Why did the Industrial Revolution happen in England and not in someplace like India or China? That fascinating question has repeatedly been asked and answered for two centuries. On this blog too a reader asked that question.
Dozens of books have been written by serious researchers on the topic, and there is quite a bit of consensus among scholars regarding the causes of the Industrial Revolution, although emphases vary. In the following I briefly outline my take on the matter. First, though, here’s how wiki introduces the IR:
The Industrial Revolution, now also known as the First Industrial Revolution, was the transition to new manufacturing processes in Europe and the United States, 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, the increasing use of steam power and water power, the development of machine tools and the rise of the mechanized factory system.The Industrial Revolution also led to an unprecedented rise in the rate of population growth.
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The Industrial Revolution began in Great Britain, and many of the technological innovations were of British origin. By the mid-18th century Britain was the world’s leading commercial nation, controlling a global trading empire with colonies in North America and the Caribbean, and with major military and political hegemony on the Indian subcontinent, particularly with the proto-industrialised Mughal Bengal, through the activities of the East India Company. The development of trade and the rise of business were among the major causes of the Industrial Revolution.
Something as complex and widespread in its impact at the IR can not be monocausal. A large set of factors, many of which were necessary and many others contingent, created the conditions for it to happen precisely where it did. These include historical, cultural, institutional, technological, scientific, commercial, climatic and geographical factors.
For example, the IR began in a temperate rather than a tropical climatic region. That’s the region above the 40 degrees north latitude. Industry involved the use of heat energy. That raises the temperature around the workplace. That raises temperatures inside factories around 20 degrees Celsius. Therefore in those places where the ambient temperature is fairly low (say, 2o degrees), inside the factory would be tolerable; but where the ambient temperature is high (say, 35 degrees), factory floor temperate would be too hot for comfort. In tropical climates people would drop dead of heat exhaustion in a typical 18th century foundry. (See the image at top of the post.)
The role of institutions is stressed by many economists. All advances have to occur somewhere for the first time, and then from there they spread elsewhere. A large number of institutional advances happened in England and Western Europe. Technological innoivations such as double-entry bookkeeping (16th century CE) and corporations were critical for the IR. Institutions were important for allowing the scale and scope of commerical activities to expand.
I favor one factor that helps explain why the IR happened broadly in Europe and England: they invented the scientific method. Many civilizations have had fairly sophisticated technology since antiquity. For example, the Chinese invented all sorts of stuff such as paper-making, movable-type printing, gunpowder, iron smelting, silk, etc. The Egyptians had the technology to build pyramids. Indians had the finest steel and textile technologies. And many civilizations also had knowledge of scientific facts. The Greeks of antiquity knew the size of the earth, for instance.
What the west invented (or perhaps discovered) was the scientific method. The scientific method was a technological invention. I see it as the single-most important factor why the IR began in England and not in India or China. Here’s the short version of my argument.
First I’d like to distinguish between technology, science and engineering. Humans have been using technology for hundred thousand years. Fire is the first major technology. Technology comes first. Later, they figured out some scientific facts. Science came later. They figured out how to get things done (technology) and then later, little bit by little bit, they figured out why things worked the way they did. For example, they knew to add carbon to pig iron to make steel but had no explanation for why or how carbon worked in steel. High-carbon Wootz steel was produced in India 2,600 years ago. The iron-carbon phase diagram which explains what steel is is less than a century old.
Science is quite distinct from technology. Science is not a collection of facts. It is a coherent set of explanations. You note some feature of nature because it strikes your fancy. You say, “Isn’t it curious how that thing is? I wonder why that is so.” And then you say, “I think it is so because of …” and you make a guess. That is a “theory” or a “hypothesis.” And you think some more about the theory and come up with some tests that test the theory. Then you do those tests. And if the result of the tests are what your theory had predicted, then you say that the theory seems to be fine so far. And you keep figuring out more tests, and given the results you get, you may modify the theory as needeed, and if needed even reject the theory and start over again.
It’s a bit of observing the world, then making up a guess about how some feature of the world works, then thinking some more, and figuring out what other bits to observe (all observations are based on theory), and then doing some figuring, and so on.
That’s the scientific method. It is what those Europeans discovered and that was one of the major factors why the Industrial Revolution began in England. The rest of the world did not have the scientific method.
Life is a Random Draw 
Mises answered this in introduction of his magnum opus “Human Action.”
I am quoting in full the relevant paragraph. Industrial Revolution will come a bit later.
“. . .The tremendous progress of technological methods of production and the resulting increase in wealth and welfare were feasible only through the pursuit of those liberal policies which were the practical application of the teachings of economics. It was the ideas of the classical economists that removed the checks imposed by age-old laws, customs, and prejudices upon technological improvement and freed the genius of reformers and innovators from the straitjackets of the guilds, government tutelage, and social pressure of various kinds. It was they that reduced the prestige of conquerors and expropriators and demonstrated the social benefits derived from business activity. None of the great modern inventions would have been put to use if the mentality of the pre-capitalistic era had not been thoroughly demolished by the economists. What is commonly called the “industrial revolution” was an offspring of the ideological revolution brought about by the doctrines of the economists. The economists exploded the old tenets: that it is unfair and unjust to outdo a competitor by producing better and cheaper goods; that it is iniquitous to deviate from the traditional methods of production; that machines are an evil because they bring about unemployment; that it is one of the tasks of civil government to prevent efficient businessmen from getting rich and to protect the less efficient against the competition of the more efficient; that to restrict the freedom of entrepreneurs by government compulsion or by coercion on the part of other social powers is an appropriate means to promote a nation’s well-being. British political economy and French Physiocracy were the pacemakers of modern capitalism. IT IS THEY THAT MADE POSSIBLE THE PROGRESS OF NATURAL SCIENCE THAT HAS HEAPED BENEFITS UPON THE MASSES.”
What is pertinent to note is that scientific revolution was concomitant with liberalism. There are people who believe that scientific thinking resulted in liberalism. But in Mises’ view, without liberalism, scientific development would’ve been impossible.
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