On the weekend, I attended a course on British history from the Peking University History Advanced Studies Program. The instructor was Professor Wang Wanqiang from Renmin University of China. I benefited greatly from it. Without using PowerPoint or handing out lecture notes, the professor systematically answered a key question through oral exposition: Why did the First Industrial Revolution occur in Britain, and why did the rise of the British Empire happen during this period? Why not in other regions of Europe with similar levels of thought and technology at the time, or in Latin America with comparable social systems, or even in China, which has abundant coal and water resources?
The professor's final conclusion was that every single factor was crucial, none could be missing. Sometimes, the course of history is a combination of chance and necessity. It was an extremely rare event for Britain to gather all these elements at this particular historical moment, and it was precisely the combined effect of these elements that inevitably led to the rise of this empire.
Core factors, none can be missing
The Glorious Revolution laid the foundation for the modern political system, ensuring the basic freedoms of citizens, and unleashed enormous social energy.
Land taxes on the nobility, introduction of income tax, and the establishment of a national debt system were pioneered. These provided necessary financial support for victory in war and the Industrial Revolution.
The abundant coal and water resources in Britain provided an important energy foundation for the First Industrial Revolution (using the steam engine as a power machine).
The contributions of scientists and thinkers like James Watt, Isaac Newton, John Locke, and Adam Smith laid the foundation for technological and economic theories.
British entrepreneurs actively promoted the application of technology and the industrialization process. Market demand: The demand for industrial products in domestic and foreign markets (including colonial markets) drove the expansion of production.
Britain's geographical position allowed it to conveniently engage in international trade, while its relatively isolated environment also provided security.
The UK's comprehensive intellectual property protection system has incentivized inventions and innovations.
Political System
Although the Magna Carta is often seen as a milestone in limiting royal power, the teacher mentioned in class that the original intention of the Magna Carta in 1215 was not to restrict the king's authority. In fact, King John, who signed the Magna Carta, soon reneged on his commitments. The concept of "freedom" in the Magna Carta was different from the freedom we understand today. At the time, people did not pay much attention to the Magna Carta, but over the years, new agreements emerged and revised it, eventually leading later generations to assign it great significance. Different eras and different groups have had varying interpretations of the Magna Carta.
However, what truly had a profound impact on the British political system was the Glorious Revolution of 1688. Although the Glorious Revolution was bloodless and appeared moderate and conservative, it brought about fundamental changes to the British political system, making it a true political revolution. The changes and evolution after the Glorious Revolution profoundly influenced the course of British history.
James II was a Catholic who always hoped to restore Catholicism. At that time, 90% of the British population were Protestants and the land was in the hands of Protestants. The restoration of Catholicism would mean that the nobles had to return the land, which made the Protestants uneasy. Initially, people thought James II was in poor health, and his two daughters were both married to Protestants, so the situation seemed tolerable. However, in his later years, James II married a Catholic princess and had a son, a situation that the nobles could not accept. Parliament therefore exiled James II and selected his daughter Mary and her husband William as the new monarchs.
After Mary died childless, Parliament decided that Anne, William's sister, should ascend the throne. After Anne passed away without an heir, Parliament made another decision, inviting George I, Elector of Hanover from Germany, to become King of England.
These three changes of monarchy were all decided by Parliament. Therefore, when inviting the monarchs, Parliament negotiated with them extensively, limiting their powers. This included the Bill of Rights and the Act of Settlement in 1689, which stipulated that Catholics could not inherit the throne. These laws laid the foundation for the later liberal democratic system, safeguarded citizens' basic freedoms, and unleashed tremendous social energy. It can be said that the institutional transformation of Britain can be traced back to the Glorious Revolution, which became an important cornerstone of Britain's modern political system.
Financial System
In 1763, Britain defeated France and became a European power, proudly calling itself the "British Empire on which the sun never sets" for the first time. An important marker of this rise can be traced back to 1689. In that great war, Britain needed a large amount of money, and these funds could only be obtained through Parliament.
The funding of the parliament mainly relied on taxation, and Britain was one of the countries with the heaviest tax burdens in the world at that time. Most members of parliament were nobles, especially land aristocrats. If we have watched British TV dramas like "Downton Abbey," we can gain some intuitive understanding of the lives of these nobles. However, to maintain stability in their rule, the British nobility had no choice but to "cut themselves," meaning taxing their own lands. Later, Pitt introduced Britain's first income tax in 1799, which alleviated the pressure on farmers and other low-income groups who depended on land taxes, and also allowed the government to raise funds for war more fairly and effectively.
This situation formed a sharp contrast with other countries. For example, in China, large landowners often did not pay taxes, and the burden of taxation eventually fell on independent farmers, leading to their bankruptcy and becoming vagrants, while land gradually became consolidated, forming an even larger landlord class. In France, although land taxes were the main type of tax, large landowners similarly enjoyed tax exemptions. This caused France, despite being stronger than Britain in its early stages, to gradually fall behind in long-term competition.
When France and Britain were competing, France's financial system ultimately collapsed, leading to national bankruptcy. While Britain also faced immense financial pressure, it managed to recover thanks to its tax system and fiscal management. The British Parliament's willingness to tax itself was quite extraordinary at the time.
At the same time, Britain was the first to establish a national debt system, allowing the state’s finances to no longer be entirely dependent on temporary taxes but instead raising public funds through issuing national bonds. This approach spread the risk and shared the benefits, as national bonds paid interest, encouraging investors to support the government. With the development of the national debt system, Britain also established a central bank, forming a complete financial system. All of this was closely related to the Glorious Revolution of 1688, laying the foundation for Britain to maintain strong economic and fiscal power in the subsequent centuries.
Entrepreneurial spirit
As an entrepreneur, although Watt was not the original inventor of the steam engine, his improvements to it, especially the invention of the crankshaft, completely changed the application direction of the steam engine, expanding its use from limited applications to broader commercial ones. Without Watt's improvements, there would have been no real commercial steam engines and thus no subsequent Industrial Revolution. Watt originally lived in poverty but eventually gained great wealth through his inventions and entrepreneurial spirit.
So, why didn't a similar Industrial Revolution happen in China? The Song Dynasty was the peak of Chinese culture, with inventions like printing leading the world. However, these technologies did not translate into large-scale productivity due to a lack of corresponding application scenarios and market demand. In contrast, Britain's overseas trade and domestic market generated enormous demand, and most importantly, the social environment in Britain at the time could foster an entrepreneurial spirit, which was the key to the occurrence of the Industrial Revolution.
. In China, the main goal of agricultural production was to maintain subsistence, and any leftover money was often used by landlords for non-essential consumption, such as weddings, funerals, or luxurious constructions like the Wang Family Courtyard or Qiao Family Courtyard, none of which promoted the continuous expansion of productivity.
On the contrary, capitalists reinvest profits into the production process in order to achieve infinite expansion. In addition to capital investment, capitalists have two other main means: reducing costs and increasing revenue. In the early days of industrialization, costs were mainly concentrated on raw materials and labor, where the exploitation of labor made many factories known as "sweatshops." However, the exploitation of workers has its limits; workers need rest and recovery, and since workers are free individuals, they will leave if there is a more cost-effective choice.
However, technological improvements and new inventions can be a continuous process with no end, constantly driving the sustained improvement of productivity. This is one of the important reasons why capitalism can promote the modernization process. For a society to achieve modernization, it must have a group of entrepreneurs who do not overly pursue personal consumption but continuously invest capital into technological improvements, performance optimization, research and development, and other ongoing production activities.
At that time, Britain was precisely because of having such a group of entrepreneurs dedicated to production and innovation that allowed the Industrial Revolution to flourish. The entrepreneurial spirit not only drove the industrialization of Britain but also laid the foundation for modern capitalism.
A nation that knows how to compromise
I remember Professor Gong once mentioned a historical story about a president (I forgot which country) who gave his son advice on his deathbed: if in the future he encounters a major decision and cannot make up his mind, he should refer to Britain's choices, because this president believed that Britain had never made a wrong decision in history.
The British nation indeed possesses a unique kind of "luck," always making the right choices at historical crossroads. Whether it was the voluntary withdrawal from India, the various decisions made during Hong Kong's return in 1997, or the choice of allies in Europe during World War I and World War II, Britain seemed to always find the right direction. The "nation of shopkeepers" (French: "une nation de boutiquiers") as Napoleon called them, has never been conquered by foreign enemies since the Norman landing in 1066. This is not only because of Britain's good fortune but also because the British are essentially a nation that understands compromise.
The English Revolution of 1640 overthrew Charles I and executed him, but ultimately the Stuart dynasty was restored. This made people realize that the Glorious Revolution of 1688 was more effective. Overthrowing the old system might not be difficult, but establishing a new and better one is extremely challenging. It is often said that the British are conservative, but in some cases, conservatism may actually be the better choice. Therefore, the British are pragmatic, knowing how to avoid blindly overthrowing the old system when facing problems, instead opting for a "patchwork" approach to maintain stability.
The British ruling class has indeed shown remarkable flexibility, knowing how to make concessions when necessary, yielding benefits to other classes and interest groups to maintain social balance and harmony. This spirit of compromise is one of the key reasons why Britain has always made the right choices at critical moments in history. It is precisely this flexibility and compromise that have allowed Britain, even after falling from its pedestal as the world's dominant power, to maintain an elegant posture and avoid the rapid decline that befell empires like Alexander's, Spain, the Netherlands, and the Soviet Union after their peaks.
Of course, while other countries can learn from Britain's experience, they cannot fully replicate it. Sun Yat-sen admired Britain's system greatly and believed China should comprehensively emulate it. At the time, only overseas Chinese who had witnessed Britain's system supported his ideas. However, such attempts at complete replication eventually ended in failure.
Modernization is indeed an attractive goal, representing higher living standards and stronger national power. However, the path to modernization does not necessarily have to follow the British model. In fact, every country must find its own unique way. Similarly, as entrepreneurs, we will learn from the best and most advanced companies, but ultimately, we must create more vital enterprises in our own way.