The Market Revolution, Industrialization, and New Technologies

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What factors of production enabled the Industrial Revolution?

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The Industrial Revolution began because technology improved at an opportune time, taking advantage of the numerous factors of production available to it. Without these opportunities, the Industrial Revolution may have fallen short and faded or may have been significantly delayed, in spite of the vast technological advancements being made at the time.

Natural resources were one of the greatest factors that allowed industrialization to thrive. The widespread availability of coal, streams and lakes with usable water, and timber helped contribute to engine-powered machines, and far-flung colonies like America and India afforded England even more resources.

At the time, too, labor was cheap and widely available, as there was a sprawling lower class of impoverished people desperate for work, including young children. Thus, industries were able to take advantage of vast amounts of low-paid workers to produce their products.

Capital was another factor that was widely available at the time. Just before the Industrial Revolution, many people owned large swathes of land or were heavily involved in banking and investing, which gave the wealthy a great source of income to invest in these burgeoning businesses, making themselves and their businesses wealthier and wealthier.

Finally, talent and entrepreneurship was needed to start these industries, and this was in great supply as well. With the blossoming of industrial businesses, many people became greatly interested in the opportunities before them, so they gravitated toward industry and created many new businesses, knowing they had the other resources available to help them succeed.

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The "four factors of production" in classical economics are land and natural resources, labor, capital, and entrepreneurship. Like much of classical economics, this concept was actually developed in the midst of the early stages of the Industrial Revolution in England, and it forms a handy explanation for the development of industry there. 

Britain was replete with the natural resources necessary for early industry. It had swift-moving streams to provide water power for early mills and transportation. It also had a large supply of coal in places like Wales that fired the engines of the industrial revolution. Great Britain also had far-reaching colonies that supplied natural resources, as well as the wealth to purchase cotton, for example, from the United States. As far as labor, Britain had a large class of farmers that were being driven from their lands by a process known as enclosure. This made it more difficult for small farmers to make a living, and made many of them into landless laborers. As such, they were mobile, flexible, and in need of work, an ideal labor force for the increasingly regimented sweatshops, cottage industries, and factory floors of the Industrial Revolution. Britain also had a large class of landowners with tremendous amounts of capital to invest in industry, and more important, they had a government with a centralized banking system. This enabled the creation of networks of credit that could finance the creation of heavily capital-intensive industries and the construction of infrastructure like railroads and canals. Finally, the political economy of Great Britain, which emphasized entrepreneurship in a relatively unregulated (but certainly not unsupported) environment encouraged capitalists to take risks by investing their money in industrial projects. 

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