The Beginning of Industrialization

Throughout Europe the phenomena of industrialization was a regional event that took place between late 1700's to the early 1900's. Many factors however determined which nations were "early industrializes" or latecomers/no-shows. In order to show why these countries are classified this way we will have to look at Britain and compare the two groups to Britain, because Britain is associated with being the first country to industrialize. We will also have to take into account what Gerschenkron thinks about early and late industrialized countries, and the six propositions he gives us. By saying this we need to see how Britain started its industrialization and compare it to early-industrialized, latecomers or no-show nations.

First of all we have to look as to why is Britain associated with being the first state to industrialize? One answer to this question is that Britain by far has more of everything. To be more specific Britain's per capita income is larger compared to other countries. In the period associated with industrialization we see that Britain's economy does not have Guilds any longer compared to France that had a law banning outside manufacturing, and it only allowed manufacturing within guilds. The eliminations of guilds could have helped in competition and an increase in productivity that could have lead to industrialization. Property Rights and patent rights in England were also established. We also see that income distribution in England was more equal. The fact that England was an island also played a great role in helping industrialization in England. Since England was an island it was less likely, and more difficult for its enemies to attack it. This fact also helped because it helps reduce transportation costs since England is an island transportation costs are lower relative to other countries. We know that transportation cost at that time were high so lower transportation costs is definitely a source of advancement. England also rids itself from serfdom; this makes its labor market more accessible. England is also blessed with a lot of coal a great advantage because coal played a significant role when it came to industrialization. We also know that population was growing in a faster rate, which helped the labor market grow. Coal was required for the technological advances of the time and having coal was a great advantage, and Britain had plenty of it. It is not known which factor is the one that caused Britain to industrialize, it could have been any one of these factors, but one thing is known that Britain is associated with the notion of being the first nation to industrialize.

The early-industrialized countries quickly catch up. We see that a few factors affect these countries. Cameron shows that all the early-industrialized countries had a few things in common, and they are as follows:

1. Each country had a sufficient amount of coal.

2. Each country incorporated the technologies of the time.

3. High literacy rates among these countries.

4. Engaged in trade with other countries.

5. Rid them-selves of serfdom.

6. Established property rights.

By taking the following steps these nations where able to catch up to Britain's standards and in some cases even surpass it. Cameron attributes political reasons to the reason as to why latecomers and no-shows did not industrialize the same time England did, as well as natural resource issues, which these countries lacked.

The Latecomers and no-shows have had a difficult time in industrialization because of various factors. First of all most of these countries lacked natural resources and most importantly coal. Secondly literacy rates in these countries were low. These countries also went through many political difficulties, which were a barrier to their progress as industrialized nations.

These countries where consistent with Gerschenkron aspects in several ways, Gerschenkron claims that the later a country industrializes the more capital intensive it becomes. This is evident with the countries that started to industrialize after England. We could see that most countries started to invest in railroad building and mining of coal and steel. He also claims that the later a country industrializes the more capital-intensive production it becomes, and this is directly related to the previous reasoning. As a result of intensive building of manufacturing plants a country would end up producing goods which are capital intensive as a result of building these plants. He also claims that the later a country industrializes there is a greater role for non-market institutions. This means that the government of a certain country could negotiate with banks to promote financing for certain industries. It could also mean that governments would give preferential treatment to certain industries such as cartels. One example of such country would be Germany. According to Cameron Germany did in fact promote cartels and it made legal for cartels to exist. The notion of a cartel or the theory of cartels usually makes us think that it restricts output, but in Germany's case this is not true the promotion of cartels in Germany actually helps Germany grow. This happens because maintaining high prices at home helps them do trade at lower prices abroad. Germany is also a good example to Gerschenkron notion of Government interference when it came to the railways. The railways in Germany were state owned and the state would not charge a high price for the use of its railway system, which in turn reduced transportation costs and promoted trade. He also says that the later a country industrializes the less significant agriculture becomes in its role as part of industrialization. This notion is not necessarily true, because agriculture for some countries constituted a large portion of their exports. He also states that the later a country industrializes the more discontinuous that country is. This notion is true for countries that are no-shows or latecomers because we see that countries that industrialize later take a much longer time to industrialize and catch up to the countries that are already in an industrialized stage. Greschenkron claim that the later a country industrializes the more pressure is placed on consumption. This is true for Russia, in Russia we see, as well as all countries that are latecomers that more emphasis is directed towards railways and mining. This means that countries need to invest in their capital-intensive enterprises therefore they will need to suppress consumption in order to boost investment in those countries. Greschenkron's assumptions are different in several aspects of countries that are latecomers. First he claims that agriculture doesn't play a significant role in industrialization. If we look back to Britain and start analyzing the reasons to what brought to Britain's industries we could conclude that advances in technology that helped agriculture become more productive, and the establishment of property rights, which brought to the whole notion of industrialization. We could see that in fact agriculture did play a role in industrialization. We could also see that Russia was dependent on agriculture for a large portion of its exports. He also mentions that the more pressure has to be placed on consumption I don't think this is necessarily true, because we know that foreign countries would invest in certain economies. For example France invested in the building of railroads and mining in several countries.

Based on the answers given to the first two questions Gerschenkron's analysis is helpful in understanding that countries that industrialize later have interrelated factors that starts with one problem and progress to different problems as they go. His propositions also give us a better understanding as to why certain countries have advantages over other countries? He also explains that cultural tension is created when countries are industrialized late, and his propositions could help us understand where these cultural tensions are originating. His propositions have certain flaws for instance: none of these propositions address as to why it takes a long time for a country to industrialize? Another notion he doesn't address is why some countries industrialize at a slower rate then other countries do? His propositions only give us an overview to whether a country industrializes for these reasons or not, but it is not definite if these propositions are true, because they don't give us clear guidelines.

When we look at countries in the industrialized period we see Britain as the country that started with industrialization, because of the factors we discussed before. Countries following Britain, which industrialized, and some who didn't or where late by doing so had there own particular reasons for industrialization or in the case of the no-shows non-industrialization. Greschenkron's approach to industrialization is broad and does not coincide to the reasons Cameron gives. I say this because the impression I got from Cameron was that countries that had natural resources had the upper hand in industrializing faster. I also got the notion that implementation of technology in the right way had a significant impact. Other important factors such as education, political situations and so forth had a considerable impact on industrialization. Britain compared to other nations industrialized or not had the upper hand in all aspects those it helped it become the first industrialized nation, which many nations followed. Nations who where latecomers probably didn't poses the traits England did (like Coal) so they suffered economically. In the no-show states two common characteristics prevail. The lack of natural resources and the political situation; for instance in Portugal the lack of natural resources caused it to be a backward nation. In Russia Serfdom still prevailed while industrialization was taking place, which slowed the pace of industrialization in that country.

So we see that there are many factors affecting industrialization, and Gerschenkron helps us identify some of these aspects, but at the same time he doesn't give us a real understanding to certain questions, which were mentioned before.

Looking at industrialization we could conclude that each country possessed common traits, but at the same token we could see that some countries had their own distinguished traits, which helped in the process of industrialization, or were the cause of their not becoming an industrialized nation. Taking all these facts we learn that industrialization has emerged as a natural and unstoppable phenomena. The facts show that industrialization was bound to happen and in fact it does happen. As a result of industrialization we are going through a technological revolution today and we should feel fortunate that we are the first to see and observe the reasons for this revolution the same way Gerschenkron was fortunate to see the industrial revolution.

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