The Pessimists v. Optimists Debate about the Industrial Revolution

Researchers and historians engaging in the pessimist/optimist debate regarding the Industrial Revolution examine how the standard of living of British workers changed over time from the mid-eighteenth century to the mid nineteenth century, and whether it was beneficial or detrimental to the worker in general. Early industrialization and capitalism impacted the standard of living in various ways and affected urban areas differently than it affected rural areas. Because this debate focuses on economic history, workers’ average real earnings are what researchers generally analyze in order to determine exactly how the standard of living in the nineteenth century compared to the standard of living in the eighteenth century in Britain, but other qualitative and quantitative evidence, such as economic, demographic, and anthropometric indicators, as well as local and regional studies, can also shed light on the matter. Aspects of well-being and quality of life are also taken into consideration. This paper will analyze both sides of this debate in order to place it in the context of the economic history of Britain and determine whether workers in Britain during the nineteenth century experienced social and economic progress, or suffered because of the forces that stimulated economic development.

Karl Gunnar Persson and Paul Sharp, examine the economic history of Europe and explain that “Economic history traces the efficiency characteristics of institutions by studying the development of commodity and labor markets, financial intermediaries (banks), the legal framework of contract enforcement, property rights, openness to trade and international capital flows”. An important proposition these authors lay out is that population growth increases demand and therefore, also the division of labor and technological progress. Population growth was a direct result of the Industrial Revolution, specifically in urban areas as the demand for labor grew. Simultaneously, as the population grew technology had to advance in order to accommodate urban expansion.

The economic situation in Britain did inevitably lead to poor living conditions within urban areas for the typical worker because of the exponential growth in population. Urban centers quickly became overcrowded requiring more housing to be built, which resulted in the city's expansion. The desire to include the human experience throughout this episode of human development has led economic historians to turn to a wide variety of measures in their research in addition to wage and earnings data, including life expectancy, child mortality, the consumption of coffee and tea, calorie and nutrition availability, work intensity, and child labor. Attempts to quantify the human experience have been outdone by analyzing statistics. In examining the working-class diet, for example, it was found that hunger qualified as a new measure for living standards and the human experience during the Industrial Revolution. By incorporating this cultural change into the analysis, the complexity of this episode of history is better attained, however, there are historians that argue that interpreting the available data is a difficult task.

J. Potter analyzes the basic argument between pessimists and optimists in the debate about whether the Industrial Revolution produced social improvement or deterioration, and explains the difficult task historians have in interpreting the available data. Pessimists usually argue that workers paid a high price for the move towards modernity during the Industrial Revolution, and optimists tend to have a more positive view of the changes that the Industrial Revolution brought about because they ultimately led to social and economic expansion and progress. Potter explains that it would be difficult to assess total gains and compare them to total losses as that would include things like happiness and other non-material things, but that is why economic effects are more readily available and easier to interpret. Potter begins by pointing out that one of the first effects of the Industrial Revolution was the creation of choice—specifically, the choice to change and improve. This effect can be either positive or negative because it is dependent upon the specific outcome, however, it can easily be argued that the opportunity for choice, alone, was a step in the right direction.

Sticking to more traditional sources of information about Britain’s economic history, Peter H. Lindert and Jeffrey G. Williamson, analyze the earnings data available from the nineteenth century in order to shed some light on the debate between pessimists and optimists. They suggest that the data shows that the quality of life improved in both urban and rural sectors over time, putting them on the optimists’ side of the debate. With industrialization came the capacity to collect data such as wage and earnings records. This data has allowed researchers to compare the quality of life from the eighteenth century to that of the nineteenth century. Although there may be other factors to consider aside from wages and earnings, such as worker demoralization from working long hours, the disruption in traditional family roles and the increase in crime, filth, and violence in urban settings, data on earnings provides useful and concrete information that can be quantified. Furthermore, these authors caution, “In judging the importance of these quality of life factors, we must avoid imposing twentieth-century values on early nineteenth-century workers”. Interpretation is subjective, just as Potter previously indicated. That is why interpreting data is a difficult task, however, quantifying data such as real wages and earnings helps to remove any subjectivity from the analysis. Even so, it is possible for historians to review wage and earnings data and come up with a pessimist’s view.

In Charles Feinstein's, pessimist view, he explains that workers’ average real earnings were used to determine that the average family’s standard of living improved by less than 15 percent between the 1780s and the 1850s. Feinstein begins his argument with the assertion that no one disputes that participants in the initial phase of industrial transformation incurred significant, qualitative, costs, and therefore, no matter what improvements real wages might show, the “disutilities of factory work and urban living” must be taken into account. For this reason, Feinstein suggests a comprehensive national measure which is a “weighted average of a representative array of component indices which effectively gives equal importance to the movements in the earnings of each individual worker”. Feinstein disagrees with Lindert and Williamson, that the average worker was much better off in any decade after the 1830s, and provides data from things such as trade statistics on the consumption of tea, coffee, sugar, and tobacco, and infant mortality rate to show how British workers suffered while not reaping many benefits. Feinstein concluded that, while the typical British working family did not necessarily experience actual deterioration in their standard of living after the Industrial Revolution, they also did not experience rapid progress that afforded them an easier life.

C. Knick Harley and N.F.R. Crafts, use computational general equilibrium (CGE) to examine technical change, trade, economic structure, and growth in Britain during the Industrial Revolution. Sustained increases in per capita income and unprecedented population growth in the mid-nineteenth century traditionally point to modern economic growth during the Industrial Revolution in Britain. Harley and Crafts reassess quantitative evidence in order to provide a revised view that indicates that technical change occurred much slower in aggregate and was concentrated in only a few industries. Harley and Crafts argue that structural changes that arose from resource reallocation in response to the rapid growth in population meant that textile and metal industries grew while agriculture contracted. Because the British economy was in large part an international trade economy, technical advances influenced foreign trade. Finally, the Harley and Crafts CGE model shows diminishing returns in agriculture which must be taken into consideration and weighed against the productivity growth in other traded manufacturers.

More recently, Robert Allen reviewed data that showed how the British economy went through two stages of inequality that were intrinsic to the growth process. This unequal and uneven development is described in Friedrich Engels’ work, Condition of the Working Class in England in 1844, which Allen uses to provide insight into the British Industrial Revolution. Allen points out that Harley and Crafts estimated the British GDP output per worker between 1780 and 1840 increased by 46 percent, while according to Feinstein the real wage index rose only 12 percent during that same time. This shows that real wage was constant, or near-constant, during that same time which supports a pessimist’s view of the British Industrial Revolution. But is one compares those figures to the data from between 1840 and 1900 that show worker output increased 90 percent while the real wage increased 123 percent, an optimist’s view is supported. Aggregate data showed that technical progress fueled the industrial revolution and the accumulation of capital was necessary. This resulted in three general revisions to the understanding of the Industrial Revolution: 

1. substantial inequality existed during the first four decades of the nineteenth century, 
2. a simple macroeconomic model can explain these trends, and 
3. the model indicates that the explanation of growth and the discussion of inequality influence each other. In other words, while the first half of the nineteenth century shows that British workers did indeed suffer, the second half shows wage increases that reflect that accumulation had caught up with technology.

In summary, this debate may be more nuanced than initially expected. It appears that optimists tend to look at real data in order to conclude that progress was definitely made according to wages and earnings, but pessimists argue that the human experience must also be taken into consideration. There are good reasons on both sides, however, the optimist argument seems to provide the best explanation that does not rely on subjective measures such as hunger or discomfort.

Reference List

1. Allen, R.C. (2009). ‘Engels’ pause: Technical change, capital accumula-tion, and inequality in the British industrial revolution,’ Explorations in Economic History (46.4), 418-435.
2. Cinnirella, F. (2008). ‘Optimists or pessimists? A reconsideration of nutritional status in Britain, 1740–1865,’ European Review of Economic History, 12(3), pp.325-354. https://www.researchgate.net/profile/Francesco_Cinnirella/publication/23564542_Optimists_or_pessimists_A_reconsideration_of_nutritional_status_in_Britain_1740-1865/links/5407307d0cf2c48563b299ea/Optimists-or-pessimists-A-reconsideration-of-nutritional-status-in-Britain-1740-1865.pdf
3. Feinstein, C.H. (1998). ‘Pessimism perpetuated: real wages and the standard of living in Britain during and after the industrial revolution,’ The Journal of Economic History (58.3), 625-658.
4. Gallardo-Albarrán, D. and de Jong, H. (2020). ‘Optimism or pessimism? A composite view on English living standards during the Industrial Revolution,’ European Review of Economic History, heaa002. https://academic.oup.com/ereh/advance-article/doi/10.1093/ereh/heaa002/5827898
5. Griffin, E. (2018). ‘Diets, hunger and living standards during the British industrial revolution,’ Past and Present, 239(1), pp.71-111.
6. Harley, C. K. and Crafts, N.F.R. (2000). ‘Simulating the two views of the British Industrial Revolution,’ The Journal of Economic History (60.3), 819-841.
7. Lindert, P. H., and Williamson, J. G. (1983). ‘English workers’ living standards during the industrial revolution: a new look,’ The Economic History Review, 36(1), 1-25.
8. Nardinelli, C. (2008). ‘Industrial revolution and the standard of living,’ Henderson, David R.: The Concise Encyclopedia of Economics. https://gospelbbq.wordpress.com/2014/10/07/the-industrial-revolution-and-the-standard-of-living/
9. Persson, K.G. and Sharp, P. (2015). An Economic History of Europe. Cambridge University Press.
10. Potter, J. (1962). ‘Optimism’ and ‘pessimism’ in interpreting the industrial revolution: An economic historian's dilemma,’ Scandinavian Economic History Review, 10(2), pp.245-261.
11. Ryckbosch, W. (2016). ‘Economic inequality and growth before the industrial revolution: the case of the Low Countries (fourteenth to nineteenth centuries),’ European Review of Economic History, 20(1), pp.1-22. https://academic.oup.com/ereh/article/20/1/1/2465267