Industrial Revolution: Difference between revisions
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'''Industrial Revolution''' is, in | The '''Industrial Revolution''' is the transformation, beginning in Britain in the second half of the eighteenth century, of an economy of agriculture and handicraft into one of machine production in factories. The term was popularised by the historian Arnold Toynbee to describe England between roughly 1760 and 1840, and has since been applied more broadly. | ||
For Austrian economists the episode is of interest less as a chapter of economic history than as the standing test case for how history gets written, since the received account of it is one they regard as demonstrably inverted. | |||
==Capital accumulation, not invention== | |||
The popular explanation credits inventions. Austrians reply that the inventions were the visible part of something else: an accumulation of capital that made it worth building machines, and a legal order secure enough that people saved rather than consumed. Ideas for labour-saving devices had appeared repeatedly in earlier centuries and gone nowhere, because the savings needed to embody them did not exist and the returns could be confiscated. | |||
What allowed output per worker to rise was the lengthening of the structure of production: tools to make tools, and the abstention from present consumption that funds them. On this reading the Industrial Revolution is [[capital]] theory illustrated at scale, and the reason wages rose is that workers were suddenly worth more to employ. | |||
==The standard-of-living debate== | |||
The received account holds that early industrialisation degraded the condition of the working class, and rests on the testimony of contemporary reformers and parliamentary inquiries into factory conditions. | |||
The Austrian reply, argued at length by [[Ludwig von Mises]], is that the comparison is drawn against the wrong baseline. The factories did not take a prosperous peasantry and immiserate it. They drew in people who were already destitute: the surplus rural population that the old order had no place for and that had previously died young. Factory conditions were terrible by any modern standard and better than the available alternative, which was starvation, and that is why people went.<ref name="ha21">[[Ludwig von Mises]]. [https://freecapitalists.org/books/human-action/read/chapter-xxi-work-and-wages/ XXI. Work and Wages], ''[[Human Action]]''.</ref> | |||
W. H. Hutt examined the specific evidentiary basis of the standard story, arguing that the parliamentary inquiries into the factory system were partisan proceedings whose findings were shaped by landed interests hostile to the new manufacturers and by competitors seeking regulation of rivals.<ref name="hutt">[[William Harold Hutt|W. H. Hutt]]. [https://mises.freecapitalists.org/daily/2443 The Factory System of the Early Nineteenth Century], 1926.</ref> | |||
[[F.A. Hayek]] collected these arguments in ''Capitalism and the Historians'' (1954), whose thesis is that the pessimistic account survived not because the evidence favoured it but because the historians who wrote it were hostile to the system it described. | |||
The debate is not settled, and Austrians overstate their position when they present it as though it were. Careful economic historians continue to disagree about real wages before 1820, where the data are thin and the price indices contested. What is much better established is the direction after 1820 and the demographic fact underneath the whole dispute: population grew rapidly, which is not what an immiserating system produces. | |||
==Child labour== | |||
The same reversal applies to the case most often cited against the period. Children worked in the factories, and this is treated as the system's characteristic cruelty. The Austrian reply is that children had always worked, on farms and in cottage industry, for longer hours and at higher risk, and that what was new was that the work became visible and concentrated where reformers could see it. | |||
Children stopped working when families grew rich enough not to need the income, which is a consequence of rising productivity rather than of the legislation that followed it. The argument is not that the factories were benign but that the legislation is credited with a change that the wealth had already made possible. | |||
==See also== | |||
* [[Capital]] | |||
* [[Division of labor]] | |||
* [[Capitalism]] | |||
==References== | ==References== | ||
{{ | {{reflist}} | ||
==Links== | ==Links== | ||
* [ | * [https://mises.freecapitalists.org/daily/4604 The Popular Interpretation of the "Industrial Revolution"] by Ludwig von Mises (excerpted from chapter 21 of [[Human Action]]) | ||
* [https://mises.freecapitalists.org/daily/2443 The Factory System of the Early Nineteenth Century] by William H. Hutt, 1926 | |||
* [https://mises.freecapitalists.org/daily/5814/Redeeming-the-Industrial-Revolution Redeeming the Industrial Revolution] by Wendy McElroy, November 2011 | |||
* [ | * [https://mises.freecapitalists.org/daily/2105 The Third Industrial Revolution] by Hans F. Sennholz, April 2006 | ||
* {{wplink}} | * {{wplink}} | ||
[[Category:Concepts]] | [[Category:Concepts]] | ||
[[Category:History]] | |||
Latest revision as of 13:10, 16 August 2026
The Industrial Revolution is the transformation, beginning in Britain in the second half of the eighteenth century, of an economy of agriculture and handicraft into one of machine production in factories. The term was popularised by the historian Arnold Toynbee to describe England between roughly 1760 and 1840, and has since been applied more broadly.
For Austrian economists the episode is of interest less as a chapter of economic history than as the standing test case for how history gets written, since the received account of it is one they regard as demonstrably inverted.
Capital accumulation, not invention
The popular explanation credits inventions. Austrians reply that the inventions were the visible part of something else: an accumulation of capital that made it worth building machines, and a legal order secure enough that people saved rather than consumed. Ideas for labour-saving devices had appeared repeatedly in earlier centuries and gone nowhere, because the savings needed to embody them did not exist and the returns could be confiscated.
What allowed output per worker to rise was the lengthening of the structure of production: tools to make tools, and the abstention from present consumption that funds them. On this reading the Industrial Revolution is capital theory illustrated at scale, and the reason wages rose is that workers were suddenly worth more to employ.
The standard-of-living debate
The received account holds that early industrialisation degraded the condition of the working class, and rests on the testimony of contemporary reformers and parliamentary inquiries into factory conditions.
The Austrian reply, argued at length by Ludwig von Mises, is that the comparison is drawn against the wrong baseline. The factories did not take a prosperous peasantry and immiserate it. They drew in people who were already destitute: the surplus rural population that the old order had no place for and that had previously died young. Factory conditions were terrible by any modern standard and better than the available alternative, which was starvation, and that is why people went.[1]
W. H. Hutt examined the specific evidentiary basis of the standard story, arguing that the parliamentary inquiries into the factory system were partisan proceedings whose findings were shaped by landed interests hostile to the new manufacturers and by competitors seeking regulation of rivals.[2]
F.A. Hayek collected these arguments in Capitalism and the Historians (1954), whose thesis is that the pessimistic account survived not because the evidence favoured it but because the historians who wrote it were hostile to the system it described.
The debate is not settled, and Austrians overstate their position when they present it as though it were. Careful economic historians continue to disagree about real wages before 1820, where the data are thin and the price indices contested. What is much better established is the direction after 1820 and the demographic fact underneath the whole dispute: population grew rapidly, which is not what an immiserating system produces.
Child labour
The same reversal applies to the case most often cited against the period. Children worked in the factories, and this is treated as the system's characteristic cruelty. The Austrian reply is that children had always worked, on farms and in cottage industry, for longer hours and at higher risk, and that what was new was that the work became visible and concentrated where reformers could see it.
Children stopped working when families grew rich enough not to need the income, which is a consequence of rising productivity rather than of the legislation that followed it. The argument is not that the factories were benign but that the legislation is credited with a change that the wealth had already made possible.
See also
References
Links
- The Popular Interpretation of the "Industrial Revolution" by Ludwig von Mises (excerpted from chapter 21 of Human Action)
- The Factory System of the Early Nineteenth Century by William H. Hutt, 1926
- Redeeming the Industrial Revolution by Wendy McElroy, November 2011
- The Third Industrial Revolution by Hans F. Sennholz, April 2006
- Industrial Revolution at Wikipedia