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Unformatted text preview: 1> </I" 2 I The high-wage economy of pre-industrial Britain The working manufacturing people of England eat the fat, and drink the sweet, live better, and fare better, than the working poor of any other nation in Europe; they make better wages of their work, and spend more of the money upon their backs and bellies,than in any other country. Daniel Defoe, The Complete English Tradesman, 1726, Chapter XXII One of the most distinctive features of the British economy in the eight- eenth century was the high level of wages. This finding is unexpected in view of the literature on the standard of living during the Industrial Revolution, much of which emphasizes the poverty of the period. British workers certainly were poor by roday's standards; however, the main point of this chapter is that British workers were more prosper- ous than their counterparts in most of continental Europe and Asia during the eighteenth century. While British workers did not share fully in the economic expansion of the Industrial Revolution,' they had already reached a high income position in international terms. The view that British workers were extremely poor during the Industrial Revolution runs back to the fierce nineteenth-century debates about 'the poor', and, in particular, to the views of the classi- cal economists. Their language is part of the problem, for they usually spoke of wages being at 'subsistence'. The term isloose and misleading. To the modern ear, it suggests that wages were only enough to buy a physiologically minimum diet, rags for clothes and a bit of thatch for I This is the view of Feinstein (1998). It has recently been challenged by Clark (2005) on the basis of a new consumer price index. Clark's index, however, places far too little weight on carbohydrates and uses a wheat price series as a proxy for bread prices even though there is abundant evidence respecting the latter. Eliminating these procedures produces a pessimistic real wage series along the lines of Feinstein's. See Allen (2007b, 2007c) l> 26 .,. The pre-industrial economy a roof. If all wages were at this 'subsistence', then workers around the globe led a uniformly miserable existence. In fact, classical views were more nuanced because 'subsistence' was an elastic term. Sometimes, it meant the physiological minimum that barely kept a family alive; sometimes, it was 'socially determined' and meant a higher standard of comfort. Rather than seeing everybody at the bare bones minimum needed for survival, the classical economists saw the world in terms of a wage ladder on which workers in northwestern Europe had the highest standard of living and workers in Asia had the lowest. Adam Smith (1776, pp. 74-5, 91, 187,206) put it like this: 'In Great Britain the wages of labour seem, in the present times, to be evidently more than what is precisely necessary to enable the labourer to bring up a family.' Workers' living standards were even a bit better in the Low Countries: 'The wages of labour are said to be higher in Holland than in England.''The wages of labour are said to be higher in Holland than in England....
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This note was uploaded on 04/29/2010 for the course ECON 4514 taught by Professor Shuie during the Spring '08 term at Colorado.
- Spring '08