Mercantilism To Industrial Revolution: Reasons For Rise Of The West – Analysis


This article explains the relationship between mercantilism and industrialization, taking into account the reasons why some regions industrialized earlier than others and their consequences during the eighteenth century. In his book, the Origins of the Modern World, Robert Marks offers a detailed overview of Britain’s transition from mercantilism to industrialization. He notes that England was the first country to free itself from the limits imposed by the biological old regime. He emphasizes how cotton textiles and the British need for coal contributed to its industrial revolution and debunks the traditional Eurocentric narrative of the necessary rise of the West. Mainly, he correctly asserts that England’s rise was in fact contingent upon a number of worldwide developments that were not of their own making. England was quite fortunate to take advantage of a series of historical events that contributed to its industrial revolution in the eighteenth century. Were it not for these developments, England could not have industrialized. 

One such contingent factor was a stable government – a strong constitutional monarchy – in England that came to power after the Glorious Revolution of 1688-1689. Willing to support its local manufacturers, the government implemented various specific objectives and policies to advance its commercial and colonial interests. The increased credit-worthiness of the British state allowed it to serve as a strong and reliable political guarantee for the country’s industrialization. Another significant variable was the development of the coal and steam industry in England. Around the 1600s, lumber had become scarce in England due to increasing deforestation. As a result, England started using coal to meet the growing need for heating and cooking, which the accidents of geography placed within its reach. The use of coal ultimately led to the advent of steam engines and an increase in machine productivity. 

In connection with that, England needed export markets to grow its cotton textile industry but faced the shortage of land to produce raw cotton. England took advantage of the transatlantic African slave trade and surplus plantations of the New World with its mercantilist trade restrictions to accumulate huge capital that also helped England ease its limited land resource pressure. The discovery of America allowed Britain to raise the mercantilist system to a degree of splendor and glory which it could otherwise never have attained. England’s protectionist measures in the triangular Atlantic trade brought about a real boom to its cotton textile production and hence to its industrialization.

In his book Capitalism and Slavery, Eric Williams provides us with an economic account of the contribution of the triangular slave trade in creating the capital that financed England’s Industrial Revolution. He describes the triangular trade as one where England supplied the exports and the ships, Africa the human merchandise, and the plantations the colonial raw materials. West Indies was the hub of the British Empire with its large sugar plantations. Even Adam Smith, in his book The Wealth of Nations, asserts that the profits of a sugar plantation in any of the West Indies colonies were generally much greater than those of any other cultivation that is known either in Europe or America. England had a monopoly on colonial markets with its Navigation laws – the keystone of its mercantilist arch – designed to tighten Britain’s control over trade. The Navigation laws required the colonies to send raw products only to England and buy only British manufactured products. England ensured that the New World would remain as producers of raw materials and consumers of England’s industrial products. Without the colonies, England would have had to allocate more land for food production and might not have industrialized. Influenced by the work of Eric Williams on Britain’s transatlantic trade, Robin Blackburn attempts to quantify the overall contribution of Atlantic exchanges to British industrial growth during the 1750-1820 period in his book The American Crucible. Blackburn explains that the British economy was more directly and variously responsive to Atlantic exchanges than was the case for the other European powers, leading to the early stages of its industrialization. He demonstrates how the wider and a complex pattern of England’s increasing transatlantic trade created profits and industrialized it at a much faster pace. 

During the eighteenth century, countries such as China and India failed to industrialize despite their impressive and high-yield agricultural production. Before 1750, China had a developed economy with its markets for land, capital, and labor all functioning efficiently in comparison to markets in Europe. However, China’s market economy developed within the constraints of the biological old regime and could not achieve industrialization. Variables such as the decline in fuel supply from wood, increase in population pressure, use of land for food than for cotton, need for capital-intensive labor for food production, and the lack of easy access to coal placed enormous ecological limits upon China’s growth. China also went through the “import-substitution” process in some of its regions to produce its own textiles. However, not only did that reduce the amount of raw cotton sold to the textile-producing companies but also decreased the amount of rice China exported to other countries before. Also, unlike England, China lacked North American colonies and hence could not accumulate capital from transatlantic trade. All these factors pushed China more toward an increasingly labor-intensive agriculture with the depletion of land resources, rather than toward industrial revolution.  

Similarly, India had a comparative advantage over England in the preindustrial age. India was the largest exporter of cotton textiles throughout the world. It was effectively able to undersell cotton textiles in the world market to virtually any other producer of textiles with high yields per acre, low-priced food, and high purchasing power. The increasing demand for Indian cotton forced England to practice mercantilism and protectionism by raising tariffs on imports to Britain of Indian textiles, and the outright banning of the import of some kinds of Indian cotton products. In the meantime, the political and military power of the Mughal empire declined and England was able to expand its overseas power in India by winning a decisive victory over the French forces during the Seven Year’s War in 1760. Keeping up with its mercantilist ideas, the British empire in India widened and further dismantled India’s political and economic structures by acquiring its wealth and making it a formal colony in 1857. England’s mercantilist practices in a way contributed to the destruction of India’s cotton textile industry, leading to what some historians call “the deindustrialization of India.” 

In addition to that, the rise of the colonial powers of Portugal and France was different from that of England in Atlantic produce and the New World contribution to industrialization during the eighteenth century. The North American colony of Portugal pioneered plantation development and the Atlantic slave trade reflecting entrepreneurial mercantilism with its long-distance commerce. However, because of its small domestic markets, Portugal was unable to boost its manufacturing economy and receive the impetus to the industrial revolution. In the case of France, its demand for plantation produce was much weaker than that of the more commercialized English market, hence restricting its industrialization. Therefore, compared to Britain, both Portugal and France could not successfully tap into the New World plantation produce, giving rise to an enormous increase in its trade.

The story of the British rise to worldwide competitiveness was a result of several “coincidences” that brought about its historical processes and developments. It can be concluded that mercantilism and the transatlantic slave trade created the right climate for England on its path toward the industrial revolution. Through its reliance on protected markets in the New World and the restriction of Asian goods, England was able to accumulate wealth and maintain a captive demand for its products. Britain also had cheap and easy access to raw materials such as cotton from within its protected empire. Other contingent factors included England’s easy access to coal deposits, technological advancements, and growth of metallurgical industries (cotton industry machine production) all attributing to Britain’s industrialization. In sum, England would not have industrialized without coal and colonies.

*Tehreem Nihar is pursuing a Masters in International Relation at Near Eastern Department, New York University. 

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