The various attempts to explain the Industrial Revolution can be described as ‘models’. An historical/economic ‘model’ is a simplified way of representing a set of economic processes - in this case, those processes which brought about the Industrial Revolution. The model provides a schematic outline which maps the broad sweep of reality - or of what the deviser of the model thinks is reality. Behind the models there are economic theories which explain why the processes outlined in the model should lead to economic growth. Theories differ, however, which is one reason for disagreement between writers on economic growth; another is the schematic nature of models, which means that it is difficult to construct a model which is simple, but is also a sufficient representation of reality. These two potential reasons for disagreement help to explain why it is so difficult to achieve consensus about the Industrial Revolution.
Underlying all the models is the concept of factors of production: land, labour and capital. Land appears self-explanatory as the essential medium for agricultural output. But the economist’s land also includes the minerals below the earth’s surface, and the latent power of wind and water; paradoxically, it also includes the fruits of the sea. In effect, ‘land’ to economists is shorthand for all the products of the natural world. Labour is more straightforward, since we all understand what work is; but there are complexities because workers can be more or less skilled. Capital has a dual meaning, as the funds which are used to finance some productive asset, and the asset itself. Capital assets include buildings to house machinery, the machinery itself, mines and other expensive items; and also such less obvious assets as the crafts-man’s tools, the farmer’s seedcorn, and the factory owner’s stocks of raw cotton.