The Industrial Revolution is the process of substitution for the mediaeval regulations which had previously controlled the production and distribution of wealth, which took place at the end of the 18^th century. In Europe the Revolution led to growth of opposite system of thoughts: Economic Science and Socialism.

Economic Science developed in England with four economists. They are Adam Smith (Wealth of Nations in 1776), Malthus (Essay on population in 1798), Ricardo (Principles of Political Economy and Taxation in 1817) and John Stuart Mill (Principles of Political Economy in 1848). The principal facts linked with the Industrial Revolution are the rapid growth of British population and the relative decline in agricultural population, which is caused by three events. The causes are the destruction of the common-field system of cultivation, the enclosure of common and waste lands and the consolidation of small farm into large.

At the end of 18^th century in the rural population some changes were born and the most important is the substitution of scientific for unscientific culture applied to agriculture. Labourers have a more scientific approach to their activities. They introduce breed of cattle, rotation of crops, steam plough and agricultural societies.

The second field of Industrial Revolution in England is textile industry, but also iron industry. In the last decades of 1700 four inventions alter the character of cotton manufacture and this let the substitution of the factory for the domestic system. The inventions are the spinning-jenny in 1770, the water frame in 1769, the Crompton’s mule in 1779 and the self-acting mule in 1792. However the most important innovations are the steam engine and the power loom. Also in iron industry some mechanical innovations change the production system. These are the invention of smelling by pit-coal and the application of the steam engine to blast furnaces.

In the first years of 1800 the improvement of means of communication such as canal system, roads and railways causes an extraordinary increase in commerce and the definitely substitution of factory system for domestic system.

Consequently the Industrial Revolution causes a revolution in the distribution of wealth. In this period the rents of land rise cause to the money invested in improvements, the effect of the enclosure system, the consolidation of farm and the high price of corn. This new distribution causes social changes in country life. It represent a great social revolution, a change in the balance of political power and the position of classes. Indeed the farmers shared in the prosperity of landlords. The most important consequences of this process are: farmers cease to live and work with labourers, who became a distinct class and the birth of class conflicts. This situation create misery in working classes, which is caused by the fall in wages in some industries, the labour conditions under the factory system and the rise of prices, especially the price of bread.

In conclusion it can be said that the effects of the Industrial Revolution prove that free competition may produce wealth without producing well-being.