Why the Industrial Revolution happened in Britain

And answers to other related questions.

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A key theme of this Substack and my book series is human material progress. In particular, I am interested in identifying the origins and causes of material progress.

One of the most important questions in modern economic history is:

“Why did the Industrial Revolution ocurr in Britain in the 18th/19th Century?”

This seems like a simple question, but when you unpack it, the question becomes quite complex. For example, one can ask this question in many different ways:

• Why did the Industrial Revolution anywhere or at any time? This is a variation of the question that I tried to answer in a previous article: Was the Industrial Revolution inevitable?

• Why did the Industrial Revolution not happen in an earlier society, such as:

  • Ancient Greece

  • Ancient Rome

  • Song China

  • the Medieval Republics of Northern Italy

  • or some other society?

• Why did the Industrial Revolution not happen on a different continent, such as?

  • Asia

  • Africa

  • North America

  • South America

• Why did the Industrial Revolution happen in Britain and not somewhere else during the same time period, such as in?

  • The Dutch Republic

  • France

  • Spain

  • Germany (or what is now Germany)

• Why did the Industrial Revolution happen in Britain and at that specific time instead of earlier or later in?

  • Roman Britain

  • Norman Britain

  • Tudor Britain

  • Stuart Britain

  • 20th Century Britain

Obviously, once you analyze all these alternate ways of asking the question, one can see just how complicated the topic is. No one simple answer is possible to answer all those variations of the question.

I think by expanding the list of related questions, we can see that this is actually an immensely complex question.

Many researchers ask just one of the above questions (or a few of the related questions) and fail to answer them all. Typically, a researcher focuses on one or more societies that seem like reasonable candidates for industrialization and then compares pre-industrial Britain to them. The researcher then shows what Britain had that the other societies lacked, and then those factors are supposed to answer to the question.

Let’s take a step back

As usual, when one asks fundamental questions about human history, I believe that you should start with what I call “all of human history in one graphic.” If you have not seen it before, I would recommend reading the linked article before continuing.

The long chain of causality

I believe that because of geographical, political, and technological constraints, an Industrial Revolution could only have come from a Commercial society (see top right in the above graphic). And a Commercial society could not have evolved without the prior existence of Agrarian societies (see the middle right in the above graphic). And Agrarian societies could not have evolved without the prior existence of Horticultural societiess. And Horticultural societies could not have evolved without the prior existence of Hunter-Gatherer societies. And Hunter-Gatherer societies could not have evolved without its own set of preconditions.

So we can see from the above, there was a long chain of preconditions that had to have been fulfilled long before Britain could have industrialized. And each one affected the timing and location of that industrialization.

After the first nation industrialized and invented an entire suite of energy, transportation, agricultural, manufacturing, and communication technologies based on fossil fuels, then other societies could overcome their geographical constraints and copy the first industrializers.

But those same nations could not have done so on their own without another nation industrializing. They each needed another nation to pioneer the industrialization process.

As it so happened the big increase in the material standard of living for the British masses happened sometime around or after 1830 with the railroad boom. Since I am primarily focused on the impact of economic growth on the material standard of living on the masses, I consider this period to be the Industrial Revolution.

Pre-1830 economic growth in Britain shared much in common with pre-industrial Commercial societies, such as:

• Medieval city/states of Northern Italy (Venice, Florence, Genoa, Milan, and many more)

• Late Medieval city/states of Flanders (Ghent, Bruges, Ypres, and Antwerp in modern-day Belgium)

• The Dutch Republic (1579-1795)

Note: I am well aware that economic historians have very different opinions of when the Industrial Revolution really took place.

For my purposes, I am primarily concerned with when there was a dramatic increase in the material standard of living of the average person as measured by estimates of per capital GDP from the Maddison project, not just sectoral change or economic growth (which had been in existence for centuries in Commercial societies).

So if you believe that the Industrial Revolution happened earlier or later, it does not really matter for the purpose of this article. As far as I know, virtually every economic historian believes that:

• the Industrial Revolution occurred in Britain sometime between 1500 and 1900, and

• It was an economic transition that took decades, generations, or even centuries, so pinpointing an exact year or decade is largely determined by definitions and perspective.

What does matter is that the Industrial Revolution was one of the great breakthroughs of material progress in world history. Importantly, though, the transition did not start human material progress. It merely accelerated a pre-existing trend within Commercial societies and enabled it to spread to far more regions in the world.

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If you enjoyed reading this series of articles, you might also be interested in reading my “From Poverty to Progress” book series:

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The preconditions for industrialization

So using our above graphic, we can see that the following needed to occur before the first nation could industrialize. To become the first society to industrialize, that society needed to fulfill:

• Multiple geographical preconditions for Commercial, Agrarian, and Horticultural societies to evolve prior to industrialization.

• Political preconditions for Commercial societies to evolve prior to industrialization.

• Technological preconditions (discussed below)

• And probably more than their fair share of good luck.

Arranged chronologically, these preconditions were:

1. The region that industrialized had to have a natural geography that enabled the evolution of:

   1. Hunter-Gatherer societies, and later the evolution of:

   2. Horticultural societies (most regions did not have those geographic conditions), and later the evolution of:

   3. Agrarian societies (even fewer regions had those geographic conditions)

2. The region that industrialized also had to have a geography and political structure that enabled the evolution of Commercial societies (only a tiny minority of regions had those characteristics, so this was the big historical bottleneck). These Commercial societies rapidly accelerated the rate of technological innovation, but that alone was not enough for an Industrial Revolution.
   Since geographical preconditions #1a, 1b, 1c, and 2 are progressively narrow (as can be seen from the graphic), so you can collapse them into just precondition #2.
   For a brief overview of how southeast England became a Commercial society, I recommend reading this article.
   

3. The existing pre-industrial Commercial societies had to continue innovating for a long enough time period to accumulate all the necessary technological innovations to make industrialization possible anywhere.
   Given how slow technological innovation was (relative to today at least), it seems likely that this accumulation of necessary technologies would take many centuries. This made it highly unlikely for early Commercial societies, such as Medieval Northern Italy to industrialize. And it made it virtually impossible for any earlier society to industrialize.
   We can disagree over exactly which pre-industrial technologies were most critical, but the list of key enabling technologies from Commercial societies comes to something like this:

   1. Agricultural technologies that generated a massive food surplus that enabled urbanization.

   2. Energy technologies and prime movers, such as:

      1. Sailing ships

      2. Windmills and watermills

      3. Horse-drawn wagons.

   3. Financial technologies, such as:

      1. Currency

      2. Joint-stock ownership companies

      3. Double-entry bookkeeping

      4. Stock exchange.

   4. Inclusive political, economic, and religious institutions.
      This was important to prevent elites from expropriating the food surplus for their own purposes.
      The vast majority of regions throughout planet Earth are excluded by technological characteristics in precondition #3. An Industrial society might have gotten along without some of these critical technologies, but it is difficult to see how they could have experienced transformative economic growth without any of them.

4. Before industrializing the society in question also had to copy those technological innovations from other Commercial societies.
   It seems unlikely for one society to invent all of the key enabling technologies, so it is much more likely that multiple societies would do so. Those societies would need to be in close enough geographical proximity to copy each other.

5. Before industrializing, the society in question had to have expert knowledge of key technologies and skills that were directly involved in industrializing industries (I plan to write articles on each in the future):

   1. Textile manufacturing and distribution

   2. Coal extraction, distribution, and combustion (which provided the energy for industrialization)

   3. Iron-making (which was a key material in industrialization)

   4. Machine tools (which enabled workers to shape iron into very large and complex shapes with precision)

   5. Tethering of energy derived from water mills into a complex pattern of machine tools within factories.

Only pre-industrial Britain fulfilled all the preconditions

To the best of my knowledge, pre-industrial Britain was the only society that had expert knowledge of all these key enabling technologies. Those key technologies and the skills to make and use them were the “proximal cause” explaining why Britain had the Industrial Revolution when it did and why it happened in Britain instead of other societies. But pre-industrial Britain could not have acquired skills in those key enabling technologies without all the other preconditions listed above.

If a society failed at any one of these five major preconditions, it would not have experienced an Industrial Revolution. Britain was the first and only society that did so. That is why Britain experienced the Industrial Revolution first.

So one can see that Britain had to fulfill many unlikely geographical, political, and technological preconditions before it could experience an Industrial Revolution, and none of those steps were known ahead of time. English kings could not plan for an Industrial Revolution. Nor could English merchants, engineers, artisans, or bankers.

The Industrial Revolution was the outcome of many contingencies. Some of them like geography were completely out of the hands of human control.

That is why I believe that the Industrial Revolution was far from inevitable. Even the preceding evolution of Commercial societies was far from inevitable. Indeed, the evolution of Commercial societies might well have been unlikely.

What about the Dutch Republic?

The Dutch Republic was very similar to pre-industrial Britain in many ways. This made the Dutch Republic a prime candidate for being an alternative path to industrialization. Both the Dutch Republic and pre-industrial Britain had:

• large urban populations as a percentage of total population

• highly productive agriculture

• plenty of checks and balances against any one person or institution becoming too powerful

• booming nautical trade

• flexible financial systems that could leverage large amounts of capital

• competitive exporting industries.

• highly skilled artisans, entrepreneurs, and engineers.

Indeed, much of what made pre-industrial Britain special was because southeast England consciously copied what worked in the Dutch Republic. Just like the Dutch consciously copied what worked in Flanders and Northern Italy.

So if the Dutch Republic had so many things in common with pre-industrial Britain, why did the Industrial Revolution not occur there?

The Dutch specialized in the “wrong” industries

I believe that the answer is that the Dutch Republic lacked skills in many of the key enabling Industrial technologies, at least compared to England. Theoretically, the Dutch Republic could have been the first nation to industrialize, but the Dutch specialized in industries that were not so key to later industrialization.

This was not because the Dutch were less skilled. Only the Dutch specialized in different industries. All Commercial and Industrial nations tend to specialize in certain industries, and which they choose can have profound consequences for the long-term economic future.

The Dutch of the 16th, 17th, and 18th Century were masters of harnessing wood, wind, water, peat, and sail. No other nation in the world, with the possible exception of England, could rival the Dutch in these key skills.

Unfortunately, for the Dutch, these technologies and skills became comparatively less important in the 19th Century. So the Dutch accidentally specialized in the wrong skills for the 19th Century. And the British accidentally specialized in the right skills for the 19th Century (but then got overtaken by the Germans and Americans in the next generation of technologies and skills). Certainly, the fact that England had significant reserves of easily accessible iron and coal played a key role in their specialized skills in those industries.

Because those Dutch industries were highly profitable for decades, if not centuries, this was not a bad decision at the time. It is extremely difficult to anticipate which technologies and skills will be essential in future generations, so nations tend to specialize in whatever technologies and skills are profitable at the moment.

Shifting centers of economic growth

This would not be the first time in economic history that a nation made huge amounts of money on technologies and skills that later became obsolete (or at least less crucial) in later generations. Nor was it the first time that a nation serendipitously specialized in technologies and skills that later became crucial to the next wave of economic growth.

Indeed, one can argue that this has been the norm over the last 800 years. Economic growth somewhere in the world has been the norm for 800 years, but the geographical location of the cutting-edge of that economic growth has been constantly changing.

Here are a few examples of previous centers of economic growth. Each city or nation had a dominant combination of specific technologies, skills, organizations, and capital. Almost all lost their dominance when new technologies, skills, organizations, and sources of capital evolved:

1. Medieval city/states of Northern Italy (Venice, Florence, Genoa, Milan, and many more)

2. Late Medieval city/states of Flanders (Ghent, Bruges, Ypres, and Antwerp in modern-day Belgium)

3. The Dutch Republic (1579-1795)

4. Pre-industrial England, particularly in the southeast (roughly 1500-1800)

5. Industrial Britain in the early 19th Century.

6. The rest of the Anglo world (USA, Australia, New Zealand, and Canada) in the early and mid-19th century.

7. Smaller European nations (Belgium, Switzerland, Netherlands, Denmark, and Sweden) in the late 19th Century.

8. Germany in the late 19th Century.

9. Japan and Hong Kong, starting in the 1870s and continuing until World War II.

10. Japan and the Asian Tigers (Hong Kong, Taiwan, Singapore, and South Korea), starting at various times in the decades immediately after World War II.

11. A much larger take-off in the more populous Asian nations (China, India and Indonesia) after 1990.

12. Next might be the remainder of South Asia and Southeast Asia?

The United States is really the only nation that has consistently specialized in cutting-edge technologies and skills for the last 150 years. And the fact that the United States has clearly lost its manufacturing dominance to Japan, South Korea, and China suggests that the USA is only a partial exception to the rule.

So I hope that the above explains my theory on why the Industrial Revolution happened in Britain when it did.

What do you think?

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If you enjoyed reading this series of articles, you might also be interested in reading my “From Poverty to Progress” book series: