2.II: Industry

Tapping into the energy of fossil fuels has created a whole new world of manufactured goods. Industry has provided jobs, consumer goods, and longer lives, while also leading to deadlier wars and serious political imbalances.

A.  The Industrial Revolution

B.  Marxism

C.  Computers

D. Citations

A.  The Industrial Revolution

After the dawn of agriculture, most ordinary people’s lives didn’t change much for millennia.  Even as late as 1750, they worked with their hands on farms or in small villages, vulnerable to nature, with no electricity or running water.  Suddenly by 1900, they had telephones, movies, trains, canned food, and headache pills!  The environment became decidedly man-made and tailored to our desires.  The industrial revolution is a very broad term for these changes that took place late in the 2nd millennium.


Watt did not invent the steam engine, but he made the crucial breakthroughs that made it revolutionary. This model dates to about 1790. The obvious component here is the wheel; previous engines could only pump up and down. But the real breakthrough was the condenser (H). Steam was cooled here separately from the hot cylinder (J), making this engine much more powerful and efficient than anything before.

18th century Great Britain was the birthplace of industry, and the British Isle remained the only industrialized region for decades.  The definitive industrial breakthrough was the steam engine.  James Watt and other engineers designed the first engines suitable for heavy use.  Burning coal powered the steam engines for factories, trains, steamboats, and pumps.  Eventually, British “state secrets” of industrial engineering got out to those nations eager and able to achieve the same kind of economic growth.  Factories appeared in Germany, Belgium, France, and the United States after 1800.

Industry quickly became self-aggrandizing.  Trains needed tracks, which needed steel.  Steel refineries required coal, which had to be shipped in trains and steamboats.  Factories brought workers to the cities.  The laborers required a large supply of housing, food, and clothing, which stimulated more industry.

The influx of workers to the cities was one of the most profound social changes of the times.  Factories, though mechanized, required a large number of laborers.  Families down on their luck on the farm were drawn to factory jobs.  They migrated to the cities at such a high rate that England was half urban by 1850.

With growth came growing pains.  Industrialization was a very difficult transition for large segments of society.  Many craft workers were displaced by factories.  Wages were low and hours were long.  Factories were dangerous and unhealthy.  Children, who had always been part of the work force at home, were easily exploited.  Governments gradually stepped in to regulate the workplace.  Children were increasingly taken out of farms and factories into schools, which revamped the curriculum to prepare kids for their industrial future.

A second wave of innovations swept the world in the late 19th century.  Oil became a major new source of energy, and lines carried electricity from power plants.  Gas-burning engines liberated machinery from factories.  In this period, the United States became the largest national economy, 1 while Russia and Japan joined the industrial ranks. 2

As the “northern” industrial nations needed natural resources beyond their borders, they turned to the regions of the non-industrial “south”.  European countries imported heavily from Africa, the US from Latin America, and Japan from Southeast Asia.  Trade was lopsided; most profits flowed to the northern manufacturers.

Since the world wars, a wave of newly industrialized countries has joined the roster, while the older industrial economies have largely shifted from manufacturing to the service sector.  Manufacturing has migrated from the West to Asia to follow low wages.  By the 1980s, a majority of the American economy was devoted to services such as advertising, computing, banking, insurance, and law. 3 Another 20th century trend was industrial environmentalism.  Governments became increasingly willing to regulate corporations for the sake of public health and safety.

The industrialization of the world has still not reached equilibrium.  Each decade, a few new undeveloped nations become more industrial, the most developed countries become more service oriented, and the least developed get left further behind.  It will never be possible or necessary for every nation to be a manufacturing powerhouse.  Instead, modern economists recognize the value of specialization and trade.  A region that is particularly good at growing crops or producing oil should specialize in exporting those commodities.  Unfortunately, such extraction economies are easily seized by corrupt local governments.  Universal prosperity will require universal free enterprise.  It will also require greater freedom of human movement across international boundaries so that poor people can more easily find jobs and education.

B.  Marxism

Industrial capitalism was one of the most abrupt changes in human history.  It had its vehement detractors.  The most influential was Karl Marx, a philosopher, labor leader, and author of The Communist Manifesto and Capital.  At his most practical level, Marx questioned the fairness of a system that entitled laborers to so little for their hard work.  His complete theory was much more convoluted than that (reading like a cross between biblical prophecy and science fiction), and his legacy has been immensely complicated.

Marx’s point of view was shaped by his very particular place in history.   Born in 1818, he grew up when industry was still relatively new and disruptive, and there was nostalgia for simpler times.  Dead by 1883, he never saw democracy in Europe.  In fact, he witnessed multiple failed revolutions including the Spring of Nations.  States were still run by monarchies and small bands of aristocrats.  These right-wing governments generally prohibited organized labor, forcefully put down strikes, and were even reluctant to regulate fair wages and working conditions.

Influenced by this environment, Marx described Europe’s past and future as a cycle of class conflict.  The way he perceived capitalism, the value of manufactured goods was created by the “accumulated labor” of factory workers, who got no ownership in the goods and only made the factory owners wealthy.  This, he believed, was not only immoral but unsustainable.  He predicted that a socialist revolution would bring workers to power.  They would eliminate private ownership and wage exploitation; society’s “means of production” would be held in trust by government for the equal benefit of everyone.  Eventually, the classes would equilibrate and government would no longer be necessary.  In the final phase, society would live as a homogeneous, decentralized commune, hence the term communism.

In retrospect, the flaws are obvious.  Socially, capitalism actually lifted many working poor into a content middle class.  Economically, the value of goods is created not only by labor but also by upper-management organization.  In fact, good organizers are 1,000 times rarer than good laborers and are accordingly worth 1,000 times as much.  A communist society would almost necessarily be a boring bureaucracy with no place for diversity, ambition, or excellence.  With no connection between self-improvement and economic growth, and without producing the consumer goods that drove industrial demand, Marx’s worker government would not create much wealth.

Why, then, was half of the world Marxist for a century?

The Russian Revolution of 1917 has been the only successful workers’ revolution in an industrialized nation.  Like earlier post-enlightenment revolutions, it was a movement for liberation from unjust monarchical rule.  The Russian tsars refused to compromise their power with instruments such as a constitution or a parliament.  Between the 1860s and 1910s, they mismanaged the economy, lost wars, and directly killed thousands of protesters.  One of the Russians most hardened in his opposition to the tsars was Vladimir Lenin.  Lenin also happened to be a radical Marxist who believed that the solution was a military revolution on behalf of workers and peasants.

The tsar abdicated under pressure in 1917.  Lenin’s Bolshevik party disrupted the power transfer process, winning over a large military contingent that enabled them to occupy the capital by the end of the year.  What followed was very similar to the French Revolution.  Widespread opposition to the Bolsheviks led to counter-revolution and civil war.  The Bolsheviks assassinated Tsar Nicholas and his family, and their campaign of Red Terror killed thousands of political opponents.  Renamed the Communist Party, their monopoly in government was stabilized by the end of Lenin’s life in 1924.

Marx-Leninism was an international doctrine; “Workers of all lands unite” is inscribed on Marx’s tomb.  Lenin believed that his “dictatorship of the proletariat” (working class) would transcend national boundaries, leading revolutions around the world.  In fact, Marx and Engels had written that socialism must become global to survive, because it was a class conflict and capitalism had created a global upper class.  One of Lenin’s final acts was to annex three states from the former Russian Empire into the growing Soviet Union, aka the USSR.  His successor, Josef Stalin, was more isolationistic and accelerated the pace of Soviet industrialization. 4 Stalin greatly strengthened his country and his party as a pretense for his own personal ambitions; having nearly absolute control of the Soviet economy made him one of the wealthiest men in the world. 5 The USSR’s expansionism became more of an issue in the cold war, discussed further below.

It is now clear that Marxism was an impractical theory, an emotional reaction to the tumultuous 19th century.  No socialist countries ever reached the communist stage.  The USSR and Red China called themselves “communist” euphemistically, but their strong central governments made them socialistic.  Since the 1960s, some countries have embraced capitalist / socialist hybridism.  Many countries of northern Europe, for instance, have free market industry but extensive public services and welfare programs.  This is not Marx-Leninism, since government does not monopolize the means of production, and the international workers’ movement is inconsequential.  “Socialist” is a bad word in the United States, largely because it is associated with the USSR, but with welfare programs and a gigantic military, the American system clearly became more socialist in the 20th century too.

C.  Computers

After industrial societies invented machines to augment their muscle power, they invented computers to supplement their brain power.  It is natural to wonder what “the first computer” was, but that is just as impossible to define as “the last computer”.  A computer is a synthesis of many complex systems:  electronics, information, calculating, communicating, memory, programming, etc.  These systems had separate histories, some dating back centuries.  There were mechanical adding machines in the 1600s and “programmable” industrial looms in the 1800s. 6 Telegraphy and text messaging existed since the 1800s.  Mathematicians developed information theory in the 1930s – ‘40s, based on 19th century logic.  The gradual convergence of these elements has led to an ever-shifting front of technology. 1  Most people today remember computers without music and cars without microchips.  This illustrates how various strands of technology are still being incorporated into the definition of what computing is.

We would all agree, though, that computers radically changed the world sometime in the 20th century.  This history will pick up with that breakthrough.  In fact, even that transition occurred gradually over decades.

A few individual computers impacted the world from secret labs during WWII.  Some of them made codes for secure communications, and others broke codes.  Computers were also enlisted to aim artillery shells, provide air defense, and solve problems about nuclear bombs.

By the late 1940’s, computers were fully electronic and digital.  The digital nature of computing means that all information, from numbers to videos, is represented in the same form.  The unit of information is a bit, a binary digit that people represent as “0” or “1”.  In a computer, bits are stored as two different electromagnetic states.  The computers of the late 1940s could even store their own programs as digital information.  Programs (e.g. “apps”) are special sets of instructions that allow one computer to perform diverse functions.  Storing programs in digital memory enabled computers to control their own processes at lightning speed, which in turn allowed people to program computers with unprecedented flexibility.  This was when computer scientists became especially excited that they were onto something with enormous potential.

Businessmen got excited too.  The drive to commercialize computers began around 1950.  As computers gradually became smaller, less expensive, and more user-friendly, clientele diffused from the military down to smaller government offices, universities, corporations, and banks.  IBM emerged as the industry giant in the mid-1950s and held on to that position for three decades.  By the 1960s, “mini” computers were accessible even to relatively small businesses.  The number of computers worldwide rose from tens in 1950 to tens of thousands by 1965. 7

Computers allowed businesses to offer better goods and more efficient services.  For example, airports could handle much more traffic, and cars became computer-designed.  Computers enhanced new pop culture media such as TV and recording studios.  They played a large role in national security, and they even flew rockets to the moon.  Until the 1970s, though, all of this took place behind the scenes.  Ordinary consumers did not directly see the computers that wrought the changes.


A transistor (electronic switch) is to a computer as a neuron is to a brain. Since the 1970s, computers have had microscopic transistors built into thin silicon chips. When you look at a computer chip, you are seeing the array of interconnections among the transistors.

The mid-century breakthroughs were enabled by the transistor, a new electronic component used to convey bits.  Transistors have been engineered exponentially smaller since 1960, a trend called Moore’s Law.  By the early 1970s, Intel was able to pack the processing power of an entire computer onto a single silicon chip, the microprocessor.  This prompted a new and unexpected movement.  Small companies, rogue professors, and even students and home hobbyists began tinkering with the microprocessor to create personal computers (PCs).    The entire philosophy of PCs diverged from that of business computers.  The prevailing vision of the 1960s was that computers would always be huge, expensive, and shared by multiple users for serious business purposes.  PCs were meant for individual use, entertainment, and creativity (the first big hits were video games).  Apple was an early industry leader with its Apple I of 1976, and has gone on to become one of the largest corporations in the world.  The IBM PC of 1981, with software provided by Microsoft, is often credited with opening the PC market to the mainstream.  It was the first PC with an operating system (a program to coordinate all its components) and something that seems obvious now, its own monitor!

Another major enabler was standardization.  The computers of the 1950s were custom-made, which made a unified computing industry impossible.  As the field grew, industry leaders set standards in programming languages, electronic components, and specifications.  This was vital for computers to network and communicate with each other.  The internet got off to a slow start in the ‘60s, with email soon to follow in the ‘70s.

The 1980s witnessed the rapid proliferation of PCs.  The effect was similar to the Enlightenment, when ordinary people became empowered to do specialty tasks like printing, graphic design, accounting, and journalism.  Rooms full of books and file cabinets started to shrink, as more information was stored on PCs and disks.  The technology was liberating, though the potential was limited by the internet, which remained somewhat exclusive to large institutions.  The enthusiastic young students of the 1980s recognized immediately that algebra and calculus were out and coding was in (a fact that schools still have not caught onto) so they had to teach themselves.  This generation of whiz-kids grew up to create the dot-com explosion. 2

Back to Chapter 2

Continue to Section 2.III: The World Wars

D. Citations

  1. Maddison, Angus (2007): “Contours of the World Economy, 1–2030 AD. Essays in Macro-Economic History”, Oxford University Press, p. 379, table A.4, cited on Wikipedia, “List of Regions by Past GDP, World 1 – 2003”, https://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_(PPP)#World_1.E2.80.932003_.28Maddison.29  (accessed 10/10/15).
  2. Stearns, Peter, The Industrial Revolution in World History, 4th ed, Westview Press, 2013, Chapter 6
  3. Ohmae, Komichi, The Borderless World: Power and Strategy in the Interlinked Economy, Harper Collins, 1999, ISBN 0887309674, p. 15
  4. Wheatcroft, S. G.; Davies, R. W.; Cooper, J. M. (1986). Soviet Industrialization Reconsidered: Some Preliminary Conclusions about Economic Development between 1926 and 1941 39 (2). Economic History Review. pp. 30–2. ISBN 978-0-7190-4600-1.
  5. Davidson, Jacob, “The 10 Richest People of All Time”, Money, 7/30/15, http://time.com/money/3977798/the-10-richest-people-of-all-time/ (accessed 10/20/15)
  6. Kopplin, John, “An Illustrated History of Computers, Part 1”, 2002, http://www.cs.kent.edu/~rothstei/10051/History.htm (accessed 10/23/15)
  7. The credible quote “estimate of 100 computers in the world in 1953” is oft-repeated online without any indication of its ultimate source.  The 1965 data is from  Truman, C.N., “The Personal Computer”, The History Learning Site, 3/17/15, http://www.historylearningsite.co.uk/inventions-and-discoveries-of-the-twentieth-century/the-personal-computer/ (accessed 10/27/15)
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