The Economy Goes Global: What Next?

Traditional revolutions not only have a start date, they have an end date as well. The American Revolution could be said to have ended with the defeat of the British army at Yorktown, Virginia, which left the thirteen former British colonies in North America free to form a new country, the United States. The French Revolution is said to have ended on November 11, 1799, when the French general Napoléon Bonaparte (Napoléon I; 1769–1821) seized control of the government, ending a decade-long experiment in democracy, a political system in which a majority of the people vote to determine the government and its policies. The Industrial Revolution is different. It represents major changes in the way people earn a living, where they live, and even in the way they view the world. The shift from a largely rural society to an urban, industrial one is still continuing, not only in the countries of Europe and North America where it started, but also throughout Asia, Africa, and South America.

The term Industrial Revolution has come to mean different things. It means the substitution of mechanical power, both engines and machines, for animal power (animals and humans). It means the shift from a rural agricultural society to an urban industrial society in which the most important economic activity is making things instead of raising animals or growing crops for food. The Industrial Revolution also represents the start of a new era of history in which people consciously seized control of their lives, using scientific methods to improve their conditions in every aspect.

The Economy Goes Global: What Next?: Words to Know

Automation:

A process designed so that one event follows another without active intervention; usually such processes involve machines that carry out tasks by design, rather than with human intervention.

Communism:

A form of government in which all the people own property, including both land and capital, in common.

Cottage industry:

A system in which skilled craftspeople manufactured goods, such as cloth, from their homes rather than in factories. This scenario was typical of the period before the Industrial Revolution.

Labor union:

A voluntary association of workers who join together to apply pressure on their employer for improved pay, shorter hours, or other advantages.

Microchips:

A tiny complex of connected electronic components produced on a small slice of material. Microchips are the basic building block of computers.

Service economy:

An economic system in which most people are engaged in helping or serving other people, rather than raising food or manufacturing products.

The substitution of machines for animals and humans

Substituting machines for animal power is one of the easiest aspects of the Industrial Revolution to understand. Starting in the 1700s, textile-making machines and steam engines began to perform work traditionally done by humans and animals. Machines did not replace humans—they were still needed to operate the machines and perform other tasks—but the modern mill or factory was quite different from the traditional family-run business centered in a cottage, or home.

The shift from cottage industry to twenty-first-century industry raises issues about how people feel about their work and the quality of their lives. The introduction of machinery certainly relieved the worker of hard labor, even drudgery, but many say machines also resulted in workers feeling alienated (set apart) from their work and being reduced to acting as parts of a bigger machine. But in the eighteenth century a worker seldom ventured far from his native village, whereas a modern worker conducts his life in a larger area and can travel the globe if he wishes.

The development of engines that rely on oil or coal for energy raises concerns about how long the energy supplies will last and what effect these fuels are having on the environment. The United States has already experienced a noticeable decline in its oil reserves and must import oil from abroad to keep its industrial economy running. Many scientists insist that the Earth is getting warmer as a result of the exhaust from millions upon millions of engines—not just cars, but also coal-burning electric generators and many other industrial machines—and that this so-called global warming could have disastrous environmental consequences.

The environment

Concerns about the impact of the Industrial Revolution on the environment, especially on the atmosphere, are far from new. In Britain, King Edward I (1239–1307) banned the burning of coal in 1272 in response partly to complaints about soot, a by-product of coal that filled the air and darkened the exterior of buildings. The term smog (a combination of smoke and fog) was first used in 1905 in London, England, to describe the unhealthy atmosphere.

In the middle of the twentieth century, the less visible pollutants from automobile exhaust (by-products of burning gasoline) led to laws that forced car manufacturers to modify their designs in order to reduce emissions. The number of cars worldwide, however, has continued to grow.

For decades, the desire to expand industrialization has been at odds with the desire to protect the environment. The battles between the two sides have taken many forms, ranging from laws governing the disposal of dirt and other wastes from coal mining operations (which can block streams and pose a threat of landslides if not properly handled) in West Virginia to laws requiring improved fuel efficiency for cars across the United States.

In the last quarter of the twentieth century, scientists raised concerns that the overall temperature of the Earth might be rising, largely as a result of atmospheric pollution. Global warming raised the prospect that the massive glaciers in the Arctic and Antarctic might melt into the oceans, raising the level of the seas and threatening the many cities situated on coasts. Scientists have called for urgent measures to reduce pollution and to start finding ways to repair the damage already done. Some politicians, on the other hand, insist that global warming has not been proved and resist calls for measures to control pollution because creating machinery that is less harmful to the environmental will cost businesses a lot of money.

The debate over the future of industrialization and the environment continues to be a hot political issue in the first decade of the twenty-first century, even as less-developed countries rapidly expand their industries and, with them, the total amount of pollutants in the atmosphere.

Ironically, the Industrial Revolution was rooted in an earlier environmental issue: the dramatic reduction in the extensive forests of oak trees that once supplied not only lumber to build houses and ships, but also wood to burn for heat in the winter. With the disappearance of the oaks, coal was viewed as a solution to heating needs. The principal motivation for the development of the steam engine developed by Thomas Newcomen (1663–1729) was to pump water from the bottom of coal mines (see Chapter 2). Technology solved one problem, the shortage of firewood, and created another: air pollution due to extensive burning of coal.

For a time after World War II (1939–45), many people thought that nuclear power would substitute for coal and oil (an enormous amount of energy is created by splitting the nucleus of an atom). As people began to question what to do with dangerous waste from nuclear plants and realized that a potential accident could result in the deaths of millions of people, their optimism for nuclear energy somewhat diminished.

The shift from agricultural to urban society

Another aspect of the Industrial Revolution was the shift in human endeavor from growing food to manufacturing objects. Throughout the eighteenth and nineteenth centuries, the majority of people in Europe and the United States were engaged in some aspect of raising food, either for themselves or to sell to others. In the twentieth century, that percentage fell dramatically as a result of new opportunities for work in cities, largely created by industrialization. The number of farmers also decreased as a result of advances in productivity due to the introduction of farm machines, improved farming techniques, and scientific developments such as the creation of artificial fertilizers.

In the first census of the United States, taken in 1790, about 95 percent of the population lived in rural areas (with 5 percent living in cities); by 2000 that figure had declined to just over 20 percent living in rural areas (with 80 percent in larger towns and cities). That someone lives in an urban area does not mean he is engaged in industry, just as someone who lives in a rural area is not necessarily a farmer; a person might live in a city or rural area and serve the people who work in industry or who farm. Since the end of World War II, the greatest change in the U.S. economy has been the growth of this service sector: jobs that are not involved in manufacturing or agriculture, but rather in delivering some type of service. Examples of service industries include health care, financial services such as banking and insurance companies, education, and entertainment (music, movies, video).

Since 1950, service occupations have been the fastest-growing job category in the United States. So strong is the service sector that the percentage of Americans engaged in industrial jobs actually declined in the second half of the twentieth century. Many of these jobs moved to other countries, especially in South Asia (including Malaysia, Indonesia, the Philippines, and India), where few people prior to mid-century worked in industry (the Industrial Revolution didn't come to some of these countries until the twentieth century; see below). Of course, not all industrial jobs have moved overseas: American factories still produce vast quantities of goods ranging from fabric to cars.

A strong argument could be made that this shift away from manufacturing represents the end—or the beginning of the end—of the industrial era in the United States. In western Europe (England, France, Germany, Spain, Italy, Belgium, Holland, Norway, Sweden, and Denmark, for example) a similar trend has taken place. Industrial work is still growing in the countries of eastern Europe (Poland, Hungary, Bulgaria, Romania, and Ukraine, for example) and Asia.

Economists, politicians, and labor union leaders argue over the implications of the shift from manufacturing to service. Can a country like the United States continue to prosper if people are engaged in helping one another, or entertaining one another, while people in other countries are turning raw materials into products? Can new industries based on intellect (thinking), such as pharmaceuticals (medical drugs) and computer software, replace manufacturing as an economic engine? If the answer is yes, then education and training will continue to be important to the future of both individuals and the entire society.

A changing worldview: The idea of progress

In the 1950s the General Electric Company (GE) had a slogan presented on television commercials: "At GE, progress is our most important product." Until the Industrial Revolution, people had little idea of progress. They lived their lives according to the natural cycle of seasons: planting crops in the spring, tending them in summer, harvesting them in fall, getting ready to plant in winter, year after year, century after century.

But with the Industrial Revolution, this cyclical notion of time changed to seeing time as a line, moving from one event to the next, one new invention to the next, each invention bigger, faster, better, improving on the one before. And so life began to be seen as moving forward and generally upward. If progress is the essence of industrialization, then the Industrial Revolution has not yet stopped.

It has been many years since the last important mechanical innovation of the type associated with the Industrial Revolution. Older machines see continuous improvements. But what about the discontinuous innovations, those technologies that seem to rise out of nowhere and change the world. Do they exist today? Perhaps, in the form of computers.

What about computers?

Do computers fit into the Industrial Revolution? Or do they represent a new revolution all on their own? From the time when modern computers were first developed in the 1930s, they have shrunk in size (they used to fill an entire room) and increased in power (early on they were only simple calculators), and they are now everywhere.

In industry, computer technology can be considered as just one step in the long string of improvements to machinery. In the first decade of the twenty-first century, more than half the homes in the United States had a personal computer, and nearly all electronic devices are run by a microchip. A microchip, the fundamental component of a computer, is faster and more reliable than a human being when it comes to coordinating the complex processes required to operate an automated machine. Today the very word automated means that a human being has been replaced by a microchip. Questions still arise, however, about whether a computer can replace a human brain. Face recognition programs, for instance, can be programmed to scan a crowd of people, looking for particular individuals. Programs such as these still need to be created by human beings, but they do demonstrate how a computer can process information quicker and more accurately than can the human brain.

Are computers, then, driving a third stage in the Industrial Revolution? Certainly, factory owners are attracted to the notion of reducing the cost of labor by using computers, the same motivation that led to adoption of most improvements to machines and indeed to the invention of machinery in the first place. And considering that machines have been supplementing, or replacing, human physical power since the eighteenth century, is the replacement of human mental power nothing more (or less) than the next, and perhaps last, stage of the Industrial Revolution?

The revolution marches on: Asia

At the beginning of the twenty-first century, while Europeans and Americans are wondering about the future, or even the present, status of industrialization, some parts of Asia are experiencing for the first time the rapid socioeconomic changes that transformed Europe and North America a century earlier. The story of an industrial revolution in Asia is quite different from that of Europe and North America, however. In Asia, industrialization was largely imported from the West.

Japan

In the mid-nineteenth century, life in Japan had changed little from the preceding two centuries. Japan had experienced none of the intellectual and economic revitalization that occurred in Europe starting in about 1400. Since the mid-1600s, Japan had been ruled by a powerful military leader called a shogun.

In 1851 American navy commodore Matthew C. Perry (1794–1858) was chosen to lead a naval expedition to Japan with the purpose of "opening" Japan to trade. Previously, Western contact with the country was limited to one Dutch trading ship allowed to land each year. The Americans had three goals: to establish Japan as a station where they could take on more supplies of coal for steamships, to assure better treatment for shipwrecked American sailors, and to open trade.

Perry arrived in Japan two years later (1853) with a force of five ships. He was determined to persuade Japan's leaders to abandon 250 years of isolation from the world. His success in doing so was remarkable. In the last half of the nineteenth century, Japan's rulers made a conscious decision to transform the country over a short period of time from a traditional rural society into a modern industrial state. They imported Western technology and manufacturing techniques on a large scale, so that fifty years after Perry's expedition Japan had become a leading industrial power. Japan's success was demonstrated in 1904 when it went to war with Russia to achieve influence over Korea and Manchuria (part of China). Japan defeated Russia within a year and established control over the previously Russian-occupied Liaotung peninsula, which juts out into the Yellow Sea between mainland China and the Korean peninsula. By 1941 Japan was so powerful it felt that it could challenge the United States for influence in Asia and attacked Pearl Harbor on December 7, 1941.

After the United States dropped two atomic bombs on Japan in August 1945 to bring World War II to an end, Japan underwent a second rapid transition, to a Western-style democracy. The transition was overseen by the United States military, which governed Japan from 1945 to 1951 and imposed a new constitution that reduced the role of the emperor and instituted democratic rule, much like countries of Western Europe or the United States.

In one hundred years, Japan had imported both an economic system and a political system, making it one of the foremost industrial powers in the world. By 2000, the three largest Japanese car makers (Toyota, Honda, Nissan) challenged their U.S. counterparts (General Motors, Ford, and DaimlerChrysler) for market domination in the United States.

China

China's reaction to meeting the industrialized West was quite different from Japan's. The Chinese had encountered Europeans as early as 1271, when the Italian explorer Marco Polo (1254–1324) opened a land route to establish trade. For hundreds of years, China carefully limited contact with the West. As European powers found sea routes to Asia, China responded by establishing special trading ports, such as Hong Kong, but still limiting Western influence.

Limiting Western influence worked, to the extent that it delayed China's introduction to industrialization, for awhile. By 1900, however, Russia was expanding eastward, helped in part by the establishment of the trans-Siberian railroad (extending from the capital of Russia in the west to the Pacific coast of Russia in the east) while Japan was pressing to extend its influence over Korea and Manchuria.

In the twentieth century, China's isolation from industrialization ended. Today, Chinese factories produce a wide range of goods sold throughout the world, and China's economy is growing rapidly. Unlike in the west, however, where changes in government followed industrialization, in China the government instituted industrialization. The Chinese Communist Party, which came to power in 1948 and has held it ever since, oversaw the start of the shift from a rural agricultural society to an urban, industrial one. In the west, by contrast, communism, an economic philosophy under which the people own all property in common, arose as a reaction to the Industrial Revolution, not as a driving force of it.

Indonesia, Malaysia, the Philippines

The story of industrialization in Indonesia, Malaysia, and the Philippines is quite different from that of either Japan or China. The revolutions in Southeast Asia were almost entirely imported—arriving usually in the form of textile facto-ries—into countries whose main resource so far has proved to be large numbers of people willing to work for small sums of money. Workers, many of them girls or women, sew inexpensive clothing sold in shopping malls across Europe and America. Like in England and the United States, people in Southeast Asia who might once have worked on farms now spend their days in factories earning low wages, while some social activists in the United States and Europe picket retail chains for selling articles made under conditions that exploit workers.

Does industrialization inevitably follow the same path everywhere? Despite the low salaries (by U.S. standards), will the Southeast Asian economies grow over time, just as the United States has evolved from a country with low wages into one with a large middle class? Will the emerging population of urban workers in Southeast Asia successfully push for more political power, just as American workers did in the period from 1830 to 1932? Is it a fundamental feature of industrialization to start with a factory and end up a century later with a society that looks something like the United States or western Europe? Will the time frame be similar, or will social and political changes follow more quickly? These questions remain unanswered.

The Middle East, Africa, and Central and South America

While the nature and speed of an industrial revolution in Asia remains a question, what about the areas of the world where industrialization is not really a factor, areas such as the Middle East, Africa, and Central and South America?

The Middle East

The story of the Industrial Revolution and the Middle East can be told in one word: oil. The largest country (in land area) of the Middle East, Saudi Arabia, also has the world's largest known reserves of underground petroleum. Saudi Arabia on its own has enough reserves to ensure the world's oil supply well into the future. Other countries in the region that also have significant supplies of oil include Iraq, Iran, and Kuwait. But throughout the twentieth century and into the twenty-first, the role of these nations in industrialization has been limited to supplying that one key raw material: oil.

There are several possible explanations for the limited extent of industrialization in the Middle East. One has to do with population. Saudi Arabia, although it covers a large land area, is sparsely populated, with an estimated twelve million people at the turn of the twenty-first century. The population of Iraq is estimated at about sixteen million (less than metropolitan New York, whose population is about twenty-one million); and Iran is thought to have around forty-eight million.

Another explanation is cultural. Most of the Arab-speaking states of the region were part of the Turkish Ottoman Empire (1300–1922), which, in effect, covered most of the Islamic world up to the end of World War I (1914–18). To a great extent, the Ottoman Empire was isolated from the rest of the world and did not go through any of the changes associated with the Renaissance (a period of heightened scholarly and scientific pursuits in Europe, from about 1400 to 1700) and the Industrial Revolution. The role of Islam in the development of Ottoman society (and thus, Middle Eastern society generally) is a subject of debate. What is clear is that adherence to Islam includes closely following social rules recorded in detail in the seventh century by Muhammad (c. 570–632), the founder of the Muslim religion. Some authorities wonder whether these rules are compatible with an industrial society. For example, Islam bars charging interest on loans, that is, the lender charging a borrower a small fee for using the lender's money. Is it feasible to build an industrial economy, which requires investing large sums of money, without permitting interest-bearing loans?

Africa

The northern strip of Africa bordering on the Mediterranean Sea is also a region shaped largely by the Ottoman Empire. Countries in the central and southern part of Africa have almost entirely missed the impact of the Industrial Revolution. Many parts of Africa were European colonies from the 1700s until around 1960. European industrial countries viewed these colonies (and others in Asia, such as Vietnam) as sources of raw materials, not as places to establish factories. Whether African states will in the future support an industrial economy remains to be seen. Since the 1950s, Europeans and Americans looking to find inexpensive sources of labor for their factories have gone to southern Asia. The possibility of African countries raising enough money to launch their own industrial revolution seems remote, at least in the early years of the twenty-first century.

Central and South America

For the most part, the countries of Central and South America, like those of Africa, have not participated in the Industrial Revolution. Exceptions would be Chile, Argentina, Peru, Venezuela, and to a lesser extent, Brazil. The reasons for this are similar to the case of Africa. Much of South America was under the rule of Spain until the early nineteenth century. Unlike English colonies in North America, which attracted large numbers of European immigrants eager to industrialize, Spanish colonies generally remained only a source of raw materials, especially gold. Although most Spanish colonies in the western hemisphere achieved independence during the eighteenth century, they were not in a position to attract capital (money to invest in factories) and large populations of workers to support industrialization on a huge scale. In addition, by the turn of the twenty-first century, South America remained south of the main trade routes connecting Europe and North America. Many South American countries have natural features, such as the Andes Mountains or the rainforests of Brazil, that make them inhospitable to large populations or easy transportation.

Agricultural exports, such as coffee, are important to some South American nations, and thus many people work the farms. In the last quarter of the twentieth century, however, some American manufacturers established textile plants in South America (notably in Peru) to take advantage of the region's relative poverty and low wage rates. Working against industrialization in the region is the illegal drug trade. While illicit drugs (notably cocaine) generate huge fortunes for criminals, little of this money makes its way into the economies of countries like Colombia or Peru, where the drugs are cultivated in large measure to serve a market in the United States.

The Industrial Revolution and human psychology

Generations after the American system of manufacturing—with its interchangeable parts and moving assembly line—was introduced, there is evidence that human beings are adapting to the system. In thousands of U.S. classrooms, teachers follow detailed guidelines on what to teach their students, knowing that at the end of the year all students will take the same test to see whether they have learned the same things. Equality in access to education notwithstanding, one argument in favor of such standardized tests is to assure employers that all students coming from the public schools have the same knowledge. Is there an unspoken desire for the schools to produce interchangeable parts?

The fundamental idea of the factory—identical products produced by those working on an assembly line—had by the twenty-first century permeated everyday life. Even food is produced in facilities that are more like factories than farms. Some chickens, for example, are raised in cages and are fed a diet shown to maximize their output (pounds of meat) per input (feed). They are then processed, cooked, and canned or frozen for use at home or in chain restaurants, where all menus are the same and all meals are assembled by workers trained in an identical manner and served to customers who know exactly what they are getting.

The lifestyle brought about by the Industrial Revolution isn't remarkable: it is standard.

For More Information

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Kaplan, Morton A., and Robert Selle. "The Emergence of a Global Society." World and I, September 1998, p. 18.

Mitchell, John G. "Urban Sprawl." National Geographic, July 2001, p. 48.

Revkin, Andrew C. "With White House Approval, E.P.A. Pollution Report Omits Global Warming Section." New York Times, September 15, 2002, p. 22.

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