Agricultural to Industrial Economy
Humanity has experienced a massive significant change in how we live our lives since the invention of agriculture 12,000 years ago.
Only a few centuries ago, with the beginning of the Industrial Revolution, which started in 1769 in the islands of Great Britain, humanity experienced another significant change.
What industrialisation meant was that humanity now started creating wealth and other goods and services previously; the economy functioned with a rent space system where there were landlords, and they would receive profits from their tenants and farmers.
This is a primitive economy with limited merchant and middle classes, predominantly in cities and operating trading links.
One of the fantastic outcomes of the Industrial Revolution was that it provided new opportunities, and typically, around 80% of people primarily survived by being farmers in the agricultural economy.
Industrialisation freed people’s farming and made it so people could survive and develop new skills without the need to be farm labourers.
From 1800, 80% of people worked on farms.
Now, only around 2.9% of the population works in the agricultural sector in the United Kingdom, and these figures vary depending on the nation’s economy and sophistication.
Living in Cities
As people in the late 18th and 19th centuries moved from the agricultural economy into industrialised manual labour professions in cities, families became much smaller. Traditionally, a family will consist of a pan-generational household with grandparents, parents and their children’s children.
Furthermore, families will be connected through the husbands and wives of the brothers and sisters living together in a communal space with different cousins and other relatives that would share in the burden and support one another in the endeavour of child raising.
Also, women tended to work in traditional industries, such as spinning wheels and turning wool into cloth; with those traditional home jobs being taken over by industrial machines, it made the women working at home redundant in the 19th century.
This incentivised more men and women to move to cities to secure work and live in smaller apartment buildings, which incentivised people to have fewer children, and children moved from being a valuable resource to an expensive luxury.
In manual labour and agricultural economies, more people are a benefit because they are a cheap source of work. As professions become more highly specialised, it takes longer and longer to have a trained workforce.
That is why when nations industrialise, their birth rates start to plummet; this is why India’s birth rate is hovering just around replacement levels of 2.1 and why China’s birth rate is plummeted since industrialisation and urbanisation in China’s coastal regions.
Having a family without the support of other relatives is much harder, and people not surrounded by other young couples are not holding the baby the very first time into their 30s and disincentivising having babies.
The pros and cons of the Industrial Revolution are that it freed people from living according to the seasons and facing the risk of famine. Still, the negative outcome is that it destroyed the family and the disincentivised connections of different generations of families and made the family unit smaller and smaller. Were now people lucky if they have two parents and a golden retriever as a family unit.
Specialisation and Race Relations
Industrial economies and the focus on capitalism over the previous aristocratic and land-based economic systems were previously wealth and power dictated to by who controlled most lands, and wealth was created from a rent space system of the tenants living on landlord’s lands.
This is according to the professor and ex-Greek Finance Minister Yanis Varoufakis in his new book Tech Feudalism when he argues that societies could overcome racism and sexism across people renowned and judged by their abilities to generate value or be of value to business owners.
In a capitalist-based society and industrial economy, a person’s value is decided by their skill sets, productivity and the ultimate value in a market-driven system with its profit incentives.
It’s tough to have a sexist society or racist society because being successful and wealthy is driven by people’s ability to create value, which means the person’s character is judged by their abilities, not by their sexual orientation or skin colour.
That’s why in any advanced industrial and post-industrial economies, racism and sexism are counter-productive to a company’s bottom line because the mark of success is now how much money you make, how much money you make for your company and status is created that way.
Western civilisation was able to overcome religious divisions and racism, unlike the chaos we have seen in the Middle East since 2010, for that region is going through its version of Europe’s wars of religion, which lasted from 1517 to 1648.
The Islamic nations in the 11th century made up 10% of global GDP; now, it’s less than 2% due to the inability caused by economic and political reasons partly due to famines in the 11th century, which led to religion predominating life.
The reasons why it was so different in Europe was partly due to the old pagan traditions and kingships still surviving during the rise of Catholicism or Christianity in the aftermath of the fall of the Western Roman Empire in 476 A.D.
In practical terms, this meant that power was concentrated among fewer people compared to Europe than in the Middle East and North Africa, which primarily had rulers and religious classes.
Furthermore, Islam was against and still is against interest on debts, and once a relative died, the inheritance would be divided between his sons; this was a climate which was and still is heavily antibusiness.
It’s incredibly ironic, since the Prophet Mohammed was a merchant and businessperson, that he founded a religion called Islam that is heavily antibusiness due to the hostile business environment.
It is hard for businesses and entrepreneurs to raise money to grow and expand their businesses because banks cannot lend money and make fixed interest on any loans, which means the Islamic world is far behind the West regarding its banking and financial system.
This is why Islam has been frozen economically in terms of Gross Domestic Product (GDP) for over 1000 years.
