What made Industrial Revolution happen at that time in England (not other places)?
Technology improvement makes workers more productive and raise wages.
Why England?
(1)Gradual emergence of national political units in Europe.
(2)Slow decay in religion.
Secular life becomes more important than "life" after death. (Influence of Renaissance.)
Notion of materialism and emphasis on self-interest.
(3)Improvement in scientific inventions and progress.
(4)Peer reflex. Society improved thanks to an agglomeration of novel ideas.
(5)England is an island.Weather good for cotton. Emphasis on overseas trade.
(6)Political institution was good.
Adam Smith claims that the society improved acceptance of giving people freedom to make their own choices.<1>Tolerance. People are more co-operative.<2>Individual freedom. People are free to express themselves.
(7)Transmitting ideology of individual rights in natural law.
New class: Bourgeoisie Pre-industrial revolution:feudal king dominated all
Merchant got respect. Post-industrial revolution:responsibility of one another
Most western countries prior to IR were characterized by a economic system called Mercantilism,which focuses on ruler's wealth, accumulation of gold by restraining imports and encouraging exports.
Characteristics:
(1)Restraints on domestic consumption.
(2)Protectionism.(High tariff)
(3)Exclusive trade with colonies and export subsidies.
(4)Government monopoly.
(5)Price control.(Maximum wages)
Schools against mercantilism
(1)Scottish moral philosophers.
(2)French physiocrats.
Physiocracy:wealth of nations derive mainly from value of "land agriculture"
(1)Natural order by which we live together without losing significant freedom.
(2)Self-interest. System works best when there's a complementary relationship between one person's labor and another's desire.
(3)Private property.
(4)Diminishing return.
(5)Investment capital. Capital starts production and profit stimulates productivity.
Circular flow of economics(introduced by Quesnay)
Household gives labor, capital, land to firms in factor markets for money and firm provide goods and service to household for profit on goods market.
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