Economic History of Europe, Essay Example

Insofar as the state has played a fundamental historical role in politics since the treaty of Westphalia, which explicitly declared a notion of political sovereignty according to the national state (where here sovereignty means the possibility for the state to make autonomous political decisions), the development of various economic policies have found themselves inseparable from the basic state model. That is to say, economic activities, in the form of, for example, trade, find themselves closely bound and even determined by the state model, whereby individual states decide upon their endemic laws regarding all facets of social life, including the economic. This is not to say, however, that all states are in themselves wholly independent entities, existing apart from each other: the state exists in relation, by definition, to other states that bear the same status of autonomy, and therefore together a community emerges which decides on a common policy. In terms of economic development, therefore, states act in a manner that select the particular economic policies that are pursued; at the same time, the choice of particular economic policies can be interpreted as means by which a given state asserts its power and hegemony in relation to other states.

It is exactly in such a framework that it is possible to understand the phenomenon of economic development in terms of industrialization. Industrialization represents a certain double-edged sword in regards to economic development. Firstly, industrialization from the perspective of the state means that the state has the basic technological capabilities, alongside social capabilities (i.e., a sufficient workforce) to embark upon the program of mass production that industrialization defines. Certainly, as Chang notes, various theories, such as neoliberal theory, interrogate the extent to which “the public nature of the motivations of the agents, such as politicians and state bureaucrats, that comprise the state.” (54) In other words, perhaps it is a mistake to view the state as a homogeneous entity that possesses a consistent policy: each state, especially in terms of economic sectors, is comprised of individuals that may possess their own particular goals. Nevertheless, the state operates as a certain basic framework that allows for the movement to mass production that industrialization entails; furthermore, such a potential, irrespective of the desires of the particular “agents” involved in such a mechanism, means that markets have become open so that there is a demand for the goods that are produced by these “agents”: there is a general framework that allows industrialization to take place, a framework closely related to the parameters established by the state model. In this regard, the state plays a crucial role, not only as a centralized authority that decides upon economic policy, but also according to the state’s existence amongst a community of equally sovereign states: such a scenario allows for the opening of various markets, whereby supply and demand themselves become possible. Such an opening allows for the very emergence of “agents”, which apparently possess their own autonomous desires.

In essence, the state functions as a crucial framework in which economic practice can be carried out. This is both a framework that exists on a particular level, i.e., a particular country possesses certain resources and also laws that allow for a certain type of economic production, such as in Great Britain with the advent of industrialization. In this particular case of Great Britain, both the country’s state policy which allowed it to be successful (i.e., its promotion of privatized industrialization (Allen, 364)) and its particular relationship to other states (i.e., Britain possessed a dominant advantage over other states because of its vast colonies (Allen, 364)) led to its particular development in the form of industrialization.

In this regard, the state provides a certain pre-condition for the success or failure of a given economic practice. In terms of industrialization, any possible achievements gained by the latter had to be prefaced by a strong state model that could supply the necessary materials, work-forces and general policy laws that would allow such a type of economic production to take hold and be successful. Namely, the state sets the basic guidelines upon which particular forms of economic production develop themselves: at the same time, that many states exist means that there are a plurality of states which are open to a relationship in terms of economic trade: in this sense, they are all equal on the basic level of sovereignty in regards to economic practice. History thus demonstrates the crucial importance of the state as a particular political model to equally particular forms of economic development.

The industrial revolution certainly represented a radical shift in the constitution of the daily lives of the workers who existed as labor-power that could contribute to the realization of the demands of mass production. Questions of the potential increase of living standards that are harkened by this revolution, however, remain subject to debate in the academic literature. This is obviously because of the relativism that is inherent to any notion of living standards: does an increased quality of life merely mean that the worker is granted more capital (i.e., money) than he or she had earned in a non-industrial setting? Certainly, there are increases in wages and even the development of the wage system itself in its modernized form that is consistent with the phenomenon of industrialization. However, if one measures quality of life only in terms of acquired capital, and not, for example, in terms of the alienation of labor, to use a Marxist term, that is experienced in industrialization, such a premise remains debatable. This concept of alienation means that in previous economic systems, workers were closely tied to what they produced and had a direct contact with the services they provided: workers, for example, would offer their various skills, as a blacksmith, as a farmer, and engage in a direct economic transaction whereby the goods they produce in an intimate manner are then exchanged for others. In the context of industrialization, such a situation irrevocably changes. The worker is merely, as it were, a cog in the machine, working on the assembly line, mass producing goods for a buyer who is completely unknown: here, the quality of the work, that is, the workmanship involved in producing a good, is alienated by the worker’s participation in a monolithic machinery (a true machinery, as such industrialization is only made possible by technological advancements), so that they are entirely separated from seeing the results of their production. Such production is instead substituted by a steady wage. Hence, from such a perspective that gauges the meaning of a quality life, the academic literature suggests that there is a clear shift in living standards, according to which industrialization did in fact usher in an age in which “there were significant rises in living standards across Europe.” (380) Namely, the heterogeneity of a system in which workers are fundamentally subject to possible vicissitudes in the market – i.e., a given worker who produces his or her own goods, is nevertheless tied to the existence of another worker, who will also desire these goods – is now replaced by a greater system, wherein the worker is guaranteed steady employment, irrespective of such local contingenices: namely, the worker in industrialization has a steady job, working in a certain location for a precise period of time and receiving a distinct number of funds for their service. From such a perspective, it certainly appears the case that quality of life of workers embroiled in industrialization improved. However, can quality of life merely be reduced to this apparent steadiness of employment? Certainly, if one considers living standards not only as a measure of how much capital is accrued, but also in terms of the aforementioned possible alienation to labor, such living standards are not entirely satisfied by the industrial revolution. In a second crucial sense, the apparent stability provided by the industrialization of production, which, as a byproduct, also entails the industrialization of the work force, is perhaps nothing more than a myth. For, although workers may be granted a steady employment by the particular industrialized system, this does not mean that this system itself is not subject to radical change. Whereas historically, industrialization was somewhat consistent, when we take a broader and even contemporary perspective, we see that industrialization which began in the West has now migrated to other regions of the world, where the work-force is fundamentally cheaper: namely, the success of industrialization does not depend upon giving workers a high standard of living, but rather that this success is entirely dependent upon the extent to which the standard of living of the workers does not render industrialization unprofitable. Historically, for example, in the case of Great Britain, there were clear improvements in standards of living in terms of stabilities engendered by a steady wage; however, from a broader perspective, where industrialization continually seeks out cheaper work forces, this demonstrates that such living standards are ultimately only the by-product of capital’s ability to re-produce itself at a profitable level.

Current academic literature has approached the phenomenon of the industrial revolution from a diverse number of perspective, such as the economic basis of this revolution in terms of its relation to concepts of supply and demand, and the greater transition such a revolution demarcated in the shift towards what has become to be known as a market economy. In the case of the former, supply and demand, as they are currently understood in economic theory, may be seen as themselves being created by the industrial revolution. Hence, theorists such as De Vries have proposed to re-term the industrial revolution as an “industrious revolution”, whereby the very parameters of supply and demand were created. As De Vries notes, this so-called industrious revolution “increased both the supply of marketed commodities and labor and the demand for market-supplied goods.” (249) Namely, from this perspective, before the industrial revolution supply and demand existed in radically different forms that how we understand them today. Supply and demand, in the pre-industrial period, can be understood in a radically minimal form: supply and demand were fundamentally intertwined, so as to render them indistinguishable. Certain goods were also in demand, therefore their supply became critical, however in a sense in which there existed an entirely unilateral relationship: it was only the problem of supplying necessary goods that was at stake in the pre-industrial revolution period. Rather, the concept of “industrious revolution” means that an entire category of goods were created that were perhaps not even in demand, i.e., they were not necessary to the everyday survival of the social group. For example, various products of the industrial revolution, such as textiles, clearly presented a practical and pragmatic value to society; however, society did not necessarily need them, as traditional forms of living had proved themselves historically adequate to realizing survival. Rather, such goods as produced by the “industrious revolution” simultaneously transform the very meaning of supply and demand: goods become in demand also because of the new social normativities that this revolution creates. Namely, certain products become desirable for the populace, according to the shift in social normativity: there is no a priori necessity to these goods, but insofar as they become more easily available, a shift occurs in the possibility of acquiring these goods. Hence, from this perspective, supply and demand is created by the industrial revolution, as it begins to present products in terms of this binary relation, whereby mass production of goods must also create their own market for the acquisition of these goods. In this regard, the question as to whether the industrial revolution was demand-led or supply-led is moot, to the extent that this “industrious revolution” engendered the concepts of supply and demand as we currently understand them.

In this sense, the question concerning the extent to which the industrial revolution demarcates the transition to a market-based society may be more clearly explained, as this revolution creates the very concept of market as we currently understand it. Namely, with the industrial revolution the market becomes the dominant concept through which we think our social existence: in previous social paradigms, the market was only a segment of this existence. Hence, dominant views on the industrial revolution, as Temin notes, tend to make two distinct claims: the “revolution was a broad change in the British economy and society”, whereas, on the other hand, “the Industrial Revolution (is) the result of technical change in only a few industries.” (63) According to the question of the shift to a market society engendered by the Industrial Revolution, both of these common interpretations seem to miss the point: the revolution created the market as we currently understand it, by facilitating production and therefore supply, and therefore needing a correlative concept of demand that ensures such supply is ultimately not superfluous. Certainly, in both of these interpretations, such a motif is present: for example, the technical change of the second interpretation clearly demarcates the potentiality for mass production that allows supply and demand to be problematic, i.e., there is an over-abundance of supply, whereas, the broader view, that a significant change occurred with the revolution, is demonstrated by this emerge of the market as we understand it as such. Accordingly, in order to reconcile these two interpretations what is required is a comprehension of the extent to which the Industrial revolution itself actualized the very notion of a market based economy, by providing a radically different notion of the market, whereby supply can exist in an excess (i.e., there is no shortage of goods, there is no struggle for survival), and precisely because supply takes the form of an excess it also becomes necessary to create a market for demand that makes this excess legitimate and not merely the production of waste by technological advantages. In short, such contemporary viewpoints, although they allude to such a notion, perhaps overlook the fact that the Industrial Revolution itself introduces the concept of the market as it is currently understood.

Works Cited

Allen, R.C., “Why the Industrial Revolution was British: Commerce, Induced Invention, and the Scientific Revolution”, Economic History Review, 64, 2, 2011, pp. 357-384.

Chang, Ha-Joon. “The Market, the State and Institutions in Economic Development”, Rethinking Development Economics, London: Anthem, 2003, pp. 42-60.

De Vries, Jan. “The Industrial Revolution and the Industrious Revolution”, The Journal of Economic History, Vol. 54, No. 2, pp. 249-270.

Temin, Peter. “Two Views of the British Industrial Revolution”, The Journal of Economic History, Vol. 57, No. 1, Mar. 1997, pp. 63-82.