Definition
Industrial capitalism is the phase of capitalism in which capital reorganises production rather than merely circulation. The decisive shift is the factory: dispersed artisan and putting-out production is concentrated under one roof, under direct supervision, around machinery owned by the capitalist. Wage-labour becomes the dominant work relation, and profit is generated from the gap between wages and the value workers add.
It emerges in Britain in the late 18th century with cotton textiles, spreads to iron and steam in the 19th, and dominates the world economy through the era of railroads, mass production, and Fordism until the mid-20th century — when financial activities begin to overtake industrial ones as the leading source of profit.
Why it matters
How it works
In the M-C-M' circuit, industrial capitalism's distinctive feature is what happens at C: capital is used to hire workers and buy inputs, and the production process itself — not arbitrage — generates the surplus that becomes profit. This requires the capitalist to control the workplace, set the pace of work, and capture productivity gains from technical innovation.
Industrial capitalism dramatically expanded what could be produced and at what scale, but it also tied capital to specific places, machines, and workforces. Those sunk investments made industrial capitalism politically negotiable: workers concentrated in factories could organise, and states could regulate the production sites without capital simply moving elsewhere — at least until globalisation made cross-border relocation cheap.