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William Radcliffe, owner of a weaving business, describes here the transition period between hand-work and mechanization in cloth production in England. The transition took place in two stages: first, mechanization of carding wool & spinning it into thread (1780-1788), and second, the invention and spread of the power loom. Radcliffe describes the first stage. He notes that the loss of a hand-spinning industry increased income disparity as some families were thrown out of work, so that the village suddenly had to contend with supporting the poor. However, cheap factory-made thread eventually brought a massive increase in demand for fabric, and those families that had the resources to respond, purchasing additional looms and expanding their businesses, became far more prosperous. Indeed he calls this phase, from 1788 to 1803, the "golden age" for weaving villages. Demand for cloth was booming, weaving was still a relatively small-scale operation so that villagers could respond to the demand, and weavers' salaries increased accordingly.
Note that Watt's engine went into production at the beginning of this period, but is not yet being used in weaving.
At the turn of the 19th century, non-human power finally reached the weaving industry. Richard Guest, the inventor of the power loom (powered by either steam or water wheels) describes this final stage of the transition of cloth production, as factory weaving displaced home weaving. The first factory for steam looms was built in Manchester in 1806 - the end of the Radcliffe's "golden age". Guest estimates labor productivity increased by a factor of 20: the work previously done by 2000 people is now done by 100 boys and girls. Home weaving was no longer competitive.
The mechanization of manufacturing - whether by water or steam power - and resultant dramatic increases in scale and productivity led to a rough and extremely rapid transition in both society and economy. While manufactured goods became much cheaper, Britain also experienced a rapid increase in income disparity and massive movement of people from farms to cities as home-based industries vanished. The transition included an unprecedented increase in child labor, with children as young as 5 leaving their families to enter the factories. Dickens wrote about packs of street children and orphans not because he was exaggerating but because that's what London looked like. Read testimony from John Birley, who was taken to the factory in 1811, at age six (scroll down on website).
Within a few decades of the invention of the steam engine people are protesting that the changes to society are intolerable. Robert Owen (1815) argues that children should not be allowed into the factories until age 10, and that public education should be provided so that they can at least read and write. The British government is investigating factory conditions by 1816. In 1831 the Labor in Cotton Mills Act limits child labor hours to 12 hours a day during the week and nine hours on Saturday.
The horrors of the first half of the 19th century lessened in the 2nd half as society and economy adjusted to the industrial system, though child labor did not immediately disappear. Industrialization in America unfolded along a similar trajectory, but delayed in time by some 50 years. Working conditions (and child labor rates) in the turn-of-the-20th-century U.S. were similar to those in mid-19th century England.
While steam and water power were socially and economically disruptive, electricity was intellectually dislocating as well. The steam engine was fairly comprehensible to people in a way that electricity wasn't. As the 20th century began, for the first time people are confronted by technology that exceeds their ability to understand. The historian Henry Adams, son of President John Quincy Adams and grandson of President John Adams, famously wrote of the Chicago Exposition of 1900 and of his experience awed and intimidated in the hall of machinery with its exhibits of dynamos (electrical generators): "No more relation could he discover between the steam and the electric current than between the Cross and the cathedral." He concludes that "his historical neck [is] broken by the irruption of forces entirely new". One caveat: when you read this, be aware that Adams is often just reciting a bunch of incomprehensible jargon to show how incomprehensible it is. You will not learn anything about technology from this chapter, only about the reaction to it. Skimming is OK.
The transition to electricity as source of power didn't follow immediately, however, and given current technology it was not always clear that switching was the economical choice. See this report on the transition in Montreal. Skim the paper; focus on getting a sense for the mix of options available, the diversity of power choices companies made, and the disorganization of the nascent electrical grid system (here entirely private). Distribution of power from the grid only became the "self-evident" and universal solution when both electricity distribution and electric motors became cheap and reliable.