Industrial Revolution

Conceptual Overview

The IR was possible due to the technological innovation that allowed for the development of machine tools, which in turn facilitated the manufacturing of other machines, with the steam engine as the most important innovation in industry and transportation. The manufacturing of these machines was made possible by developments in iron smelting and metal working, through the use of coke instead of charcoal. Subsequent inventions for the textile industry were highly important, from the flying shuttle invented in 1733, to the dressing frame developed in 1803, enabling England to become the leader in world trade in wool and cotton fabrics.

Nevertheless, the causes of the British industrial revolution extend beyond technological development, and in this regard an intense debate has emerged. Some of the factors that have been highlighted are the following: transformations in agriculture, growth in foreign trade, and an abundance of capital and credit, within a business framework in which, according to Max Weber, technical progress and the acquisition of wealth were considered to be desirable and legitimate. Other important factors were the ideas professed in various Protestant faiths with regard to austerity in spending and the virtues of saving and investing. It is also important to establish that a favorable climate for the development of the factory system was created by the individualism and rationalism in British society, its greater social flexibility, and its legislation that was more permissive than in other European countries in relation to trade associations and workshops.

The IR cannot be understood without the contribution made by modern political economics, emerging with the writing of Adam Smith dated 1776 and titled The Wealth of Nations, and in which the causes of wealth within a competitive system of industrial freedom are analyzed. When Smith, Ricardo, and other scientists from the same era proposed the market and free trade as regulators of the economy, they contributed to the forming of public and private policies promoting a new form of decentralized organization of the economy and of companies based on competition.

Critical Commentary and Future Directions

An important element incorporated beginning with the second IR consisted of scientific administration, completing the first major cycle of the rationalization of the internal operation of organizations. See Figure 1. It is important to highlight the importance of the organization of the first planning departments, as well as the standardization and differentiation of [Page 655]work through time and movement studies, and the implementation of wage incentive systems associated with productivity. Later, with the beginning of the scientific and technological revolution, Keynesian economics contributed knowledge for the fiscal and monetary regulation of the economy, and organizational theories moved away from an internal framework for analyzing companies, to incorporate structural explanatory elements. The liberation of flows of communication has played an increasingly important role in the successive industrial revolutions. The universe of communication networks has constituted the essential focus around which progress has developed, although it has also been known to play an important role in the generation of utopias, according to Armand Mattelart.

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