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I suggest reading Adam Smiths wealth of nations from 1760s. It is rather ironic that such an old book actually describes these things very well. Adam Smith accu

I suggest reading Adam Smiths wealth of nations from 1760s. It is rather ironic that such an old book actually describes these things very well. Adam Smith accurately predicted that South American would develop poorly compared to North America. What is good about Smith's description is that he includes the factors mentioned here as well as a number of others which together give a very good explanation for why the industrial revolution had to happen in Europe and England in particular. 1) As mentioned the fragmentation of Europe gave competition of ideas, and avoided the intellectual stagnation of the great arab and eastern empires. 2) Coast line and river relative to landmass is crucial. You thin land e.g. given more relative coastline than circular. Hence America, Africa and China are poor fits. You also want many rivers criss crossing and not just a few going one direction. WHY? Because before railroads, transport by water will be crucial. Massive amounts of specialization is needed for industrialization. That requires being able to ship products out to as many people as possible cheaply. You can only achieve that with lots of easily available water transport combined with high population density. There is no country fitting that description that Britain in the 1700s. No country had as high population density and high density of rivers and coastline relative to landmass as them. In fact the country starting a sort of earlier industrial revolution was the Netherlands which had a similar advantage. Due to being under the sea level, digging canals was very easy. So they could dig a lot of them and transport goods cheaply. The Netherlands had nothing else of important resources, they just had high population density combined with an extensive canal network. That made the Netherlands the richest country in the world per capita in the 1600s. 3) Institutions. Adam Smith compares these extensively between the North and South of America. The Portuguese and Spanish possessions had very unfavorable institutions and social structures for economic development. Unlike North America they let a few elites take all the land. It ended up like a sort of feudal system were people worked at the local castle and village for their "lord". In contrast North America was divided into lots of small patches of land with competing farmers selling their products in a free market. North America inherited British rule of law, rather than rule of men, so businessmen in North America could feel safe lending money or investing in ventures with more powerful individuals. In the south you could never know if you'd get your money back from some well connected individual, because written laws mattered little, but connections was everything. In short I think the receipt for industrialization is many small competing states, lots of rivers and coastline with dense population combined with strong institutions. By strong institutions one might instead say that rule of law is observed combined with some form of democratic or power sharing traditions.

krona 10y ago
Some nice insights but I think you downplayed the catalytic role the development of banking and finance had during the 18-19th century, in both Britain and the Netherlands. e.g.: Empire: How Britain Made the Modern World -- N. Ferguson
- woodandsteel 10y ago
  As Paul Kennedy explains in The Rise and Fall of the Great Powers, one consequence of the unending warfare in Europe was the development of better financial institutions such as central banks. The problem is that warfare is very expensive, so states were always going broke, and the one that won a war tended to be the one that ran out of funds last. As a result there was a lot of innovation in matters like national budgeting and financial regulations. By coincidence, I am reading Alfred Zimmern's The Greek Commonwealth, which has extensive discussion of the economics of classical Athens. The government there had no budget, just a bunch of containers for funds for different purposes, and new expenses were just voted on, along with how the money would be raised, as they came up.
pipio21 10y ago
Obviously the number 1 thing is having an empire. Netherlands and Portugal had an empire in Africa and Asia. The commerce with them and north of Europe(via the Hanseatic League) is what made Netherlands the richest country per capita. North America was created under totally different circumstances than South America. For instance, Spanish and French went to Louisiana but could not control the Mississippi river. It was a very hard place to live filled with Mosquitoes that transmitted illnesses that killed most people. France exchanged that for a small piece of land(Guyane), and it was a good deal at the time. That this place could later become one of the most fertile places on Earth is only possible because of lots of scientific discoveries that happened later in time, like the combustion engine making possible moving enormous amount of land(creating dykes), DDT killing the mosquitoes, railroads for transporting the grain and the capital generated being reinvested in further development. We could not extract political narratives for comparing 20th century empires to 15th. Most people used in the West conquest to native population came from rail roads. Rail roads did not exist before 1850, way later to Spain and Portugal starting to lose territories in America.

krona 10y ago

Some nice insights but I think you downplayed the catalytic role the development of banking and finance had during the 18-19th century, in both Britain and the Netherlands. e.g.: Empire: How Britain Made the Modern World -- N. Ferguson

woodandsteel 10y ago
As Paul Kennedy explains in The Rise and Fall of the Great Powers, one consequence of the unending warfare in Europe was the development of better financial institutions such as central banks. The problem is that warfare is very expensive, so states were always going broke, and the one that won a war tended to be the one that ran out of funds last. As a result there was a lot of innovation in matters like national budgeting and financial regulations. By coincidence, I am reading Alfred Zimmern's The Greek Commonwealth, which has extensive discussion of the economics of classical Athens. The government there had no budget, just a bunch of containers for funds for different purposes, and new expenses were just voted on, along with how the money would be raised, as they came up.

pipio21 10y ago

Obviously the number 1 thing is having an empire. Netherlands and Portugal had an empire in Africa and Asia. The commerce with them and north of Europe(via the Hanseatic League) is what made Netherlands the richest country per capita. North America was created under totally different circumstances than South America. For instance, Spanish and French went to Louisiana but could not control the Mississippi river. It was a very hard place to live filled with Mosquitoes that transmitted illnesses that killed most people. France exchanged that for a small piece of land(Guyane), and it was a good deal at the time. That this place could later become one of the most fertile places on Earth is only possible because of lots of scientific discoveries that happened later in time, like the combustion engine making possible moving enormous amount of land(creating dykes), DDT killing the mosquitoes, railroads for transporting the grain and the capital generated being reinvested in further development. We could not extract political narratives for comparing 20th century empires to 15th. Most people used in the West conquest to native population came from rail roads. Rail roads did not exist before 1850, way later to Spain and Portugal starting to lose territories in America.