the joint stock company with limited liability, which had been illegal for over a century, ever since an orgy of speculation in the early 1700's. Although partnerships, in which each partner was liable for the debts of the concern, were more common than companies, the tendency was toward the corporate form with its manifold advantages in the raising of capital for largescale profitable expansion. 

The London Stock Exchange was founded in 1802. This institution, which quoted prices of stocks for the convenience of investors, permitted the holder of stocks to dispose of his holdings without personally having to find a buyer. There was a considerable growth of specialized banking institutions, which, among other tasks, mobilized capital for the benefit of the industrialists and lent it out at interest, or themselves invested in the stocks of commercial companies. Other banks provided short-term loans, which were self-liquidating, for companies and individuals who needed accommodation for specific purposes. In the latter part of the century private banking began to disappear in England, to be replaced by the enormous banks of the twentieth century, each with thousands of branches throughout the country. This tendency, however, was not followed by the United States until very recent times. 

 

INFLUENCE OF INDUSTRY ON GOVERNMENT

Responsiveness to pressure from business The large industrialists exercised indirectly an important influence on the political life of the country. Although members of the manufacturing class seldom sat in Parliament themselves, and left their interests to be handled by the old ruling class, their needs were made known to the legislators in the customary manner. As will be discussed in the next chapter, the manufacturers pressed for the repeal of the Corn Laws, an aim which was finally achieved in 1846. Their purpose in pressing for repeal was to ensure cheap food for their workers, thus freeing the latter from the necessity of spending the bulk of their earnings on food. All tariffs were soon afterward taken off; the navigation laws were repealed; and Britain embarked on a policy of full free trade, uncomfortable though the prospect was for the agricultural interests. To replace the lost revenue, income tax was reinstituted in 1841—it had been briefly in operation during the Napoleonic wars—as a straight percentage of earnings. The rate was graduated under the Lloyd George budget of 1909. There after the rich paid at a higher rate than the poor. 

 

Free trade policy and its consequences The free trade policy initiated by the nineteenth- century British was backed by a strong political movement, but it was based on a clear understanding of the trade position of the country at the time. British industry was far ahead of that of the rest of the world. There was no shortage of markets for British goods at prices which comfortably undercut any foreign products in the fields in which Britain specialized, primarily cotton textiles and machinery. Britain also had at her disposal the enormous market of India, which consumed vast quantities of cheap Lancashire cotton products. 

Much of Britain's success was due to the understanding of her traders and economists that it would be impossible for her to continue to sell goods if she refused to buy. In general, she needed to buy little save food and raw materials, but she was quite ready to buy specialized machinery and luxury specialties. As a rule, most foreign products in her own fields of specialization were too expensive, and, since there was little danger of large imports, she did not need tariff protection. But her purchases of food and raw materials meant that the less developed food-growing countries abroad had money to buy industrial goods from her, and the United States, which was a growing industrial country but also exported food, also had plenty of sterling to finance purchases in Britain. When a country simply did not have the money to buy British machinery, Britain engaged in overseas investment, not only in her colonies, but in all countries which were willing to buy. She was repaid either by the payment of interest on foreign loans or by dividends from companies founded abroad with British capital. Thus Britain, by the latter part of the nineteenth century, had built up an apparently impregnable economic position. She had a visible adverse balance of trade, but her shipping and insurance income, together with returns from invested capital, were easily enough to cover the deficit, with many millions of pounds to spare.

 

Ephemeral nature of British industrial supremacy Nevertheless, in retrospect, the first three quarters of the nineteenth century can be seen to have been but a temporary phase. Britain's strong economic position was not based on the possession of abundant resources, nor on skills peculiar to the British. Coal was being used at an alarming rate, and the best seams were being consumed first, leaving high-cost production for the future, when the mines were so deep that they lost their competitive position in world trade. Britain's iron ore was not unlimited, and she lacked oil, water power, and timber as well as food. Other countries had more abundant resources once they were put to efficient use, and there was nothing to prevent them from acquiring British skills. Thus, by the end of the nineteenth century, Britain was already feeling the wind of competition. Joseph Chamberlain, always the best spokesman for industrial interests, devoted the later part of his life to the attempt to persuade his countrymen to adopt tariff reform, or protection. Germany, the United States, and France industrialized behind tariff walls, even though for a short time they tried free trade at the insistence of Britain. Their home products might be more expensive to produce, but the price was equalized by the tariffs. They bought from Britain only when it was necessary for them to do so, and the British deficit in visible trade began to grow toward the end of the century. But until the first World War income from investments and services still covered the deficit handsomely. Only after the war, when so many of her investments had to be liquidated, did Britain turn belatedly to protection. Nevertheless protection was extended to very few products before 1932, at which time Britain, in the throes of the Great Depression, had no alternative. 

It was difficult for the British to realize that what had worked in their great Victorian Age and made Britain the most prosperous and successful country in the world was now outmoded. Even though she needed imported foodstuffs more than ever before, she could not afford to allow cheap Japanese and German goods to undercut her own products in her own home market, and it was not always true that, as the advertisers insisted, "British means best." In actual fact much of her machinery, built to last indefinitely, was often outmoded by the new machines built by her competitors. But it was difficult to make the decision to scrap machines which still had many years of useful life left in them. The number of customers who continued to re-order, because they had always used British products and had confidence in them, diminished every year. Even before World War I Germany was making severe inroads, not only into markets hitherto the preserve of the British, but into the home market of Britain herself. The Germans, starting late, were blessed with new machinery, and they had a spirit of enterprise which was beginning to falter in late- nineteenth-century Britain. German trade representatives studied the markets and German manufacturers produced to fit their needs instead of manufacturing whatever they wished, relying on advertising to create the need afterward. The first World War gave Britain a breathing space, since German industry had been largely destroyed and her markets taken from her by the war. But, as we shall see, Britain did not take full advantage of the time she was allowed; and there were other industrial nations ready to enter the market and give her severe competition. 

It may, indeed, be said that it was not until very recent years that the British truly moved out of the Victorian Age, and put aside forever the traditions that had grown up during that unique period in their history. The Victorian Age was one of solid comfort and prosperity for the middle classes, and a rising standard of living even for the workers. The British believed, correctly, that prosperity had been built on the edifice of free trade, and on the skill and reliability of her manufacturers and workers. But it had been built also on a virtual industrial monopoly, on skills that could be imitated, on experience that could be duplicated, and on investments which could never be replaced in a competitive world once they had been lost. In spite of Britain's possession of colonies which continued to provide fields for investment, markets, and raw materials, her leadership in industry was bound to pass in time to those countries with greater resources and a greater home market, where costs of production would be lower because of the ability to make profitable use of high-priced machines. By World War I Britain's percentage of the export trade of the world had decreased so that it was only slightly higher than that of Germany and the United States (13.9, 13.3, 13.1 respectively). Though Germany was to fall back again after the war, the United States, which had exported in 1914 almost as much food as industrial products, easily overtook Britain, retaining the lead she had won during the war itself. And it was methods developed in the United States and to some degree in Germany that were to dominate the economies of the world in the second phase of the Industrial Revolution, to which we shall now give our attention. 

 

Industrial revolution—later phase

 

GROWTH OF INDUSTRIAL TECHNOLOGY AND ITS CONSEQUENCES

 

It was made clear at the beginning of this chapter that the terms "early" and "later" phases of the Industrial Revolution are used primarily for the purpose of convenience, and that there is no clear dividing line between the two. The later phase, as the author sees it, is notable for three major changes: the employment of new sources of energy, such as gas, electricity, and oil; the ever increasing use made of science, especially for the creation of materials that do not appear in nature; and new methods of production, especially what is called "mass production," involving the use of machines to make ever more complex tools, and the manufacture of interchangeable parts which are joined together in an "assembly line" to make the finished product. 

This second phase had important consequences in all industrial countries. The expense of the new machines ensured that only those who had access to large concentrations of capital could enter the field of big business. Though small and medium-sized business has survived in certain areas, in many others big business has dominated the market. The huge market that is necessary for the economic use of the new techniques has had to be created both at home and abroad. The power of big business attracted into existence the countervailing power of the big union—and big government followed not far behind. The increased consumption made possible by the production of standardized goods at low prices gave rise to new problems of distribution, and the displacement of men by machines gave birth to serious temporary dislocations. Mass hiring and mass firing in accordance with the necessities of the market tended to lower the standing of even the skilled worker in his own eyes, since his skill could not always guarantee him a job. The two great world wars of the twentieth century have shown that the possession of industrial resources has become the only passport to victory, and a sizable proportion of the national income of every industrial country is now devoted to armaments. The power and influence of national governments have naturally increased in view of the key part they play in the organization of national security. 

Obviously, all these consequences of the Industrial Revolution cannot be dealt with here in detail. Only a few indications will be given of the general scope and direction of these effects, most of which are familiar enough to every reader. 

The key inventions may be passed over briefly. Electricity had been known in the eighteenth century, and an electric battery had been made as early as 1800 by Alessandro Volta. But it had few practical uses until Michael Faraday discovered, in the early nineteenth century, how to generate electricity in adequate volume. Even so the dynamo, which made possible the use of electric motors, did not appear until 1867. Thomas Edison perfected both the electric generator and "electric light" later in the century. Further problems arose when it was desired to transmit electricity over long distances, and such inventions as the transformer speedily followed. The first Niagara Falls plant for making electricity through use of waterpower was completed just before the end of the century, but most of the electricity in the world is still made in steam plants which utilize coal. 

Toward the end of the century a process was invented which utilized coal dust in the making of gas; since that time gas and electricity have continued to compete for domestic use in most countries on fairly equal terms. Petroleum was first used to make kerosene for lighting purposes. This process required little refining, and the oil by-products were used for lubrication. When the internal combustion engine was invented (Nicolaus Otto, 1867; Gottfried Daimler, 1883), and the automobile began its prodigious growth, gasoline, a further refinement of petroleum, became the preferred fuel. As time went on, the superiority of oil to coal in the bunkering of ships, and its ever new uses for the many varieties of the internal combustion engine, made it into one of the most important of the world's strategic resources. The chemical industry began to create new substances not found in nature, from the simple and inflammable celluloid and the synthetic resin bakelite (invented by Leo Baekeland in 1909), to the numerous so-called plastics in use today.

 

MASS PRODUCTION—

SCIENTIFIC MANAGEMENT AND THE INTERCHANGEABLE PART

 

In retrospect it appears that of greater significance than any invention was the concentrated thought that was given to the improvement of industrial organization. The pioneer in this work was the American Frederick Winslow Taylor (1856-1915), who perceived that if the workers engaged in making a product specialized in a particular operation and performed only this limited operation, leaving others to perform similarly limited operations, a great saving of labor would result. In the textile industry, with which he was at first especially concerned, he suggested that workers be paid by the piece, and not by the hour or the day, thus giving efficient workers an incentive to produce more of their specialty. It was no great leap from this to the notion of an assembly line which moved while the workers stayed in one place, each tending his particular small job throughout the day. When Henry Ford in 1913 began to produce automobiles by this method, he was able to cut the cost of production by a full two thirds, forcing his competitors to follow his example if they were to stay in business. 

This method of "mass production" is based on the notion of the complete standardization of every part. The part may be made by machines designed to produce just this part and no other, and every part will be exactly the same as every other made by the same machine. Every example of the part is therefore interchangeable with the others made by the same machine. Although the process was not entirely new, its systematic use in large industry was revolutionary. Not all industries could make profitable use of mass production. But some use was made by all efficient industries of Taylor's principles of scientific management, and throughout the twentieth century the trend toward specialization has continued. 

 

ECONOMIC CONSEQUENCES OF MASS PRODUCTION

Necessity for secure home market To utilize the methods of mass production it is essential to have mass consumption. Henry Ford, by increasing the wages of his workers to the then unheard-of figure of five dollars per day, dramatized his hope, soon to be fulfilled, that his employees would be able to save enough money to buy a Ford car (not an impossible dream when the cars were sold at $290). The possession of a large home market gave a great competitive advantage to those countries which were well populated and industrialized, as long as the bulk of the country's production could be consumed in this market. For this there were two essential requisites—enough money to buy the goods produced, and knowledge on the part of the consumer of what was available for purchase. The first need could be met by high wages, the second by advertising, which stimulated the desire to buy at the same time that it made known the fact that a particular product was on the market ready for customers. 

In the area of mass consumption the United States had a great advantage over Britain, who lacked a large home market and thus had to concentrate much of her manufacturing capacity on producing goods for export. Export sales are far less predictable than domestic sales, and foreign competition makes export sales always more difficult and usually less profitable. Britain therefore has always been faced with the problem whether it is worth while to install expensive machinery when there is no certainty that there will be enough sales to pay for it. The United States, on the contrary, has always been able to concentrate on her huge home market; and in spite of high labor costs the extensive use of machines has usually brought the cost of goods produced on a mass basis down to a level where they can compete on fairly equal terms in the open export market. The United States, however, has always been compelled to advertise very heavily to sell her goods at home, and manufacturers have quickly become aware that high wages put the worker in a position where he can also be a big consumer. In other industrial countries the worker has had to fight more aggressively for increases in wages. Only in very recent times, and with the extension of consumer credit—a field in which America also blazed the way—has the worker been able to buy to any considerable extent the goods he has played such a large part in producing. 

It remains true, however, that there is an enormous pressure on the manufacturer in all industrialized countries to find new markets for his goods. His capital investment is so heavy that he cannot afford to keep his machines idle. He also often cannot afford not to install expensive machines, since he would then be unable to meet the prices of those of his competitors who have installed them. The purpose of the machine and the mass production of goods is to lower the unit cost. But if he does not sell enough units, then this cost necessarily increases. A half-used machine is an expense he cannot afford. He cannot permit foreign products to compete in his home market, since they would tend to rob him of essential sales which are needed to keep his machines busy—hence his insistence on tariffs in all fields where foreign goods are competitive in price, or, in their absence, his demand for open or hidden subsidies. 

The business cycle Nevertheless, from time to time the market becomes saturated, and even after eating up the consumers' surplus for the near future through easy credit terms, the manufacturer still finds himself unable to sell. For whatever reason this occurs—and there are hundreds of theories to account for the so-called business cycle—the effects are obvious enough. He is forced to lay off his workers, who thereupon become unable to buy his products, thus increasing the "recession" and converting it into a true "depression." The simplest way to overcome this is for the government to step in with extensive orders; but in a depression the tax receipts of the government are also reduced. Since the modern world economy is based on interdependence, the export markets are very soon affected by a depression, which cannot be confined to a single country. It is thus impossible for export markets to take up the slack. The countries producing raw materials find that their products are no longer in demand, and their prices consequently fall. They are therefore unable to purchase the manufactured goods of the industrial countries which supply them. It is a melancholy fact that the easiest way to create exports is by giving the goods away without payment. When the goods are those customarily purchased and paid for, the usual suppliers are ruined, since they are deprived of their former export markets. Only war materials are not paid for, and yet are consumed abroad at a tremendous rate. From a purely economic point of view a bomb dropped abroad is an export of some metallic products which are not paid for by the receiving party but by the people of the exporting nation through their taxes, and through tax burdens in the form of interest paid by succeeding generations. This specialized export market has the further advantage that it is practically unlimited; it offends no one but the enemy nation of the moment; and public opinion in the producing country thoroughly supports the general principle of such "gifts," transforming the largest exporters into patriots. None of the industrial countries fully recovered from the Great Depression of the 1930's until they began to produce goods for war. The fact, however, was noted by the industrial nations, and it was widely recognized that one of the tasks of government was to use whatever means were available to take up the economic slack during recessions, by monetary and other policies attempting to stimulate the return of confidence and to start the wheels of business rolling again. Because both wars and depressions give rise to a backlog of unfulfilled demands for goods, the basis is laid for renewed economic growth. 

Finance capitalism and the "managerial revolution" It has already been noted that the constant growth in the use of machinery, and especially mass production, has made it increasingly difficult for an individual businessman to accumulate enough capital to own a large business on his own account. It is no longer as easy as in the first half of the nineteenth century for a man to put aside enough profits to finance his own expansion. Even those manufacturers who have started successful small businesses at some time in their career find themselves in need of far more capital than they can raise themselves. It is at this point that the professional accumu- lators of capital play an important part. Sometimes the banks and finance companies buy a share in the business, which may include some control of its policies. In other cases the hitherto private company appeals to the public to buy its stocks, and it becomes a public corporation, with the original owner perhaps continuing to own the majority of the voting stock, and with it control of the corporation. Sometimes the stock is so widely held that a comparatively small percentage held by a single stockholder is, for practical purposes, enough to control the business. Ownership therefore becomes divorced from management, and the professional class of managers, who may be only minor stockholders, run the corporation. The numerous actual owners of the stocks are sleeping partners only, and their compensation for the use of their money by the corporation is the regular dividend voted by the board of directors. They can exercise their right of ownership only in exceptional circumstances, as, for instance, when some large stockholder attempts to organize their voting power to expel the existing management with which he is dissatisfied. Hence the effort on the part of managers to keep the stockholders content by making high enough profits to enable them to pay regular and satisfactory dividends, and to keep the price of their stocks on the open market at a profitable height. 

 

Countervailing power—Rise of the big labor unions Both management and workers in big business are wholly dependent on whether they can sell their products; and in the twentieth century it is not always possible, as we have seen, to sell the product at a profitable price. This inability may be due only in a minor degree to the unsatisfactory nature of the product itself, or even to the lack of pulling power of the corporation's advertising. Although management in some industries has at its disposal various techniques—many of them forbidden by law in some countries—for sharing the market with their competitors and "administering" prices, so that there is enough profit on a smaller turnover to meet all expenses and pay dividends, it remains true that business is to a large degree subject to forces and conditions beyond its control. This is even more true of the workers, whose specialized skills, however effective, may suddenly no longer be in demand. As specialists, it is difficult for them to transfer their work elsewhere; even if they could, they are probably making regular payments on their house and numerous appliances as well as on furniture, and to abandon these possessions would be a severe hardship. 

The result has been the constant growth of trade or labor unions, whose primary task is to put pressure on management. In recent times large unions have refused to work at all unless fortified by contracts signed with the management. Such contracts attempt to guarantee employment at stated wages over considerable periods of time. The craft unions, which play an effective part in smaller businesses and in the more highly skilled craft trades, were unable to put sufficient pressure on big business. Thus in many countries, especially in the period between the two world wars, there was a growth of "vertical" union organization, under which all the workers in a particular industry were organized into a major union. These so-called "industrial" unions, which came to wield a very great strength in some countries, were more successful than the craft unions in dealing with big business, and represented a considerable force in their own right, with which management found it expedient to deal—often, be it said, to the disadvantage of the consumer. 

 

SOCIAL CONSEQUENCES OF THE INDUSTRIAL REVOLUTION

 

Improved standard of living for masses The chief social effect of the new phase of the Industrial Revolution was the general improvement of the standard of living of the poorer classes, insofar as this standard consists of the increased consumption of manufactured goods and scientifically produced foodstuffs. Although the degree of this improvement has varied widely in different industrial countries, and has been most spectacular in the United States, the improvement was visible in all industrial countries. Even in industrial countries, however, it did not spread to all groups of citizens. There have always been isolated pockets of depression —for example, in the coal industry in Britain  and, to a lesser degree, in the United States, and in sectors of agriculture. But the great majority of people in all industrial countries has benefited. 

Parallel with increased consumption of goods has gone increased consumption of services. In some countries, such as the United States, the public sector, paid for by taxes, has not increased as greatly as the services, useful as well as purely ornamental, provided by private enterprise in response to stimulated demand. In Britain the reverse is true, since it came gradually to be realized that it was the government's task to equalize as far as possible the services that could be paid for by the richest and poorest of its citizens. National health services, national broadcasting services, and other amenities were provided, while utilities used by all the people—such as railroads, gas, light, and power—were gradually taken over by most European governments and deficits made up from taxes. 

The standardization of the citizen The citizen, whose hours of labor were gradually reduced as the machines took over most of the hard work formerly done by him, found himself faced by the problem of what to do with his new leisure time. Thus arose an enormous demand for entertainment and, to a lesser degree, for education, which has been satisfied in different ways in the different industrial countries. The entertainment fare offered by commercial and governmental sources has necessarily tended to increase the standardization of the citizens, who consume standardized products and are entertained by standardized movies and radio and television programs, which, to succeed, must appeal to as many people as possible. The process of standardization has to a considerable degree alienated many of the more individualistic artists and writers from their society, which great numbers of them look upon with disgust. The literary artist cannot be sure of the success of his product unless it can be made "popular." Books that show a profit for the manufacturer must be sold to a wide market; experimental movies are generally unprofitable; the necessity to simplify for the mass market has seriously handicapped the serious thinker, whose comprehension of the world is not necessarily a simplified one. 

 

Leisure and its problems The average man has ceased to find confidence in his vocational skill, and his work, often monotonous, is unable to satisfy his creative capacities. He is inclined to perform his daily stint for the sake of receiving his wages. Thereafter his time is "his own," and it is the private rather than the vocational part of his life that is most important to him. It is this facet of his life that the entertainment industry endeavors to satisfy, as do numerous other industries catering to suppressed creative urges—the hobby and do-it-yourself industries, the vendors of cookbooks, and the garden supply industry for those who have their own gardens. 

The powerlessness of modern man in face of his world has called forth many and varied efforts to deal with it, some constructive, some escapist. For those who escape into pure fantasy there are the psychologists and professional therapists; for those who find satisfaction in group activity and organizations there are numerous causes to be supported; for those who seek to find a meaning in life there are the religions, traditional and new, and the metaphysical cults, which have all grown rapidly during the twentieth century; and for those who find satisfaction in the power and effectiveness of their nation and its "victories" in the competitive struggle for existence, there are all degrees of nationalism—and nineteenth-century imperialism was, as we shall see, at least in part an outgrowth of psychological needs. The persistence and intensification of all these tendencies remain predictable in a world of still increasing standardization. 

 

 

POLITICAL CONSEQUENCES:

THE INDUSTRIAL REVOLUTION ECONOMIC NATIONALISM

 

The political consequences of the latest phase of the Industrial Revolution have already been hinted at. The nations which are short of resources and lack access to capital for industrialization within their own borders envy the better-endowed nations and are covetous of theirresources. The countries which are already industrialized have won power and prestige commensurate with their ability to make munitionsand put well-equipped armies into the field.Those countries which have huge populationsbut little industry strive to use their manpowerto compensate for their shortage of skills, capital,and resources. Thus there is a well-recognizeddivision of the world into the have and thehave-not countries.

The government of each modern nation isgenerally expected to support the industry ofits people and to strengthen its position in adangerous and, competitive world. Since everynation wishes to industrialize, it cannot affordto accept foreign manufactures in areas whereit is striving to build its own industry. A country with a textile industry cannot afford to havethat industry ruined by imports from betterequipped nations. Its one recourse is to protectits own budding industry by tariffs, quotas, andthe like. It thus constricts the market for theexports of other countries to the degree to whichit establishes its own. It may be appreciatedthat in a dangerous world no nation cares tobecome dependent on foreign countries for munitions and military equipment, since in time ofwar it might find itself unable to obtain materials necessary for its survival. So uneconomicheavy industries are built up in as many countries as have the minimum of necessary rawmaterials within their borders.Today national power is to a large degreea function of national industry. Although it isstill possible for a poor country to exercisemoral pressure, and to some degree use for itsown benefit the competing power blocs of theUnited States and the Soviet Union, the actualpower of such a country is limited by thestrength of its own economy and the extent ofits resources, and by the strength of the alliesit can acquire. In a very real sense these smallnations are pawns in power politics rather thanprime movers—kings, queens, or castles. Butthese latest consequences of the Industrial Revolution will be discussed further in Chapter 26,devoted to the post-1945 world. In the rest ofthis chapter reactions to the Industrial Revolution will be considered, especially the newthinking that tried to give the emerging massesa say in public affairs somehow proportionateto their numbers. Much of this thought wasfrankly revolutionary, and its effects are stillwith us.

 

 

Political and social thoughtin the industrial age

 

The Industrial Revolution naturally calledfor much new thought on social as well aspolitical and economic issues. No nation had asocial or political structure suited to the neweconomic realities; the legal framework hadbeen inherited from the long-past feudal periodand had been modified piecemeal, in responseto pressure from the interested classes. The English political system was transformed during thenineteenth century by the dominant middleclass, and later by the working classes, who wonfull franchise for themselves by the end of thecentury. Similar changes took place in otherEuropean countries. Behind these politicalchanges was an increasing body of more or lesssystematic thought which tried to take accountof the realities brought into being by the Industrial Revolution, and to resolve the problemscreated by industrialization.Most of nineteenth-century social thoughtwas concerned above all with the new role ofthe state in society. It was clear to all that thestate was an entity not to be ignored. It wasthe fountainhead of power, and it could indisputably coerce its citizens and compel them toadopt one policy or another; such a policycould be beneficial or harmful to one sectionof society according as one section or anothercontrolled it. Although some thinkers believedthe state to be an unmitigated evil and wishedto abolish it, and others thought it should interfere as little as possible in social and economiclife, all agreed that it was a factor to be reckoned with. Much thought, of course, had beengiven in earlier centuries to the role of the stateand the task of the ruler. But in the new industrial age these questions assumed greater urgency. It was manifest that the state, as thefocus of power, was in a position to do something about the problems of industrial society whereas the individual was not, except as he could, in association with others, put pressure on the government of his state to do as he wished.

UTILITARIANISM AND SOCIAL REFORM IN ENGLAND

The eighteenth-century enlightenment had been interested primarily in the natural rights of men, and was inclined to regard such rights as either inherent in the nature of the world or sanctified by God. Although there had been many who had urged different kinds of social reform, there was, by the time of the French Revolution, no systematic body of thought capable of being applied to the new problems of the industrial age. The nearest approach to such a body of thought was being provided, as might have been expected, in England, under the inspiration of Jeremy Bentham, most of whose work came to fruition only in the last years of his long life (1748-1832) and in the generations that followed him. 

All his life Bentham carried on a ceaseless fight against the irrational mass of customs and precedents that constituted the English law in his day. Early in his career he produced an extensive criticism of Blackstone's commentaries on the English law. The burden of his criticism was that the laws of England had been designed for certain social circumstances which had now changed. There was nothing sacred, or indeed especially admirable, about these laws, which were indeed for the most part irrational as well as outmoded. Blackstone's admiration for them was altogether misplaced. Bentham then proceeded to suggest changes that ought to be made on the basis of a new principle, the principle of utility—whether the laws were useful for the majority of the human beings who lived under them. He proposed to apply this yardstick to all existing and future legislation, and suggested that a calculus of pleasure and pain should be set up. A law, to be useful for society, should give a maximum of pleasure to the largest number of people, and a minimum of pain to the smallest. Even what had been thought of as natural rights should be considered as rights conferred by society, social rather than natural rights, which society could and should abrogate if they were found to be inimical to the interests of the majority. 

Bentham and his many followers in nineteenth-century England were of course unable to establish any exact calculus of pleasure and pain. But the general principle that legislation should be socially useful was gradually adopted as self-evident, though opinion naturally differed as to the social utility of any particular piece of legislation. The English radicals of the early nineteenth century, who will be considered further in the next chapter, were strongly influenced by the thought of the Utilitarians, as they were called; and it cannot be denied that the theory, unsystematic as it was, and usable by any group of reformers to justify even the abrogation of minority safeguards, paved the way for a much-needed modernization of the English law. It led also to the concentration of attention on specific and concrete problems rather than on purely abstract speculations concerning the nature and role of government. Moreover it underpinned the new notion that it was the primary task of government to ensure the welfare of as many of its citizens as possible. 

THE SAINT-SIMONIANS AND CHRISTIAN SOCIALISTS

Contemporary with the English Bentham was the French nobleman Claude Henri, Comte de Saint-Simon (1760-1825), who, himself ahead of his time and not very influential in his own day, gave his name to a whole group of reformers known as the Saint-Simonians. SaintSimon was extraordinarily sensitive to the changes that were likely to be brought about in society by the Industrial Revolution, which in his day had scarcely begun. He foresaw that the old aristocracy to which he belonged would no longer provide men of importance in the new era. Indeed, the future would belong to the men who could control industrial enterprises and accumulations of capital, and to the men who could convert their knowledge into power. SaintSimon was so convinced of his own ideas that he abandoned his title during the French Revolution and backed the revolutionaries to the best of his ability. He foresaw that the Industrial  Revolution

would entail an even greater exploitation of men by other men than had been customary in the past. These insights led SaintSimon to advocate increased interference by the state for the benefit of the economically weak, and to demand that the state should supervise production and distribution of the new industrial goods. Moreover, it should give its support to cooperative societies, of which the first had yet to be formed; should abolish inheritance by private persons; and should itself become the sole legatee of private fortunes. The state should use the capital thus acquired to encourage and, when necessary, establish cooperatives. This program, in Saint-Simon's view, would be "practical Christianity." 

It is not surprising that Saint-Simonianism was dubbed Utopianism, after Sir Thomas More's sixteenth-century classic which had described an ideal society that existed "nowhere" (the Greek meaning of Utopia). But many of Saint-Simon's ideas were fastened upon by other thinkers who were equally horrified by the conditions in industry, and equally anxious to encourage cooperation rather than exploitation. Thus Charles Fourier (1772-1837) worked out a plan for cooperative living in small communities, which he hoped would lead to a transformation of society. Unhappily, the communities which were set up under his inspiration in fact all failed to live up to their promise. Robert Owen (1771-1858), a Scottish industrialist, , improved conditions in his own factories and found that his innovations led in practice to greater output and profit; but when he branched into the formation of cooperatives—and, indeed, of communistic self-contained colonies—he met with no more success than had Fourier. These late eighteenth- and early nineteenth-century ideas thus provided a body of inspirational thought on which others could draw, but they were not destined in themselves to bear much fruit in practical life. 

The English reformers are an exception to this rule, since they were able to use Parliamentary institutions to obtain needed legislation. In this work they were joined by humanitarians, such as Lord Shaftesbury, and by others who called themselves Christian Socialists. These latter, for humanitarian reasons, tried to improve the lot of the poor by practical means, such as the founding of settlement houses and workingmen's colleges. They also supported labor unions, and pressed for political reform and legislative action—in which they were at one with the Parliamentary radicals. 

 

THE "SCIENTIFIC SOCIALISM" OF KARL MARX 

 

Far more important and influential than any Utopian Socialist, and far better informed on the economic and social realities of his day— yet basing his thought squarely on that of his predecessors—was the great synthesis! and original thinker Karl Marx, whose theories were destined to be taken up by men of action, and whose analyses have affected, for good or ill, everyone who has called himself a socialist since his day. Such men have often rejected almost all his conclusions, and adopted as their own not one single plan of action advocated by Marx in the course of his works; but they have, both consciously and unconsciously, been affected by his thought. Marx called his socialism "scientific," and it was he who insisted more than anyone else on the "Utopian" nature of the thought of his predecessors. By "scientific" he meant that it was based on the facts of history, as interpreted by himself, and he called for social action that would be in harmony with the trend of history and not arbitrarily conceived in accordance with the dictates of human wishes, desires, and aspirations. He believed his work to be thoroughly "objective," like natural science, in the sense that it was depersonalized and had in it nothing of his own personal prejudices. Others who studied in the same way as he could not fail, in his view, to come to the same conclusions. Like scientific theories that could be verified by experiment, his theories could likewise be subjected to empirical verification. The strength and persistence of Marxism in a radically changed world a century after he wrote has been due, above all, to its supposed ability to predict and to its supposed scientific truth. Such a theory obviously requires careful analysis in an age when eternal verities are hard to come by—and the potency of its appeal should 

be appreciated even while it is shown in what respects it has failed to predict accurately. 

 

Theoretical basis of Marxism—Debt to Hegel If the basic thought of Marx is to be grasped, it is essential to recognize the manner in which it rests upon the early nineteenth-century philosophy of George Wilhelm Hegel, the most influential German philosopher of the period. It was Hegel's contention that there is, in the affairs of men, a real "historical necessity," as he called it. Forms of political, social, and economic change are striving to come to expression in life, and must ultimately come to expression because they are historically necessary. This, in Hegel's formulation, is the Idea striving to express itself. All change represents, as it were, a further incarnation of the Idea. Men cannot prevent the Idea from manifesting itself; they can only cooperate with it and thus be in the forefront of the stream of history. For Hegel, faced with a divided Germany in dire need of unification, the coming German monarchy was the most perfect expression of the Idea. The Idea cannot be grasped by the analytical faculties of man, called by Hegel the understanding (Verstand}, but only by reason or intuition {Vernunft}, a higher faculty in man than mere understanding or intellect. This faculty enables man to grasp by a flash of intuition the manner in which events are working, and makes possible the prediction of the next stage of the manifestation of the Idea on earth. 

Hegel himself believed he had discovered the key to the means by which one stage of social life moved forward to another higher stage, and propounded the notion that this process occurred through the conflict of opposites (a Greek idea implicit especially in Empedocles and Heraclitus—what Empedocles had called Love and Strife), which harmonized themselves through the conflict, thereby setting in motion a new conflict. He called the two opposites thesis and antithesis, each thesis bringing into operation its antithesis. The resolution was made in a synthesis of the two, which thereupon became the new thesis, in turn bringing about its own antithesis. This procedure Hegel called the dialectic, believing that the method was implicit in the Socratic system described by Plato in his Dialogues. But for Hegel the process led to an ever more perfect manifestation of the Idea; thus the method could be called dialectical idealism. 

What Marx did was to select those parts of Hegel's scheme which appeared to fit in with his own very thorough and careful study of the social, political, and economic facts of his era, and in the later part of his life he claimed that he had stood Hegel right side up. The sole reality in human existence, according to Marx, was the "prevailing mode of economic production and exchange." The ideas held by men were not divine or superearthly, as Hegel held; on the contrary, they were determined by the prejudices of their economic class. If the economic facts are known, the thoughts of men are predictable. There is indeed, according to Marx, a historical necessity, and the dialectic is certainly the method of discovering it. All history is the history of class struggle, and this struggle and its different phases represent the thesis, antithesis, and synthesis. The rise of the bourgeoisie was a historical necessity, for the bourgeoisie has a part to play in history—namely, the destruction of the outdated feudal system. But the bourgeoisie digs its own grave because it brings into existence its own antithesis, the proletariat, whose triumph involves the destruction of the bourgeoisie and the advent of a classless society —the withering away of all forms characteristic of bourgeois rule, including the state. 

The Marxian system is therefore called dialectical materialism, against Hegel's dialectical idealism, and Marx characterized Hegel's notion of the Idea as "abstract thinking" and "simple mystification," since Hegel preferred to couch his philosophy in abstract terms rather than complete his insights with a proper appreciation of the actual facts of life as Marx had observed and studied them. It was difficult for a disciple of Hegel to discover how the Idea was striving to manifest itself and thus cooperate with it. There was no such difficulty for a follower of Marx, who could see for himself from the facts of history just how the dialectic had worked in the past and how the bourgeoisie had destroyed the ancient feudal forms and substituted capitalismas its economic method. There was no difficulty and much satisfaction to be gained from predicting the next stage, when the bourgeoisie would fall into the pit it had dug for itself by bringing into being the urban masses and the workers who would themselves come to control society (the dictatorship of the proletariat) . Moreover, the bourgeoisie would succeed only too well in its economic tasks, but by its own success would bring about its own downfall, since there were internal defects or "contradictions" in the capitalist system. Since Marxism predicted the destruction of the ruling bourgeoisie, it became a revolutionary creed. Marxists were trained to believe that the forces of history were fighting on their side, and they had only to cooperate with them to win the victory. 

 

Underestimation of the strength of nationalism A further crucial point of contrast between the political thought of Marx and Hegel needs to be considered. Hegel had regarded the national state as the highest manifestation of the Idea on earth, as was natural for a German in his time. Marx, on the contrary, regarded the state as the natural means through which the bourgeoisie asserted its supremacy. Since Marx regarded the struggle between whole classes as a historical necessity, he underestimated the force of nationalism. Viewing it as a temporary phenomenon characteristic of the phase of bourgeois supremacy, he believed that the working classes of all countries, once they had become class-conscious, would unite to overthrow the bourgeoisie of all countries, who themselves constituted a class and would likewise unite to defend their interests. The unity of both classes, the international bourgeoisie and the international proletariat, would transcend national boundaries. 

So it happened that when Marx and his friend and financial backer, Friedrich Engels, took positive action to set in motion the historically "necessary" revolution, they appealed to all working men and women everywhere, and from the beginning the movement was international rather than national. Indeed, as we shall see, the greatest ideological enemy of international socialism and communism was found to be nationalism, which was always characterized by Marx as simply "bourgeois nationalism." The epic struggle between Stalin and Trotsky in Russia, where a proletarian revolution had already been put in motion, was concerned with the question of whether socialism could be established in one country first and later spread to the others by force of example, or whether it must be international from the beginning and could succeed only insofar as it obtained the adherence and support of the proletariat everywhere. 

 

Marxism as program for social action and state control The perception by Marx of the eternal class struggle as a historical necessity had evidently been formed on the basis of his observation of the nineteenth-century conflict between employers and their workers, with the scales weighted in favor of the employers. Marx, leaning upon the views of the classical economists, especially David Ricardo, whose "iron law of wages"—that competition for jobs necessarily drives the wages of the worker down— was an important element in this thinking, propounded in a new form the medieval theory of surplus value. In all products, he proclaimed, labor constituted the only true value. But the total wage bill is much less than the price of the products in the market. The remainder is "surplus value," which is unjustly withheld from the workers who have created it. This is the toll levied upon the worker by the bourgeoisie capitalist because he owns the means of production. It is essential, therefore, that the means of production should be owned by society as a whole and not by private individuals. "Dispossess the possessors" became a fighting slogan of all Marxists. 

Production for the benefit of society (the earlier meaning of socialism) thus came to entail nationalization by the State, the organized body of society. This had not been the intention of Marx. But since ownership had to be exercised by someone, this task was ultimately to fall to State bureaucrats, even though in theory the means of production belonged to the people. Other branches and offshoots of the socialist movement, such as syndicalism and anarchism, believe that the workers themselves should organize to take over and manage industry; this was, indeed, attempted in the earliest phase of the Russian Revolution of 1917. In practice the State, which wielded power, was unwilling to permit the resulting inefficiency and finally took control itself. In parliamentary democracies, such as Britain, some State control was exercised in the management of nationalized industry through inherited political institutions. 

 

 

Marx as a prophet The ideas of Marx, as has been suggested, were rooted in the social and economic conditions of his day, and his work represents one of the greatest of nineteenthcentury attempts at synthesis. It is shot through with important insights, and every social and economic thinker since his day has been compelled to take notice of it. In the study of history, in particular, economic and social realities have since his day won far more consideration than in earlier times, when the particular means of production of a society was given scant consideration in comparison with the deeds of monarchs and the intrigues of courts. But on the whole, in the century since Marx, his view of history and his belief in the inevitability of socialism have been disproved by actual events, understandable as his predictions were in the mid-nineteenth century. Above all, the rigidity of the distinction between classes has been shown to be untrue. In capitalist societies, especially in the United States, there has been a constant movement from the proletariat into the bourgeoisie, so that today it is difficult to say who belongs to which class. Marx predicted that the lowest strata of the bourgeoisie would either sink into the working classes, or would play the role of lackeys for the bourgeoisie and become more reactionary than that class. This latter prediction was accurate for the rise of the Nazi movement in Germany, but it is not a necessary feature of society. For capitalism and the rule of the bourgeoisie have shown themselves, in the past century, far more capable of change than Marx had foreseen—so much so that capitalism has transformed itself, and few economies today bear much resemblance to their nineteenth-century counterparts. 

The capitalist system has not only shown itself capable of providing an ever higher standard of living and ever more material products for the workers to consume; it has also, through the intervention of the State, provided numerous social services paid for by the proceeds of taxation—services which nineteenth-century Socialists believed would be provided only when the people themselves owned the means of production. In other words, the bourgeoisie, by permitting the workers to share, however unequally, in the proceeds of their enterprise, have not only reconciled most workers to their lot and undermined their class solidarity, but in the process have converted nineteenth-century capitalism into a mixed economy. This development, totally unforeseen by Marx, leaves socialist movements of the present time little to plead for but more rewards and services of the same nature, and a vague moral appeal for a more equitable distribution than has been conceded in most countries by the ruling bourgeoisie. 

The socialism or communism of Soviet Russia (originally the words were interchangeable) is based on State ownership of the means of production and the abolition of those profits which form the main incentive of capitalists. But though it has appealed to the solidarity of the working class and insisted that some time the proletariat would destroy the bourgeoisie, as predicted by Marx, in fact the Soviet system bears little resemblance to socialism as propounded by Marx himself. It is, indeed, increasingly difficult to fit it within the ideological framework provided by him. This does not prevent the Soviet system from having a potent appeal, especially in countries which have not yet undergone their "bourgeois revolution." But the appeal is rather on the grounds of its efficiency and ability to solve the economic problems of these countries than on the grounds of its "historic necessity." 

 

Marxism and the European Socialist parties The new socialist movement, strengthened by the theoretical structure of Marxism and fortified by the positive action of Marx, Engels, and others, soon absorbed most of the earlier forms of socialism. The moderates who looked toward social reform and modifications in the existing system without revolution for the most part worked within the framework of relatively small   

national groups and parties. Ferdinand Lassalle, a Socialist who desired State intervention on behalf of the workers and who founded the German Social Democratic party, did not live to see his party taken over by the Marxists. He was killed in 1864 in a duel at the age of thirtynine, and his successors as party leaders were unable to resist the rising tide of Marxism. Until very recently the venerable Social Democratic party in Germany paid at least lip service to Marxian principles, even though in practice it accepted the framework of the national state. This party always looked forward to a cooperative commonwealth which would replace the bourgeois capitalist state; but it also put forward minimal demands as a working program of reforms. Bismarck tried to suppress the party by legislation but succeeded only in driving it underground until his fall from power. Thereafter it rapidly became the leading political party in the German Empire, and held more seats in the Reichstag than any other. 

The largest of the French Socialist parties was Marxist until the first World War, though, as customary in France, there were several schisms in the party. In later years the only fully Marxian party was the powerful Communist party of France, though the other Socialist parties retained some elements of Marxism. In Italy the Socialist party was likewise strong, though syndicalism, which retained its revolutionary fervor after the Socialists had become relatively respectable and had been joined by many bourgeois reformers, was also strong among the working classes. Syndicalism believed in direct action by the workers to establish rule by themselves and entailed the destruction of bourgeois capitalism and its institutions. 

 

The Socialist Internationals Already during the lifetime of Marx and Engels an effort had been made to persuade the workers of all countries to unite in a program in the interest of their class. Thus in 1864 the First International was established with frankly revolutionary aims. Although moderate workingmen as well as anarchists and syndicalists took a part in the early congresses of the First International, the revolutionary Marxists captured control without much difficulty. But the organization, after the expulsion of dissident elements, was too weak to achieve much. The first International petered out in the early 1870's, to be replaced in 1889 by a Second International. But since this was made up of the existing Socialist parties in the various European countries, it had necessarily to be more moderate than its predecessor. Conditions varied so much in the different countries, that few were able to adopt and proclaim the full Marxist program and theoretical structure. 

Early in the twentieth century a number of theoretical Marxists became aware that the predictions of the master did not seem likely to be fulfilled in the near future. They were ready to accept the consequences of this fact by revising Marxist theory as well as practice. Whenever this "revisionism" appeared it was met by outraged opposition from the orthodox Marxists, and schisms developed in the socialist ranks everywhere. The break was nowhere more virulent than in Russia, where the orthodox Marxists, the Bolsheviks, waged constant war on the Mensheviks, who adopted the Marxian creed but wished to proceed gradually, and on the other lesser Socialist parties. These believed only in ultimate Marxian goals achieved through State action, and not in overthrowing the State itself in favor of a dictatorship of the proletariat. Thus socialism became gradually a different creed from communism, which adopted the revolutionary implications of Marxism. Socialism accepted the existing framework but believed in much that Marx had taught, looking forward not to the abolition but to the socialization of private property and to the nationalization of as much of industry as seemed feasible within the given governmental structure. 

 

The non-Marxian Socialist movement This tactical flexibility characteristic of modern socialism was always true of the movement in Britain, where the working classes have found their means of political expression through the labor unions, and where support has been forthcoming from intellectuals who were not of the working classes but who felt that the political and economic structure of the country should be reformed for the benefit of the worker. In the 1880's the Fabian Society was founded, which strove to educate the people slowly (Q. Fabius Maximus, after whom the organization was named, was a Roman general who held Hannibal at bay by delaying tactics) to the need for social reform. Bernard Shaw, H. G. Wells, and the two reformers Sidney and Beatrice Webb belonged to the group, which still leads in social thinking and continues to publish pamphlets suggesting new goals to be pursued by reformers. Although most of the Fabians were socialists, few were Marxian socialists, and none accepted Marx's most extreme doctrines and program. An early social democratic party in England which was Marxian made few converts among the workers and gradually faded away, leaving the way open for a genuine working-class movement which looked to the achievement of power through the ordinary processes of government. The Labor party, which was initially an organization of trade unions, cooperative societies, and socialist groups and did not include individual members, became quickly effective in English political life and since 1923 has always constituted either the Government party or the Opposition. The conservatism of the trade unions, the majority of whose members have never been socialist, ensured the respectability and relative conservatism of the party. Not until after many of the more moderate Labor party leaders decided to form a coalition with the Conservatives in 1931 to combat the Great Depression did the leadership fall into the hands of true socialists, with a program for the nationalization of industry. Even so the policy of the Labor party was still far from Marxian, the full Marxian program being taken over, as elsewhere, by the tiny British Communist party. 

In the British Dominions the important Labor parties of New Zealand and Australia, which held power quite early in the twentieth century, enacted many socialist reforms and pioneered social legislation, following the tradition of the British Labor party rather than the Social Democratic parties of the Continent. Scandinavia and Finland have been ruled since World War I more by Social Democratic (socialist) parties than by any others. But this has meant an effort by the State to control the excesses of private enterprise and to take over private enterprise only when it seemed that it could achieve social purposes better than private industry itself. These countries have mixed economies; and in all of them the cooperative movement is strong and is encouraged by the State as an alternative to both State control and unfettered private enterprise. In the United States, though socialist parties have long existed, they have never won much public support. Both major parties at different times have adopted social reform as part of their own programs and have enacted it into law. In Latin America, only Uruguay has seen much systematically applied socialism in accordance with theoretical socialist principles. 

 

SUMMARY AND CONCLUSION

THE NATIONAL STATE AND WORLD ECONOMY

 

The Industrial Revolution represents an irreversible change in the history of Western man. There can be little doubt that the problem of production is in principle solved. The world could easily, within a very short time, produce enough goods to satisfy all reasonable human needs. The resources and technique, however, are available to the world as a whole, not to each country according to the present national divisions of the world's territory. Every nation wishes to industrialize to solve its own economic and social problems, and to obtain the standard of living to which the peoples of the world have now come to believe they are entitled as a matter of right. It is therefore obvious to the rational man that the resources and techniques available to the most advanced industrial nations should be shared with the others, who are either less well endowed by nature or who started the industrial process much later than they. 

But the means by which this sharing can be accomplished are by no means obvious, and the archaic political structure of the world makes the process exceedingly difficult. The advanced industrial nations themselves are faced with severe problems, which are as yet far from solution and may be incapable of solution within the political framework inherited from the past. The continuing Industrial Revolution requires a constant growth of output and consumption,   

and this, in the case of all fully developed industrial nations, entails in turn a constantly increasing export trade. This export trade is limited by the ability of the less developed countries to pay for imports. They can pay for imports only by industrializing themselves; but this means, in the initial stages, a tariff wall against competitive imports. Furthermore, within the industrial countries there are cycles of contraction and expansion which invariably have their effects on the countries that buy from and sell to them. The reasons for such cycles are still imperfectly understood, and the means for dealing with them are no less imperfect; they might be totally inefficacious if another depression like that of the 1930's were to strike the world economy. 

In spite of the problems involved, no one today suggests that the Industrial Revolution should be halted, nor that there should be a truce to inventions. The promise of world plenty and the satisfaction of all reasonable wants is so tempting that everyone wants to share in it; how they are to do so may well be the crucial problem for the rest of this century and even for several centuries to come—provided the tensions produced do not result in a war which will destroy the industrial civilization of Western man, and compel the survivors to start again with a new political and social structure that may be able to solve the problems better than ours. 

 

Suggestions for further reading 

 

PAPERBACK BOOKS 

 

Berlin, Isaiah. Karl Marx: His Life and Environment. Galaxy. By one of the best-informed historians of Marxism. Somewhat hostile to Marx, but relatively fair-minded in view of the customary approach in western countries. 

Fremantle, Anne. Little Band of Prophets. NAL. Useful study of the Fabians, with bibliography of their works. 

Hayek, F. A. The Road to Serfdom. Phoenix. Argues eloquently against socialism, democracy, and the welfare state. 

Mannheim, Karl. Ideology and Utopia. Harvard. Thought-provoking classic. 

Marx, Karl, and Engels, Friedrich. The Communist Manifesto. Gateway. 

Marx, Karl, and Engels, Friedrich. Basic Writings on Politics and Philosophy. Ed. by Lewis S. Feuer. Anchor. An adequate selection for those who do not wish to attempt the formidable originals, especially Karl Marx, Capital (Modern Library Giant). 

Mill, John Stuart. Utilitarianism. Liberal Arts Press. By the mid-nineteenth-century Utilitarian on his predecessors, their theories, and his own. A strong defense of the pleasure principle of Utilitarianism as the foundation of justice and freedom. 

Stace, W. T. The Philosophy of Hegel. Dover Extremely valuable work, much clearer than Hegel's own writings, but still difficult and requiring hard study. 

Usher, A. P. A History of Mechanical Invention Beacon. Already recommended for the medieval period, the book is invaluable for the Industrial Revolution, and is less confined than some accounts to the developments in England. 

Wilson, Edmund. To the Finland Station. Anchor. An interesting and well-written account of radical and socialist movements from th French to the Russian revolutions. 

 

CASEBOUND BOOKS

Ashton, T. S. The Industrial Revolution, 1760- 1830. London: Home University Library, 1948) Excellent survey, based on the newest interpretations. 

Clough, Shepard B. The Economic Development of Western Civilization. New York: McGraw Hill Book Company, Inc., 1959. The earlier part of this book is not substantially different from the Economic History of Europe, recommended in Chapter 9, although much shorter; but the later part, especially on the nineteenth and twentieth centuries, is much improved, and is excellent on the period covered by this chapter. 

Cole, G. D. H. Socialist Thought. New York: St. Martin's Press. 5 vols. Vol. I: The Forerunners 1789-1850 (1953); vol. 2: Marxism and Anarchism (1954). Comprehensive works by the most important English interpreter of socialism of recent times. 

Hammond, J. L. and B. The Rise of British Industry. New York: Harcourt, Brace and Company, 1937.

Relatively short and useful survey by the two social historians who elsewhere adopt a very severely critical attitude toward the early Industrial Revolution and its effects on English workers. 

Hayek, F. A., ed. Capitalism and the Historians. Chicago: The University of Chicago Press, 1954. Several writers discuss the anti-capitalist views of most historians; two further essays, one by T. S. Ashton, present the revisionist view regarding the well-being of the early industrial workers. 

Hayes, Carlton J. H. A Generation of Materialism. New York: Harper & Brothers, 1941. Provocative and interesting work, hostile to many features of modern society but well informed, and especially interesting on the social conse- quences of industrialism.

Schumpeter, Joseph. Capitalism, Socialism, and Democracy. New York:Harper & Brothers, 1942. A classic account of the three systems and their theoretical basis. 

Toynbee, Arnold. Lectures on the Industrial Revo- lution of the Eighteenth Century in England. London: Longmans, Green & Company, 1884; reprinted 1937. Pioneer work which influenced the thinking of generations of historians, who regarded the Industrial Revolution, as did Toynbee, as almost wholly to the disadvantage of the early workers. Most modern works adopt a more balanced view (see Hayek). A shorter version, The Industrial Revolution (Beacon), is available

Webb, Sidney and Beatrice. History of Trade Unionism. London: Longmans, Green and Com- pany, Inc., 1957. The classic account, long but authoritative.