history of industrial revolution

8/3/2019 History of Industrial Revolution

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History of Industrial Revolution.

The Industrial Revolution was a period from the 18th to the 19th century where major changesin agriculture, manufacturing, mining, transportation, and technology had a profound effect on

the socioeconomic and cultural conditions of the times. It began in the United Kingdom, thensubsequently spread throughout Europe, North America, and eventually the world.

The Industrial Revolution marks a major turning point in human history; almost every aspect ofdaily life was influenced in some way. Most notably, average income and population began toexhibit unprecedented sustained growth. In the two centuries following 1800, the world's averageper capita income increased over 10-fold, while the world's population increased over 6-fold. Inthe words of Nobel Prize winner Robert E. Lucas, Jr., "For the first time in history, the livingstandards of the masses of ordinary people have begun to undergo sustained growth. ... Nothingremotely like this economic behavior has happened before.

Starting in the later part of the 18th century, there began a transition in parts of Great Britain'spreviously manual labor and draft-animalbased economy towards machine-basedmanufacturing. It started with the mechanization of the textile industries, the development ofiron-making techniques and the increased use of refined coal. Trade expansion was enabled bythe introduction of canals, improved roads and railways.

The introduction of steam power fuelled primarily by coal, wider utilization of water wheels andpowered machinery (mainly in textile manufacturing) underpinned the dramatic increases inproduction capacity. The development of all-metal machine tools in the first two decades of the19th century facilitated the manufacture of more production machines for manufacturing in otherindustries. The effects spread throughout Western Europe and North America during the 19th

century, eventually affecting most of the world, a process that continues as industrialization. Theimpact of this change on society was enormous.

The first Industrial Revolution, which began in the 18th century, merged into the SecondIndustrial Revolution around 1850, when technological and economic progress gainedmomentum with the development of steam-powered ships, railways, and later in the 19th centurywith the internal combustion engine and electrical power generation. The period of time coveredby the Industrial Revolution varies with different historians. Eric Hobsbawm held that it 'brokeout' in Britain in the 1780s and was not fully felt until the 1830s or 1840s, while T. S. Ashtonheld that it occurred roughly between 1760 and 1830.

Some 20th century historians such as John Clapham and Nicholas Crafts have argued that theprocess of economic and social change took place gradually and the term revolution is amisnomer. This is still a subject of debate among historians. GDP per capita was broadly stablebefore the Industrial Revolution and the emergence of the modern capitalist economy. TheIndustrial Revolution began an era of per-capita economic growth in capitalist economies.Economic historians are in agreement that the onset of the Industrial Revolution is the mostimportant event in the history of humanity since the domestication of animals and plants.


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Industrial Development and Economic Growth:

1. IntroductionThe share of poor people in the global population has declined during recent decades. According to Chen andRavallion (2004), one-third of the population of the world lived in poverty in 1981, whereas the share was 18

per cent in 2001. The decline is largely due to rapid economic growth in populationrich countries like Chinaand India. There are, however, remarkable differences between countries and between regions in thedeveloping world. Some regions and countries, notably in East Asia, are rapidly catching up to industrializedcountries. Others, especially in Sub-Saharan Africa, are lagging far behind and the share of poor people in the

population has even increased in some countries. Industrial development has had an important role in theeconomic growth of countries like China, the Republic of Korea (Korea), Taiwan Province of China (Taiwan),and Indonesia. Along with accelerated growth, poverty rates have declined in many countries. Some countrieshave managed to achieve growth with equity, whereas in others inequality has remained high. In this chapter,the growth stories of seven countries China, India, Korea, Taiwan, Indonesia, Mexico and Brazil aredescribed and discussed. The main emphasis is on describing their growth processes and strategies, therole of industrial development, the contribution of a range of policies to growth performance, and the impact ofgrowth on poverty and income inequality. The study begins with a short theoretical discussion of the impact

of industrial development on growth and the impact of growth on poverty and income inequality and thenproceeds to the country examples.

3. Economic growth and the poorRapid economic growth is often essential for achieving a reduction in absolute poverty. As growth may beassociated with increased income inequality, it does not automatically address the whole poverty problem. Thetraditional economic development literature considered highly unequal income and wealth distribution as anecessary condition for continued and rapid economic growth. The basic economic argument to justify largeincome inequalities was that high incomes (personal and corporate) were a necessary condition for highersavings, which in turn were needed for investment and economic growth (Todaro, 1994).

5. Industrialization, economic growth, poverty and inequality:Country examples

5.1 ChinaAfter World War II, China adopted a development strategy that included deliberate insulation from the worldeconomy, industrialization and economic dominance of the state. As the country was falling far behindWestern countries, however, it began reforming its closed and centrally planned economy in 1978. Sincereforms, growth has accelerated and in the 1980s and 1990s GDP growth rates were the highest in the world,9.9 per cent and 10.3 per cent respectively, up from 6 per cent in the 1970s (World Bank, 2004a). Growth has

been especially high in industry, the compound annual growth rates being 11.3 per cent between 1980 and2002, with services also growing fast (10.4 per cent). The share of industry in GDP has increased from 35 percent in 1965 to 46 per cent in 2004.

5.2 IndiaThe economic development strategy that India chose after the Second World War was very similar to Chinas

near autarky, industrialization and the dominance of the state in the economy. Development was considered

synonymous with industrialization and industry was concentrating mainly on basic goods like steel andmachinery. Private capital was not seen as an efficient motor for development, and it was considered to have atendency towards monopolization. Because of that, state control was considered to be essential. The chosendevelopment strategy was one of import substitution. Development policies included licensing of industrialactivity, the reservation of key areas for state activity, controls over foreign direct investment, andinterventions in the labour market (Kaplinsky, 1997).

5.3 South KoreaEconomic growth in South Korea has been rapid during the last 40-45 years. During its rapid industrialization,the country was able to achieve remarkable growth with steep reductions in poverty and inequality. In 1960-


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2002, the compound annual GDP growth rate (CAGR) was 7.5 per cent. Growth has been high especially inmanufacturing. Between 1960 and 1969, the CAGR of manufacturing value added was 16.5 per cent and

between 1970 and 1979 it was 17.6 per cent. Growth in agricultures value-added has been continuouslydeclining, falling from 5.1 per cent in the 1960s to only 1.7 per cent during 1990-2002. Rapid growth has beenassociated with significant structural changes (Figure 5). In 1965, the share of manufacturing in GDPwas 14 per cent and that of agriculture 39 per cent.

5.4 Taiwan Province of ChinaLike Korea, Taiwan has experienced rapid economic growth over the past half century. The average annualgrowth rate during that period has been 8.4 per cent, reaching almost 10 per cent in the 1960s and 1970s(Liang and Mei, 2005). Economic growth has been heavily based on the growth of manufacturing,and from the 1960s onwards on export-orientation. At the outset, the country specialized in labour-intensive

production and later shifted towards capital-intensive and high-tech production.

Need of Industralization in Pakistan.

During the early twentieth century, the Muslims of the subcontinent were under the proverbial

thumb screws, victims of the merciless oppression of the British Empire. A dark time indeed foranyone who declared faith in Islam. But its not wise to wound, what you cant kill. Like acompressed spring, the Muslim Nation rose as one, united under the banner of Allah. Under theleadership of Jinnah, the Muslims found new faith. Faith in the Almighty, faith in their owncapabilities, faith in their ideologyThe movement led to the birth of a new nation and the dawning of a new era in the subcontinent.On 14th August, 1947, Pakistan appeared on the face of Gods green Earth, a dream made intoreality even in the face of insurmountable odds. The Muslims achieved more than just a strip ofland. They regained their identity, which had been lost over the decades of foreign rule. Our forefathers, proved once again the age old saying of champions:

Everything is possible. The impossible just takes longer to achieve.

The subcontinent was split down the middle giving rise to two countries who were bitter rivalsfrom day one. There was too much bad blood for anyone to think that the two countries couldever be allies. But nobody was thinking that far ahead apart from the one man who was behindthe vision of Pakistan. Muhammad Ali Jinnah even warned people of Pakistan.

Do not be overwhelmed by the enormity of the task. There is many an example in history

of young nations building themselves up by sheer determination and forces of character

Pakistan was born, Jinnah was our newly appointed Governor General and the rest, as they say,

is history.

Fast forward six decades, two wars, and the separation of East Pakistan to the year 2010. Wehave entered the 21st Century and the new millennium. The post 9/11 war on terror still rages onin Afghanistan and Iraq with the threat of invasion looming over Iran. Pakistan and India areoccupying extremely important strategic positions in world affairs. Both are nuclear powers,Pakistan being the only Muslim State which can claim that honor. But the economic state of thetwo rival countries could not be any different.


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Where India has excelled, Pakistan has faltered. Where India has won, Pakistan has lost. Indiahas been placed alongside China as the next economic Super Power whereas Pakistan is stilltrying to find its footing in every sector other than defense. India has used its enormous workforce to establish industrial stability whereas Pakistan is still considered a developing country.India is a safe investment option for foreign companies whereas Pakistan is considered a

liability. Any existing companies are cutting their losses and leaving our shores. Our dependenceon foreign aid is increasing instead of being reduced. Pakistan is currently under debt to theWorld Bank, the IMF and various countries amounting to $51bn. Why has India managed tobecome an Industrial Powerhouse, while Pakistan has not?

Pakistan is one of the largest producers of cotton, wheat, rice and sugarcane in the world.Pakistan is producing 44, 15, 5 and 2 million tons of sugar-cane, wheat, rice and cotton annually.Pakistan manufactured cotton wool and fabric is exported worldwide. But despite this fact, ourper-hectare production is abysmal to say the least. The prices of sugar and wheat are increasing.Pakistan was considered a gas rich country. Nowadays, the price of natural gas has leveled thatof petroleum. Pakistan has an abundance of gypsum, copper, chromites and rock salt. But there

isnt a single industry worthy of notice on domestic soil. In the area of defense, Pakistans might,eclipses that of even India. With all these advantages in Pakistans favor the question arises.Where did we go wrong? Why arent we the shining beacon for the Muslim Ummah as we weredestined to be? Industrialization has proven to be our Achilles heel and the main hurdle betweenus and our rightful place in the world.Although Industrialization depends upon numerous factors, I have highlighted only four in thisarticle. Agriculture, energy, raw materials and work force.

The secret to success in any field is to always play to your strengths. Pakistan has a versatileagricultural industry. 75% of our population depends upon agriculture for their living. We should be using our agricultural expertise as the backbone of our industrial sector. If we realize our

potential, Pakistan could be sufficient in food stuffs along with being a major exporter in wheat,cotton and rice. But a major percentage of our fertile land goes to waste, the reasons being lackof irrigation, plant diseases, and water logging. Feudalism is also rampant among the agriculturalcommunity. Feudal Lords buy up land and do not utilize it. Thus that land is of no use to anyone.As in all walks of life, we need to look further what Islam says about a problem. Hazrat Umarsaid:

If any one doesnt utilize his land for three years, the state will take it back and will

provide it to the person that can utilize it.

Apostle of Allah (peace be upon him) said:

The land is the land of Allah, and the servants are the servants of Allah. If anyone brings

barren land into cultivation, he has more right to it. -Dawud :: Book 19 : Hadith 3068

Hoarding is the first cousin of feudalism and equally responsible for the price hike in all foodcrops. Hoarders withhold their crops from the market creating an artificial shortage. When theprices increase, they slowly inject their goods into the market for immense profits.


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Another bane for small scale farmers are taxes. The taxation policy on land and crops leaves thefarmers with such a small profit ratio, that they are discouraged form further cultivation.The crops grown in Pakistan are useless unless they are exported to earn foreign exchange. Forthis to take place effectively, they need to be transported to port cities such as Karachi.Transportation has become such a large expense that most farmers cannot afford it.

The reason for transportation being so expensive is the rising price of fuel. This brings us to thecritical point of energy. Availability of energy is the cornerstone of a successful industry.Without electricity, no industry can be set up in Pakistan. The government policy on energyleaves much to be desired. In Karachi alone, there is a deficit of 246 MW. We are buying energyfrom foreign sources. Oil comprises Pakistans chief import which amounts to $6.5bn. This alonelays a heavy blow on our foreign exchange reserves, but Islam directs us to exploit cheap energyresources (Available in our land) and provide it to the public on actual cost without any profit.The Holy Prophet said:

Muslims have common share in three (things). Grass, water and fire. -Dawud :: Book 23: Hadith 3470

The word fire here means all sorts of energy commodities which are owned collectively by thepublic and the governmental sector is just to administer its production and distribution on actualcost, hence entities in this sector cant be privatized, and cant be made a source of huge profitmaking. Imagine the scenario if electricity generated in Pakistan is sold on actual price then thisinexpensive electricity will provide the opportunity to the industries to grow and to deliver their products on cheap price in the international market, so that our industries can easily competewith others.

We should be reducing our dependence on fossil fuels and look for alternative forms of energy.

Pakistan is a nuclear power. But our production of electricity from nuclear energy is negligible.Pakistan has an abundance of high grade coal. But no steps are taken to utilize theses sources ofenergy. The only possible outcome from this situation is increasing debt and power shortages.

Pakistan is blessed with an abundance of raw materials. But the refining of these materials isntcarried out here. The refining creates a needless expense which proves to be a hurdle forindustrialization.

Why cant high grade raw materials be produced on domestic soil? We have the work force.What is stopping us from fulfilling our true potential? Industrialization requires initial capitalwhich the government is unwilling or unable to spend. From the above study we can clearly seethat Pakistans vision is short-term. Within our out dated infrastructure, lies the source of incomeof too many important people. We believe in making hay while the sun shines. Instead ofplanning for the future, we take what we can and give nothing back. What we forget is that,

God helps those who help themselves.

It all comes down to a simple equation. If a countrys exports are larger than its imports, thecountry excels, where as the reverse case spells certain doom. It does not take a genius to guess


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that Pakistan falls into the latter category. The only hope for salvation for Pakistan lies in itsindustrialization. Unless Pakistan establishes domestic industries which generate revenue andreduce dependence on imports, there is no hope for a better, brighter future.

history of industrial revolution

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