The period of industrialization before the first factories came up in Europe is termed as proto-industrialization. This period was marked by merchants from towns getting products made in villages.
Reasons for focus of merchants on villages: There were powerful trade and craft guilds in urban areas. These associations controlled competition and prices and prevented entry of a new player in the market. Because of them, it was difficult for new merchants to set business in towns.
Features of proto-industrialization in Britain:
1.The merchants supplied money to the peasants in the countryside. They motivated them to produce products for an international market.
2.Land was becoming scarce in villages. Small plots of land were not enough to meet the need of a growing population. Peasants were looking for some additional sources of income.
The proto-industrial system was a network of commercial exchanges. It was controlled by merchants. Goods were produced by peasants who worked within their family farms and not in factories. The finished product passed through several stages and reached the markets of London. From London, the products were supplied to the international market.
The Coming Up Of Factory
The earliest factories in England came up in the 1730s. By late 18th century, there were numerous factories dotting the landscape of England. In 1760 Britain was importing 2.5 million pounds of raw cotton. This quantity increased to 22 million pounds by 1787.
Benefits of factories: The factories increased efficiency of workers. Because of new machines a worker could produce better products in much bigger quantities. Cotton textiles were the main area in which industrialization happened. Managing and supervising the labour was much easier in factories than it was in the countryside.
The pace of Industrial Change
Cotton and metals were the most dynamic industries in Britain. During the first phase of industrialization (upto 1840s), cotton was the leading sector. The iron and steel industries grew rapidly with the expansion of railways. The railways expanded in England from the 1840s and in the colonies from 1860s. By 1873, the export of iron and steel from Britain was valued at about 77 million pounds. This was double the value of cotton export.
At the end of the nineteenth century, less than 20% of total workforce was employed in technologically advanced industrial sectors. This shows that the traditional industry could not be displaced by the new industries.
The cotton or metal industries could not set the change of pace in the traditional industries. But the traditional industries experienced many changes which were brought by small and apparently ordinary innovations. Food processing, building, pottery, glasswork, tanning, furniture making and production of implements were such industries.
The new technology took a long time to spread across the industrial landscape. High cost of machines and costly repair scared the merchants and industrialists. The new machines were not as effective as claimed by their inventors and manufacturers.
Historians acknowledge the fact that the typical worker in the mid-nineteenth century was not a machine operator but the traditional craftsperson and labourer.
Hand Labour and Steam Power: During this period, there was no shortage of human labour. Because of good supply of workers, there was no problem of labour shortage or high wages. As a result, the merchants and industrialists preferred to manage with human labour rather than investing in costly machines.
Machine-made goods were standardized and could not match the high quality finish of hand-made goods. The people from the upper classes preferred things produced by hand.
The situation was different in nineteenth century America. There was shortage of labour in America and hence mechanization was the only way out in that part of the world.
Life of Workers
There was large scale migration from countryside to cities in search of jobs. Finding a job depended on existing network of friendship and kin relations. People without existing social connections in the cities found it difficult to find a job. Many people had to wait for long periods before they could get a job. Such people often had to spend nights on bridges or in night shelters. Some private individuals set up Night Refuges. The Poor Law authorities maintained Casual Wards for such people.
Many jobs were seasonal in nature. Once a busy season was over, the poor were once again on the streets. While some people returned to the countryside, many stayed back to look for some odd jobs.
There was some increase in the wages in the early nineteenth century. It is difficult to arrive at figures from various trades and fluctuations which happened from year to year. The period of employment was also critical in determining the quality of life of a worker. During the best of the times till the mid-nineteenth century, about 10% of urban population was extremely poor. During the periods of economic slump, the unemployment increased anything between 35 and 75%.
Workers often turned hostile to new technology because of fear of unemployment. For example; when Spinning Jenny was introduced, women began to attack the new machines because they survived on hand spinning.
After the 1840s, construction activity increased in the cities. This opened greater employment opportunities. The number of workers in the transport industries doubled in the 1840s, and doubled again in the subsequent 30 years.
The Age of Indian Textiles
The East India Company had consolidated its business by the mid-eighteenth century. The earlier centres of trade; like Surat and Hooghly; declined during this period. The new centres; like Calcutta and Bombay emerged.
Once the East India Company established political power, it began to assert its monopoly right to trade.
The Company tried to eliminate the existing traders and brokers who were connected with the cloth trade. It tried to establish a more direct control on the weavers. A paid servant; called gomastha was appointed to supervise weavers, collect supplies, and examine the quality of cloth.
The Company prevented weavers from dealing with other buyers. This was done through the system of advances. Under this system, the weavers were given loans to purchase raw materials. Once a weaver took the advance, he could not sell his produce to any other trader.
The new system of advances created many problems for the weavers. Earlier, they used to grow some crops on their land which took care of their family needs. Now, they had not time for cultivation and they had to lease out their land.
Unlike the traditional merchants, the gomastha was an outsider who had no social links with the villages. He used to visit with sepoys and peons and punished weavers who could not meet the deadline. The gomastha behaved arrogantly. There were reports of clashes between weavers and gomasthas in many villages.
The system of advances resulted in many weavers falling in debt trap. In many places in Carnatic and Bengal, weavers deserted villages and migrated to other villages to set up looms. Many weavers began to refuse loans, closed down their workshops and took to farming.
Manchester comes to India
By the beginning of the nineteenth century; a long decline of textiles exports from India initiated. In 1811 – 12 piece-goods accounted for 33% of India’s exports but it declined to less than 3% by 1850-51.
Because of pressure from the British manufacturers, the government imposed import duties so that the goods manufactured in Britain could sell in England. They also pressurized the East India Company to sell British manufactured goods in Indian markets. At the end of the eighteenth century, there had been negligible import of cotton piece-goods in India. But by 1850 cotton piece-goods constituted over 31% of the value of Indian imports. By 1870s, the value increased to over 70%.
The machine-made cotton was cheaper than hand-made cotton piece-goods in India. The weavers thus lost a huge market share to imports from Britain. By 1850s, most of the cotton producing centres in India faced a steep decline.
The Civil War broke out in the US in 1860s. Due to that, the cotton supply from the US to Britain was cut off. Britain turned began to source cotton from India. This led to a huge shortage of raw cotton for weavers in India.
By the end of the nineteenth century, cotton factories began to come up in India as well. This was the final blow for traditional cotton textiles industry in India.
Factories Come Up
The first cotton mill in Bombay came up in 1854 and it went into production two years later. By 1862 four mills were in operation. Jute mills also came up in Bengal around the same time. The Elgin Mill was started in Kanpur in the 1860s. In Ahmadabad, the first cotton mill was set up in the same period. By 1874, the first cotton mill of Madras began production.
The Early Entrepreneurs
The history of many business groups goes back to trade with China. From the late eighteenth century, the British in India began to export opium to China and import tea from there. Many Indians took active participation in this trade by providing finance, procuring supplies and shipping consignments. Once these businessmen earned enough, they dreamt of developing industrial enterprises in India.
Dwarknanath Tagore was among the pioneers to begin industries in the 1830s and 1840s. Tagore’s enterprise sank during the business crises of the 1840s. But in the later nineteenth century, many businessmen became successful industrialists. In Bombay, Parsis like Dinshaw Petit and Jamsetjee Nusserwanjee Tata went on to build huge industrial empires. Seth Hukumchand; a Marwari businessman; set up the first Indian jute mill in Calcutta in 1917. The Birla Group was similarly started by successful traders from China.
Capital was also accumulated through other trade networks; like Burma, the Middle East and Africa.
There was a virtual stranglehold of the British players on business in India which leaved little scope for growth of Indian merchants. Till the First World War, European Managing Agencies controlled a large sector of Indian industries.
Where Did the Workers Come from?
In most of the industrial regions workers came from the surrounding districts. Most of the workers were migrants from neighbouring villages. They maintained contact with their rural homeland; by returning to their villages during harvests and festivals.
After some passage of time, workers began to migrate greater distances in search of work. For example; people from the United Provinces began to migrate to Bombay and Calcutta.
Getting a job was not easy. Industrialists usually employed a jobber to hire new people. The jobber was usually an old and trusted worker. The jobber usually preferred people from his own village. He helped them settle in the city and provided financial help during crisis. The jobber thus became an influential person. He began to demand money and gifts for his favour and began to control the lives of workers.
The Peculiarities of Industrial Growth
European Managing Agencies were interested in certain kinds of products. They focused on tea and coffee plantations, mining, indigo and jute. These products were mainly required for export and were not meant for sale in India.
The Indian businessmen avoided competing with Manchester goods in the Indian market. For example; they produced coarse cotton yarn which was used by handloom weavers or exported to China.
By the first decade of the twentieth century, various changes affected the pattern of industrialization. This was the time, the swadeshi movement was gathering momentum. Industrial groups organized themselves for collective bargaining with the government. They pressurized the government to increase tariff protection and grant other concessions. This was the period when the export of Indian yarn to China declined. This was because the produce from Chinese and Japanese mills flooded the Chinese market. The Indian manufacturers began to shift from yarn to cloth production. Between 1900 and 1912, the cotton piece-goods production doubled in India.
Industrial growth was slow till the First World War. The War changed the situation. The British mills became busy in meeting the needs of the army. This resulted in decline of imports to India. There was a vast home market to be catered by the Indian mills. The Indian mills were also asked to supply goods for the British army. This created a boom in industrial activities.
After the war, Manchester could never recapture its lost position in the Indian market. The British industry was no longer in a position to compete with the US, Germany and Japan.
Small Scale Industries Predominate
In spite of industrial growth, large industries formed only a small segment of the economy. About 67% of the large industries were located in Bengal and Bombay. Small-scale production continued to prevail in the rest of the country. Only a small portion of the industrial workforce worked in registered factories. This share was just 5% in 1911 and 10% in 1931.
The handicrafts expanded in the twentieth century. The handicrafts people adopted new technology. For example; weavers started the use of fly shuttle in their looms. By 1941, more than 35% of handlooms in India were fitted with fly shuttles. The percentage was 70 to 80 in major textile hubs; like Travancore, Madras, Mysore, Cochin and Bengal. Many other small innovations helped in improving productivity in the handloom sector.
Market for Goods
The manufacturers practiced various ways to lure new customers. Advertisement is one of the various ways to attract new customers.
The producers from Manchester labeled their products to show the place of manufacture. The label ‘Made in Manchester’ was considered to be the sign of good quality. The labels also carried beautiful illustrations. The illustrations often carried the images of Indian gods and goddesses. This was a good attempt to develop a local connect with the people.
By the late nineteenth century, manufacturers began distributing calendars to popularize their products. A calendar has a longer shelf life than newspaper or magazines. It works as a constant brand reminder throughout a year.