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What were the different paths to industrialization followed by Britain, France and Germany?

There have been and are many paths to industrialization between countries. Britain’s transition to capitalist industrialization was not at all typical of the European experience.

Thus Patrick O’Brien and Caglar Keyder, suggest that the British experience is ‘initial’ rather than ‘normal practice’, especially with regard to the relative size and productivity of agriculture

They state that ‘Economic theory lends no support to assumptions that there is one definable and optimal path to higher per capita incomes and still less to the implicit notion that this path can be identified with British industrialization as it proceeded from 1780 to 1914’.

Instead of being presented as the paradigmatic case, the first and most famous instance of economic growth, the British Industrial Revolution is now depicted in a more negative light, as a limited, restricted, piecemeal phenomenon, in which various things did not happen or where, if they did, they had far less effect than as previously supposed.

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Instead of stressing how much had happened by 1851 (whatever the qualifications), it is now commonplace to note how little had actually altered (whatever the qualifications)

Recent research has stressed the gradualness of change when seen from a macroeconomic standpoint and has also been tending to argue that the ‘industrial revolution’ was not merely economic, but social, intellectual and political too.

The change in emphasis in historiography has been from national aggregates and sectoral analysis to regional variations and uneven development, from the few large and successful businessmen to the many small and inept entrepreneurs.

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The historiography of the British Industrial Revolution has moved away from viewing the late eighteenth and early nineteenth centuries (particularly 1780-1815) as a unique turning point in economic and social development.

For example, A.E. Musson’s survey, The Growth of British Industry criticizes what he regards as ‘the general interpretation presented in most textbooks’, namely that ‘the industrial revolution had taken place by 1850, that the factory system had triumphed.

He stresses the extent to which consumer goods industries remained handicraft industries, located in small workshops; the degree to which, as shown in the 1851 Census, patterns of employment and occupational structure remained dominated by traditional craftsmen, labourers and domestic servants; and the very slow rate at which factories spread and steam power was diffused.

He argues that ‘There are good grounds for regarding the period 1850-1914 as that in which the Industrial Revolution really occurred, on a massive scale, transforming the whole economy and society much more deeply than the earlier changes had done.’

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Since the 1980s, studies of the Industrial Revolution have borne out its gradual pace of change. New statistics have been produced which illustrate the slow growth of industrial output and gross domestic product.

Productivity grew slowly; fixed capital proportions, savings and investment patterns altered only gradually; workers’ living standards and their personal consumption remained largely unaffected before 1830 and were certainly not squeezed.

Research by Williamson, Knick Harley and Feinstein has revealed the fact that Britain passed through a turning point around the 1820s. Growth in National Income was much lower before than after that date.

There was a doubling in the growth rate of industrial production too. Feinstein’s estimates of the rate of capital formation shows that it drifts upwards from then, as does the rate of capital accumulation and the growth rate of capital invested per worker employed in industry. The turning point was dramatic in the standard of living.

The adult, male, working class real wage failed to increase between 1755 and 1819, but from 1819 to 1851, it rose at an annual rate of 1.85%, according to estimates in 1983 by Lindert and Williamson. Among the early industrializes, France remains the most aberrant case.

That fact gave rise to a large literature devoted to explanations of the supposed ‘backwardness’ or ‘retardation’ of the French economy. The dominant tendency in the Anglo-American literature on modern French economic growth was to treat it in this context.

Indeed, in what might be regarded as the founding account of that development, Sir John Clapham went so far as to muse that ‘it might be said that France never went through an industrial revolution.’ What has impressed economic historians as they have looked at nineteenth century France is the failure of some dramatic breakthrough to appear, the absence of a marked acceleration in growth?

The well-known characteristic of French industrialization was a relatively slow expansion of large-scale capital-intensive forms of production. Investment in the advanced sector proceeded at a leisurely pace, there being no clear acceleration until the 1850s or 1860s and there was a correspondingly limited increase in new employment outlets.

In 1851, at the first industrial census, what the French call la gratide Industry occupied 1.3 million workers, or less than 25% of the industrial labour force. More in evidence were the ‘proto-industrial’ forms.

The persistence of domestic workshops and hand tool methods until at least mid-century, if not beyond, was common to a whole variety of industries, with urban artisans tending to work full-time on the higher quality goods, leaving the less skilled tasks to the peasant worker.

Even in the more mechanized industries, large numbers of mines, iron works, spinning mills and weaving sheds were small by British or German standards, located in isolated rural areas and dependent on labour which continued to work part-time in agriculture. Unlike Britain or France, capitalist industrialization in Germany had to wait the formation of a well-defined area, a unified Germany, before it could commence.

Before the mid-nineteenth century political fragmentation, whether within the Holy Roman Empire or the German Federation, was reinforced by the economic conditions numerous customs barriers, poor communications network, primitive roads and the reduction of economic activity to isolated islands that were separately linked to regional markets. As Sheehan has pointed out, there was nothing particularly German about these economies.

R.C. Trebilcock has argued that the German pattern of development was very different from that of the British ‘prototype’. Britain had faced an industrialization of low cost, a technology of low capital intensity, and had acquired both by recourse mainly to the savings – personal, familial, or local – amassed by entrepreneurs and their thrifty reinvestment of profits.

Bank participation was usually employed, at most, in the provision of short-term working capital and rarely in connection with long-term capital formation or share ownership. Banks were, in contrast, more important for German industrialization.

Indeed Germany was the principal case of ‘moderate backwardness’ for some scholars, that case in which banks supply crucial financial and entrepreneurial inputs. Unlike Trebilcock, others have found close affinities in the British and German paths of industrialization.

Both were concentrated within a relatively brief and clearly marked period of years. Both were based on the classical sectors of coal, iron, engineering, and, to a lesser extent in the German case, textiles.

The development of the railways triggered a greater range of ‘backward’ and ‘forward’ linkages in Germany (on the metallurgical and mining industries, the employment structures and the rate of capital formation) than the industry had done in England, at about the same periods of the nineteenth century.

German industrialization was also distinctive on account of the role performed by cartels. Cartels were groups of firm that combined to control prices and markets. They either lined firms making the same range of products or those that engaged in different stages of the production of the same products.

They began to emerge from the late 1870s, and in close collaboration with the biggest banks, gave German industry a degree of concentration in the spheres of capital and labour that was unmatched after where else except in Imperial Russia. They promoted rapid technical progress, a high rate of capital formation and an unrivalled supremacy in the export of manufactured products.

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