This article first appeared on Business Insider.
It was the most rapid industrial revolution in human history, as it dramatically increased productivity and opened up new horizons for industries like manufacturing, transport, and telecommunications.
But it also had its drawbacks, with massive unemployment and mass poverty, as well as the loss of millions of jobs.
Today, the Industrial Revolution is largely forgotten by most historians, but it’s not because it hasn’t had a large impact on the economy.
It’s because many of its most significant social and economic effects have been largely ignored.
“The industrial revolution was the beginning of a new age of growth and prosperity for people, societies, and governments,” economist Daniel Kahneman wrote in his seminal book Thinking, Fast and Slow.
“The impact of the industrial revolution on economic growth was dramatic, and the impact of it on social and political change was similarly profound.”
While many of the social and demographic changes associated with the Industrial Age have been well documented, the economic effects of the new economy remain largely hidden from public view.
As the following infographic from the American Association for the Advancement of Science explains, most people aren’t aware that “the industrial revolution” was not a simple shift from manufacturing to a new, low-cost way of producing goods.
“What people do not know is that the transition from factory work to service work is not a smooth one,” the AAAS said.
“It took decades for people to learn the new skills that would enable them to produce goods at a higher cost.”
The process of moving to a service-based economy has been called “the transformation of work.”
For most people, the transition was gradual and often a relatively slow one, with people relying more on the jobs of others and gradually getting more skilled and more independent as they entered the workforce.
As the following chart from the AAAP shows, by the 1970s, most Americans had moved into the service-sector.
But the transition to service jobs came at a steep price.
“This shift created enormous economic, social, and political costs that persist to this day,” the organization wrote.
“For instance, many Americans today face the daunting task of managing the growing costs of health care and social services while simultaneously facing rising costs of housing, food, and transportation.”
The Industrial Revolution also came with its own set of problems.
As economist John Taylor explained in his book The Great Transformation, it “created a large social and institutional gap between the highly educated and the working class” — a situation that continued to grow throughout the twentieth century.
The American Institute of Architects estimated that by the end of the nineteenth century, the top income earners in the country had moved from manufacturing jobs to service or retail jobs, while the bottom 40 percent of earners had lost jobs to the “service sector.”
The gap between these groups widened as the industrial age progressed, and today, a third of Americans are not in the middle class.
Many Americans don’t realize that the economic and social consequences of the Industrial Era are so complex and nuanced, even for a modern-day economy that’s largely focused on technology.
For example, the AAAPS notes that the shift from service-oriented industries to manufacturing took years and many factors into account: The pace of innovation in the manufacturing industry meant that it was relatively slow, and new ideas were often too difficult to implement and test, and so the manufacturing industries were often seen as being in a transitional phase.
The AAAS points out that while the shift to service-driven industries was relatively rapid and gradual, the resulting economic and political disruption could have been devastating.
“Many of the changes that occurred in the last century have not been reflected in the history of the United States, in the way in which we think about the role of the American economy,” the AAS said in its report.
“In fact, they are largely unrecognized.”
A recent study by the University of California at Berkeley’s Haas School of Business found that the United State’s manufacturing industry suffered a net loss of $10.6 trillion from 1929 to 2004.
According to the study, a net $10 trillion loss for the United Kingdom alone, and a net economic loss of around $2.2 trillion for the European Union alone.
And that’s not to mention the massive impact that the industrial era had on social unrest and economic inequality.
As researchers at the University at Buffalo recently wrote, “The industrial era was the catalyst for a huge number of social and structural changes, both in terms of economic growth and social disorder.”
The most important legacy of the modern industrial revolution has been its impact on poverty.
According a recent report from the United Nations Office on Drugs and Crime, between 1940 and 2003, the number of people living on less than $1.25 per day increased by about 10 percent.
That means that the poorest 40 percent Americans were almost four times more likely to be living in poverty in 2003 than in 1940.
“For a generation, the ‘