Due to the industrial revolution, there was an emergence of new economic system driven by technological progress. Such economic system has brought about numerous social and monetary benefits. But as a new economic system surfaced, there are bounds to be problems that will follow along. Just like how a new system will bring about new advancements, new problems will undoubtedly be unavoidable as well. In this essay, I will be discussing about how the new economic system has benefitted everyone socially and economically. Also, I will bring in arguments that such economic system does not necessarily bring about benefits but there are disadvantages as well. From there, I will discuss about the possible replies to such disadvantages.
By talking about industrial revolution, we are actually referring to the emergence of a new economic system due to the results of technological advancements. With these technological advancements, we see how a society has shifted to focus more on factories as well as machinery. Such shift could not be made possible without the access to new raw materials such as coal and iron. These raw materials thus played an important role in the emergence of factories as well as other modes of transportations. In general, the new economic system has brought about three main improvements: 1) new production methods, 2) consumption patterns and 3) mass production.
Firstly, each worker will be specialised in one particular area of work. For instance, Henry Ford wanted to increase the production of automobiles. So, instead of requiring all the workers to be knowledgeable about how to assemble a car, they are only required to know how to assemble one aspect of the car. By doing so, workers will be more focused on the single task at hand rather than juggling to manage different tasks. By carrying out repetitive tasks, workers are less prone to errors and are able to work more efficiency and effectively. The exploitation of new raw materials such as steel and iron also increases the accessibility to machines. With machines, they begin replacing human labour in producing the goods, speeding up the production process. Because of the introduction of machines, it reduces the need to hire workers. Thus, goods can not only be produced faster but also cheaper. Secondly, because Ford wanted to increase in the demand of his cars, he paid his workers wages that are of middle class level. With more money, workers are now able to afford middle class lifestyle such that they can afford to buy his cars, resulting in a guarantee of demands for his automobiles. Increase of wages also resulted in new consumption patterns as workers can now afford to purchase goods off the markets. Thirdly, because of these new production methods, it resulted in the possibility of mass production. With work specialisation and machines, the need for manpower is greatly reduced. By cutting down on manpower, it helps to cut down on hiring costs as well as reduce the need for supervision. This way, output is greatly maximised even though input is minimised.
These new improvements thus benefitted everyone in both social and economic aspects.
Firstly, living standards has improved because of the new economic system. Because of the increase in wages, there is a shift towards a middle-class society. People now have sufficient income to purchase goods that they previously could not afford. This phenomenon not only benefits the buyers but the suppliers as well. Because of buyers’ purchasing power, there is an increase in demand for certain goods. And due to mass production, suppliers can now cater to such demands of the buyers – they are able to produce goods in large numbers at a relatively cheap price. This way, suppliers can secure the number of buyers as well as generate profit.
Secondly, because of improvements in standard of living, it narrows down the social gaps as well as inequality in society. With the rising of middle-class, more people can now afford the basic necessity as well as luxury goods like automobiles and housing and also provide proper education for their children. These luxury goods are no longer deemed as only for the upper classes. Consumers goods are no longer targeted towards the upper class but also for the new middle-class. Because of the increase in number of buyers, suppliers have to ensure that their prices are cheap enough to maintain a competitive edge among competitors. With the increase in wages and reduced cost of living, more people can now afford to live a better life. To a certain degree, everyone now has equal access to necessity. While it is undeniable that the upper classes might still be more privileged than others, social gaps are now narrowed.
Thirdly, because of industrial revolution, there has been a growth of factories and also a shift from agriculture to manufacture. With more factories, it means that there will be new job opportunities for all. Instead of staying put, workers see this revolution as an opportunity to seek for better career prospects. They begin moving to the city areas in hope of finding a new job and aimed for improved standards of living. With more people migrating to the city, there will be an increase in population in the city areas. Generations and generations will stay in the city rather than moving back to the countryside. And even those who failed to find a decent job in the factories will seek for alternatives and start their own businesses in order to survive. This thus not only lead to a surge in population but also an increase amount of small family-owned businesses and companies, nourishing the economic growth of a city and attracting potential investors and businesses.
Lastly, there has been an increase in investments. Because of specialisation in labour and the use of machines to produce goods, supplies can be produced cheaper and quicker which in turn can be sold to the market at a cheaper price, increasing the amount of profits earned. As goods start to be more affordable to the public, consumer demands will start surging. To cater to the growing pool of demand, suppliers need to produce sufficient supply at a faster rate and relatively low price. With the increased amount of profits earned, suppliers can now invest in further innovations to speed up the production process. By purchasing more machines and improvising them, goods can be produced at a much faster rate as compared to before, contributing to the growth of profits. This is a continuous cycle where suppliers can use the profits to further invest in innovations to improve their production process such that they continue making more profits.
But despite all these societal and economic benefits, there are arguments that the new economic system does not necessarily benefit everyone. Because of the new economic system, there are two major issues: the impact on environment and the depreciation of the value of workers. As a result of more factories, pollution is unavoidable. In order to meet the demands of consumers, factories have to constantly produce more goods. And to produce more goods, it will undoubtedly involve the use of more machines, burning an excessive amount of fossil fuels which in turns produce harmful gases that will be released, resulting in air pollution. Also, instead of proper disposal of waste, factories usually just dumped their waste into rivers and sewers in order to save cost and time. This in turns pollute rivers and lakes that are supposedly the water source for the people. Such occurrence of pollution will directly create a series of health problems for people, especially in cities where factories and residence areas are closely located. The new economic system can be socially and economically beneficial but at the expenses of the health of the people.
Also, with new methods of production, the value of workers will start to depreciate. While it is true that workers tend to work faster when they only focus on repetitive job scope, they acquire no skillset and they tend to get bored easily. When they leave their workplace, it will be difficult to get a new job. Everyone that came from the same working background will have similar skillset of no value. Without any unique skillsets, they need to compete with others who share common skills as them to find a new job. Next, as more new machines are invented, they will eventually replace the jobs of workers. The need for manpower is minimised since all the tasks can be completed by the machines, saving hiring cost and time, promoting effectiveness and efficiency. Workers will only be needed to supervise and maintain the working conditions of machines – they are merely hired to look after machines. Such jobs require no specific skills and workers can be easily replace anytime. Even though the new economic system resulted in higher wages and improved living conditions for the workers, such benefits are only in the short run. If we were to analysis the benefits in the long run, there will be no future career prospects for the workers. After getting substituted by the machines, they will fall out of jobs and fall back into the lower-class category.
However, there are some possible replies to these disadvantages. In order to avoid pollution, the only plausible way is to outsource or shift the productions to other cities. But to outsource, employers will lose control over the production process and are more prone to unforeseen circumstances. Also, if companies were to locate their business elsewhere, it only solves the issues of pollution temporary. Without the existence of the factories, there will be no pollution. But to relocate the business is not to get rid of pollution, but to relocate the pollution as well. The city may now be free from pollution at the costs of affecting another city and its people. If companies were to either outsource or shift their productions, they are increasing their expenses on productions and transportations. Profits generated will not be as significant as compared to producing products locally, losing the benefits of a new economic system.
With the development of the new economic system, new methods of production are unavoidable. The aim of specialisation of labour is to maximise the output of each worker such that more products can be produced quicker. Even though labour specialisation consists of repetitive job scopes and does not involve the acquiring of new practical skills, workers can still find means to develop their individual style of working to further enhance their work efficiency and effectiveness. And such individualised working style is not a common trait shared among labour specialisation workers. These workers are still able to develop their own unique skillsets if they want to retain a competitive edge in the workforce. Also, with the development of the rail system and steam engines, international trading is now made possible. Due to trading, it helps gain access to a wider variety of consumer goods as well as create new employment opportunities. Consumers can now obtain goods at a cheaper price by importing from other countries. Similarly, goods can also be exported to countries where the production cost is high in their home countries. As goods are now available internationally, employers will need to hire more workers in order to speed up the manufacturing process and to ensure that the machines are constantly in working conditions. Although the new economic system introduces the usage of machines that might replace human labour, it also opens up international trade that in turn spur new employment opportunities at the same time. Rather than arguing that the new economic system is able or not able to benefit everyone, it is more appropriate to say that the new economic system is a reciprocate situation. By giving something, the new economic system takes away something as well.
Benefits are subjective and it is implausible to determine whether the new economic system is benefitting for everyone or not. The only solution is to accept both the benefits and problems that come along with the new economic system. To reject either the benefits or the problems is to reject the acceptance of a new economic system driven by technological process.