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This chapter examines the scope and intensity of productive labour and its relationship to consumer aspirations. It demonstrates that changes in consumption demands play a role in the process of industrialization. The first ‘industrious revolution’ within the household sector reinforced significant changes in business organization, affecting both the international wholesale trade and the retail provision of goods. This phenomenon paved the way for the Industrial Revolution, which was advanced by new technologies and changes in organization.

The available statistics show that there was a sharp acceleration of the growth of British industrial output, investment, and trade in the last few decades of the eighteenth century, justifying the general use of the expression ‘Industrial Revolution’ and refuting the efforts of a few historians to deny its very occurrence.

In particular, the extraordinarily rapid growth of output and exports of the cotton industry was widely remarked upon both at the time and ever since, and was generally and plausibly attributed to a series of inventions and innovations, which increased productivity per hour of work by more than an order of magnitude and made possible rapidly descending costs and prices.

Only a little less rapid was the growth of the British iron industry, its rate of technical change, and its widening range of applications throughout the economy.

These exceptionally dynamic industries made an outstanding contribution to the growth of the economy as a whole based on water‐powered mechanization and a new transport infrastructure of canals, rivers, and roads.

Finally, British leadership in the Industrial Revolution must be attributed not only to these changes in technology and in the economy but also to the confluence and congruence of these changes with developments in the political and cultural subsystems particularly favourable to science, technology, and entrepreneurship.

The book asks when financial development is good for growth. It turns to industrializing England for an answer, using London goldsmith bankers as a case study. The book traces the early history of domestic banking in eighteenth-century London. It reveals how goldsmiths learned to be bankers in the tumultuous early years of the century, how a few of them prospered in the South Sea Bubble, and how the banks operated after mid-century. Financial repression by the government—a response to the pressing need to finance ever longer and more expensive wars—was a key constraint for private financial development. The usury laws restricted the ability to lend; war-time borrowing shocks crowded out private loans. Based on new evidence from historical bank archives, especially those of Hoare's Bank, the authors compile a rich new dataset with micro-level information on lending decisions, cash ratios, and profitability. Their conclusions shed light on one of the great unsolved puzzles of the Industrial Revolution—if technological change was fast, why was growth itself slow? Their answer emphasizes the important difficulties thrown up the institutional context in Hanoverian England—a “warfare state” bent on repressing financial development to facilitate its access to private savings.

This chapter examines the British experience with structural change and fiscal crisis, before dealing with the postwar United States. The rise and decline of Victorian Britain is a variation on the theme of structural change and fiscal crisis played out in the case of Renaissance Florence. History did not repeat itself in Victorian Britain, but certain underlying themes of human nature can be found in these two important periods. Britain adapted extremely well to one set of very large structural changes, the ones that created the Industrial Revolution. However, the patterns that led to that success became rigid and prevented Britain from responding to a second set of structural changes late in the nineteenth century. The result was that Britain, like Florence, was overtaken by other nations and slipped from the top rank.

This chapter examines the role of apprenticeship in the British Industrial Revolution. The apprenticeship system contributed in four ways. First, it provided training of necessary skills in the expanding area of employment and newer sectors. Second, it promoted efficient training among masters and men. Third, it reduced the transaction costs involved in transferring resources from agriculture to non-agriculture and facilitated the expansion of sectors which promoted trade and commerce. Finally, apprenticeship saved poor children from social exclusion and enabled them to become more productive adults. The chapter also suggests that the apprenticeship system also created a structure of contract enforcement which ensured that both masters and trainees would derive the benefits from human capital accumulation.

This chapter sets out the stakes of the book's argument, situating the English East India Company with respect to some of the larger processes of transition and change in the early modern period and the dawn of modernity in the nineteenth century. The issues addressed are large-scale macro-historical outcomes, such as economic development in the West, underdevelopment in Asia, growth in state capacity, the development of economic theory, and the emergence of new organizational forms. All are linked to and intertwine with the story of the English East India Company. In addition, these developments have at times been indirectly linked to the Industrial Revolution, which the chapter also briefly touches upon.

This chapter examines why Britain managed, for about a century, to generate and diffuse superior production techniques at a faster rate than the Continent, and to serve as a model that all European nations wished to emulate; and how and why it eventually lost its leadership and technology. It observes that technological success depended on both the presence of positive elements and on the absence of negative ones. The chapter notes that the generation of technological ideas and the ability to implement them are among the positive factors that provide technological successes. It further observes that one crucial difference between Britain and the Continent that helped Britain to establish its head start was its endowment of skilled labor at the onset of the Industrial Revolution.

Economic history has always been quite a peculiar department both in the domain of history and that of economics; dealing with change, institutions, collective rationality, and conflicting strategies of economic agents, privileging descriptive and non‐formal analytical tools, economic history remained for long outside the scope of formal neoclassical economics.

This chapter describes and discusses the story of the incorporation of economic history into the mainstream of economic theory through the cliometric revolution, a powerful intellectual movement emerging by the late fifties, which encapsulated this reconstruction of economic history from the point of view of marginalist price theory and the postulates of individual rationality; Meyer and Conrad were the major drivers of this radical vision, and challenged the ‘old historians’ school’, today best represented by the response of David Landes.

Yet the coherence of the cliometric movement was soon jeopardized by internal contradictions: Paul David issued the most powerful challenge to the seminal building block of the new approach, Fogel's ‘Time on the Cross’, a revision of the traditional approach to the economics of slavery in the pre‐Civil War USA.

Douglass North is another example of a dissident from cliometrics, and Alfred Chandler provided alternative arguments for a reasoned history approach to societal change.

The cliometric analysis of the British Industrial Revolution, using counterfactuals, namely by Crafts and Hawke, is discussed and contradicted in the chapter.

This chapter discusses the technological progress in the Industrial Revolution, usually dated between about 1750 and 1830. It notes that although Britain is frequently thought of as its locus, a large part of the new technology was the result of work done in other European countries and, later, in the United States. The chapter observes that the fruits of the Industrial Revolution were slow in coming, and that although per capita consumption and living standards increased little initially, production technologies changed dramatically in many industries and sectors, which prepared the way for sustained Schumpeterian growth in the second half of the nineteenth century, when technological progress spread to previously unaffected industries. It examines the technological changes during this period occurring in four main groups, namely: power technology, metallurgy, textiles, and a miscellaneous category of other industries and services.

The “List Critique” is the most explicit work Karl Marx wrote on nationalism. This work actually remained unknown until it appeared in a Soviet historical journal in 1971, long after he died. Conventional Marxian scholarship has tackled Marx's stand on nation and nationalism, however problems still remain despite its wide acceptance. In Marx's view, modern society consisted of two classes: the capitalists and the industrial workers. The theories and practices plus the Industrial Revolution all added to one process and that was the rise of capitalism. Meanwhile, the doctrine of the list was a contrast to everything that was taking place in society. The list called for the unification of all classes of a nation against other nations. Friedrich Meinecke pointed out the wave of nationalism while Marxism postulated the formation of the proletariat as a force that transcended national identities. Thus, Marxism viewed nationalism as the enemy.

This chapter presents the text of a lecture on the Industrial Revolution in Great Britain given at the British Academy's 2009 Keynes Lecture in Economics. This text suggests that the Industrial Revolution was Britain's response to the global economy that emerged after 1500 and that Britain's success in world trade resulted in one of the most urbanised economies in Europe with unusually high wages and cheap energy prices. The text here also highlights the contribution of Britain in the invention of the steam engine and the cotton spinning machines and in scientific discoveries relating to atmospheric pressure.

This chapter reviews recent research on Britain's Industrial revolution, showing that the presumed rate of economic growth during this economic watershed has been reduced progressively by several authors working with different methods. How can the evidence of widespread technological progress around the start of the nineteenth century be reconciled with the slow rate of national growth? Data from several goldsmith banks let us examine one hypothesis: that the British government's demand for resources to fight Napoleon crowded out demand from the private economy for investment. Previous historians have proposed crowding out but have had trouble identifying its effects. The usury rate meant that scarcity of bank loans showed up in credit rationing rather than higher interest rates. We show that loans from Hoare's Bank and other lenders decreased when the British government borrowed, and the rate of growth of the economy slowed at these times.

This lecture discusses a quest for the Industrial Revolution. It determines that the key feature of this revolution consisted less in an acceleration in growth than in the absence of any deceleration. The lecture further considers certain implications that may be termed the crafts revision and the prominence of agriculture.

A historical analysis of early modern Western Europe demonstrates that it was the interests of princes and kings, and the forms of government, that mainly determined whether there was economic growth or stagnation—and that these even partly explain the Industrial Revolution. The different parts of the chapter discuss prince‐ and merchant‐dominated city states in pre‐industrial Europe, the military revolution (with sections on the decline of Spain, and the stagnation of the Dutch Republic), and the anomaly of Britain as the only nation state that continued to grow its economy under the burden of maintaining the military effort required of an early modern European great power.

This chapter concerns the Industrial Revolution. The Industrial Revolution involved the transformation of organic economies by means of a complex of changes which gave birth to the modern world. In Europe, East Asia, and elsewhere those economies were agricultural. Thus the chapter discusses the replacement of an economy 80 per cent of the output of which might have been agricultural by another in which manufacturing became the dominant sector. This involved a transition in the scale of manufacturing from artisanal to large-scale workshop and then factory production. In Britain, that entailed technological innovation, but it would not have been possible in the first place without prior sustained changes in the rest of the economy and society.

An understanding of thrift in the United States requires a look back at developments in England and, before that, in Holland. With the relative leveling of society in the wake of the Renaissance, and especially the Reformation, aristocratic virtues gradually lost their long-held social dominance. In their place arose new commercial and civic virtues that legitimated the rising capitalist order. This chapter shows that the lesson of this early history is not what many have assumed. It questions the oft-repeated assumption that it was an increase in savings due to thrift that drove the rise of capitalism as the dominant economic order in the Anglo-American world. The chapter demonstrates that all of the historical evidence points instead to a combination of relative political freedom and technological innovation that led to the most dramatic economic growth—by a factor of eighteen—in world history. However, it concedes that thrift's social status did change in the period leading up to the Industrial Revolution from an utterly unremarkable feature of human existence to a marker of middle-class respectability and comportment. Along with all the economic virtues, thrift became an important regulating ideal.