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Q6. What do you understand by “Industrial Capitalism” and what were its consequences? Also discuss the origin of Labor Laws.


The system of society which came into being as a result of the industrial revolution may be termed industrial capitalism. Industrial capitalism refers to an economic and social system in which trade, industry and capital are privately controlled and operated for a profit.

Industrial capitalism is characterized by a complex division of labor between and within work process and the routine of work tasks; and finally established the global domination of the capitalist mode of production.

According to Thorsten Veblen on his conspicuous consumption theory 1902, he stated that rise of industrial capitalization was as a result of wealth accumulating thus the wealthy developing more in function and structure as a result of having access to more goods and services. Thus there arises a differentia on class. This was further enhanced through inheritance of wealth and inheritance of gentility. Thus those who were born wealthy outranked the others born in less wealth thus becoming servants.

Rise of industrial capitalization was as a result of five main viewpoints which include; conspicuous consumption, great monopoly, scientific management and difference in living standards.

The main classes in this society were: Capitalists who were the owners of means of production and workers who worked for wages.


Consequences of Industrial capitalism:

  1. It resulted in the concentration of economic power in a few hands. A small number of capitalists came to control the lives of not only a large number of workers whom they employed but also, directly or indirectly, the economic life of the entire society.
  2. The concentration of economic power in a few hands resulted in shocking social inequalities and created a wide gulf between capitalists and the rest of the population.
  3. The Industrial Revolution produced a vast number of landless workers, who were wholly dependent on an employer and had no specialized skill set.
  4. Usually there were more workers than jobs on offer and they had to accept whatever wage the employer offered. They had to work for long hours even to have a subsistence survival.
  5. Workers had no job or social security.


The origin of Labor Laws.

From the 18th century onward labor laws became necessary when customary restraints and the intimacy of employment relationships in small communities ceased to provide adequate protection against the abuses incidental to new forms of mining and manufacture on a rapidly increasing scale.

It happened at precisely the time when the 18th-century Enlightenment, the French Revolution, and the political forces that they set in motion were creating the elements of the modern social conscience. It developed rather slowly, chiefly in the more industrialized countries of Western Europe, during the 19th century

The first landmark of modern labour law was the British Health and Morals of Apprentices Act of 1802; Similar legislation for the protection of the young was adopted in Zürich in 1815 and in France in 1841. By 1848 the first legal limitation of the working hours of adults was adopted by the citizens’ assembly of the Swiss canton of Glarus. Sickness insurance and workmen’s compensation were pioneered by Germany in 1883 and 1884, and compulsory arbitration in industrial disputes was introduced in New Zealand in the 1890s.

The progress of labour legislation outside western Europe, Australia, and New Zealand was slow until after World War I. The more industrialized states of the United States began to enact such legislation toward the end of the 19th century, but the bulk of the present labour legislation of the United States was not adopted until after the Depression of the 1930s.

There was virtually no labour legislation in Russia prior to the October Revolution of 1917. In India children between the ages of seven and 12 were limited to nine hours of work per day in 1881 and adult males in textile mills to 10 hours per day in 1911, but the first major advance was the amendment of the Factory Act in 1922 to give effect to conventions adopted at the first session of the International Labour Conference at Washington, D.C. Trade Unions

Many of the laws to protect workers have been due to the pressure from workers’ trade unions. When the English workers first formed trade unions, employers called them `unlawful combinations’ and laws were passed to curb such `evils’.

  • But by 1824 the workers succeeded in getting laws against unions repealed and there was a remarkable growth in unions for all the trades.
  • English industrial workers did not have the right to vote in those days. In the beginning in fact, the population of new industrial cities had no representation in Parliament at all.
  • In the thirties and forties of the 19th century, a movement known as the ‘Chartist Movement‘, was launched to get the right of vote for workers.
  • Though the movement declined by the fifties of the 19th century, left its influence and through the Acts of 1867, 1882, 1918 and 1929 all adult citizens were enfranchised.
  • The English workers also won the right not only to organize trade unions but also the right to strike to force employers to concede their demands.

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