Demand, Market and Govt. Support
The increase in demand and labour that a growing population supplied were crucial to the development of industrial capitalism; and substantial growth in population undoub- tedly took place over the century, from 5.83 million in England and Wales in 1701 to 9.16 millions in 1801.
In this course of affairs, although, at home, demand from the poorer classes undoubtedly led to increase in agricultural production and the transport industries which were linked to it, it was middle class demand that merits attention. There was a long history to this development, but it created a market for substantial rather than fine goods, in other words, those suitable for machine production. A rise in income before 1740 and a combination of rise of middle classes and growth of overseas market after 1740 gave a substantial scope to the market for industrial capitalism.
Large centers of production were controlled by the government. Government orders for munitions were of importance to the iron industry, wool and textile industries. The Navigation Act (initially passed in 1660), and related legislation, were important to the shipbuilding industry, since they required that trade with the colonies and carriage of goods from Asia, Africa and America could only be done on English ships. Government followed a protectionist policy of considerable scope (general import duties rising from 10% in 1698 to 15% in 1704 to 20% in 1747, 25% in 1759, 30% in 1779
and 35% in 1782. Most celebrated was the duty on corn imports, established by the Corn Law (initially passed in 1670) by a sliding scale, which varied from 25% of the home price to a minor charge when that price was particularly high.
After the period of spirited growth described above, industrial capitalism in Britain was consolidated in the mid nineteenth century, partly through participation in international construction of railways. Other emerging Industrial nations increasingly placed British production under severe competition after the 1870s, which is described as the beginnings of the Great Depression. This “depression” affected both agriculture and industry: the former as a result of the arrival of cheap grain from North America on British markets from the 1870s, and the latter because of competition from new industrializing nations.
Railways to Colonial Markets
The gradual development of steam-engine drawn railway lines in England after the first Darlington-Stockton rail was built (1825), substantially affected the iron and coal industries in Britain, which provided rolling stock, rail etc.
The railways contributed to “economies of scale”, because, for a variety of industries, they cut down the time taken for transport. If cotton had been crucial to the economy of industrial capitalism to the 1840s, it was coal and iron which led thereafter.
Much of the industrial expansion of this period was the consequence of the large amounts of capital generated during the early phase of the industrial revolution. Such capital inevitably flowed to railways, given their considerable attractions (the Stockton Darlington generated 15% interest on investment in 1839-41, and the Liverpool-Manchester, a 10% dividend in 1830). From the 1860, with increasing competition from European economies and the economy of the United States, the international position of British industrial capitalism declined. The consequence was the resort to underdeveloped and colonial markets which became increasingly important to the country by the end of the nineteenth century.
Modern Industrial Society and New Classes
Capital accumulation in the countryside and erosion of common communal rights led to significant class formation within the peasantry in most areas of Europe. All over Europe, the development of capitalism and modern class society meant the breakup of peasant societies, and the differentiation of the peasantry into classes ranging from the peasant petty bourgeoisie to the rural proletariat. More than anywhere else in Europe, the peasantry in Russia became responsive to political appeals and played a significant role in the overthrow of capitalism and the establishment of the socialist regime. With the development of capitalism in Europe that rural conflicts became subsumed into the fundamental dichotomy of Capital and Labour, even as peasant agriculture remained alive and the landlords remained privileged strata of European societies.
This entire process of social restructuring that ensured a smooth and profitable integration of the landed aristocracy into the capitalist economy and bourgeois society was helped along by the political victory of the land-owning gentry, for example, in the ‘Glorious Revolution’ after the English Civil War, followed by the land enclosures of the 18th century. Only from the 1880’s that we can seriously speak of the declining wealth or political influence of the landed gentry in England. Landlordism actually vanished in Russia with the destruction of capitalism itself.
The second half of the nineteenth century can be characterized as the age of the bourgeoisie in Western Europe, although in the eastern parts the bourgeoisie having attained its own identity and wealth, was yet to exert its hegemony. Throughout Western Europe the wealthiest and the most influential section of the bourgeoisie were now bankers, factory owners and mine owners, i.e. capitalists particularly after the 1850’s. The merchants lost their eminence as their class gained hegemony. Commercial bourgeoisie invested in urban property and land, participated as actors on the political stage.
The virtues of the capitalist ethos- individualism, thrift, hard work, competition, use of money power, family, were values basically promoted by middle class, and came to dominate industrial society as a whole. The bourgeoisie also included the professional salaried component that grew with the growth of bureaucracies, the sectors of health and medicine, law and order, education, publishing, printing and mass media, and culture as an industry, with a new system of patronage linked to mass production.
This entire bourgeoisie shared a critical distance from the landed aristocracy and the monarchies in their countries as they grew in strength and significance, and despite the clear differentiation among themselves were united in their opposition to privilege and despotism. Social democracy and the women’s movement, which questioned the status quo, were born as a result of these.
Numbers increased rapidly with the expansion of services of various kinds under capitalism: Retailing, marketing, distribution, banking and finance. This led to emergence of lower middle class. The lower middle class, though highly stratified, can be divided into two main groups – the classic petty bourgeoisie of shopkeepers and small businessmen, and the new white-collar salaried occupations, mostly clerks but also commercial travellers, schoolteachers, and certain shop assistants.
They stood for the broad features of the capitalist economy, strongly defended the right to private property and their goals were to aspire to bourgeois status and climb higher in the social ladder. They did not agitate to overthrow the bourgeois social order or to challenge the right to private property, even as they suffered the consequences of increasing concentration of production and trade, and lost out badly in the ensuring competition. In the labour market too their situation was precarious.
Industrialization may have reduced the barriers between the landed classes and the wealthy middle classes, but it sharpened the differences between the middle class and the labour class. This is one of the reasons for their emerging as a political and social class despite their varied composition. The city and social life reflected the strong division of the rich and poor. They had different spaces in the city to live in, and the amenities and the facilities were quite different.
The industrial revolution destroyed the traditional world of the new factory worker. The new worker was now entirely dependent on a cash wage, subjected to a totally different work rhythm dictated by the factory discipline and the machine. Working conditions were terrible. The new industrial working class bore the brunt of the early industrial growth. Long hours of work (15-16 hours, later 12 hours), unending grind and terrible behaviour by the supervisors often led to series of spontaneous worker riots.