1 Requirements for the industrial Revolution The Industrial Revolution in England.
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Transcript of 1 Requirements for the industrial Revolution The Industrial Revolution in England.
2
Requirements for Industrial Revolution
1. Savings or surplus (S) require:
2. Savings have to turn into productive investment:a. Capitalist = Businessman. A market is needed, so we
need: * Reliable Demand (10)
* Transport and Communication Revolution
b. Capitalist Businessman. Besides the market, we need:
* Credit Revolution (bank development…)
* Legal – corporative revolution (stockmarket, joint stock companies, bankruptcy…)
a. Agricultural revolution
b. Commercial revolutionand/or
Economic Development: Y = C + S
Y = I / KPR
S I
Demographic revolution )
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3. Capital-product relationship is labour applied to physical capitalWe need:a. Technology
- Previous Scientific Revolution (XVII th century)
- Applicability of inventions for the sake of profit
b. Labour- Quality
* Educational Revolution
* Mentality Revolution (bourgeois revolution, women liberation…)
- Quantity
* Agricultural Revolution
* Demographic Revolution
Requirements for Industrial Revolution
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Demographic Indicators
Rate of reproduction= 2,1 or 2,2Gross birth rate (N) = n/P x 1000Mortality Rate (M) = m/P x 1000Rate natural increase= n – mLife Expectancy (e0)Population pyramidsHuman Development Index
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Human Development Index 2006
██ 0.950 and over██ 0.900-0.949██ 0.850-0.899██ 0.800-0.849██ 0.750-0.799
██ 0.700-0.749██ 0.650-0.699██ 0.600-0.649██ 0.550-0.599██ 0.500-0.549
██ 0.450-0.499██ 0.400-0.449██ 0.350-0.399██ 0.300-0.349██ under 0.300██ n/a
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Value theory in David Value theory in David RicardoRicardo THEORETICAL PROBLEM:
In 1815, corn price increased in England and a Parliamentary Commision tried to determine if it was due to the high rents demanded by landowners
RICARDIAN SOLUTION: CORN MODEL. Assumptions:
Corn is the only commodity in the economy Corn value depends on the cost of production in
the land with worst natural conditions Different lands have different fertilities Diminishing marginal returns in agriculture
Classical EconomicsClassical Economics
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Population increases
100 U100 U1
ALandK/L
80 U90 U90 U2
90 U90 U100 U100 U1
BALandK/L
Population increases
60 U70 U80 U80 U3
70U80 U80 U9O U9O U2
80 U80 U90 U90 U100 U100 U1
CBALandK/L
Population increases
40 U50 U60 U70 U70 U4
50 U60 U70 U70 U80 U80 U3
60 U70 U70 U80 U80 U90 U90 U2
70U70U80 U80 U90 U90 U100U100U1
DCBALandK/L
TP and MgPL = 100 UR = 0 U
Price increasesTP = 280 U
MgPL = 90 UR = 10 U
Price increases
TP = 520 UMgPL = 80 U
R = 40 U
Price increases
TP = 800 UMgLP = 70 U
R = 100 U
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Putting-Out system
1884, Van Gogh 1883, Van GoghJan Gossaert, 1530
Las Hilanderas, Diego Velázquez (1599-1660) Santa Isabel’s tapestry factory workshop