The Industrial Revolution has changed the face of nations, giving rise to urban centers requiring vast municipal services. It created a specialized and interdependent economic life and made the urban worker more completely dependent on the will of the employer than the rural worker had been. Relations between capital and labor were aggravated, and Marxism was one product of this unrest. Doctrines of laissez-faire, developed in the writings of Adam Smith and David Ricardo, sought to maximize the use of new productive facilities. But the revolution also brought a need for a new type of state intervention to protect the laborer and to provide necessary services. Laissez faire gradually gave way in the United States, Britain, and elsewhere to welfare capitalism. The economic theories of John Maynard Keynes reflected this change. The Industrial Revolution also provided the economic base for the rise of the professions, population expansion, and improvement in living standards and remains a primary goal of less developed nations.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.