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Although capitalism has been a dynamic socioeconomic system since its inception, the pace of technological and social change accelerated exponentially in the 18th and 19th centuries with the Industrial Revolution. It is important not to equate capitalism and industrialization, for they are not synonymous. Historically, the Industrial Revolution occurred long after capitalism began; indeed, for most of capitalism's history, it involved preindustrial forms of production, including artisanal and household types. However, starting in the mid 1800s, an explosive increase in the speed and productivity of capitalist production occurred that transformed the worlds of work, everyday life, and the global economy. Industrialization is a complex process that involves multiple transformations in inputs, outputs, and technologies. Three dimensions are particularly important here: (1) the use of inanimate energy, (2) technological innovation, and (3) increased productivity. This entry first describes these aspects of the Industrial Revolution and then examines its geographical development, cyclical nature, and global impact.

Inanimate Energy

If preindustrial societies relied and continue to rely on animate sources of energy (i.e., human and animal muscle power), industrialization can be defined loosely as the harnessing of inanimate sources of energy. The first of this type was running water in waterwheels, a source used since the late feudal era to grind corn and flour and to saw wood. Running water was a major source of energy in the earliest stages of the Industrial Revolution, but it constrained firms to locating near streams and rivers; moreover, most streams are ephemeral, that is, they do not flow all year long.

A more efficient source of inanimate energy involves the steam engine, originally designed by Thomas Newcomen in 1712; the first prototype, however, was built by the Scottish engineer James Watt in 1769 as part of an effort to expunge seawater from coal mines that reached under the ocean. The steam engine marked a decisive turning point in the process of industrialization, with widespread applications in several areas of production and transportation. Wood provided the first major source of fuel for this invention, which required heating water into steam to drive the engine's pistons. As producers began to cut down forests in Britain in large numbers, deforesting much of the country, wood supplies began to dwindle, and the rising cost eroded profits. As wood became scarce, producers switched to coal. Thus, as Britain industrialized, several areas became major coal-producing centers, including Southern Wales and Newcastle. As the Industrial Revolution spread across the face of Europe in the 19th century, the large coal deposits of the Northern European lowlands became increasingly important, fueling the growth of manufacturing complexes in Belgium, Northern France, Northern Italy, Germany, Poland, and the Ukraine. In the United States as well, Appalachian coal played a key role in the nation's industrialization, and that industry flourished hand in hand with the rise of the Manufacturing Belt. In the late 19th and 20th centuries, coal was joined by other fossil fuels, particularly petroleum and natural gas. The abundance of cheap energy was the lifeblood of industrialization, and production became increasingly energy intensive as a result.

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