Hi and welcome back to Heimler’s History.
In the last few videos we’ve been talking
about the Industrial Revolution and the massive
changes that accompanied its advent.
And in this video we’re going to narrow
in on the economic and social changes that
accompanied the Industrial Revolution as states
began to industrialize.
And if that sounds funner to you than getting
kicked in the face by a zebra, then let’s
get to it.
So as the Industrial Revolution began to take
hold in many states, there was a significant
economic shift.
States that had long embraced the economic
system of mercantilism now abandoned it in
favor of Adam Smith’s laissez-faire capitalism.
And in case you forgot, mercantilism was the
economic system which championed the following
tenets.
First, there is only a fixed amount of wealth
in the world, so if my slice of the pie is
going to be bigger, yours has to be smaller.
Second, a country’s portion of that wealth
was measured in silver and gold.
Third, in order to accumulate more silver
and gold a state had to maintain a favorable
balance of trade, by which they meant more
exports than imports.
And fourth, colonies existed to serve the
parent country by sending raw materials and
buying manufactured goods.
Now, all of this required heavy government
intervention.
Now free market economics, or capitalism (which
aren’t exactly the same thing, but for our
purposes, we’ll use the terms interchangeably),
posits that there is no limit on the creation
of wealth.
Furthermore, people should be left alone to
make economic decisions by the forces of supply
and demand.
If they are left alone to do so, then they
will ultimately make decisions that benefit
society economically.
And so that naturally means that capitalism
requires big daddy government to step aside
and leave consumers and producers alone.
Needless to say, the shift from mercantilist
economies to free market economies created
a buttload of wealth for those who actually
made the change.
Now, this economic shift led to new ways of
organizing businesses.
You may remember back in the last unit we
talked about joint-stock companies which established
trading posts all throughout the world.
And the rise of these kinds of entities was
a significant economic innovation on the way
new trading ventures and exploration was financed.
And what you need to remember about them for
the purposes of this video is how they worked.
Several investors invested money into a company,
and if that company succeeded, the shareholders
were paid handsomely.
However, the shareholders were also responsible
for the debts of the company if it failed.
So it was definitely a risky proposition.
But during this period we see the rise of
the descendants of joint-stock companies,
namely, corporations.
Corporations worked just like joint stock
companies except they introduced something
very significant, namely, limited liability.
Under this system, shareholders shared in
the profits of the company, but their liability
for the debts of the company was limited.
Which is to say, they could only lose the
amount of money that they originally invested
in the company.
And hey, if you got a corporation in one country,
why not have one in nine countries?
And now we see the rise of multinational corporations.
And let me just give you two examples.
First, the Hong Kong and Shanghai Banking
Corporation established by the British.
After the Opium Wars, British merchants flooded
into China in order to establish trade.
And quickly they decided that they needed
a bank to finance their wares.
Because after all, the amount of opium that’s
required to get the bulk of the Chinese population
stoned off of their brains, well, that ain’t
gon’ pay for itself.
And so this bank eventually established branches
in many nations including China and Japan.
A second example of multinational corporations
established during this period was the Unilever
Corporation.
So the British and the Dutch partnered to
establish this one.
And their goal was to produce and sell household
items, most notably, soap.
And so they established factories in many
different nations in order to manufacture
and sell these items, and even to this day
the Unilever Corporation is still keeping
us filthy people clean.
Now maybe it goes without saying, but because
these multinational corporations were global
in scale, they became massively wealthy on
a scale that prior to this, was pretty rare.
Alright, now you didn’t think that all this
economic innovation wasn’t going to have
any social consequences did you?
So right along with the rise of capitalism
and the profusion of manufactured goods on
the market came a rise of a consumer culture
among the middle classes in many industrialized
societies.
In general, standards of living rose.
Ane people had more disposable income with
which they could buy the dizzying array of
goods on the market.
But there was only so much that people could
buy.
That didn’t stop companies from improving
their manufacturing methods and producing
more goods for sale than any population could
possibly afford.
So what are you gonna do?
Well, you create the advertising industry.
Here was a whole industry that rose up, devoted
to the task of making people feel empty inside
unless they bought product X.
And finally, as a result of all these shifts
you see the rise of a leisure culture.
Now because people spent long and dreary days
working inside factories, they began to long
for escape.
And so you get pubs popping up all over the
dang place.
It was a place that people could go after
work and socialize and drink away the dreariness
of factory life.
And as this practice gained popularity in
the 1800s, you begin to see some of the first
modern references to the problems of alcoholism.
But on a lighter note, a new invention called
the bicycle became popular among middle class
folks who could afford them.
Also people got really into cock fighting
which, in case you’re unfamiliar with the
practice, is when people bet on two roosters
who fight and kill each other.
So that’s fun.
And also during this time people took their
leisure increasingly by watching spectator
sports like horse racing and baseball.
I mean, why play sports when you can just
watch other people play them?
Okay, that’s what you need to know about
Unit 5 Topic 7 of AP World History.
If you need help with your AP World History
class or a good resource to study for your
exams in May, then here’s the Ultimate Review
Packet that I think will make all your dreams
come true.
If you want me to keep making videos for you,
then subscribe and come along.
I’m glad you tuned in—Heimler out.
