I am often grateful for the industrial revolution. Cheap, mass-manufactured goods, inexpensive food produced with modern farming methods, exotic fruits and fish shipped in from thousands of miles away, swift travel to far away places to experience new sights and sounds, good and (comparatively) painless dental treatment – none of this could have happened without that amazing episode in history which shifted societies from a pre-industrial to an industrial economy.
A modern hypermarket heaving with produce. (c) Coolcaesar
The fact that the advanced countries of the world are hurtling towards a post-industrial economy does nothing to lessen my gratitude. Without that revolution all the wonderful new developments in the offing – AI, VR, robotics, abundant and sustainable energy, medical breakthroughs and so on – could not have been dreamed up.
Anyone with an inkling of history, however, knows that the industrial revolution came with a cost; and that those who paid the cost were not, in the main, the ones who reaped the rewards. Poor working conditions maimed and killed; appalling urban environments blighted the lives of millions; rivers, atmospheres and wildernesses were polluted beyond recognition.
The painting “Manchester from Kersal Moor”, by William Wyld (1806-1889). Wikimedia
All this has fuelled the anger of many. But we should spare a thought for another group who were victims of the ruthless nature of early industrial capitalism: the capitalists themselves.
Some years ago, I was the history consultant on a project commissioned by a large European bank; I had been commissioned to develop digital educational resources on the history of business and finance. I looked at a number of case studies of commercial enterprises drawn from different periods in history, and one of these was a British mid-19th century shipyard.
Now, at that very time, the majority – I’ll repeat that, the majority – of seagoing ships were being built in British yards. It is an understatement to say that the shipbuilding industry in Britain was booming. Nevertheless, the shipyard which I focussed on went bust.
This was not unusual; most did.
Most of the cotton mills which powered the first stages of the industrial revolution failed. Most of the companies which powered the spread of railways failed. Even most of the banks which powered the financial liquidity which made possible the … – well, you get my point, don’t you.
History, it’s often said, is written by the winners. That was certainly true of the industrial revolution. The likes of Carnegie, Rockefeller and Ford had reams of books written about them. For each success, however, there were probably at least five failures: enterprising, hard-working, capable people who just could not make their businesses thrive.
The business world of the early 19th century was a ruthless jungle. The famous humanitarian factory owner, Robert Owen, and owner of the pioneering New Lanark cotton mill, once said that “bad money drives out good”. What did he mean by this?
Robert Owen’s New Lanark mill, now a world heritage site (Wikimedia)
He meant that competition was so fierce, and operating margins so thin, that the mill manager had little choice but to pay his people as little as possible and drive them as hard as possible. Their reputation for callous hard-heartedness may have been the natural disposition of some of them, but surely not all: most felt they had no choice but to squeeze as much profit as they could from their workforce. The alternative was almost certain failure for their enterprises.
And business failure in the early 19th century was not for the faint-hearted. In the days before limited liability it usually meant utter ruin, for oneself and one’s loved ones. This was the fate of many of the business owners of the early industrial revolution.
By Peter Britton