Unit 1: Industrialization and Theories of Economic Change
In the late 18th century, the world economy embarked on a rapid process of change. During this Industrial Revolution, new technologies greatly magnified the productivity of workers, while fossil fuels pushed manufacturing and transportation systems far beyond the natural limits of human and animal power. As these advances drove the cost of industrial production down, consumption of manufactured goods skyrocketed around the world. By the end of the 19th century, nearly every society on Earth had been affected by the arrival of new products, new means of transportation, new weapons, and new ideas. Scholars have tried to explain the causes of this great transformation since it began.
This unit will explain what industrialization is and provide a brief overview of what the Industrial Revolution was and how it revolutionized people's lives. We will then study different interpretations of economic theory that attempted to account for these dramatic changes, beginning with pre-industrial theories and culminating with current perspectives on the global economy.
Completing this unit should take you approximately 9 hours.
Upon successful completion of this unit, you will be able to:
- name key economic theorists and summarize their main ideas about economic growth;
- describe what the Industrial Revolution was and explain why England was one of the first nations to industrialize; and
- compare classical and contemporary theories of industrialization.
1.1: Industrialism: An Overview
1.1.1: The Industrial Revolution in England
Read this lecture to learn about the conditions in England that helped give rise to the industrial revolution.
1.1.2: Changing Daily Lives
Watch this video and pay attention to how the Industrial Revolution changed daily life in Britain and the United States.
1.2: Classical Theories
1.2.1: Mercantilism
Read this article about the history of mercantilism to learn about how this theory of trade and industry emerged.
1.2.2: Adam Smith
Read this short biography of Adam Smith to understand the context of Adam Smith's thinking about economic change.
Browse this work and read the first book to get a sense of the kinds of arguments Smith made in his writing.
1.2.3: Max Weber
Read this excerpt from The Protestant Ethic and the Spirit of Capitalism to get a sense of Max Weber's argument that religious affiliation affected the willingness of people to engage in capitalist enterprises. Weber is only laying out his main ideas in this opening chapter.
1.3: Radical Theories
1.3.1: Friedrich List
Read this article in preparation for reading List's primary source next.
Read this excerpt from List's work.
1.3.2: Karl Marx
Read this article to for a basic outline of Karl Marx's theory of economics.
1.3.3: Joseph Schumpeter
Read Schumpeter's article and note his argument about the connection between individualistic economic desire and the community at large.
1.4: Contemporary Perspectives on Industrialization
1.4.1: The "Stages of Growth" Theory
Read this chapter from W. W. Rostow's The Stages of Economic Growth: A Non-Communist Manifesto for an explanation of industrialization and economic change.
1.4.2: "Dependency" Theory
Read this article to understand the arguments that dependency theorists make about industrialization and trade.
Unit 1 Assessment
- Receive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
