Industrialization followed different rhythms and patterns according to the different states, but it had implicit consequences that affected everyone in general.
- The agrarian society was replaced by an industrial one. Industry and services concentrated most of the active population, concentrated in cities rather than in the countryside.
- Both industrial and agricultural production increased enormously, eliminating famines and multiplying consumption.
- The population grew at a hitherto unknown rate and was subject to great mobility, leading to large migrations.
- Capitalism underwent notable changes, tending towards business concentration, banking and the Stock Market acquired more and more prominence, giving rise to financial capitalism.
- The economy became more and more global.
Factories, new centers of power
The appearance of the factories was a complete revolution and had consequences:
- Industrial activities were concentrated in certain places: industrial regions were created (in the center of England, in the Ruhr area, in Saxony, in Lombardy …) that led the economic growth of the states.
- The way of working was modified: each worker specialized in a single task in the production process, which was called the division of labor. Each worker had a fixed schedule and had to work at the rhythm of the machine.
- Productivity increased: workers were able to make more pieces than a craftsman in the same time.
- The prices of the products fell: with so much supply (high productivity) and so much competition (many companies), prices fell trying to attract buyers.
The industrialized industries
The UK led the industrial revolution and economic growth thanks to advances in two main sectors, the textile industry and the steel industry.
Textile industry
The cotton textile industry was the most important in the United Kingdom at the beginning and in which technological transformations took place the fastest. The cotton has been considered the leading sector of the industrial revolution given its size and its ability to carry over other sectors. Cotton replaced the wool fabrics, predominant in previous centuries, and the majority of British production went abroad, thus strangling textile production in other countries. The British textile industry was successful thanks to four new machines:
- Spinning Jenny (1764) dramatically increased the amount of yarn that one person could produce per day.
- Water Frame (1765) made it possible to produce cotton strong enough to be used as a warp.
- Spinning mule (1775) made it possible to make a new fabric that was much smoother and finer.
- Power loom (1784) increased productivity definitively. With these looms powered by the steam engine, an enormous quantity of textiles could now be made.
Steel industry
The iron industry reached a great development in the middle of the 19th century. The main innovation was the new coking coal (or mineral coal) smelting process, which was a very abundant type of coal in the UK. The use of charcoal (from wood) to melt iron was thus abandoned, which was the type of charcoal that had traditionally been used and generated poorer quality metals (in addition to the fact that wood was scarce in the UK). In 1783, the puddling process was invented to obtain quality refined iron ingots on a large scale. Modern blast furnaces were built and the demand for and production of iron multiplied. This material was used to make machines and tools. In Spain, the largest company in the country was Altos Hornos de Vizcaya (AHV).
Revolution in transportation
The new transport, faster, safer and with greater load capacity, had a strong economic and social impact.
- They promoted the development of industries such as mining, metallurgy and iron and steel and the appearance of new jobs, such as machinists or stokers.
- Trade developed as crossing times and transportation costs were reduced, and travel was favored.
- They promoted the specialization of the global economy. Industrialized countries specialized in the production of manufactured products (which they then exported) while non-industrialized countries and colonies were dedicated to selling raw materials to industrial countries.
- They modified daily life. They made it possible to improve the diet, by being able to transport perishable food, and facilitated emigration.
Liberalism and capitalism
Parallel to the industrialization process, a new economic doctrine, liberalism, spread throughout the Western world. It was based on the theory put forward by the Scotsman Adam Smith (1723-1790) in his work The Wealth of Nations (1776). For this thinker, economic activity should be based on:
- economic freedom to create businesses, hire workers, and set conditions and prices for products. Quite the opposite of the guilds that existed during the Middle Ages and the Old Regime.
- the State should not intervene in the economy, because it adjusted naturally through the action of the so-called invisible hand of the market. Smith believed that the law of supply and demand was responsible for regulating the economy, setting prices and wages fairly: if there was much supply of products or labor and little demand, prices and wages would decrease; if supply was low and demand high, prices and wages would rise.
- the division of labor so that each worker specialized in a phase of the production process, since in this way production and productivity would increase.
At the end of the 19th century, new systems were applied to increase production:
- the engineer Frederick W. Taylor created Taylorism. The production process was divided into small tasks, the duration of which was timed. Each worker specialized in a task and received a salary proportional to the work performed.
- businessman Henry Ford used chain work in his automobile factories. Products were passed from one operator to another through an assembly line; This way, downtime between one task and another was avoided and the number of products produced by each operator increased.
The need to make large investments and the desire to control the markets led to mergers and agreements between companies. Thus arose different forms of business concentration:
- Cartel: it is an association of companies dedicated to the same branch of activity, which reach agreements to control production and distribution, set prices and share profits.
- Holding: is a group of companies controlled by one of them, which is the owner of most of its shares.
- Trust: it is a voluntary grouping of different companies to cover all stages of production of a product, in order to dominate the market and eliminate competition.
