The Standard of Living during the British Industrial Revolution

Does Development Bring

Wealth and Health

or Poverty and Misery

to the Masses?

Stellar Performance?

• From 1780 to 1860, British per capita incomes rise from £11 to £28, a 155% gain, unparalleled in history.

• But what about the Distribution of Income and Wealth?

• Health?• Pollution?• Do a few, the majority or the many

benefit?

Globalization—Spread of Industry todayDo the workers of poor countries benefit?

Look at the Epicenter of Industrialization—Britain 1780-1860

• Very rapid industrialization

• Explosive population growth

• Rapid Urbanization

• Measure income, wealth and distribution over long period---a “completed” episode

• Alternative measures of well-being: literacy, health (height), institutions

Oliver Goldsmith (1724-1774), PoetThe Deserted VillageSweet Auburn! loveliest village of the plain,

Where health and plenty cheered the laboring swain…..How often have I paused on every charm, The sheltered cot, the cultivated farm, The never-failing brook, the busy mill, The decent church that topped the neighboring hill, The hawthorn bush, with seats beneath the shade, For talking age and whispering lovers made. How often have I blest the coming day,When toil remitting lent its turn to play, And all the village train, from labor free, Led up their sports beneath the spreading tree; While many a pastime circled in the shade, The young contending as the old surveyed; And many a gambol frolicked o'er the ground…..

Ill fares the land, to hastening ills a prey, Where wealth accumulates, and men decay:

Friedrich Engels(1844)The Condition of the Working Class in England,

• “Manchester is the regional capital of South Lancashire and the class home of English industry. It is the masterpiece of the Industrial Revolution…..A hundred years ago this region was to a great extent thinly populated marsh-land. Now it is covered with towns and villages and is the most densely-populated part of England. In Lancashire—particularly Manchester---is to be found not only the origin but the heart of the industry of the United Kingdom.”

• “The evolution of the modern system of manufacture has reached its climax in Manchester. It was in South Lancashire cotton industry that water and steam power first replaced hand machines. It was here that such machines as the power-loom and the self-acting mule replaced the old hand-loom and spinning wheel.”

Engels (1844)• In the circumstances it is to be expected that it is in this

region that the inevitable consequences of industrialisation in so far as they affect the working classes are most strikingly evident. Nowhere else can the life and conditions of the industrial proletariat be studied in all their aspects as in South Lancashire. Here can be see most clearly the degradation into which the worker sinks owing to the introduction of steam power, machinery and the division of labor.

• The cities are no more than huge working-class communities. They only part not given over to housing the workers are the factory buildings, some main streets lined with shops, and a few semi-rural lanes where the factory owners have their villas and gardens. The towns themselves have been badly planned and badly built. They have dirty courts, lanes and back alleys. The pall of smoke which hangs over these towns has blackened the houses of red brick.

Engels (1844)…looking over a bridge with a view of the city

• The view from this bridge is quite characteristic of the whole district. At the bottom, the Irk flows, or rather stagnates. It is a narrow coal-black, stinking river full of filth and rubbish which it deposits on the more low-lying right bank. In dry weather this bank presents the spectacle of a series of the most revolting blackish puddles of slime from the depths of which bubbles of miasmatic gases constantly rise and create a stench which is unbearable even to those standing on the bridge forty or fifty feet above the level of the water…. Above the Ducie Bridge there are some tall tannery buildings, and further up there are dye-works, bone mills and gasworks. All the filth, both liquid and solid, discharged by these works finds it way into the River Irk, which also receives the contents of the adjacent sewers and privies. If one looks at the heaps of garbage below Ducie Bridge one can gauge the extent to which accumulated dirt, filth and decay permeates the houses on the steep left bank of the river. All of them have been blackened by soot, all of them are crumbling with age and all have broken window panes and window frames.

• The filth and the stagnant pools in the working class quarters of the great cities have the most deleterious effects upon the health of the inhabitants because they engender just those gases which give rise to disease.

• The way in which the vast mass of the poor are treated by modern society is truly scandalous. They are herded into great cities where they breathe a fouler air than in the countryside which they have left. They are housed in the worst ventilated districts of the towns; they are deprived of all means of keeping clean. They are deprived of water because this is only brought to their houses if someone is prepared to defray the cost of laying pipes. River water is so dirty as to be useless for cleansing purposes. The poor are forced to throw into the streets all their sweepings, garbage, dirty water, and frequently even disgusting filth and excrement.

• It is notorious that general overcrowding is a characteristic feature of the great towns, but in the working class quarters people are packed together in an exceptionally small area. Not satisfied with permitting the pollution of the air in the streets, society crams as many as a dozen workers into a single room, so that at night the air becomes so foul that they are nearly suffocated. The workers have to live in damp dwellings. When they live in cellars the water seeps through the floor and when they live in attics the rain comes through the roof. The workers have to wear poor and ragged garments and they have to eat food which is bad, indigestible and adulterated. Their mental state is threatened by being subjected alternately to extremes of hope and fear. They are goaded like wild beasts and never have a chance of enjoying a quiet life. They are deprived of all pleasures except sexual indulgence and intoxicating liquors. Every day they have to work until they are physically and mentally exhausted. This forces them to excessive indulgence in the only two pleasures remaining to them.

Engels concludes• If one individual inflicts bodily injury upon another which

leads to the death of the person attacked we call it manslaughter; on the other hand, if the attacker knows beforehand that the blow will be fatal we call it murder. Murder has also been committed if society places hundreds of workers in such a position that they inevitably come to premature and unnatural ends. Their death is as violent as if they had been stabbed or shot. Murder has been committed if thousands of workers have been deprived of the necessities of life or if they have been forced into a situation in which it is impossible for them to survive.

• Industry alone has been responsible for all this and yet this same industry could not flourish except by degrading and exploiting the workers.

What is the Marxist mechanism at work here?

• Capitalists need to expropriate labor in order to accumulate capital. Wages are pushed down to obtain more machinery.

• Two problems: theoretical and empirical• Theory: Modern economic theory shows in a

competitive economy that an increase in capital increases the marginal productivity of labor and hence wages.

• Empirical: Consequently the 50% increase in capital per worker (1780-1860) should increase wages.

• However…we cannot dismiss Engels completely because his observations about poverty, health and environment were widely observed.

• So measurement is required.

Lindert and Williamson (1983): Study of Adult Male Average Full Time Earnings

Feinstein “Pessimism Perpetuated”

• What is required to measure real wages?• Nominal full-employment earnings of all

wage earners.• Wages? Sample? Earnings? Different

Occupations? Unemployment? Shifting Industry?

• Prices? Basket? Food? Clothing Rent?• Choice of Index: Laspeyres? Paasche?

Fisher Ideal?

Feinstein Concludes• Real weekly earnings 1778/82 to 1853/57

increased less than 30%, allowing for unemployment and short-time work---not doubled like Lindert and Williamson claim.

• Wage earners average incomes were stagnant for 50 years until early 1830s. Explains working class radicalism. Some increase then, fall back only began to really take off in 1860s---accords with greater social peace of mid-late Victorian period.

• Results look worse when you consider adulteration of food and drink, increase in number of dependents, poor public health, and decline in welfare expenditures.

Nicholas and Steckel JEH 1991English Workers’ Heights 1770-1815

• Height is a net measure of nutrition• Height depends on the nutrition available for

physical growth after the claims made by the body for maintenance, illness and work---surplus for growth.

• Sample of 11,303 of the 160,000 English convicts sent to Australia 1817-1840. The authorities measured height, age, occupation, conjugal status, literacy, place of birth, and crime.

Nicholas and Steckel

• Conclude that height of both rural and urban fell after 1780. Urban heights fall even more.

• Food shortages because of poor harvests and Napoleonic wars explain much but not all of decline in living standards before 1820.

If it is not capital accumulation—what could be driving the stagnation or decline of wages?• Population of England (millions)• Year Gregory King’s Actual• Estimate 1693• 1300 2.8• 1400 3.3• 1500 3.8• 1600 4.6• 1700 5.6 5.5• 1800 6.4 8.9• 1900 7.4 32.5• 2000 8.3 50.0

Why Does Population Explode?• Traditional Society does limit births• Biological maximum birth rate is 60 per thousand per

year—but in England in 1650s it was only 27 per thousand and average woman had only 3.6 children.

• Why?– Average late age of first marriage for women 24-26– 10 to 25% of women never marry– Low illegitimacy rates 3-4% of births

• Why do we observe these patterns---one reason: Deaths from pregnancy of women marrying at age 20 were 11.3% in 1650-1700

• But by 1700, age of first marriage begins to drop and the birth rate rises (1750-1800, pregnancy death rate 7.1%, 1800-1837, 4.3%)

• Birth Rate Death Rate PopGrowth• 1701-1750 3.38 3.28 0.10

• 1751-1780 3.37 3.04 0.33

• 1781-1800 3.75 2.74 1.01

• 1801-1831 3.85 2.25 1.60

• England, expressed as a percent of the population

Napoleonic Wars 1793-1815

• Labor is drawn out of the economy into army and navy. Wages rise.

• Peace 1815---400,000 men are returned to the labor market. Effect on wages?

• Bottom Line----huge population boom so it is surprising that wages don’t collapse. That wages did not collapse is a tribute to rising productivity.

But what about “Urban Disamenities”

• How to capture effects of ill health, pollution, congestion, noise and crime?

• Engels? Dickens?• Were workers attracted to cities with these

problems? How? Workers vote with their feet. Cities have opportunity. [Marx: “the idiocy of rural life”]

• Compare wages and other factors between cities and countryside---”Sweet Auburn” and “Sheffield”

Infant Mortality Rates

Regression Analysis and Disamenities Premium

Distribution of IncomeShare of the Top 5%

• England and Wales 1867 46%

• Prussia 1875 26%

• Denmark 1870 37%

• US 1900 24%

• Britain looks very high

Gini Coefficient= 0.5 times the mean of income differences divided by mean income

• Gini Coefficient for England1688 0.4681759 0.4871801 0.5191867 0.5381880 0.5201913 0.502The “Kuznets Curve” High returns to entrepreneurs

and favored factors during period of rapid innovation and growth

Why are these alternative measures of welfare important?

Why are these alternative measures of welfare important?

Multiple Measures

The British Experience Compared