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Economic History

The Industrial Revolution

Business I 210 words Free to read

The Great Escape

Between 1760 and 1840, Britain broke the Malthusian trap. Productivity outran population, and per-capita income surged: $\approx \$1{,}000in1700toin 1700 to\approx \$2{,}700$ in 1870.

The escape bundle

IngredientWhy it mattered
Cheap coalEnergy stopped competing with food
Steam engineConverted coal into mechanical work
Textile machinesFirst mass mechanisation
InstitutionsPatents and property rewarded risk

The factory system replaced putting-out, centralising powered machinery. Agriculture fell; manufacturing rose. Britain became the first majority-urban nation, sparking the demographic transition as death rates fell before birth rates.

Why Britain First?

Robert Allen's thesis explains the puzzle: high wagescheap energyincentive to mechanise\frac{\text{high wages}}{\text{cheap energy}} \Rightarrow \text{incentive to mechanise}.

British wages were high and coal was cheap. Substituting labour with coal-powered machines was profitable in Lancashire, but not in low-wage Bengal, where machines would never pay back.

Key Contrasts & Pitfalls

ConceptDefinition / Reality
Great DivergencePomeranz's debate on China vs Britain
PitfallIt was not British genius, but price structures

Joel Mokyr stresses the industrial Enlightenment: networks linking science to craft. No monocausal theory works; energy, wages, and institutions aligned for a contingent revolution.

Why Britain, Why Then?

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Economic History