The Industrial Revolution was the period when machines first became really important to the economy. Starting around 1760 in England and running till about 1850, a huge string of innovations and new technologies dramatically reshaped (or ‘revolutionized’) the economy.
The Industrial Revolution was kicked off with the invention of a whole range of new machines that made it easier to make cloth. Machines like the spinning jenny, the flying shuttle, the cotton gin and the power loom all dramatically sped up the process of turning raw cotton into cloth, making British textile producers very wealthy. Other powerful technologies would follow, like the steam engine, which led to transportation technologies like trains and steamboats, and the telegraph which made communication across long distances quick and cheap.
Not all of the innovations of the Industrial Revolution were physical. The nature of work was restructured away from small workshops and home production to massive factories, where all the steps of making something could be done in a row, called ‘assembly line production’, and workers became a lot more productive as a result.
At first, the factories of the Industrial Revolution were powered mostly by water wheels, which used the energy of fast moving streams and rivers to drive machines. By the mid-1850s however, coal became the big thing, used to power trains, heat homes, and process iron and steel. The use of coal, as well as other fossil fuels like petroleum, grew exponentially in the decades after 1850, in a period sometimes called the Second Industrial Revolution, or the Technological Revolution. This second revolution lasted until around 1910, and created technologies like electricity, internal combustion engines and mass steel production.
A lot of economists and historians think of the Industrial Revolution as a major turning point in world history—even the major turning point. For most of human history, the amount of stuff an average person could make—their productivity—was pretty much stagnant. Good periods, when people got more productive (like the height of the Roman Empire), were always followed by equally bad periods when productivity fell (like the Dark Ages).¹
The Industrial Revolution changed this. For the first time, economies started continually growing year after year, allowing countries in Europe and North America to quickly become much richer than the rest of the world. This makes the Industrial Revolution quite important for answering modern economic questions like why are some countries are richer than others and can economic growth can continue forever.