11.11: History of Industrialization
- Page ID
- 213956
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)History of Industrialization
Industrialization was not a process that emerged, fully-formed in England in the eighteenth century. It was the result of centuries of incremental developments that were assembled and deployed in the 18th century. Early industrialization involved using water power to run giant looms that produced cloth at a very low cost. This early manufacturing didn’t use coal and belch smoke into the sky, but it initiated an industrial mindset. Costs could be reduced by relying on inanimate power (first water, then steam, then electricity), converting production to simple steps that cheap low-skilled laborers could do (Taylorism), getting larger and concentrated in an area (economy of scale), and cranking out large numbers of the same thing (Fordism). This is industry in a nutshell. The advantage of industry was that a company could sell a cheaper product, but at a greater profit.
As this mindset was applied to other goods, and then services, the world was changed forever. Places which had been producing goods for millennia suddenly (really suddenly) found themselves competing with a product that was far cheaper. Economist Joseph Schumpeter coined the term “creative destruction” to describe the process in which new industries destroy old ones. Hand production of goods for the masses began to decline precipitously. They quickly became too expensive in comparison to manufactured goods. Today, hand produced goods are often reserved for the wealthy.
A contemporary example of the industrial mode of production is fast food. Looking inside the kitchen of a fast food restaurant will reveal industrially prepared ingredients prepared just in time for sale to a customer. It is not the same process that you would use at home.
In the abstract, companies do not exist to provide jobs or even to make things. Companies exist to produce a profit. If changing the method of making a profit is necessary, then the company will do that in order to survive. If it cannot, then it will go away. For example, many companies today are highly diversified, for example Mitsubishi produces such unrelated products as cars and tuna fish. What is the connection between the two. They both produce profit.
Industrialization was not a process that emerged, fully-formed in England in the eighteenth century. It was the result of centuries of incremental developments that were assembled and deployed in the 18th century. Early industrialization involved using water power to run giant looms that produced cloth at a very low cost. This early manufacturing didn’t use coal and belch smoke into the sky, but it initiated an industrial mindset. Costs could be reduced by relying on inanimate power (first water, then steam, then electricity), converting production to simple steps that cheap low-skilled laborers could do (Taylorism), getting larger and concentrated in an area (economy of scale), and cranking out large numbers of the same thing (Fordism). This is industry in a nutshell. The advantage of industry was that a company could sell a cheaper product, but at a greater profit.
As this mindset was applied to other goods, and then services, the world was changed forever. Places which had been producing goods for millennia suddenly (really suddenly) found themselves competing with a product that was far cheaper. Economist Joseph Schumpeter coined the term “creative destruction” to describe the process in which new industries destroy old ones. Hand production of goods for the masses began to decline precipitously. They quickly became too expensive in comparison to manufactured goods. Today, hand produced goods are often reserved for the wealthy.
A contemporary example of the industrial mode of production is fast food. Looking inside the kitchen of a fast food restaurant will reveal industrially prepared ingredients prepared just in time for sale to a customer. It is not the same process that you would use at home.
In the abstract, companies do not exist to provide jobs or even to make things. Companies exist to produce a profit. If changing the method of making a profit is necessary, then the company will do that in order to survive. If it cannot, then it will go away. For example, many companies today are highly diversified, for example Mitsubishi produces such unrelated products as cars and tuna fish. What is the connection between the two. They both produce profit.