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Impact of Industrialisation on the Development of Market

Read this article to learn about the impact of Industrialisation on the development of market!

Production in a traditional society was done at the local level of the community or the village.

The distribution of these products was also local, and the jajmani system is one of the ways in which it was done. In England too, villages produced goods which were consumed locally.

Industrialisation increased the production of goods which could no longer be sold/exchanged locally as these were far in excess of the local needs.

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For example, all cloth manufactured in the textile industry in Surat is not consumed locally. Much of it is sent out of the region to different places.

We have seen how the use of money was able to overcome problems of trade and exchange. The market too, performed an important role in this regard. A market is a place where goods and services are exchanged. Modern markets may not be physical; they can be notional and we can see how goods and services are traded. There is no centralised place for this; exchange can take place through advertisements in the print media, electronic media, the Internet and so on.

Markets therefore, have a wider reach. Sociologically, one of the most important features of markets today is that they integrate societies by breaking down the isolation of villages and bringing them within the ambit of the wider society. For instance, agricultural products manufactured in different corners of the country find their markets in far-off urban centres. Similarly, industrial goods produced in one place are sold all over the country.

A word cloud of market analysis related items

Image source: colourbox.com/preview/8576970-word-cloud-market-analysis.jpg

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The market has national and international features. Initially, the borders of countries are drawn and their markets operate within those boundaries. The exchange of goods in the market integrates different parts of the country into a unified whole. One can trace the growth of nationalism to the integrating role of the market.

As industries and manufacturing start expanding rapidly, the boundaries of the nation-state may tend to become too restrictive. Hence, new markets are sought which are outside the national boundaries. At one time, such moves were accompanied by force and led to colonial conquests by the industrialised nations. British colonialism was extended after it underwent the industrial revolution.

Since Britain, and more specifically England, is the mother of the Industrial Revolution, it was also the first country to colonise non-industrialised countries in different parts of the world. The other colonising countries like France, Portugal, the Netherlands, etc., were not industrialised when they embarked on their colonising ventures.

Hence, they had influence only in the port cities because they were interested in trade rather than increasing their markets. After these countries underwent industrialisation, they started colonising whole countries. The objectives were, firstly, to use these colonies as suppliers of raw materials for industry and, secondly, to use them as markets for industrial products from the colonising country.

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Such ventures were imperialist in nature because they succeeded primarily by exploiting the colonised country for their own gains. After WWII, there were rapid changes globally, as many of the countries including India broke away from the yoke of colonialism.

In modern times, international trade is considered an important aspect of industrial development. Trade can be in terms of goods and services such as manpower. We also find the developed countries trying to exert control on the exports of the less developed countries, even today.

They have dominated international regulatory bodies such as the General Agreement on Tariffs and Trade (GATT) and now the World Trade Organization (WTO). Many of the less developed countries find the terms of trade loaded against them. At times, the developed countries lay down conditions which are based less on economic realities than on socio-political factors.

Hence the market itself may not be a perfectly egalitarian system but, given the fact that despite its limitations it is the best institution for exchange of goods and services, it survives. There are checks and balances in the markets, nationally as well as internationally.

At the national level, the state plays an important role in regulating the markets. This could be in the form of framing laws that prevent any single private producer from monopolising the markets. In India, the Monopolies and Restrictive Trade Practices Act, 1969 (replaced by the Competition Act, 2002, with effect from 1 September 2009), tried to regulate the growth of individual or family- based monopoly control of the market through its products.

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