Eighteenth-century Europe, like other areas of the world, relied mainly on wood for energy, and human beings and animals continued to perform most work. This dependence meant that Europe and the rest of the world remained poor in energy and power. By the eighteenth century, wood was in ever-shorter supply. Processed wood (charcoal) was the fuel that was mixed with iron ore in the blast furnace to produce pig iron. The iron industry’s appetite for wood was enormous, and by 1740, the British iron industry was stagnating. Vast forests enabled Russia in the eighteenth century to become the world’s leading producer of iron, much of which was exported to Britain. As wood became ever more scarce, the British looked to coal as an alternative.

To produce more coal, mines had to be dug deeper and deeper and were constantly filling with water. Mechanical pumps, usually powered by animals walking in circles at the surface, had to be installed. At one mine, fully five hundred horses were used in pumping. Such power was expensive and bothersome. In an attempt to overcome these disadvantages, Thomas Savery in 1698 and Thomas Newcomen in 1705 invented the first primitive steam engines. Both engines burned coal to produce steam, which was then used to operate a pump. By the early 1770s, many of the Savery engines and hundreds of the Newcomen engines were operating successfully in English and Scottish mines.

In 1763, a gifted young Scot named James Watt (1736–1819) was drawn to a critical study of the steam engine. Watt was employed at the time by the University of Glasgow as a skilled craftsman making scientific instruments. In 1763, Watt was called on to repair a Newcomen engine being used in a physics course. After a series of observations, Watt saw that the Newcomen engine’s waste of energy could be reduced by adding a separate condenser. This splendid invention, patented in 1769, greatly increased the efficiency of the steam engine.

To invent something is one thing; to make it a practical success is quite another. Watt needed skilled workers, precision parts, and capital, and the relatively advanced nature of the British economy proved essential. A partnership in 1775 with Matthew Boulton, a wealthy English industrialist, provided Watt with adequate capital and exceptional skills in salesmanship that equaled those of the renowned pottery king, Josiah Wedgwood. (See “Individuals in Society: Josiah Wedgwood.”) Among Britain’s highly skilled locksmiths, tinsmiths, and millwrights, Watt found mechanics who could install, regulate, and repair his sophisticated engines. From ingenious manufacturers such as the cannonmaker John Wilkinson, Watt was gradually able to purchase precision parts. By the late 1780s, the firm of Boulton and Watt had made the steam engine a practical and commercial success in Britain.

The steam engine was quickly put to use in several industries in Britain. It drained mines and made possible the production of ever more coal to feed steam engines elsewhere. The steam-power plant began to replace waterpower in cotton-spinning factories during the 1780s, contributing greatly to that industry’s phenomenal rise. Steam also took the place of waterpower in flour mills, in the malt mills used in breweries, in the flint mills supplying the pottery industry, and in the mills exported by Britain to the West Indies to crush sugarcane.

Coal and steam power promoted important breakthroughs in other industries. The British iron industry was radically transformed. Originally, the smoke and fumes resulting from coal burning meant that coal could not be used as a cheap substitute for expensive charcoal in smelting iron. Starting around 1710, ironmakers began to use coke — a smokeless and hot-burning fuel produced by heating coal to rid it of water and other impurities — to smelt pig iron. After 1770, the adoption of steam-driven bellows in blast furnaces allowed for great increases in the quantity of pig iron produced by British ironmakers. In the 1780s, Henry Cort developed the puddling furnace, which allowed pig iron to be refined in turn with coke. Cort also developed steam-powered rolling mills, which were capable of turning out finished iron in every shape and form.

The economic consequence of these technical innovations was a great boom in the British iron industry. In 1740, annual British iron production was only 17,000 tons. With the spread of coke smelting and the impact of Cort’s inventions, production had reached 260,000 tons by 1806. In 1844, Britain produced 3 million tons of iron. Once expensive, iron became the cheap, basic, indispensable building block of the economy.

The significance of the railroad was tremendous. It dramatically reduced the cost and uncertainty of shipping freight over land. This advance had many economic consequences. Previously, markets had tended to be small and local; as the barrier of high transportation costs was lowered, markets became larger and even nationwide. Larger markets encouraged larger factories with more sophisticated machinery in a growing number of industries. Such factories could make goods more cheaply and gradually subjected most cottage workers and many urban artisans to severe competitive pressures. In all countries, the construction of railroads created a strong demand for unskilled labor and contributed to the growth of a class of urban workers.

Water travel was also transformed by the steam engine. French engineers completed the first steamships in the 1770s, and the first commercial steamships came into use in North America several decades later.