An Economic Critique of the Early Critics of the Industrial Revolution

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An Economic Critique of the Early Critics of the Industrial Revolution

Giorgio Secondi

Phillips Exeter Academy

Exeter, NH

2010 NEH Seminar for School Teachers

Historical Interpretations of the Industrial Revolution in Britain

  1. Introduction

Contemporary historians see the Industrial Revolution in Britain as a gradual process of economic and social change rather than as an explosive event that catapulted the country into the modern era.1 Nonetheless, the period conventionally identified with the British Industrial Revolution—1780-1830 or, more broadly, 1750-1850—continues to be recognized by historians as central. As Pat Hudson and Maxine Berg have written, it was clear to contemporary observers such as Patrick Colquhoun, Robert Owen, or Peter Gaskell, that dramatic changes were taking place under their eyes.2 Indeed, the second half of the eighteenth century is the time when more and more of Britain’s intellectuals began to write about the economic and social changes they were observing, attempting to understand, explain, and assess what was increasingly looking like an unstoppable series of momentous events in the country’s history. Adam Smith’s The Wealth of Nations, published in London in 1776, was one of the most influential and widely read accounts of the beginning of the Industrial Revolution, and Smith’s assessment was largely enthusiastic. According to Smith, the expanding British economy, which to many contemporaries appeared as a chaotic brawl driven by greed and self-interest, was really the manifestation of a marvelous system where the pursuit of self-interest led to the best outcome for society. Specialization and division of labor allowed for efficiency gains that raised standards of living for the average Briton.3

This paper is about intellectuals who, unlike Smith, saw the Industrial Revolution as a turn for the worse. They perceived it as a threat to a long-established order, lamented its negative effects while dismissing the positive ones as temporary at best, and predicted an eventual return to a more traditional economic system. I will focus especially on the work of two commentators who were well known and widely read during their lifetimes: Robert Southey (1774-1843) and Thomas Carlyle (1795-1881). Both, in explaining how and why the Industrial Revolution was unraveling British society, analyzed and interpreted the changes in the economy, revealing their beliefs about how an economy works. Such beliefs betray a limited understanding of the economics behind the changes that Britain was experiencing. The goal of this paper is not to criticize these writers for being poor economists;4 it is instead to try to understand where their beliefs came from and why specific aspects of the Industrial Revolution were especially difficult for contemporaries to comprehend. My hope is that this exercise will help shed light on the view of the world these writers held and, more broadly, on the reasons why, to this day, economic change is so often hard to understand and accept.5

In reviewing the writings of these commentators, I find that three economic issues seem especially arduous for the critics to understand: the effects of the increasing introduction of machines into production processes, the effects of international trade and of economic competition between countries, and the role of technological progress. I argue that the inability to conceive of a dynamic economy and the belief in the incompatibility between industrialization and Christian orthodoxy likely played the greatest role in preventing the critics from developing a more accurate understanding of the Industrial Revolution.

  1. Machinery

None of the many economic changes that took place during the Industrial Revolution captured the contemporaries’ imagination and came to define the period more dramatically than the large-scale introduction of machines in production processes. Of course, machines had been used in production for centuries, both in agriculture and in manufacturing. The factory system, however, was largely unknown until the eighteenth century, and was pioneered by entrepreneurs such as Richard Arkwright, who built the first textile mill in Cromford in 17716. The collection of hundreds of water-powered (later steam-powered) machines in one place for the purpose of production had a dramatic impact on contemporary observers. Some saw mechanization as a symbol of progress that opened a new economic era. But many worried that the nature of production had changed for the worse: whereas in the past the worker was in charge and the machine was merely a tool assisting her, in the new factories machines appeared to be in charge, stealing the limelight from the workers and relegating them to a subservient position. Thomas Carlyle, in his 1829 essay titled Signs of the Times, made his aversion to machines abundantly clear:

Our old models of exertion are all discredited and thrown aside. On every hand, the living artisan is driven from his workshop, to make room for a speedier, inanimate one. The shuttle drops from the fingers of the weaver, and falls into iron fingers that ply it faster… There is no end to machinery. Even the horse is stripped of his harness and finds a fleet fire-horse yoked in his stead. Nay, we have an artist that hatches chickens by steam; the very brood-hen is to be superseded! For all earthly, and for some unearthly purposes, we have machines and mechanic furtherances; for mincing our cabbages; for casting us into magnetic sleep. We remove mountains and make seas our smooth highway; nothing can resist us. We war with rude nature; and by our resistless engines, come off always victorious, and loaded with spoils.7

The negative reaction to machinery of many contemporaries has several explanations. On a basic economic level, workers often saw machines as competing for their jobs. In a 1786 petition, woolen workers in Leeds stated this view clearly: “the Scribbling Machines have thrown thousands of your petitioners out of employ, whereby they are brought into great distress, and are not able to procure a maintenance for their families…”8 Robert Southey showed a similar concern in an essay published in 1832, writing that “machinery at length has come in competition with human labour… The multitude who have been thrown upon the public are now to be fed, means for employing them are to be devised, and the recurrence of any similar calamity is, if possible, to be prevented.”9 The Luddite movement, which swept parts of Britain in the second decade of the nineteenth century, was one of the more radical responses by workers to the perceived threat of machines.10

Yet the reaction against widespread adoption of machinery, as Carlyle’s essay suggests, had deeper roots than fear of job loss. John and Barbara Hammond put it best in their 1917 book, The Town Labourer: “The men and women of Lancashire and Yorkshire felt of this new power that it was inhuman, that it disregarded all their instincts and sensibilities, that it brought into their lives an inexorable force, destroying and scattering their customs, their traditions, their freedom, their ties of family and home, their dignity and character as men and women.”11

While the initial impact of machinery on people’s lives was quite clear to contemporary observers, the effects of mechanization on the economy were far harder to understand. In the first half of the nineteenth century, the question of the economic effects of machinery generated a lively debate among political economists, who considered the answer essential for understanding the implications of the mechanization of production. Maxine Berg investigates this debate in her 1980 book on the “machinery question.”12 She notes that reactions to the introduction of machinery were decidedly mixed, as the concerns of the critics clashed with the enthusiasm of both entrepreneurs and many everyday observers, who couldn’t help being excited by the technological progress that the machines embodied. Even Southey’s writings appeared to reflect an ambivalent view. His complaints about machines throwing people out of jobs were tempered by the recognition that machines had potential beneficial effects: “in its remoter consequences whatever diminishes the necessity for bodily labour will be a blessing to mankind.”13

Modern economists think about the machinery question differently from the critics of the eighteenth century (even though not very differently from the leading economists of the time such as Adam Smith). Workers (labor) and machines (capital) are seen as the key inputs in the production of industrial goods. Labor and capital are generally believed to work together in the production of output: weavers need looms to produce shirts, and looms need weavers to operate them in order to be useful in production. And while eighteenth-century observers of Arkwright’s textile mills may have felt that the machines were “in charge,” broadly speaking this view makes no economic sense. Workers are always in charge, in the sense that machines are only useful when operated by workers. Even today, no matter how automated a production process might be, it still needs people (workers) to design the production process, and to produce, introduce, and operate the machines. Computers may be very powerful, but unless we produce them, decide to buy them, program them, turn them on, and punch the right keys into the keyboard, they’re just inanimate and useless objects.14

The view that machines are always, ultimately, a tool controlled by workers, may help understand the key economic effect of the increase in the adoption of machines that took place during the Industrial Revolution. The effect is an increase in workers’ productivity (workers’ or labor productivity measures output per hour of labor). By and large, a worker with a machine can produce more output per hour than a worker without a machine; and a worker with more machines can produce more output than a worker with fewer machines. E.g., an office worker with a computer, a phone, and a fax will likely get more work done than a worker with just a phone and a fax—and a lot more work done than one with just a phone. There are obvious exceptions, and, of course, the relation between machines and productivity holds true only up to a point (a worker with ten computers isn’t much more productive than one with nine); but, again, by and large, for an economy with relatively few machines, an increase in capital (machines) translates into an increase in labor productivity. Understanding this increase in productivity is crucial to understanding the answer to the machinery question: in the long run, increases in productivity are by far the most important source of increases in standards of living.15 Higher productivity leads to more production, more jobs, more demand, and higher incomes. In short, what economists refer to as “capital accumulation” (an increase in the number of machines used in production) raises standards of living and does not destroy jobs. But how exactly does that work?

It’s tempting to think that the increase in labor productivity generated by the introduction of machines is precisely what causes unemployment to rise. Indeed, this is clearly the view of Southey and the other critics. If a worker with a machine can produce twice as much as she could without one, the employer may choose to fire every other worker. When personal computers started becoming more common, many university administrators decided to provide each college professor with a personal computer—and soon proceeded to fire the professors’ secretaries. If one worker can get more work done with a machine, fewer workers are needed, and unemployment results. This somewhat intuitive story embodies what economists call the “lump of labor fallacy,” or the error predicated on the belief that there is a fixed amount of labor to be done. This, in turn, implies thinking that output is fixed. If an economy was restricted to producing 100 goods every year, there is no doubt that the introduction of machines would create unemployment. As each worker can produce more and more, fewer workers are needed to produce 100 goods. The important point, however, is that the economy is not restricted to producing a fixed output. To the contrary, the very reason why entrepreneurs such as Arkwright or Wedgewood introduced machines was that they were planning to produce more at a lower cost. As long as output is allowed to rise, higher productivity need not result in unemployment.

The question may arise at this point of whether the entrepreneurs who, thanks to machinery, can now produce more at a lower cost will actually be able to sell all these extra goods. Will the demand be there to snap them up? This was, indeed, another concern of contemporary observers. The critics were constantly worrying about the “glut” of goods that the Industrial Revolution was bound to cause. In an 1826 letter to statistician John Rickman, a long-time friend, Robert Southey wrote, “if some more effectual step is not put to the erection of new cotton mills, &c., than individual prudence is ever likely to afford, at some time or other the steam-engine will blow up this whole fabric of society. […] [T]hey are manufacturing more goods than the world can afford a market for, and the ebb is then as certain as the flow…”16 Carlyle expressed a similar concern in his 1843 book Past and Present, dedicating an entire chapter to “over-production.” He wrote:

But what will reflective readers say of a Governing Class, such as ours, addressing its Workers with an indictment of ‘Over-production!’ Over-production: runs it not so? ‘Ye miscellaneous, ignoble manufacturing individuals, ye have produced too much! […] He that seeks your indictment, let him look around. Millions of shirts, and empty pairs of breeches, hang there in judgment against you. We accuse you of over-producing: you are criminally guilty of producing shirts, breeches, hats, shoes and commodities, in a frightful over-abundance. And now there is a glut, and your operatives cannot be fed!’17

It is, of course, entirely possible for any producer to overestimate current demand and produce too much of a good. But we don’t need to worry about an entire economy becoming “too productive” and running against the problem of lack of demand. One way to think about why this is the case is to realize that when workers become more productive, the production of each good becomes cheaper. The entrepreneur is still paying the worker for one hour of labor, but he’s getting more goods from that hour of labor. Of course, this is the very reason why the entrepreneur was eager to introduce machines and raise labor productivity—cheaper production gives him an advantage over competitors. And if there is competition, as there certainly was during the Industrial Revolution, lower costs of production will lead to lower prices for the finished products. In turn, lower prices will spur higher demand, reassuring the entrepreneur that he can produce more and sell more. In fact, the entrepreneur will not only be able to sell the extra output, but will have an incentive to hire more workers and expand output further. The reason is that workers are now more productive, which means that they’re better workers; yet, they still cost the same to employ.

When we look at what actually happened—in England or just about in any other country that industrialized—we find that the effects of the introduction of machinery were as described above, even though this was not immediately obvious to contemporary observers. By the middle of the nineteenth century the British economy produced a lot more than a century earlier and employed a lot more workers; the average worker was able to both produce and earn more.18 The introduction of machinery was not the only factor responsible for the rise in standards of living, but the other factors (to be discussed below) operated in a similar way, i.e., they contributed to increasing the productivity of workers.

The economic answer to the machinery question may seem oversimplified—and, indeed, the version I told is, even though the essence of the argument remains true and is supported by substantial empirical evidence. The two main qualifications are that the many positive effects of machinery (1) take time to manifest themselves and (2) benefit the average worker but not necessarily all workers. Over short periods of time, it’s entirely possible to observe workers being fired as machines are introduced (as was the case for the secretaries losing their jobs when professors were given computers). Similarly, jobs for workers with specific skills may disappear because of the introduction of machines (if you were skilled at driving a horse-cart, the introduction of automobiles didn’t benefit you). Both of these effects were observed during the Industrial Revolution and contributed to foster negative reactions to machinery. What the critics did not realize at the time was that as jobs were lost in specific sectors and occupations, many more jobs—typically better, higher-paying jobs—were being created in other parts of the economy as lower costs allowed for more demand and more production of all sorts of goods. Similarly, in the U.S. today we have many fewer secretaries than we used to have—and hardly any drivers of horse-drawn carriages outside of Central Park; yet we have a lot more financial analysts, software programmers, and biotech engineers with no desire whatsoever to drive horse carts.

III. Britain and the World Economy

A second economic issue that contemporary social critics struggled to understand is international competition and the effects that industrialization in other countries was likely to have on England. The shared view of the critics seems to be that any economic progress England was making during the Industrial Revolution would come to a halt as soon as other countries industrialized. In other words, England could benefit from industrializing only as long as it did not face competition from other countries. Southey, in his 1829 Colloquies, stated the following speaking through Montesinos—the fictional character who discusses changes in contemporary society with Thomas More: “Other nations may compete with us, and our foreign trade in consequence may gradually decline.”19 Southey seemed especially concerned about other countries copying English technology and stealing markets from Britain. In fact, he went so far as to predict the demise of the manufacturing system as a result of other countries’ appropriation of British technology: “But the [manufacturing] system bore in itself the seeds of its own destruction. It was not possible that improvements in machinery should always be confined to ourselves… no laws, however severe, could prevent the emigration of artificers.”20 Such statements reflect a mercantilist view of trade: globally, only so much trade can be carried out, so increasing one country’s share of it necessarily implies decreasing another country’s. We know today that trade is usually what economists call a positive-sum game: as countries trade more, they specialize in exporting what they’re particularly good at producing (what they can produce most efficiently, or at the lowest opportunity cost). This lowers costs of production, allowing all countries to produce and trade more.21 Indeed, as more and more countries industrialized, Britain’s international trade continued to increase, as did British standards of living.22

Carlyle’s writings about the need to abolish the Corn Laws suggest greater appreciation for the potential of international trade: “The Corn-Laws gone, and Trade made free, it is as good as certain this paralysis of industry will pass away. We shall have another period of commercial enterprise, of victory and prosperity; during which, it is likely, much money will again be made, and all the people may, by the extant methods, still for a space of years, be kept alive and physically fed.”23. But his understanding that free trade in food could benefit Britain by making food cheaper does not seem to extend to the broader concept that free trade makes production of most goods cheaper, raising standards of living. He seems to view the abolition of the Corn Laws as providing a one-time gain, soon to be nullified by a corresponding increase in population: “If our Trade in twenty years, ‘flourishing’ as never Trade flourished, could double itself; yet then also, by the old Laissez-faire method, our Population is doubled: we shall then be as we are, only twice as many of us, twice and ten times as unmanageable!”24

Yet another misperception of the effects of international trade concerns the outcome of increased competition that typically results from trade. The belief is that competition must result in a decline in the quality of goods. Southey writes, “The point of emulation between rival manufacturers, is not so much who shall send forth the best goods, but who the cheapest; flimsy articles are thus manufactured for rapid sale, and for the foreign market. Formerly their aim was to produce substantial goods, which should wear well, and with which the purchaser should have reason to be satisfied; now it is how to make the largest quantity with the smallest expenditure of materials.”25 This view is still pervasive today, as complaints are often heard about the low quality of cheap imported goods—and about how much better the goods made domestically used to be. Empirical evidence, however, shows that quality of goods increases when competition is greater, which should make sense: a monopolist doesn’t need to worry about producing high-quality goods because consumers can’t vote with their feet and buy from someone else if they’re dissatisfied. Competition, on the other hand, forces producers to please customers: producers who fail to please see their clients flee elsewhere.26

The common misperception that trade and increased competition lower the quality of goods is likely due to the fact that trade tends to increase the range of goods available to consumers; this doesn’t just mean that more goods are available, but also that the same good is now available in a range of types, from the very basic version (low quality and low price) to the most sophisticated version (high quality and high price). Whereas before trade today’s Americans may only have had access to medium-quality, fairly expensive shirts, after trade they can now choose between medium-quality, cheaper shirts, low-quality, very cheap shirts, and high-quality, very expensive shirts. Consumers tend to flock to the cheapest version, only to complain that trade has lowered the quality of goods; the fact that the shirt they’re buying is much cheaper than it used to be is often forgotten, as is the fact that there is no shortage of higher-quality shirts for consumers willing to pay the higher price (have you stopped by a Giorgio Armani boutique recently?).

IV. Technological Progress

The economic phenomenon contemporary observers of the Industrial Revolution seem to misunderstand the most is technological progress. Economists make a difference between technological progress and capital accumulation (the increase in machinery discussed earlier). When the use of machines is increased, the economy is increasing one if its key inputs; the result is increased output (and increased output per worker). Technological progress involves not an increase in one of the inputs (labor or capital) but rather the introduction of new production methods that allow producing more output from a given set of inputs. There are many reasons why a given set of inputs may allow for more output. As Adam Smith explained in The Wealth of Nations, specialization and division of labor is one such reason. If workers specialize in specific tasks, it may be possible to achieve greater output even though the number of workers or machines has not changed. An improvement in the quality (rather than the quantity) of machines may also result in technological progress. An office worker with one computer is likely more productive when she has a powerful modern computer than when she uses a thirty-year-old Commodore 64. Economists consider technological progress even more important than capital accumulation in generating economic growth. The reason is that resources are generally limited—they may be abundant, but there is typically a finite supply of them. This is especially apparent for natural resources such as land. But if we can find ways to squeeze more output out of given resources, then we essentially overcome the constraint that the fixity of resources imposes.

Technological progress was significant during the Industrial Revolution, both because the quality and sophistication of machinery was improving and because new methods of organizing production (e.g., the factory system) were being devised and introduced. Much like capital accumulation, technological progress allows for an increase in labor productivity. Workers with better machines, workers who specialize, workers who work with each other more efficiently are all more productive than they used to be. But the writings of contemporary critics show that the idea of continuous technological progress, or a continuous improvement in methods of production, was very hard to understand. Over and over the idea of a limit to production dictated by limited resources emerges in the writings of the critics.

The critics’ discussion of population growth and of the pressure of human resources on the land makes their lack of understanding of the power of technological progress especially apparent. Southey states repeatedly that there are two ways to tackle population growth: bring more British land into cultivation or send people off to the colonies—in his words, “enlarging the hive, or sending out swarms.”27 The only solution, therefore, is to increase available land; the idea that a fixed amount of land may be able to support an increasing number of people (through an increase in productivity) is completely absent. Similarly, Carlyle’s passage about the abolition of the Corn Laws quoted above implies overpopulation as the overriding concern. The reality we have observed, both in England and globally, is that new technologies make fixed resources such as land more productive: Britain’s population, at 14 million at the time of Southey’s writings, now exceeds 60 million—yet standards of living have increased enormously. Globally, world population has doubled since the 1950s, yet food supply has nearly tripled, largely thanks to the introduction of new production methods that have raised land productivity.28

V. Understanding the Critics

The critics’ reaction to the Industrial Revolution helps us understand the popular view of the economy in early-nineteenth-century Britain. As beliefs that had developed over centuries came to clash with radical and sometimes rapid changes, contemporaries struggled to reconcile what they observed with what they had always known. While exceptional thinkers like Adam Smith, David Ricardo, and John Stuart Mill developed brand-new frameworks and theories to interpret what they were observing, most people preferred to retreat into the comfort of the familiar, fabricating rationalizations that did not fit the evidence well, but did help reassure them that they could still understand and live in an increasingly confusing world.

Southey’s and Carlyle’s writings suggest that one crucial belief that contemporaries were often unable to let go of was the existence of a stationary economy. It was simply too hard to come to terms with the possibility of a permanently dynamic economy—one that would keep growing over time, allowing for ever-increasing standards of living. For centuries, the economies of the West had been essentially stationary: sons learned their fathers’ jobs, daughters married and raised a family like their mothers, and society reproduced itself with little change from generation to generation.29 The working of the economy in traditional societies was easy to understand: some years were better than others, but, by and large, not much changed in the long run. The reproduction of the system ensured survival for a static population. In such a society, productivity growth was essentially absent—or, more likely, so slow that changes were extremely gradual and hard to notice.

With the Industrial Revolution came large-scale adoption of machinery, increased trade, and new methods of production, all of which spelled rapid productivity growth and radical changes in the economy. We know now that this was the beginning of a dramatic increase in population, productivity, and standards of living—one that continues to this day. But the idea was too foreign at the time. The critics, therefore, chose to dismiss the changes as transitory. At worst, the new innovations were seen as temporary improvements bound to be undone, not unlike the bumper-crop years of the agricultural economy: one could enjoy a temporary surge in output and standards of living, but knew all along that soon things would be back to the old normal. When Southey talked about “the euthanasia of the system”30 and, as quoted earlier, the system that “bore in itself the seeds of its own destruction,” he revealed this view: Britain might have experienced dramatic changes, but they were not to last. Carlyle, as mentioned in the section on trade, reflected instead the slightly more optimistic view according to which the Industrial Revolution allowed a one-time improvement in the economy; however, the economy could not keep growing—it would return to a stationary state after the one-time jump.

Ultimately, both Southey and Carlyle seemed to base their refusal to conceive of a permanently growing economy on religious principles. It was clear to both authors that there was a fundamental incompatibility between the new economy with its never-ending changes and the stability of a natural order that an all-knowing God presided upon. Their impatience with a system that seemed to be driven by supply and demand or by the profit motive is apparent in their writings. After describing the economic and social changes brought about by the Industrial Revolution, Southey asked, “was there ever a time when the sins of this kingdom called more cryingly for chastisement?”31 And later: “And this, I believe, is true; men are benevolent when they are not selfish: but while gain is the great object of pursuit, selfishness must ever be the uppermost feeling. I cannot dissemble from myself that it is the principle of our social system, and that it is awfully opposed to the spirit of Christianity.”32 And if the political economists of the time were offering new explanations, Southey was clearly uninterested—not because they didn’t make sense, but simply because they seemed to neglect religion: “You must not suppose that our political economists seek in the Bible for instruction! Moral considerations are allowed no place in their philosophy…how much less then should religion be found there! […] Take the brains of the whole school, and distil them in vacuo… and you could not extract so much essential thought as may be found in any one page of our old divines.”33

Carlyle’s position was similar. First he lamented how the profit motive appeared to have become more important than religious principles: “But, it is said, our religion is gone… God’s absolute Laws, sanctioned by an eternal Heaven and an eternal Hell, have become Moral Philosophies, sanctioned by able computations of Profit and Loss, by weak considerations of Pleasures of Virtue and the Moral Sublime.”34 Then he made it clear that God’s laws were bound to be re-established—that economic man posed no real challenge to the immutable order established by God: “Thus does man, in every age, vindicate, consciously or unconsciously, his celestial birthright. Thus does nature hold on her wonderous, unquestionable course; and all our systems and theories are but so many froth-eddies or sand-banks, which from time to time she casts up and washes away.”35 And, again:

Let inventive men consider, Whether the Secret of this Universe, and of Man’s Life there, does, after all, as we rashly fancy it, consist in making money? There is One God, just, supreme, almighty; but is Mammon [i.e., capitalism] the name of him? –With a Hell which means ‘Failing to make money’… all this Mammon-Gospel, of Supply-and-demand, Competition, Laissez-faire, and Devil take the hindmost, begins to be one of the shabbiest Gospels ever preached; or altogether the shabbiest […] O, if you could dethrone that Brute-god Mammon, and put a Spirit-god in his place! One way or other, he must and will have to be dethroned.36

Nearly two-hundred years later, the tension between Christian principles and economic considerations has not gone away. But economic change has proved unstoppable—and Christianity has had to adapt. And while industrialization has long ago been accepted, globalization has become the new tide that economists try to explain rationally and commentators love to decry. The safe bet is that the critics will continue to denounce the unfamiliar, appeal to their audiences’ established beliefs, and make doomsday predictions about the future. Meanwhile, the economy will take its course, the unfamiliar will gradually become familiar, and new generations will adapt, as they always have, to the new face of our permanently dynamic system.


Ashton, T.S. The Industrial Revolution: 1760-1830. Oxford: Oxford University Press, 1968.

Baumol, William J., and Alan S. Blinder. Macroeconomics: Principles & Policy. Mason, OH: South-Western Cengage Learning, 2009.

Berg, Maxine. The Machinery Question and the Making of Political Economy, 1815-1848. Cambridge: Cambridge University Press, 1980.

Carlyle, Thomas. “Signs of the Times.” Edinburgh Review (1829). Reprinted in Critical and Miscellaneous Essays. Boston: Phillips, Sampson, and Company: 1855.

---. Past and Present. London: Chapman and Hall, Strand: 1845 (first edition 1843).

Hammond, J.L., and Barbara Hammond. The Town Labourer 1760-1832: The New Civilisation. London: 1917.

Heilbroner, Robert L., and William Milberg, The Making of Economic Society, 12th ed. Upper Saddle River, NJ: Pearson Prentice Hall, 2008.

Hobsbawm, Eric. Industry and Empire: The Birth of the Industrial Revolution. New York: The New Press, 1968.

Hudson, Pat, and Maxine Berg. “Rehabilitating the Industrial Revolution.” The Economic History Review 45, no. 1 (February 1992): 24-50.

Jefferson, J.M. “Industrialization and Poverty: in Fact and Fiction.” In The Long Debate on Poverty: Eight Essays on Industrialisation and “the Condition of England,” London: Institute of Economic Affairs, 1972.

Kornai, János. The Socialist System: The Political Economy of Communism. Princeton: Princeton University Press, 1992.

Morgan, Kenneth. The Birth of Industrial Britain: Social Change, 1750-1850. Harlow: Pearson Education Limited, 2004.

Secondi, Giorgio, ed. The Development Economics Reader. London: Routledge, 2008.

Southey, Robert. Essays, Moral and Political. London: John Murray, 1832.

---. The Life and Correspondence of Robert Southey. Edited by Charles Cuthbert Southey. New York: Harper & Brothers, 1855.

---. Sir Thomas More: Or, Colloquies on the Progress and Prospects of Society. London: John Murray, 1829.

Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. New York: The Modern Library, 1994 (first edition 1776).

Spielvogel, Jackson J. Western Civilization, Volume II: Since 1500, 7th ed. Belmont, CA: Thomson Higher Education, 2009.

Wrigley, E.A. Continuity Change & Change: The Character of the Industrial Revolution in England. Cambridge: Cambridge University Press, 1998.

1 See, e.g., Kenneth Morgan, The Birth of Industrial Britain: Social Change, 1750-1850 (Harlow: Pearson Education Limited, 2004), 3; E.A. Wrigley, Continuity Change & Change: The Character of the Industrial Revolution in England (Cambridge: Cambridge University Press, 1998), 8-9; Eric Hobsbawm, Industry and Empire: The Birth of the Industrial Revolution (New York: The New Press, 1968), 13.

2 Pat Hudson and Maxine Berg, “Rehabilitating the Industrial Revolution,” The Economic History Review 45, no. 1 (February 1992): 26.

3 Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: The Modern Library, 1994; first edition 1776). Chapter I in Book I makes the case for the power of specialization and division of labor. The statement on the invisible hand (which ensures that pursuit of self-interest leads to the best outcome for society) is in Book IV, Ch. II (485).

4 While it would be unreasonable to expect eighteenth-century writers to understand economics as well as contemporary economists, the fact is that much of our understanding of how economies work and change was developed by such thinkers as Adam Smith, David Ricardo, and John Stuart Mill, who lived in the very same Britain that Southey and Carlyle were observing. Without a doubt, the first political economists showed a truly unusual ability to think beyond the intellectual orthodoxy of the time.

5 A different, yet somewhat related, exercise is performed by J.M. Jefferson, who looks at the representation of the Industrial Revolution in works of fiction of the time, showing that the writers’ view of societal change was often based on partial or erroneous information. See J.M. Jefferson, “Industrialization and Poverty: in Fact and Fiction,” in R.M. Hartwell and others, The Long Debate on Poverty (London: Institute of Economic Affairs, 1972).

6 T.S. Ashton, The Industrial Revolution: 1760-1830 (Oxford: Oxford University Press, 1968), 59.

7 Thomas Carlyle, “Signs of the Times,” Edinburgh Review (1829). Reprinted in Critical and Miscellaneous Essays (Boston: Phillips, Sampson, and Company: 1855), 188.

8 “The Leeds Woolen Workers’ Petition (1786),” quoted in Jackson J. Spielvogel, Western Civilization, Volume II: Since 1500, 7th ed. (Belmont, CA: Thomson Higher Education, 2009), 561.

9 Robert Southey, “On the Rise and Progress of Popular Disaffection,” in Essays, Moral and Political, Vol. II (London: John Murray, 1832), 94.

10 Morgan, The Birth, 80-82.

11 J.L. Hammond and Barbara Hammond, The Town Labourer 1760-1832: The New Civilisation (N.p.: n.p., 1917), 18.

12 Maxine Berg, The Machinery Question and the Making of Political Economy, 1815-1848 (Cambridge: Cambridge University Press, 1980).

13 Southey, “On the Rise,” 94.

14 By the same token, you may feel as if the iPhone is running your life. But, of course, you decided to buy it and you decided to let it run your life. The iPhone did not show up at your door, unannounced, slap you in the face, and start ordering you around the house…

15 See, e.g., William J. Baumol and Alan S. Blinder, Macroeconomics: Principles & Policy (Mason, OH: South-Western Cengage Learning, 2009), 107.

16 Robert Southey, The Life and Correspondence of Robert Southey, ed. Charles Cuthbert Southey (New York: Harper & Brothers, 1855), 442.

17 Thomas Carlyle, Past and Present (London: Chapman and Hall, Strand: 1845; first edition 1843), 230.

18 See, e.g., Morgan, The Birth, ch. 3.

19 Robert Southey, Sir Thomas More: Or, Colloquies on the Progress and Prospects of Society (London: John Murray, 1829), 244.

20 Southey, “On the Rise,” 90-91.

21 A contemporary example may help: if both Brazil and Canada try to both grow bananas and timber, bananas will be costly in Canada and timber will be costly in Brazil. If Brazil specializes in bananas and Canada in timber, and the two countries trade with each other, both bananas and timber will become cheaper on the global market. Both countries will be able to produce more and have higher standards of living than in the absence of trade. I don’t mean to ignore the many complications that go along with international trade; but it’s the basic point—gains from trade through specialization—that the social critics are missing.

22 Hobsbawm notes that between 1850 and 1900—the time when most continental European countries experienced their Industrial Revolution—British average real wages grew by 84 per cent. Eric Hobsbawm, Industry and Empire, 138.

23 Carlyle, Past and Present, 249-250.

24 Ibid. The issue of population growth is addressed in the next section.

25 Southey, Sir Thomas More, 158.

26 Probably the strongest body of evidence on the connection between competition and quality of goods and services comes from the former socialist planned economies. In an environment where state-owned firms manufactured goods with no competition (domestic or international), the quality and variety of goods for sale suffered tremendously, much to the detriment of consumers’ standards of living. See, e.g., János Kornai, The Socialist System: The Political Economy of Communism (Princeton: Princeton University Press, 1992), 262-68.

27 Southey, Sir Thomas More, 173.

28 Giorgio Secondi, ed., The Development Economics Reader (London: Routledge, 2008), 205.

29 Robert L. Heilbroner and William Milberg, The Making of Economic Society, 12th ed. (Upper Saddle River, NJ: Pearson Prentice Hall, 2008), 6-8.

30 Southey, Sir Thomas More, 156.

31 Ibid., 51.

32 Ibid., 160.

33 Ibid., 172.

34 Carlyle, Past and Present, 185

35 Carlyle, “Signs of the Times,” 192.

36 Carlyle, Past and Present, 247-48 and 255.

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