World Economies in the 1700s: Trends, Factors & Characteristics

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  • 0:09 18th Century Economies
  • 0:55 Demographic and…
  • 2:17 Trade Shifts
  • 3:53 Early Industrialization
  • 5:14 Lesson Summary
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Lesson Transcript
Instructor: Christopher Sailus

Chris has an M.A. in history and taught university and high school history.

In this lesson, we explore the economic trends of 18th-century Europe and the demographic and ideological factors which made the Industrial Revolution possible.

18th Century Economies

It seems that every day you hear talk about the economy. In the news, at the office, on the bus - the economy's health and its fluctuations are on everyone's lips. This was not always the case of course; believe it or not, globalized business and the Wall Street Journal have not always existed.

Some of the trends and factors which made these common parts of our everyday life were created in the 18th century, largely due to the Industrial Revolution. But the Industrial Revolution was not simply created by a few old guys deciding to build some factories. The Industrial Revolution required basic and widespread social, demographic, and cultural changes in order to create the conditions necessary for the growth of heavy industry. In this lesson, we will examine these factors and changes in 18th-century European economies and society.

Demographic and Agricultural Revolution

First of all, the 18th century saw a massive growth of population in Western Europe. From roughly 1700 to 1800, the population nearly doubled, from approximately 100 million Western Europeans at beginning of the century to approximately 190 million by the end. People, though, didn't just begin having twice as many babies as before; the birth rate only rose by a fractional percentage, not nearly enough to account for this population explosion. Though the topic is still hotly contested in historical circles, many historians think that the dramatic drop in the death rate was the root cause of the population growth. This was likely due to the fact that no major famines or plagues are reported in Europe in the 18th century. These two things had been the major checks on population in prior centuries.

Though part of this was certainly luck, one cause of the decrease in famines was the agricultural advances which also took place in the 18th century. After all, someone had to feed all these extra people! Agricultural improvements, such as crop rotation, advances in field irrigation and drainage technology, and widespread use of natural fertilizers, enhanced crop yields and produced heartier vegetables. Additionally, the introduction of American plants and crops, such as the potato and the tomato, to European farms and markets diversified the European diet and introduced new nutrients to both Europeans and the soil.

Trade Shifts

Partially as a result of the European colonies in the Americas and the new crops, materials, and - perhaps most importantly - gold and silver, that flooded into Europe, the general focus of European trade shifted from southern Europe to northern and western Europe. Indeed, prior to the discovery of the Americas, the main focus of European trade was the Mediterranean because the markets of Genoa, Venice, and elsewhere were Europe's main gateway to the goods of the Far East. As colonialism of the western hemisphere became more profitable and enriched its main actors like Great Britain and France, the economic might of these countries grew at the expense of the states of southern Europe, like Spain and the Italian city-states. By 1800, this slow transformation of the last few hundred years was complete, with Great Britain owning the largest navy in Europe and the economic capital of Europe arguably in Holland rather than in Italy.

The northwestern states of Europe were also much better poised to take advantage of the emergence of free markets which occurred in the 18th century. Though this trend was also slow - there was no one point where all of Western Europe embraced free markets - by 1800 free markets were an important facet of European economic activity. Spurred by the classical liberalism espoused by the leaders of the Enlightenment, free markets allowed for greater movement of people, goods, and wealth throughout the Early Modern period, and those already economically successful loaned out their capital at interest, fostering large business ventures and increasing the aggregate wealth of successful companies and the loaners alike. The virtue and theoretical framework of these free markets was worked out in Adam Smith's landmark work, The Wealth of Nations, published in 1776 in England.

Early Industrialization

All of these factors helped foster the early years of the Industrial Revolution in the second half of the 18th century. Like the other trends discussed in this lesson, the Industrial Revolution did not have a 'eureka!' moment, but was the culmination of decades of technological innovation taking place at the same time as important societal and demographic trends. Without the increased European population, early industrialists would've had no one to man the innovative machines of their factories!

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