The impact of the first industrial revolution on the British economy

The unprecedented industrial revolution that broke out in Britain in the second half of the eighteenth century changed the course of human history. This revolution is not only a technological revolution, but also a great leap forward in social and economic development. It played a major role in the development of the British economy, which enabled the United Kingdom to greatly improve its status in the world economy and became the hegemon of the world economy at that time. This article makes a superficial analysis of the impact of the first industrial revolution on the British economy.

  1. Urbanization has promoted the development of the British economy

Urbanization refers to the change in the place of residence of the population, that is, from rural residents to urban residents, the migration of population to cities caused by industrialization, and the process of population concentration caused by the “aggregation benefits” of industry. The first industrial revolution initiated the United Kingdom Urbanization is an accelerator of British urbanization. In turn, urbanization has promoted the industrial revolution in Britain and has had a significant impact on the development of the British economy.

Urbanization promoted the process of British industrialization. The progress of urbanization concentrates production, service, housing, consumption, etc. in the same area, thus producing huge social benefits. When commenting on London, Engels pointed out: “Such a city is a very special thing. This kind of large-scale concentration, 2.5 million people gathered in one place, has increased the power of these 2.5 million people by 100 times.”

With the development of British urbanization, in the 80 years before and after the Industrial Revolution, the labor productivity of British workers increased by 20 times, and the productivity of cotton spinning mill workers was 266 times higher than that of hand-spinners; British coal production and cotton processing were equivalent to half of the world’s ; British industrial output value accounts for 51% of the entire world, import and export trade accounts for 25%, and railways exceed 10,000 kilometers.

In short, the progress of urbanization accelerated the process of British industrialization, made Britain the world’s top industrial power in the mid-19th century, and promoted the further development of the British capitalist economy.

  1. The widespread use of the pound sterling after the first industrial revolution

Before the Industrial Revolution, the British still used gold as the main basis for valuing and trading commodities, so the pound sterling at that time was just a kind of paper money, a unit of recording gold and used to exchange gold coins. After the first industrial revolution, Britain’s national strength grew rapidly, and the status of the pound sterling also increased, gradually replacing gold and becoming the world’s currency. At this point, the international reserves of central banks in many countries have been changed to British pounds instead of gold, and 90% of international trade uses British pounds.

In 1844, the United Kingdom also promulgated the “Bank of England Regulations”, and the Bank of England became the only bank capable of issuing British pounds. In addition, the Bank of England, as the central bank, provides financial support to other banks in times of difficulty, maintaining the stability of the British economy and the firm position of the pound sterling, thus making London the world’s financial center and contributing to Britain’s hegemony in the world economy.

  1. The Industrial Revolution made Britain the largest creditor nation

Encouraged by the great achievements of the first industrial revolution, Britain opened its domestic market to world products. Britain’s imperialism is in the form of a vast colony, a large number of financial assets, and a major capital exporting country. It has the status of a net creditor country—accounting for about 50% of the world’s capital output. Therefore, after the first industrial revolution, Britain became the world’s largest creditor country.

  1. The first industrial revolution prompted Britain to have a high industrial output value

The productivity caused by the Industrial Revolution has made a huge leap. In the 80 years before and after the Industrial Revolution, the British industrial output value accounted for 51% of the entire world, import and export trade accounted for 25%, and the railway exceeded 10,000 kilometers.

Moreover, after the Industrial Revolution, the proportion of agriculture in the British national economy dropped to 21%, and the proportion of rural population in the national population dropped from 70% in the 18th century to 22% in 1841, and only 14.2% in 1851, to 1850. The urban population has basically exceeded 50% of the country’s total population, and Britain has changed from an agricultural country to an industrial country. It can be seen that Britain instantly transformed from an agricultural country into a world industrial power after the first industrial revolution, thereby indirectly promoting its economic development.

In summary, the first industrial revolution had a huge impact on the British economy. It enabled the urbanization of the UK, made the pound widely used, made the UK the world’s largest creditor country at the time, provided the UK with high industrial output value, guided the UK from an agricultural country to an industrial country step by step, and strengthened the UK’s international presence in all aspects. Economic status has promoted the development of the British economy.