Modern World History 3.9 Rise of Capital

We all know what happens when the Capitol rises: the Hunger Games start. 

...Oh, capital. Okay, we're probably safe. For now. 

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Transcript

00:20

No? Alright, fine.

00:21

Guess we're talking about the industrial kind instead.

00:24

But first, let's go back in time a bit.

00:25

Between the epoch of the Greeks and the Romans and the 18th century, mechanical invention was pretty much nil.

00:33

Aristocrats relied on peasants and animals to perform manual labor.

00:37

They would've used windmills, too, but Don Quixote kept coming along and destroying the darned things.

00:41

Around this same time, a bunch of Europeans kicked off the

00:44

Age of Exploration by going out into the world to

00:47

conquer new lands, enslave new peoples, and steal lots of natural resources from native populations.

00:54

The end result? The economies of Europe expanded by leaps and bounds as the loot flowed in.

00:59

Thinking small and local didn't work anymore.

01:02

It was time for mercantilism to take the wheel.

01:04

Fun fact: that was almost the title of a Carrie Underwood song…"Mercantilism Take the Wheel."

01:09

Just didn't have quite the same ring to it though.

01:12

The central tenet of mercantilism is that you must export more than you import.

01:17

This seems like a pretty simple concept, right?

01:18

However, in order for mercantilism to work,

01:21

the nations of Europe had to embrace protectionism.

01:24

Sorry, Spaniards. No fine French champagne for you.

01:27

We hear the iced tea is pretty nice.

01:28

While protectionism was great for the people in charge in Europe, it was terrible for consumers,

01:33

who couldn't get access to all the products they wanted.

01:35

Protectionism also drove up the prices on certain products, walloping consumers right in the pocketbook.

01:41

Lots of that lovely money flowed into the hands of businessmen looking to get even wealthier than they already were.

01:47

While British merchants in particular believed in the power of investing,

01:51

they had some help for their schemes from the Bank of England.

01:55

Founded in 1694, the institution existed to help British citizens

01:59

borrow money at low interest rates, which meant

02:01

lots of entrepreneurs could take out loans to invent and innovate.

02:05

But the British had way more going for them by the time the 18th century rolled around than just stellar business acumen.

02:11

England was an island, which meant it had access to water,

02:15

which meant its merchants had no trouble getting their products to even the most exotic places.

02:21

You know, like, Boston Harbor.

02:23

Additionally, England was a politically stable country,

02:25

and had been since 1688.

02:27

No war or conflict had come along

02:29

to destroy English infrastructure or force English businessmen to spend their money on things like AR-15s.

02:36

England also had a ton of coal and iron at home,

02:39

which came in handy when Thomas Newcomen

02:41

invented the first steam engine in 1712.

02:44

A perfect storm was brewing in England.

02:47

This tiny island had the money, the geographic location, the stability, and the resources to do something amazing.

02:53

Like lose the American colonies to a bunch of upstart revolutionaries for not sharing.

02:57

Okay, well, so that maybe wasn't so amazing for the British.

02:59

But some of the folks on ye olde Albion started to wonder what would happen if animals and people,

03:06

both of which need food and sleep, didn't have to do so much manual labor.

03:10

And what if it were possible to produce a lot of stuff, like buttons or bullets or jelly beans, really, really quickly and cheaply?

03:17

It dawned on the British that the new machines they'd been building,

03:20

like Newcommen's steam engine, could be used

03:22

to complete work far faster than animals or people could.

03:26

More efficiency meant more money, which meant more innovation, which meant more money.

03:30

And so the Industrial Revolution was born. At least, it was born in England.

03:35

Don't worry, Russia, you'll get to modernize, too. Eventually.