The essence of the Industrial Revolution is the substitution of competition for the mediaeval regulations which had previously controlled the production and distribution of wealth. It is not only one of the most important facts of English history, but Europe owes to it the growth of two great systems of thought — Economic Science, and its antithesis, Socialism. The four great English economists’ work are:

-Adam Smith’s Wealth of Nations published in 1776. He investigated the causes of wealth and aimed at the substitution of industrial freedom for a system of restriction.

-Malthus’ Essay on Population published in 1798, which may be considered the product of that revolution, then already in full swing. Adam Smith had concentrated all his attention on a large production; Malthus directed his inquiries, not to the causes of wealth but to the causes of poverty, and found them in his theory of population.

-Ricardo's Principles of Political Economy and Taxation published in 1817 and in which Ricardo sought to ascertain the laws of the distribution of wealth.

-Stuart Mill's Principles of Political Economy published in 1848. Mill himself asserted that "the chief merit of his treatise” was the distinction drawn between the laws of production and those of distribution, and the problem he tried to solve was, how wealth ought to be distributed. A great advance was made by Mill's attempt to show what was and what was not inevitable under a system of free competition.



The facts of the Industrial Revolution are the fast growth of population and the positive decline in the agricultural population. An agrarian revolution plays as large part in the great industrial change of the end of the eighteenth century as does the revolution in manufacturing industries.
The three most effective causes were: the destruction of the common-field system of cultivation; the enclosure, on a large scale, of common and waste lands; and the consolidation of small farms into large.
The period was one of great agricultural advance; the breed of cattle was improved, rotation of crops was generally introduced, the steam-plough was invented, agricultural societies were instituted.
Passing to manufactures, the all-prominent fact are the substitution of the factory for the domestic system the consequence of the mechanical discoveries of the time. Four great inventions altered the character of the cotton manufacture: the spinning-jenny, patented by Hargreaves in 1770; the water-frame, invented by Arkwright in 1769; Crompton's mule introduced in 1779, and the self-acting mule first invented by Kelly in 1792. None of these by themselves would have revolutionized the industry. In 1769 James Watt took out his patent for the steam-engine. Sixteen years later it was applied to the cotton manufacture.

The most famous invention of all, and the most fatal to domestic industry, the power-loom, though also patented by Cartwright in 1785, did not come into use, for several years, and till the power-loom was introduced the workman was hardly injured. At first, in fact, machinery raised the wages of spinners and weavers owing to the great prosperity it brought to  the trade. In fifteen years the cotton trade trebled itself; from 1788 to 1803 has been called its -golden age"; for, before the power-loom but after the introduction of the mule and other mechanical improvements by which for the first tune yarn sufficiently fine for muslin and a variety of other fabrics was spun, the demand became such that “old barns, cart-houses, out-buildings of all descriptions were repaired, windows broke through the old blank walls, and all fitted up for loom-shops; new weavers' cottages with loom-shops arose in every direction every family bringing home weekly from 40 to 120 shillings per week.”

At a later date, the condition of the workman was very different. Meanwhile, the iron industry had been equally revolutionised by the invention of smelting by pit-coal brought into use between 1740 and 1750, and by the application in 1788 of the steam-engine to blast furnaces. In the eight years which followed this later date, the amount of iron manufactured nearly doubled itself. 

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It represented a great social revolution, a change in the balance of political power and in the relative position of classes. The farmers shared in the prosperity of the landlords; for many of them held their   farms under beneficial leases, and made large profits by them.  
In consequence, their character completely changed; they ceased to work and live with their labourers, and became a distinct class.