rom the very beginning, the Industrial Revolution relied upon trade with the "underedeveloped world, and especially with that sector of it which was under effective economic or political control by Britain: the formal or informal Empire" [Hobsbawm, 124]. Before 1850 South America, chiefly Brazil, served as the largest single market for British textiles, although after mid-century the East Indies became increasingly important until by the last quarter of the nineteenth century this part of the empire accounted for as much as sixty percent of Britain's textile production. Indeed, as Hobsbawm put it, after the beginning of the Great Depression in 1873, "Asia saved Lancashire" (125), something possible because Britain had earlier destroyed India's textile industry in order to remove potential competition (127). During the last quarter of the eighteenth century, British attempts to impose the same policy on the American colonies had led to their loss; in the first quarter of the next century, Britain succeeded doing in India what it had failed to do in America.Although thus securing these markets later saved England's textile industry, it also led to the nation's eventual economic decline: becoming excessively dependent upon its colonies ultimately lessened Britain's competeive advantages:
Britain had escaped from the Great Depression (1873-96) — the first international challenge — not by modernizing her economy but by exploiting the possibilites of her traditional situation. She had exported more to the backward and satellite economies (as in cotton), and made what she could from the last great technical innovatons she had pioneered, the iron steamship (as in shipbuilding and coal exports). When the last great receptacles of cotton goods developed their own industries — India, Japan, and China — the hour of Lancashire tolled. 
Possessing a great Empire here proved a double-edged sword, for it produced great prosperity in the short term, but in the long term led to overconfidence, obliviousness to innovation, and willingness to retain obsolescent technologies, and eventual economic disaster.
- The First Phase of the Industrial Revolution: Textiles
- The Second Phase: Railways and Steel
- The Third Phase: Electricity and Chemicals
- The Fourth Phase: Digital Information Technologies, Miniaturization
- The Industrial Revolution and the Failure of Great Britain
Hobsbawm, Eric. Industry and Empire: The Birth of the Industrial Revolution. rev. ed. New York: New Press, 1999.
Last modified 27 March 2001