Three Cheers for the Industrial Revolution
Of the many great sayings attributed to Mark Twain, this is my favorite: “It ain’t so much the things we don’t know that get us into trouble as the things we do know that ain’t so.”
Consider the free market, what Karl Marx taught us to call “capitalism.” What’s the one thing everyone knows about capitalism? Why, that it started out as a mean, nasty tool of greedy industrialists.
“The Industrial Revolution,” we all learned, was a terrible Moloch that devoured children, put profits before people, and though it made great fortunes (or, perhaps, partly because it made great fortunes), was a wicked development. The Industrial Revolution, we’ve all be taught, was the original sin of capitalism, necessary, perhaps (perhaps) to prime the engine of economic progress, but lamentable nevertheless.
Ask anyone: the Industrial Revolution is a stigma that no amount of societal amelioration can remove. The “factory system,” an integral part of the Industrial Revolution, was an urban nightmare, a Dickensian melodrama in which rural innocence was mauled and blighted in those horrific, unsanitary “Satanic mills” that William Blake anathematized.
Once upon a time, before the advent of the factory system, workers “did not need to overwork. . . . They had leisure for healthful work in garden or field, work which, in itself, was recreation for them, and they could take part beside in the recreation and games of their neighbours. . . .Their children grew up in fresh country air, and, if they could help their parents at work, it was only occasionally.”
Alas, this Eden, as described by Frederick Engels in a fairytale called "the condition of the working classes in England in 1844," was destroyed by the advent of the machine. “The proletariat,” writes Engels “was called into existence by the introduction of machinery:”
That’s the sad story of capitalism we all imbibed with mother’s milk, or formula. No less an authority than Bertrand Russell has assured us that “the Industrial Revolution caused unspeakable misery both in England and in America. I do not think any student of economic history can doubt that the average happiness in England and early nineteenth century was lower than it had been hundred years earlier.”
As F. A. Hayek pointed out long ago, this picture of economic depredation is the “one supreme myth which more than any other has served to discredit the economic system [capitalism] to which we owe our present-day civilization.”
When we move from the realm of myth-making to historical truth, however, we see that the Engels-Russell narrative, is a tissue of exaggerations, misrepresentations, and outright lies. A “careful examination of the facts,” said Hayek, has led to a “thorough refutation of this belief.”
The myth we were brought up on contrasts the idyllic world of rural life, living close to the land, with the sooty urban alternative. But the truth is that life was indeed “solitary, poor, nasty, brutish, and short” in the world of pre-industrial England. By the 1830s, life was being transformed by the wealth that the factory system brought to England.
One recurrent charge made by critics of the factory system is that it flooded with world with “cheap goods.” The word “cheap,” as the economist Louis Hacker noted, is “invested with a sinister connotation.” What it actually meant was that young women could now, for the first time, buy inexpensive dresses in a variety of patterns instead of having to make their own clothes -- a more romantic pastime only if you happen to be rich enough to have escaped the necessity of doing so.
The early nineteenth century, according to the conventional wisdom, was a time of great economic oppression. In fact it was the debut of an era of progress and wealth creation the likes of which the world had never seen. “The nineteenth century, for the first time,” Hacker wrote, “introduced on a broad scale state policies of public health and public education. The nineteenth century, by turning out cheap goods, made possible the amazing climb of real wages in industrialized economies. The nineteenth century, by permitting the transfer of capital in large amounts, opened up the interiors of backward countries for development and production.”
Was there squalor and misery and poverty in the early nineteenth century? You betcha. And a lot of it was abetted by poor government policy. The infamous tax on windows, for example, and the high excise on building materials. (You want houses to be made in a sturdy manner? Don't make it more difficult for builders to build them.)
The truth is that after 1820, the standard of living was rapidly increasing in British society and the Industrial Revolution was its motor.
The bottom line is that the free market, aka “capitalism,” is the greatest engine for the production of wealth that the ingenuity of man has ever devised. The activity of capitalism cannot be divorced from the corrective of risk and the spur of competition. The possibility of failure, in other words, is inseparable from capitalism. The failure rate of early telegraph, canal, railroad, mining, and automobile industries in U.S. was enormous. But it was only by providing an environment in which risk, ambition, and entrepreneurship could flourish that real progress could be made.
The prerequisites are a government that guarantees a level playing field for economic activity and that refrains from interfering in the law-abiding entrepreneurial enterprises of individuals.
Not a day goes by without lamentations about the evils or limitations of capitalism emitted by some of capitalism’s most conspicuous beneficiaries. But the capitalist system has made possible over the last century, and especially in the last several decades, the greatest accumulation of wealth in the history of the world.
The Industrial Revolution in England was the crucible of this modern prosperity in part because of the freedom of economic activity that it, unlike the states of continental Europe, enjoyed. It is time to stop bad-mouthing a development that was hugely important to our current prosperity: three cheers for the Industrial Revolution!