2 Lessons from the first three industrial revolutions

The people that harnessed the new power source of steam were entrepreneurs. The people that developed the cotton mills of the North of England were people that could see the need for cheap and speedy production of materials and could use the new technology to achieve this.

However, such an innovation did not come without cost, albeit the cost was not always a financial one. This revolution required the relocation of masses of people from a rural setting to an urban setting in order to provide the labour for the new factories.

This created a number of side effects that still impacts today. One could argue that it was the Industrial Revolution that started the breakup of the traditional family. Until that point families lived in small rural communities with only about 2% living in towns.

With the need for employees created by the factories, and with the opportunities for financial reward aparent in such employment, the start of the migration to find financially rewarding jobs had begun and has continued until today when such a migration has a global dimension.

Whilst some would argue that this was to the benefit of the individuals that took such a path, to the point where over 50% of the population in developed countries now live in an urban environment, there were clearly many downsides, many of which we are only seeing today. As a consequence, many, including governments, do not recognise or attribute the cause to the Industrial Revolution.

The most obvious effect of the Industrial Revolution was the impact on the farming community who lost many of their workforce to the attraction of the new industries. As a result, countries that were once self-sufficient in food production had to start to import and hence pay more for food products. Attempts to regulate production have failed spectacularly with resulting food mountains, moneyed farmers and no improvement in the situation.

This migration also had the effect of starting the demise of the extended family support that had been inherent in the village system. While it may not have had an immediate effect on young people searching for something other than farming, it is clear today that lack of family assistance is a growing problem for the governments with a need for care at both ends of the age spectrum that is no longer provided by family.

The second impact of the Industrial Revolution was on the education system. Good, targetted education within rural village schools was replaced by a system that was designed to produce sufficient clones to operate the machines of the Revolution.

To achieve this the government turned to the academics of the day who produced a cut down version of the university education that addressed the basics all should know. Over time this process has developed into an education ladder that starts in early childhood and ends at University.

What this system does is to confuse intelligence with academic attainment. It also presupposes that the primary skills for those at the top of the tree are academic ones. The softer skills of communication, people management, creativity etc. are given little or no weight on the academic ladder.

As a consequence, much inate creativity is subsumed through education in the pursuit of academic excellence. Hence it is no surprise to find that those people that started those big earning companies like Microsoft and Apple did so by jumping off of the education ladder. Yet the system with its foundations in the Industrial Revolution is still maintained by academics and civil servants who were the lucky ones that made it to the top of the ladder!

A third effect of the Industrial Revolution was the impact of chasing the money. There is no doubt that the new factories that were fuelled by steam created significant wealth for those that took the entrepreneurial risk. However, once the big profit genie is out of the bottle then it is pretty well impossible to get it back in the bottle again.

Another effect of the industrial revolution was the advent of cheaper goods. This led to a steady increase in the accumulation of wealth as a means of identifying your position isociety.

As a consequence the next two revolutions only served to increase this desire for more and cheaper goods. From the Model T Ford through to the smartphone and flat screen TV there has been a permanent lust for the new model of everything. This has resulted in directing revolutions more towards the profit motive that appeals to the vanity of consumers rather than addressing the real needs of society. As a consequence, we have developed a world where more people have mobile phones than have access to clean water.

At the time of the first industrial revolution many countries also had empires and these empires continued to fuel the achievements of the developed world through the provision of resources to support the economic growth.

One would have hoped that the provision of independence to so many of these countries would have stopped the plundering of natural resources. However, as well as needing to sell these resources in order to survive economically, the developed countries found a new cheap resource to aid their development.

Not only did they want the natural resources, they now also wanted cheap labour. Again, this was benevolently seen as assistance in bringing down unemployment and assisting economic development. However, such decisions on use of labour were often designed, not on the basis of ulturism, but on the prevailing tax laws and the needs of shareholders. As a consequence, there has never been stablilty for these developing countries.

Leaving these once colonial outposts also created a further problem. On the surface, they had been ruled for many years by some of the supposedly best democracies. However, in reality, much trade was conducted by back-pocket diplomacy.

Furthermore, many of these democrats that had ruled their country were upper class diplomats or senior forces officers. As a consequence the countries were led by a privileged elite. Small wonder then that when independence came, the new rulers assumed that this elite status and all of its trimmings were a natural reward for ruling!

A further problem with the imposition of the democratic process at independence came from the fact that many of these countries came from a tribal basis where conflicts were settled by which tribe was the strongest. It was niaive to think that these tribes would have witnessed, much less experienced the much lauded democracy. Indeed, given the prevalence of the military, it is likely that they saw autocracy rather than democracy. It is quite interesting that the military attache is still a major player in most consulates.

If you add to this the fact that the democracies of the Western World were developed over hundreds of years, it was foolish to believe that democracy could have been imposed after a simple two year cutover period.

Clearly, one cannot lay all of the troubles of the world at the feet of the three industrial revolutions, but actions taken to support the revolutions, through the use of raw materials and human capital, have not helped them nearly as much as it first appears.

In the first industrial Revolution the impact on employment was largely positive. The use of steam in places like the large cotton mills created a lot of new employment. The same was true of the second industrial revolution, albeit that the work was often repetitive and monotonous.

However, as many of the jobs in the first and second industrial revolutions started to move abroad where there was cheaper labour, so unemployment started to rise. This was further exacerbated with the third industrial revolution, where robotic production lines and computers that did tasks much quicker and more accurately replaced large numbers of people.

With the third industrial revolution things such as the internet, mobile telephones and social networks began to emerge. Indeed, from the time of electronic devices such as video recorders, remote controls, DVDs and electronic games, the gulf between the young people who embraced such technology and parents that grew up in a much simpler environment started to grow.

This gap was further widened by two other things that came as a consequence of things that emerged from the various revolutions. We talked earlier of the desire to chase material wealth, and this led to an increase in both parents going out to work. This in turn led to parents needing to abdicate parts of their parental role to others.

You may also remember we talked about the break up of the compact family unit as people moved away from the villages to take the more lucrative jobs of the revolution. This often meant that the parental role needed to be passed to teachers and child-minders who did not have the same interaction as the old family unit used to have.

As a consequence, at a time when young people were having access to more and more complex technology, their parents were less aware of the potential of such devices and less able to exercise the necessary parental control. Discovering soft pornography magazines under the pillow in the 1950s was a much easier task than detecting what people were doing on a device that you didn’t really understand.

Suddenly, keeping secrets was much easier than was the case in the past and the opportunities were potentially much more dangerous. But this was still just the tip of the iceberg before the commencement of the fourth industrial revolution.

So, to date the three industrial revolutions have succeeded in advancing economic activity in many areas. As a consequence, it has increased the wealth of many. However, it has done so at the expense of many more. We now live in a world where 62 people own as much wealth as the poorest 50% of the planet.

Sadly, the reaction of governments to all of the things that we have discussed has been remarkably poor and almost always too late. Governments tend to react to a crisis rather than anticipating and working on preventative measures.

The mass employment into the new industries also created the unions. They recognised that individuals could not take on the big bosses, but that as a representative group they could do so. For a long time unions were effective in protecting their members and ensuring good pay and conditions.

But as soon as a large group forms then a leader or leaders are required. This leads to a desire for power and from that the desire is to protect the size of its membership rather than doing the best for their members. So suddenly members start to become pawns in the power game rather than the ‘raison d’etre’.

The inability of governments to recognise the need for reasonable regulation in the control of unions allowed them to become too powerful and led to major confrontations. Governments also failed to spot the potential for further union conflict through the advances of technology. For example, with the change from steam trains to electric trains there was no need to have two people in the driver’s cab. However, running the train with one was like a red rag to a bull as far as union members wanting to protect their power base were concerned.

Of course, one could argue that the world has muddled through this far, so surely we will continue to cope with whatever is thrown at us. Children are still mainly going to school, although truanting is on the rise; taxes may well be raised to cope with increased numbers of unemployed; but countries are likely to become more insular as they seek self-preservation. Jobs that were once the perogrative of the underdeveloped countries will disappear and hence the gap between rich and poor will widen. This will not stop the pursuit of riches by those in developed countries who will still want the latest of everything.

Sadly, the gap between rich and poor, together with the pursuit of riches by the poorer members of communities will likely cause an increase in thefts, unrest and violence.

If one adds to this succeeeding generations living longer and health improvements requiring funding, we are in danger of seeing a society that requires more health professionals, more law enforcement and less workers to generate the taxes necessary to fund them.

So this time around, we need to look for alternative solutions to the problems that Industrial Revolutions bring with them. We need proactive solutions now rather than reactive band-aid after the problems have arisen.

In the following chapters we will look at what the 4th Industrial Revolution is likely to look like and try and anticipate the problems that it will bring with it.