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For most of human history, material progress was a local miracle. A handful of European city-states discovered how to escape the limits of geography, only to be overtaken by larger empires before their breakthroughs could spread. Yet six major breakthroughs spread material progress throughout the globe.
This article explores the fourth of those breakthroughs—the British Industrial Revolution—but first, it briefly recaps the essential steps that brought humanity to the edge of this turning point. If you’ve already followed the series so far, feel free to jump ahead; if not, here’s how the story of global progress truly began.
The emergence of Commercial societies in Europe about 800 years ago that innovated four of the Five Keys to Progress (productive agriculture, trade-based cities, decentralized power, and export industries).
The diffusion of Commercial societies from Northern Italy to Flanders and then to the Netherlands and finally to Southeast England.
The migration of Europeans to much of the rest of the world. The migration of peoples from Britain to North America was particularly important.
The Industrial Revolution in Britain (the topic of this article), which added the fifth Key to Progress (widespread use of fossil fuels). The Industrial Revolution involved the application of fossil fuels to transportation, communication, materials, agriculture and other technologies, increasing their usefulness. This dramatically increased the rate of innovation to a level where real progress could take place in Western Europe and North America.
The Allied victory in World War II, which ended the totalitarian threats of Nazi Germany, Imperial Japan and Fascist Italy. Once the economies of Western Europe and Japan recovered from the devastation of the war, they grew at an unprecedented rate for almost 30 years.
The collapse of the Soviet Union in the early 1990s (the topic of this article), which ended the last of the great predatory empires and undermined the legitimacy of centralized political monopolies. As a result, country after country dismantled totalitarian and authoritarian regimes in favor of increased freedom, democracy, market-based competition, and global trade.
Commercial Societies before the Industrial Revolution
In previous articles in this series, we have seen how Commercial societies in Northwest Europe created the first self-sustaining economic growth that led to real progress for the masses. They did so because they possessed four of the Five Keys to Progress (productive agriculture, trade-based cities, a decentralization of power, and exporting industries).
But the lack of the Fifth Key to Progress – widespread use of fossil fuels – placed a fundamental cap on how far that progress could continue. The Dutch Republic in 1670 with a per capita GDP of $2,130/year appears to have hit this cap, as the Netherlands was not able to break this level for another 160 years.
The British Industrial Revolution
It was not for another 176 years that another nation was able to break through this limit (the UK in 1846). Economic historians call this the “Industrial Revolution.” While there is a huge controversy as to exactly when this economic transformation took place and how long it took to complete the transition, there is widespread agreement that this was one of the great transformations in human history.
The British Industrial Revolution led to another 180 years of economic growth and still counting. Most importantly, this economic growth spread beyond a relatively small network of Commercial societies to encompass much of Europe and North America.
The most common interpretation of the Industrial Revolution is that it was the beginning of modern economic growth. Most economic historians view the pre-industrial era as having no economic growth that benefitted the masses.
Economic historians typically view the pre-industrial era as being dominated by a Malthusian trap where population growth proceeded faster than the growth of agricultural productivity. They also typically hand wave away pre-industrial economic growth in Commercial societies as merely temporary bursts of growth that were doomed to fail in the long run.
The Industrial Revolution could only happen in a Commercial society
I believe that this Malthusian trap existed, but not for all pre-industrial societies. As we have seen, Commercial societies implemented a farming system that roughly quadrupled food production relative to the Ancient farming system.
Economic historians typically see two large categories of European societies:
Pre-industrial agricultural societies, which include pre-industrial Britain, France, Germany, and Italy (as well as much of Eurasia). These were all caught in the Malthusian trap
Industrial societies with the Industrial Revolution in Britain being the critical dividing line.
Economic historians typically see pre-industrial Britain as not just another agricultural society in Eurasia. Pre-industrial Britain was different from France, Germany, China, and India in many fundamental characteristics. And other societies in Europe at the time shared those same characteristics.
I believe, however, that pre-industrial England was a Commercial society.
My view is that there were three types of societies (not two):
Agrarian societies (such as France, Germany, and much of the rest of Eurasia)
Commercial societies which invented human material progress and were a necessary intermediate step before industrialization
Industrial societies, which radically accelerated progress and spread it to regions where it was impossible with pre-industrial technologies, skills, and organizations.
While the traditional interpretations stress what pre-industrial Britain had in common with France, Germany, and Italy, I stress the differences. And while the traditional interpretation tends to ignore Northern Italy, Flanders, and the Netherlands, I focus on those societies.
Pre-industrial economic growth in Commercial societies roughly quadrupled the standard of living from roughly $500 per year to well over $2000 per year. Yes, those Commercial societies were small in population and the cutting edge of economic growth shifted between societies, but this does not diminish this accomplishment.
Most importantly, I see Commercial societies as a necessary precondition for the Industrial Revolution to have happened in the first place. Commercial societies invented many of the technologies, skills, and organizations that were necessary for the Industrial Revolution to take place. So Commercial societies were not some curiosity from history. They were critical to building the economic foundation for the greatest economic transformation in world history.
The First Industrial society
Britain pioneered a new type of society: the Industrial society. The Industrial society is very similar to Commercial societies in that people acquire their food by selling a skill or product in the marketplace so that they can purchase food within that same market. This is very different from all the rest of human history where they vast majority of people had to acquire their food through their own physical efforts (hunting, fishing, herding, or farming).
The key difference between previous Commercial societies and Industrial Britain is that the United Kingdom combined this with the widespread use of fossil fuels. Britain was the first nation to unlock the Fifth Key to Progress, and it transformed human history.
Pre-industrial coal use
Industrial societies, however, added another layer: applying the awesome energy density of fossil fuels to a host of new technologies. It is important to note that the use of coal for heating homes was common in London and some other English cities long before the Industrial Revolution. To the best of my knowledge, no other society used coal to anywhere near the extent of pre-industrial England (although the Dutch Republic used peat quite widely before the Industrial Revolution).
I do not believe that this undermines my overall argument as heating homes is a specific application of fossil fuels with limited benefits to other sectors of the economy. Warm homes are far more comfortable to live in, but they do not transform societies as the application of fossil fuels to agriculture, transportation, communication, and manufacturing do.
I do believe, however, that pre-industrial coal usage for heating homes gives us an important clue as to why the Industrial Revolution took place in Britain. The use of coal gave Britain critical technologies, skills and organizations that could later be modified and scaled up. While they did not know it at the time, this gave Britain a critical skills advantage over other Commercial nations that might have industrialized earlier.
Industrial technologies
Key technologies enabled Industrial societies to do the following:
Exploit the awesome energy density of fossil fuels
Dramatically increase the productivity of agriculture (using tractors, nitrogen fertilizer, etc.)
Build technology that is so cheap that even the poor can afford to purchase it (using assembly lines)
Transport people and goods rapidly, cheaply, and across long distances (using railroad, steamships, automobiles, airplanes, and container ships)
Communicate across long distances (using the telegraph, telephone, radio, television, mobile devices, and the internet).
Develop new materials and mass produce them for sale (steel, concrete, asphalt, glass, and plastic)
None of this would have been possible without the widespread use of fossil fuels.
In pre-industrial societies, the vast majority of useful energy was derived from human muscle power, animal power, burning wood, or harnessing water or wind. All of these power sources ultimately derived from the sun. Industrial societies added on energy derived from fossil fuels, primarily coal. In the later phases of the Industrial Revolution, petroleum and natural gas played important roles.
The use of fossil fuels injected a huge amount of useful energy into Industrial societies. They found new ways to apply this energy to transportation, communication, materials, and agriculture. The railroad, steamship, factory, electrical grid, telegraph, radio, steel, nitrogen fertilizer, automobiles, trucks, container ships, and airplanes are just a few of the innovations that helped to sustain progress.
Putting the Industrial Revolution into context
Most economic historians claim that the British Industrial Revolution was the beginning of human material progress, but I think the evidence is to the contrary. Widespread economic growth that materially benefitted the massive was clearly in evidence as far back as the Commercial city/states in Northern Italy (1200-1500).
Unfortunately, economic historians are so focused on the British Industrial Revolution that they neglect an earlier economic transformation was that was just as important: the emergence of Commercial societies in Northwest Europe. Many regions within Northwest Europe (and here I am including Northern Italy in that term) had been experiencing material progress for at 500 years before the British Industrial Revolution.
Now stating this makes some people think that I am down-playing the significance of the British Industrial Revolution. Far from it.
The British Industrial Revolution was clearly one of the great transformations in human history, and we are still living with the consequences to this day.
But the British Industrial Revolution did not start human material progress.
To put the British Industrial Revolution in the context of human history, we need to step back a bit. Take a look at this graphic. If you have not seen this graphic before, I would recommend reading my article on it.
Essentially, you can see that you can understand human history at a VERY high level, but seeing the interaction between geography and society types.
At its most basic, human history has been about our struggle to acquire enough food calories from the local environment to survive and reproduce. This makes us just like all other biological animals. All animals have a specific range that is constrained by its ability to digest food available in the local environment.
What makes humans different is our ability to innovation a massive number and variety of technologies to modify our natural environment to optimize our chances of surviving and reproducing. The most important types of technology are:
Subsistence technologies - technologies that enable humans to acquire more food from their local environment as well as supporting technologies to preserve, store and distribute the food surplus.
Energy technologies - technologies that harness and transform energy from the local environment for other uses.
What you see in the graphic above is humanity gradually inventing new subsistence and energy technologies that extract more and more useful food and energy from the natural environment. Each time a critical new subsistence or energy technology is invented, it creates an economic and social transformation in that region. And societies from other regions can potentially copy those technologies.
The fundamental problem is that pre-industrial subsistence and energy technologies were tightly constrained by the local environment (particularly biomes). This has meant that no pre-industrial subsistence and energy innovations were truly global. They were only useful to societies with similar biomes.
The significance of the British Industrial Revolution
So let’s back to the main question. What was the significance of the British Industrial Revolution. The true significance of the British Industrial Revolution was that it:
Rapidly accelerated existing material progress for the masses that had previously been restricted to Commercial societies in Northern Italy, Flanders, the Netherlands, and England (which I explain in the first third of this series).
Greatly reduced geographical constraints on material progress for the masses by inventing a suite of agricultural, energy, transportation, manufacturing, communication, urban infrastructural, and military technologies that applied the awesome energy density of fossil fuels.
This made it possible for other nations to skip over the Commercial societies stage and go directly to Industrial societies. Now, don’t get me wrong, this was not an easy transformation for any nation to make, but it was possible for the first time in human history.
Basically, it involves copying the Five Keys to Progress and nations that had previously evolved into more complex societies could make the transition far sooner than the rest.
So the centuries since the British Industrial Revolution has seen a steady stream of nations that learned to copy the Industrial technologies, skills, and organizations invented by Britain. When they did so, they were able to grow even faster than Industrial Britain did.Transformed the military balance of power between “free” societies (based on market-based economies, inclusive government, and transparent non-violent competition between elites) and predatory Agrarian regimes that acquired their wealth through taxes, land rents, and military conquest.
From roughly 1200 to roughly 1800, predatory Agrarian regimes had gobbled up fledgling Commercial societies. Commercial societies operated on principles that strongly foreshadowed modern Liberal Democratic Capitalism, but they had one critical vulnerability: they had a very small population size. This combined with they much greater wealth made them very vulnerable to military conquest by much larger Agrarian regimes.After the British Industrial Revolution, the military balance of power swung very hard towards ‘free” societies: the United Kingdom, its Dominions (Canada, Australia, and New Zealand) and, most importantly, the United States. It is not an accident that World War I, World War II, and the Cold War were all won by Western nations that had once been Commercial societies and industrialized early. Germany, Russia, and Japan were able to copy military technologies that leveraged their large populations into powerful armies, but their non-Commercial history greatly hindered them in the great military and ideological conflicts of the 20th Century. And the United States leverage those victories into a global trade system that:
Gave most nations military security.
(because of above) Political elites shifted their world view away from the pursuit of wealth via military conquest to a world view towards the pursuit of wealth via long-term economic growth.
Incentivized institutions based on transparent non-violent competition between economic, political, religious and ideological elites (Key #3).
Enabled them to access the high seas to:
Acquire food abundance and security (Key #1).
Acquire technologies, skills, and organizations to build urban infrastructure (Key #2).
Acquire critical industrial inputs and export markets (Key #4)
Acquire energy abundance and security (Key #5).
So whereas before the British Industrial Revolution, no nations had access to all Five Keys to Progress and only a few had access to the first four, after the British Industrial Revolution it was now possible across the entire globe.
The results has been a massive expansion in the number of people who enjoy the benefits of modern material progress.
This article is part of my multi-part series on How progress spread across the globe:
How Progress Spread Across the Globe (podcast)
The significance of the Industrial Revolution (this article)
How the Industrial Revolution upset the military balance of power
How Progress shaped the Great Power conflicts of the 20th Century
How Progress spread across the globe (the series)
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The agriculture revolution(s) increased the amount of available energy in the form of calories but did not lead to sustained progress.,
This is because, as he and others point out, that surplus was captured by political and religious elites. It took institutional change for the fruits of progress to be inclusively shared, and as the cities grew, the cauldrons of innovation take hold.
Our ability to harness fossil fuels, essentially stored and compressed solar energy, kicked off the industrial revolution.