1. (1000 AD โ 1500 AD) Increased yield in agriculture resulting from the privatization of common and and the creation of capitalist farms allowed for more people to live in cities around 1600. There werenโt factories at this point, but a higher proportion of people able to be something other than a farmer.
2. (1500 AD โ 1700 AD) Firms get bigger and start selling beyond their local market. They are aided by government spending on Canals and Turnpikes. This government spending is made possible by the increased tax revenue from the new tradesmen, who exist because farming is now more productive. This is commonly referred to as the โmerchantilist eraโ or the โcolonial eraโ.
3. (1700 AD โ 1880 AD) A โcommon marketโ is formed in England, the old local markets become obsolete and are retired or simply become part of a uniform trade law emanating from London. This makes mass production profitable, i.e. factories, because now the โmarketโ you are selling to is the whole of England, not 10,000 people, of whom perhaps only 1,000 need new shoes every year. Factories are water-powered. This is โearly industrializationโ.
4. (1880 AD on) The steam engine becomes economical, which is then used to make farming even more efficient, which then frees up more labor for factories, which are also made more economical as they no longer have to rely on water-power โ and at that point you have entered the world of โthe economyโ as we know it today.
