Perhaps the most important debate in economic history focuses on why the Industrial Revolution originated in western Europe, and Britain in particular, rather than in other parts of the world, such as Asia. Historians continue to debate this issue, but the best answer seems to be that Britain possessed a unique set of possibilities and constraints — abundant coal, high wages, a relatively peaceful and centralized government, well-developed financial systems, innovative culture, highly skilled craftsmen, and a strong position in empire and global trade — that spurred its people to adopt a capital-intensive, machine-powered system of production. The long-term economic advantages of this system were not immediately apparent, and its adoption by the British was more a matter of circumstance than a planned strategy.

Thus a number of factors came together over the long term to give rise to the Industrial Revolution in Britain. The Scientific Revolution and the Enlightenment fostered a new worldview that embraced progress and the role of research and experimentation in understanding and mastering the natural world. Britain’s intellectual culture emphasized the public sharing of knowledge, including that of scientists and technicians from other countries. The British Royal Society of Arts, for example, sponsored prizes for innovations in machinery and agriculture and played a pivotal part in the circulation of “useful knowledge.”

In the economic realm, the seventeenth-century expansion of rural industry produced a surplus of English woolen cloth. Exported throughout Europe, English cloth brought commercial profits and high wages to the detriment of traditional producers in Flanders and Italy. By the eighteenth century the expanding Atlantic economy and trade with India and China were also serving Britain well. The mercantilist colonial empire Britain aggressively built, augmented by a strong position in Latin America and in the transatlantic slave trade, provided raw materials like cotton and a growing market for British manufactured goods (see Chapter 17). Strong demand for British manufacturing meant that British workers earned high wages compared to the rest of Europe.

Agriculture also played an important role in bringing about the Industrial Revolution in Britain. English farmers were second only to the Dutch in productivity in 1700, and they were continually adopting new methods of farming. The result, especially before 1760, was a period of bountiful crops and low food prices. Because of increasing efficiency, landowners were able to produce more food with a smaller workforce. By the mid-eighteenth century, on the eve of the Industrial Revolution, less than half of Britain’s population worked in agriculture. The enclosure movement had deprived many small landowners of their land, leaving the landless poor to work as hired agricultural laborers or in cottage industry. These groups created a large pool of potential laborers for the new factories.

Abundant food and high wages in turn meant that the ordinary English family no longer had to spend almost everything it earned just to buy bread. Thus the family could spend more on manufactured goods — a razor for the man or a shawl for the woman. They could also pay to send their children to school. Britain’s populace enjoyed high levels of literacy and numeracy (knowledge of mathematics) compared to the rest of Europe. Moreover, in the eighteenth century the members of the average British family were redirecting their labor away from unpaid work for household consumption and toward work for wages that they could spend on goods, a trend reflecting the increasing commercialization of the entire European economy.

Britain also benefited from rich natural resources and a well-developed infrastructure. In an age when it was much cheaper to ship goods by water than by land, no part of England was more than fifty miles from navigable water. Beginning in the 1770s a canal-building boom enhanced this advantage. Rivers and canals provided easy movement of England’s and Wales’s enormous deposits of iron and coal, resources that would be critical raw materials in Europe’s early industrial age. The abundance of coal combined with high wages in manufacturing placed Britain in a unique position among European nations: its manufacturers had extremely strong incentives to develop technologies to draw on the power of coal to increase workmen’s productivity. In parts of the world with lower wages, such as India and China, the costs of mechanization at first outweighed potential gains in productivity.

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A final factor favoring British industrialization was the heavy hand of the British state and its policies, especially in the formative decades of industrial change. Despite its rhetoric in favor of “liberty,” Britain’s parliamentary system taxed its population aggressively. The British state collected twice as much per capita as the supposedly “absolutist” French monarchy and spent the money on a navy to protect imperial commerce and on an army that could be used to quell uprisings by disgruntled workers. Starting with the Navigation Acts under Oliver Cromwell (see Chapter 15), the British state also adopted aggressive tariffs, or duties, on imported goods to protect its industries.

All these factors combined to initiate the Industrial Revolution, a term first coined by awed contemporaries in the 1820s to describe the burst of major inventions and technical changes under way. This technical revolution went hand in hand with an impressive quickening in the annual rate of industrial growth in Britain. Whereas industry had grown at only 0.7 percent between 1700 and 1760 (before the Industrial Revolution), it grew at the much higher rate of 3 percent between 1801 and 1831 (when industrial transformation was in full swing).1