The Economic Development of the World: Part 10

Corporations in the United States

The history of companies stretches back to Roman times, and deals principally with associations of people formed to run a business, but also for charitable or leisure purposes. A corporation is one kind of company, and refers to an entity which has a separate legal identity from that both of those people who carry out its activities and those who have rights to its property. Originally, corporations were solely able to be established through an act of the state, for example through royal charter or an Act of Parliament.

It was only in the mid-19th century, the first being through the Joint Stock Companies Act 1856 in the United Kingdom, that private individuals could, through a simple registration procedure, be considered to have established a corporation with limited liability. Companies today dominate economic life in all developed countries and in the global economy.

In the United States, corporations are the bases for a small village to grow into a large city in a matter of a few years. The removal of a large corporation can cause a large city to fall into bankruptcy as well as a large exodus of its people. For example, in the 1940s and 1950s, the city of Pittsburgh was the third largest city for having corporate headquarters in the country. By 2010, it has fallen into bankruptcy and most of its manufacturing base and corporate leadership vanished. 

This is a 1/8 share of the Stora Kopparberg mine, dated June 16, 1288. The alleged oldest commercial corporation in the world, the Stora Kopparberg mining community in Falun, Sweden, obtained a charter from King Magnus Eriksson in 1347.

The United States

Most corporate charters were, and still are, regulated by the states. Prior to the late 19th century, most companies were incorporated by a special bill adopted by legislature. By the end of the 18th century, there were about 300 incorporated companies in the United States, most of them providing public services, and only eight manufacturing companies. In the early 19th century, states began to enact corporation laws. New York was the first state to enact a corporate statute in 1811. The 1811 New York corporate law allowed for the formation of limited liability corporations with a simple registration system; however, this was only available for manufacturing companies. New Jersey followed New York's lead in 1816, when it enacted its first corporate law.  In 1837, Connecticut adopted a general corporation statute that allowed for the incorporation of any corporation engaged in any lawful business. Delaware did not enact its first corporation law until 1883.

These early state corporation laws were all restrictive in design, often with the intention of preventing corporations for gaining too much wealth and power. Investors generally had to be given an equal say in corporate governance, and corporations were required to comply with the purposes expressed in their charters. Therefore, some large-scale businesses used other forms of association; for example, Andrew Carnegie formed his steel operation as a limited partnership and John D. Rockefeller set up Standard Oil as a corporate trust.

Until the late 19th century, the formation of a corporation usually required an act of legislature. State enactment of corporation laws, which was becoming more common by the 1830s, allowed companies to incorporate without securing the adoption of a special legislative bill. However, given the restrictive nature of state corporation laws, many companies preferred to seek a special legislative act for incorporation to attain privileges or monopolies, even until the late nineteenth century. In 1819, the U.S. Supreme Court granted corporations rights they had not previously recognized in Trustees of Dartmouth College v. Woodward. The Supreme Court declared that a corporation is not transformed into civil institution just because the government commissioned its corporate charter; and, accordingly, it deemed corporate charters "inviolable" and not subject to arbitrary amendment or abolition by state governments.

In the late 19th century, state governments started to adopt more permissive corporate laws. In 1896, New Jersey was the first state to adopt an "enabling" corporate law, with the goal of attracting more business to the state. As a result of its early enabling corporate statute, New Jersey was the first leading corporate state. In 1899, Delaware followed New Jersey's lead with the enactment of an enabling corporate statute, but Delaware only became the leading corporate state after the enabling provisions of the 1896 New Jersey corporate law were repealed in 1913. Despite the fact that New Jersey changed its corporate law again in 1917 to reenact an enabling corporate statute similar to the repealed 1899 enabling statute, corporations had relocated to Delaware for good; Delaware has been the leading corporate state since the 1920s.

In 1890, Congress passed the Sherman Antitrust Act, which criminalized cartels that acted in restraint of trade. While the case law developed, which eventually began cracking down on the normal practices of businesses who cooperated or colluded with one another, corporations could not acquire stock in one another's businesses. However, in 1898, New Jersey, at the time the leading corporate state, changed its law to allow this. Delaware mirrored New Jersey's enactment in an 1899 statute that stated that shares held in other corporations did not confer voting rights and acquisition of shares in other companies required explicit authorization. Any corporation created under the Delaware General Corporation Law (DGCL) could purchase, hold, sell, or assign shares of other corporations. Accordingly, Delaware corporations could acquire stock in other corporations registered in Delaware and exercise all rights. This helped make Delaware increasingly an attractive places for businesses to incorporate holding companies, through which they could retain control over large operations without sanction under the Sherman Act. As antitrust law continued to tighten, companies integrated through mergers fully.

Limited liability was a matter of state law, and in Delaware up until 1967, it was left to the certificate of incorporation to stipulate “whether the private property of the stockholders... shall be subject to the payment of corporate debts, and if so, to what extent.” In California, limited liability was recognized as late as 1931.

The Multinational Corporations

A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation that is registered in more than one country or that has operations in more than one country. It is a large corporation which both produces and sells goods or services in various countries. It can also be referred to as an international corporation.

They play an important role in globalization. Arguably, the first multinational business organization was the Knights Templar, founded in 1120. After that came the British East India Company in 1600 and then the Dutch East India Company, founded March 20, 1602, which would become the largest company in the world for nearly 200 years.

A corporation may choose to locate in a special economic zone, which is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws.
It is very important to remember that a transnational corporation (TNC) differs from a traditional MNC in that it does not identify itself with one national home such as the United States or Italy. While traditional MNCs are national companies with foreign subsidiaries, TNCs spread out their operations in many countries sustaining high levels of local responsiveness. An example of a TNC is Nestlé who employ senior executives from many countries and try to make decisions from a global perspective rather than from one centralized headquarters. These companies can  control national governments due to the amount of money out lay in a given country or region. For example, in the Vietnam War, ESSO supplied North Vietnam with Oil products while EXXON supplied South Vietnam with Oil products. The US Air Force made it clear to its pilots not to bomb Standard Oil assets such as ESSO and EXXON. This is why a group of corporations can control foreign policy of governments. If they can do that, a nation’s military can be controlled by a given group of corporations.    

These multinational interest are US interest because they are in control of the US Congress and their money elects the President of the United States.  
  

This is why multinational corporations have enemies. Anti-corporate advocates criticize multinational corporations for entering countries that have low human rights or environmental standards. They claim that multinationals give rise to huge merged conglomerations that reduce competition and free enterprise, raise capital in host countries but export the profits, exploit countries for their natural resources, limit workers' wages, erode traditional cultures, and challenge national sovereignty. Some of these anti-corporate people are what we call terrorist today.

Results of the 2013 Cemetery Ridge 5K Challenge

At the start of the race in 38 Degree temperatures

Before I start, I understand that for someone at 8 years old running a 5K (3.1 Miles up and down a mountain) is unusual. But keep in mind; we are talking about Daniel Tulloch the Jamaican Flash here. Everyone knows that running is in his Jamaican blood. The Flash lives by a different standard, a world standard. Let’s start by comparing his times as a 7 year old vs. an 8 year old Flash. 

This 2 minute segment of the race shows Daniel getting ready to run the course.

Look at the valley below. This is where Daniel had to run too. Then he had to run back up the mountain and back behind where I am taking this picture to the finish line. 

This is the killer hill in this race. Daniel has about one mile to go, up a steep mountain grade and over the top of the mountain to get to the finish line.

In 2012, Daniel ran in the 14 and under age group. He came in 13th out of 25 males with an official time of 24 Minutes 2 seconds. His pace was 7 Minutes, 51 Seconds per mile. Daniel's speed was 7.6 Miles per hour. 

This year Daniel came in 38th out of around 150 people with a time of 25 Minutes 1.13 Seconds. That is 59 seconds slower than when he was 7 years old.

To start, Daniel did something that he has not done in competition since he was 4 years old. He did not go pee before he got on the starting line. Instead when we got to the cemetery, 3 minutes before gun time, he informed me that he had to pee. I told him it was too late, he can go when he got back. So he had to hold it for 3.1 miles.

Second, Saturday morning at race time, Daniel got up and went to the race in 38 degree temperature. He had to run in a hat and gloves.

Third, his competition was 14 and under. They were not the usual 14 and under boys. He was running against the Palmyra Cougars Cross Country Track Club. The youngest of these boys is in the Seventh Grade. They are very good! 

This is the Gravel Hill's Cemetery Ridge 5K Challenge race that Daniel ran, a 3.1 Mile course.

What is next?

November 9, 2013, we are running in Philadelphia. We will enter into the USATF 2K Cross Country Association Meet. I expect him to advance to the USATF 2K Cross Country Region 2 Meet. That will be the battle. 

If he qualifies in that meet, Daniel will move on to the National USATF Cross Country Meet in San Antonio Texas on December 14, 2013. If he qualifies for nationals, this will be his fourth consecutive USATF National Meet and his second consecutive Cross Country Meet. 

I have had many friends who I noticed had a gambling problem.

I have had many friends who I noticed had a gambling problem. That was my first clue to keep them far away from me. Whether they bet on sports, scratch cards, roulette, poker, or slots—in a casino or online—problem gambling puts a strain on relationships, interfere with work, and lead to financial catastrophe. Problem gamblers may even do things they never thought they would do, like steal money to gamble or pay their debts.

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First you must know what you are dealing with.

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The myth is that you have to gamble every day to be a problem gambler. The fact is that a problem gambler may gamble frequently or infrequently. Gambling is a problem if it causes problems.

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The myth is that gambling is not really a problem if the gambler can afford it. The fact is that problems caused by excessive gambling are not just financial. Too much time spent on gambling can lead to relationship breaking down and loss of important friendships.

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The myth is that partners of problem gamblers often drive problem gamblers to gamble. The fact is that problem gamblers often rationalize their behavior. Blaming others is one way to avoid taking responsibility for their actions, including what is needed to overcome the problem.

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They myth is that if a problem gambler builds up a debt, you should help them take care of it. That fact is that quick fix solutions may appear to be the right thing to do. However, bailing the gambler out of debt may actually make matters worse by enabling gambling problems to continue.

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Gambling addiction, also known as compulsive gambling, is a type of impulse-control disorder. Compulsive gamblers can’t control the impulse to gamble, even when they know their gambling is hurting themselves or their loved ones. Gambling is all they can think about and all they want to do, no matter the consequences. Compulsive gamblers keep gambling whether they’re up or down, broke or flush, happy or depressed. Even when they know the odds are against them, even when they can’t afford to lose, people with a gambling addiction can’t “stay off the bet.”

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Gamblers can have a problem, however, without being totally out of control. Problem gambling is any gambling behavior that disrupts your life. If you’re preoccupied with gambling, spending more and more time and money on it, chasing losses, or gambling despite serious consequences, you have a gambling problem.

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Unpleasant feelings such as stress, depression, loneliness, fear, and anxiety can trigger compulsive gambling or make it worse. After a stressful day at work, after an argument with your spouse or coworker, or to avoid more time spent on your own, an evening at the track or the casino can seem like a fun, exciting way to unwind and socialize. But there are healthier and far less expensive ways to keep unpleasant feelings in check. These may include exercising, meditating, spending time with friends, taking up new hobbies, or exploring relaxation techniques.

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For many people, an important aspect of quitting gambling is to find alternate ways to handle these difficult feelings without gambling.  Even when gambling is no longer a part of your life, the painful and unpleasant feelings that may have prompted you to gamble in the past will still remain. So, it’s worth spending some time thinking about the different ways you intend to deal with stressful situations and the daily irritations that would normally trigger you to start gambling.

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Signs and symptoms of problem gambling

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Gambling addiction is sometimes referred to as the "hidden illness" because there are no obvious physical signs or symptoms like there are in drug or alcohol addiction. Problem gamblers typically deny or minimize the problem. They also go to great lengths to hide their gambling. For example, problem gamblers often withdraw from their loved ones, sneak around, and lie about where they've been and what they've been up to.

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Do I have a gambling problem?

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You may have a gambling problem if you:

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• Feel the need to be secretive about your gambling. You might gamble in secret or lie about how much you gamble, feeling others won’t understand or that you will surprise them with a big win.

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• Have trouble controlling your gambling. Once you start gambling, can you walk away? Or are you compelled to gamble until you’ve spent your last dollar, upping your bets in a bid to win lost money back?

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• Gamble even when you don’t have the money. A red flag is when you are getting more and more desperate to recoup your losses. You may gamble until you’ve spent your last dollar, and then move on to money you don’t have- money to pay bills, credit cards, or things for your children. You may feel pushed to borrow, sell, or even steal things for gambling money. It’s a vicious cycle. You may sincerely believe that gambling more money is the only way to win lost money back. But it only puts you further and further in the hole.

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• Family and friends are worried about you. Denial keeps problem gambling going. If friends and family are worried, listen to them carefully. Take a hard look at how gambling is affecting your life. It’s not a sign of weakness to ask for help. Many older gamblers are reluctant to reach out to their adult children if they've gambled away their inheritance. But it's never too late to make changes for the better.

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Treatment for problem gambling

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Every gambler is unique and so needs a recovery program tailored specifically to him or her. What works for one gambler won’t necessarily work for you. The biggest step in treatment is realizing you have a problem with gambling. It takes tremendous strength and courage to own up to this, especially if you have lost a lot of money and strained or broken relationships along the way. Don’t despair, and don’t try to go it alone. Many others have been in your shoes and have been able to break the habit.

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Overcoming a gambling addiction or problem is never easy. But recovery is possible if you stick with treatment and seek support. To find help in your area, see Resources and References below.

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Group support for gambling addiction and problem gambling

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Gamblers Anonymous is a twelve-step recovery program patterned after Alcoholics Anonymous. A key part of a 12-step program is choosing a sponsor. A sponsor is a former gambler who has time and experience remaining free from addiction, and can often provide invaluable guidance and support.

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Therapy for problem gambling

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Cognitive-behavioral therapy for problem gambling focuses on changing unhealthy gambling behaviors and thoughts, such as rationalizations and false beliefs. It also teaches problem gamblers how to fight gambling urges, deal with uncomfortable emotions rather than escape through gambling, and solve financial, work, and relationship problems caused by the addiction.

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The goal of treatment is to “rewire” the addicted brain by thinking about gambling in a new way. A variation of cognitive behavioral therapy, called the Four Steps Program, has been used in treatment of compulsive gambling as well. The goal is to change your thoughts and beliefs about gambling in four steps; re-label, reattribute, refocus, and revalue. More comprehensive information about cognitive behavioral therapy and applying it to your situation is found below.

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Seeing a therapist does not mean you are weak or can’t handle your problems. Therapy is for people who are smart enough to realize they need help. It can give you tools and support for reframing your thoughts that will last a lifetime.

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Maintaining recovery for problem gambling and gambling addiction

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As you may have noticed, quitting problem gambling is relatively easy. It’s staying in recovery- making a permanent commitment to stay away from gambling- that is such a challenge. Maintaining recovery for problem gambling and gambling addiction  is possible if you surround yourself with people to whom you’re accountable, avoid tempting environments, give up control of your finances (at least at first), and find exciting or enjoyable activities to replace gambling.

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Changing your lifestyle and making healthier choices

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One way to stop yourself from problem gambling is to analyze what is needed for gambling to occur, work on removing these elements from your life and replace them with healthier choices. The four elements needed for problem gambling to continue are:

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• A decision: Before gambling occurs, the decision to gamble has been made. If you have an urge to gamble: stop what you are doing and call someone, think about the consequences to your actions, tell yourself to stop thinking about gambling, and find something else to do immediately.

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• Money: Gambling cannot occur without money. Get rid of your credit cards, let someone else be in charge of your money, have the bank make automatic payments for you, and keep a limited amount of cash on you at all times.

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• Time: Gambling cannot occur if you don’t have the time. Schedule enjoyable recreational time for yourself that has nothing to do with gambling, find time for relaxation, and plan outings with your family.

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• A game: Without a game or activity to bet on there is no opportunity to gamble. Don’t put yourself in tempting environments or locations. Tell the gambling establishments you frequent that you have a gambling problem and ask them to restrict you from betting at their casinos and establishments. Block online gambling sites on your computer.

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Maintaining recovery from problem gambling or gambling addiction depends a lot on the reasons why you were gambling in the first place. Once you’ve quit gambling, reasons such as depression, loneliness, or boredom will remain, so in order to maintain your recovery, you’ll need to address these problems.

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Dealing with gambling cravings

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Feeling the urge to gamble is normal, but that doesn’t make it any easier when you are struggling to make better choices. Remember, as you build healthier choices and a good support network, resisting cravings will be easier and easier. The following strategies can help;

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• Reach out for support. Call a trusted family member, meet a friend for coffee, or go to a Gamblers Anonymous meeting.

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• Do something else. Distract yourself with another activity, such as cleaning your house, going to the gym, or watching a movie.

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• Postpone gambling. Tell yourself that you’ll wait five minutes, fifteen minutes, or an hour — however long you think you can hold out. As you wait, the urge to gamble may pass or become weak enough to resist.

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• Give yourself a reality check. Visualize what will happen if you give in to the urge to gamble. Think about how you’ll feel after all your money is gone and you’ve disappointed yourself and your family again.

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• Avoid Isolation. If you gamble to socialize or be around other people, try healthier ways to build a social network. Volunteer, connect with old friends, make new friends.

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If you aren’t able to resist the gambling craving, don’t be too hard on yourself or use it as an excuse to give up. Overcoming a gambling addiction is a tough process. You may slip from time to time; the important thing is to learn from your mistakes and continue working towards recovery.

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Helping a family member with a gambling problem

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Does my loved one have a gambling problem?

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If your loved one has a gambling problem, he or she might:

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• Become increasingly defensive about his or her gambling. The more a problem gambler is in the hole, the more the need to defend gambling as a way to get money. Your loved one may get secretive, defensive or even blame you for the need to gamble, telling you that it is all for you and you need to trust in the “big win someday.”

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• Suddenly become secretive over money and finances. Your loved one might show a new desire to control household finances, or there might increasingly be a lack of money despite the same income and expenses. Savings and assets might mysteriously dwindle, or there may be unexplained loans or cash advances.

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• Become increasingly desperate for money to fund the gambling. Credit card bills may increase, or your loved one may ask friends and family for money. Jewelry or other items easily pawned for money may mysteriously disappear. 

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How to help with a gambling problem

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Compulsive and problem gamblers often need the support of their family and friends to help them in their struggle to stop gambling. But the decision to quit has to be theirs. As much as you may want to, and as hard as it is seeing the effects, you cannot make someone stop gambling.

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If your family member has a gambling problem, you may have many conflicting emotions. You may try to cover up for a loved one or spend a lot of time and energy trying to keep him or her from gambling. At the same time, you might be furious at your loved one for gambling again and tired of trying to keep up the charade. The gambler may also have borrowed (or even stolen) money from you with no way to pay it back. He or she may have sold family possessions or run up huge debts on joint credit cards. When faced with the consequences of their actions, a gambler can suffer a crushing drop in self-esteem. This is one reason why there is a high rate of suicide among problem gamblers.

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Preventing suicide in problem gamblers

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When gamblers are feeling hopeless, the risk of suicide is high. It’s very important to take any thoughts or talk of suicide seriously. If you or someone you care about is suicidal, call the National Suicide Prevention Lifeline at 1-800-273-8255. For a suicide helpline outside the U.S., visit Befrienders Worldwide.

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Tools for family members of problem gamblers:

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• Start by helping yourself. You have a right to protect yourself emotionally and financially. Don’t blame yourself for the gambler’s problems. The right support can help you make positive choices for yourself, and balance encouraging your loved one to get help without losing yourself in the process.

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• Don’t go it alone. It can feel so overwhelming coping with a loved one’s problem gambling that it may seem easier to rationalize their requests and problems “this one last time”. Or you might feel ashamed, feeling like you are the only one who has problems like this. Reaching out for support will make you realize that many families have struggled with this problem. Or you might consider therapy to help sort out the complicated feelings that arise from coping with a problem gambler.

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• Set boundaries in managing money. If a loved one is serious about getting help for problem gambling, it may help if you take over the family finances to make sure the gambler stays accountable and to prevent relapse. However, this does not mean you are responsible for micromanaging the problem gamblers impulses to gamble. Your first responsibilities are to ensure that your own finances and credit are not at risk.

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• Consider how you will handle requests for money. Problem gamblers often become very good at asking for money, either directly or indirectly. They may use pleading, manipulation or even threats and blaming to get it. It takes time and practice to learn how you will respond to these requests to ensure you are not enabling the problem gambler and keeping your own dignity intact.

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Do’s and Don'ts for Partners of Problem Gamblers

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• Seek the support of others with similar problems; attend a self-help group for families such as Gam-Anon.
• Explain problem gambling to the children.
• Recognize your partner’s good qualities.
• Remain calm when speaking to your partner about his or her gambling and its consequences.
• Let your partner know that you are seeking help for your own sake because of the way gambling affects you and the children.
• Understand the need for treatment of problem gambling despite the time it may involve.
• Take control of family finances; review bank and credit card statements.

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Don’t

• Preach, lecture, or allow yourself to lose control of your anger.
• Make threats or issue ultimatums unless you intend to carry them out.
• Exclude the gambler from family life and activities.
• Expect immediate recovery, or that all problems will be resolved when the gambling stops.
• Bail out the gambler.
• Cover-up or deny the existence of the problem to yourself, the family, or others.

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They may think they can’t stop but, with the right help, they can overcome a gambling problem or addiction and regain control of themselves. The first step is recognizing and acknowledging the problem.

Source: Dept. of Mental Health & Addiction Services

The Economic Development of the World: Part 9

World Gross Domestic Product from year 1 AD when Jesus 
was born to 2003 A.D.

 The Industrial Revolution

The causes of the Industrial Revolution were complicated and remain a topic for debate, with some historians believing the Revolution was an outgrowth of social and institutional changes brought by the end of feudalism in Britain after the English Civil War in the 17th century. As national border controls became more effective, the spread of disease was lessened, thereby preventing the epidemics common in previous times. The percentage of children who lived past infancy rose significantly, leading to a larger workforce. The Enclosure movement and the British Agricultural Revolution made food production more efficient and less labor-intensive, forcing the surplus population who could no longer find employment in agriculture into cottage industry, for example weaving, and in the longer term into the cities and the newly developed factories. The colonial expansion of the 17th century with the accompanying development of international trade, creation of financial markets and accumulation of capital are also cited as factors, as is the scientific revolution of the 17th century.

Until the 1980s, it was universally believed by academic historians that technological innovation was the heart of the Industrial Revolution and the key enabling technology was the invention and improvement of the steam engine. However, recent research into the Marketing Era has challenged the traditional, supply-oriented interpretation of the Industrial Revolution.

Lewis Mumford has proposed that the Industrial Revolution had its origins in the Early Middle Ages, much earlier than most estimates. He explains that the model for standardized mass production was the printing press and that "the archetypal model for the industrial era was the clock". He also cites the monastic emphasis on order and time-keeping, as well as the fact that medieval cities had at their center a church with bell ringing at regular intervals as being necessary precursors to a greater synchronization necessary for later, more physical, manifestations such as the steam engine.

The presence of a large domestic market should also be considered an important driver of the Industrial Revolution, particularly explaining why it occurred in Britain. In other nations, such as France, markets were split up by local regions, which often imposed tolls and tariffs on goods traded among them. Internal tariffs were abolished by Henry VIII of England, they survived in Russia till 1753, 1789 in France and 1839 in Spain.

Governments' grant of limited monopolies to inventors under a developing patent system (the Statute of Monopolies in 1623) is considered an influential factor. The effects of patents, both good and ill, on the development of industrialization are clearly illustrated in the history of the steam engine, the key enabling technology. In return for publicly revealing the workings of an invention the patent system rewarded inventors such as James Watt by allowing them to monopolise the production of the first steam engines, thereby rewarding inventors and increasing the pace of technological development. However, monopolies bring with them their own inefficiencies which may counterbalance, or even overbalance, the beneficial effects of publicising ingenuity and rewarding inventors. Watt's monopoly may have prevented other inventors, such as Richard Trevithick, William Murdoch or Jonathan Hornblower, from introducing improved steam engines, thereby retarding the industrial revolution by about 16 years.

What was the Industrial Revolution?

The Industrial Revolution was the transition to new manufacturing processes in the period from about 1760 to sometime between 1820 and 1840. This transition included going from hand production methods to machines, new chemical manufacturing and iron production processes, improved efficiency of water power, the increasing use of steam power and the development of machine tools. It also included the change from wood and other bio-fuels to coal. It began in Great Britain and within a few decades had spread to Western Europe and the United States.

The Industrial Revolution marks a major turning point in history; almost every aspect of daily life was influenced in some way. In particular, average income and population began to exhibit unprecedented sustained growth. In the words of Nobel Prize winner Robert E. Lucas, Jr., "For the first time in history, the living standards of the masses of ordinary people have begun to undergo sustained growth ... Nothing remotely like this economic behavior is mentioned by the classical economists, even as a theoretical possibility."

William Bell Scott Iron and Coal, 1855–60

The period of time covered by the Industrial Revolution varies with different historians. Eric Hobsbawm held that it 'broke out' in Britain in the 1780s and was not fully felt until the 1830s or 1840s, while T. S. Ashton held that it occurred roughly between 1760 and 1830.

Some 20th-century historians such as John Clapham and Nicholas Crafts have argued that the process of economic and social change took place gradually and the term revolution is a misnomer. This is still a subject of debate among historians. GDP per capita was broadly stable before the Industrial Revolution and the emergence of the modern capitalist economy. The Industrial Revolution began an era of per-capita economic growth in capitalist economies. Economic historians are in agreement that the onset of the Industrial Revolution is the most important event in the history of humanity since the domestication of animals and plants.

The First Industrial Revolution evolved into the Second Industrial Revolution in the transition years between 1840 and 1870, when technological and economic progress gained momentum with the increasing adoption of steam-powered boats, ships and railways, the large scale manufacture of machine tools and the increasing use of steam powered factories.

Causes in Europe

A 1623 Dutch East India Company bond.

European 17th century colonial expansion, international trade, and creation of financial markets produced a new legal and financial environment, one which supported and enabled 18th century industrial growth. This growth was led by European Corporations that soon became multinational corporations.

One question of active interest to historians is why the industrial revolution occurred in Europe and not in other parts of the world in the 18th century, particularly China, India, and the Middle East, or at other times like in Classical Antiquity or the Middle Ages. Numerous factors have been suggested, including education, technological changes (see Scientific Revolution in Europe), "modern" government, "modern" work attitudes, ecology, and culture. The Age of Enlightenment not only meant a larger educated population but also more modern views on work. However, most historians contest the assertion that Europe and China were roughly equal because modern estimates of per capita income on Western Europe in the late 18th century are of roughly 1,500 dollars in purchasing power parity (and Britain had a per capita income of nearly 2,000 dollars) whereas China, by comparison, had only 450 dollars.

Some historians such as David Landes and Max Weber credit the different belief systems in China and Europe with dictating where the revolution occurred. The religion and beliefs of Europe were largely products of Judaeo-Christianity, and Greek thought. Conversely, Chinese society was founded on men like Confucius, Mencius, Han Feizi (Legalism), Lao Tzu (Taoism), and Buddha (Buddhism). Whereas the Europeans believed that the universe was governed by rational and eternal laws, the East believed that the universe was in constant flux and, for Buddhists and Taoists, not capable of being rationally understood. 

Other factors include the considerable distance of China's coal deposits, though large, from its cities as well as the then unnavigable Yellow River that connects these deposits to the sea.

Regarding India, the Marxist historian Rajani Palme Dutt said: "The capital to finance the Industrial Revolution in India instead went into financing the Industrial Revolution in Britain." In contrast to China, India was split up into many competing kingdoms, with the three major ones being the Marathas, Sikhs and the Mughals. In addition, the economy was highly dependent on two sectors—agriculture of subsistence and cotton, and there appears to have been little technical innovation. It is believed that the vast amounts of wealth were largely stored away in palace treasuries by totalitarian monarchs prior to the British take over. 

Absolutist dynasties in China, India, and the Middle East failed to encourage manufacturing and exports, and expressed little interest in the well-being of their subjects.

Causes in Britain

As the Industrial Revolution developed British manufactured output surged ahead of other economies. After the Industrial Revolution, it was overtaken later by the United States.

Great Britain provided the legal and cultural foundations that enabled entrepreneurs to pioneer the industrial revolution. Key factors fostering this environment were:

(1) The period of peace and stability which followed the unification of England and Scotland;

(2) no trade barriers between England and Scotland;

(3) the rule of law (respecting the sanctity of contracts);

(4) a straightforward legal system which allowed the formation of joint-stock companies (corporations); 

(5) a free market (capitalism).

Geographical and natural resource advantages of Great Britain were the fact that it had extensive coast lines and many navigable rivers in an age where water was the easiest means of transportation and having the highest quality coal in Europe.

There were two main values that really drove the industrial revolution in Britain. These values were self-interest and an entrepreneurial spirit. Because of these interests, many industrial advances were made that resulted in a huge increase in personal wealth. These advancements also greatly benefitted the British society as a whole. Countries around the world started to recognize the changes and advancements in Britain and use them as an example to begin their own industrial revolutions.

Industrial Revolution on Slavery

The debate about the start of the Industrial Revolution also concerns the massive lead that Great Britain had over other countries. Some have stressed the importance of natural or financial resources that Britain received from its many overseas colonies or that profits from the British slave trade between Africa and the Caribbean helped fuel industrial investment. However, it has been pointed out that slave trade and West Indian plantations provided only 5% of the British national income during the years of the Industrial Revolution. Even though slavery accounted for minimal economic profits in Britain during the Industrial Revolution, Caribbean-based demand accounted for 12% of Britain's industrial output.

It became apparent that paid labor produced more industrial output than slave labor. Here is the reason why British industry eventually turned away from slavery and caused the British government to make antislavery part of British foreign policy. In the United States, the newly formed government argued over slavery from the Revolutionary War against the British to the Civil War between the states. The turning point in the US on the Slavery issue came when President Lincoln figured out that the Union could cripple the Confederate War Machine by freeing the slaves in areas that the Union troops occupied. At the end of the war, the people saw a benefit in a free labor system. However, they did not want these ex-slave in their communities.  

The effect of science and technology on business

The greater liberalization of trade from a large merchant base may have allowed Britain to produce and use emerging scientific and technological developments more effectively than countries with stronger monarchies, particularly China and Russia. Britain emerged from the Napoleonic Wars as the only European nation not ravaged by financial plunder and economic collapse, and having the only merchant fleet of any useful size (European merchant fleets were destroyed during the war by the Royal Navy). Britain's extensive exporting cottage industries also ensured markets were already available for many early forms of manufactured goods. The conflict resulted in most British warfare being conducted overseas, reducing the devastating effects of territorial conquest that affected much of Europe. This was further aided by Britain's geographical position—an island separated from the rest of mainland Europe.

Another theory is that Britain was able to succeed in the Industrial Revolution due to the availability of key resources it possessed. It had a dense population for its small geographical size. Enclosure of common land and the related agricultural revolution made a supply of this labor readily available. There was also a local coincidence of natural resources in the North of England, the English Midlands, South Wales and the Scottish Lowlands. Local supplies of coal, iron, lead, copper, tin, limestone and water power, resulted in excellent conditions for the development and expansion of industry. Also, the damp, mild weather conditions of the North West of England provided ideal conditions for the spinning of cotton, providing a natural starting point for the birth of the textiles industry.

The stable political situation in Britain from around 1688, and British society's greater receptiveness to change (compared with other European countries) can also be said to be factors favoring the Industrial Revolution. Peasant resistance to industrialization was largely eliminated by the Enclosure movement, and the upper class developed commercial interests that made them pioneers in removing obstacles to the growth of capitalism. (This point is also made in Hilaire Belloc's The Servile State.)

Britain's population grew 280% 1550–1820, while the rest of Western Europe grew 50-80%. 70% of European urbanization happened in Britain 1750–1800. By 1800, only the Netherlands was more urbanized than Britain. This was only possible because coal, coke, imported cotton, brick and slate had replaced wood, charcoal, flax, peat and thatch. The latter compete with land grown to feed people while mined materials do not. Yet more land would be freed when chemical fertilizers replaced manure and horse's work was mechanized. A workhorse needs 3 to 5 {{{u}}} (1.21 to 2.02 ha) for fodder while even early steam engines produced 4 times more mechanical energy.

In 1700, 5/6 of coal mined worldwide was in Britain, while the Netherlands had none; so despite having Europe's best transport, most urbanized, well paid, literate people and lowest taxes, it failed to industrialize. In the 18th century, it was the only European country whose cities and population shrank. Without coal, Britain would have run out of suitable river sites for mills by the 1830s.

Transfer of knowledge

A Philosopher Lecturing on the Orrery (ca. 1766). 

Informal philosophical societies spread scientific advances

Knowledge of innovation was spread by several means. Workers who were trained in the technique might move to another employer or might be poached. A common method was for someone to make a study tour, gathering information where he could. During the whole of the Industrial Revolution and for the century before, all European countries and America engaged in study-touring; some nations, like Sweden and France, even trained civil servants or technicians to undertake it as a matter of state policy. In other countries, notably Britain and America, this practice was carried out by individual manufacturers eager to improve their own methods. Study tours were common then, as now, as was the keeping of travel diaries. Records made by industrialists and technicians of the period are an incomparable source of information about their methods.

In the United States, industries were created and managed by ethnic groups so people in these groups learned the trade of whatever ethnic employer had that business. Blacks, Indians, Hispanics, and Asians were left out of this process for the most part.

Another means for the spread of innovation was by the network of informal philosophical societies, like the Lunar Society of Birmingham, in which members met to discuss 'natural philosophy' (i.e. science) and often its application to manufacturing. The Lunar Society flourished from 1765 to 1809, and it has been said of them, "They were, if you like, the revolutionary committee of that most far reaching of all the eighteenth century revolutions, the Industrial Revolution". Other such societies published volumes of proceedings and transactions. For example, the London-based Royal Society of Arts published an illustrated volume of new inventions, as well as papers about them in its annual Transactions.

There were publications describing technology. Encyclopaedias such as Harris's Lexicon Technicum (1704) and Abraham Rees's Cyclopaedia (1802–1819) contain much of value. Cyclopaedia contains an enormous amount of information about the science and technology of the first half of the Industrial Revolution, very well illustrated by fine engravings. Foreign printed sources such as the Descriptions des Arts et Métiers and Diderot's Encyclopédie explained foreign methods with fine engraved plates.

Periodical publications about manufacturing and technology began to appear in the last decade of the 18th century, and many regularly included notice of the latest patents. Foreign periodicals, such as the Annales des Mines, published accounts of travels made by French engineers who observed British methods on study tours.