US History Books do not point out the benefits of the industrial revolution.
As we approach the 250 of our countryth Birthday, there is no better time to think about where we were and how we got here. However, Americans are surprisingly ignorant of our past.
As I noted in Part I, the book The triumph of economic freedom From Phil Gramm and Donald J. Boudreaux is a useful medicine. Together, the authors have built through academic literature and dissolved wild myths about our economic history – the waves usually taught in high schools and colleges across the country.
Here are some more examples:
The birth of capitalism in England
About the fourth decade of 19th century, something that ever happened that had never happened in the history of the world. The income of the average worker in northern Europe increased to a higher level than it was last year. It then increased again next year. And he continued to go up – after time, then.
For the first time in the history of the human race, people have encountered the effects of economic growth.
For the previous 200,000 years, the human beings who lived the land lived the level of survival. This is the raw equivalent of about $ 2 a day at today’s prices.
Suppose you had only $ 2 a day to secure all the food you eat, all the clothes you wear and all the shelter you have access to. Imagine what your life would be like. This is how your ancestors lived for almost all human history.
Deirdre McCloskey calls 19th century the “great enrichment”. He writes: “The industrial revolution began the largest concentration of material blessings ever experienced by ordinary men, women and children.”
But this is not the way other authors described the period and is not what has been taught in high schools and colleges in 20th century and even today. According to the philosopher Bertrand Russell, “the industrial revolution has caused untold misery in both England and America.” Frederick Engels contrasts the pleasure and ease of rural life with the hell of the factories in which “workers treated as brutes, they actually became so”. In A Christmas CarrollCharles Dickens depicts a world in which the unemployed wipes for potatoes that have fallen from a wagon and people live in mistreasure. Historian Arnold Toynbee describes the industrial revolution as:
[A] Period as devastating and as terrible as any one through which one nation ever passed. Destructive and terrible, because, side by side with a large increase in wealth, it was considered a huge increase in Pauperism. And production on a huge scale, the result of free competition, led to a rapid alienation of classes and the degradation of a large producer body ….
Like any good economist, Gramm and Bordeaux ask, if things were so bad in cities, why so many people migrate there from the countryside? After all, until the mid -19sth Century, half of the population in England were urban residents. When they examined the scientific evidence, they were not surprised to find that as bad life in cities it may seem to modern observers, it was better than in the areas where people left. Here are some of what they found:
- From 1830 to 1900, per capita income in England was more than doubled.
- From 1840 to 1900, real salaries of specialized and unskilled manufacturers increased by 113 % and 124 % respectively.
- From 1841 to 1901, life expectancy increased by 20 %.
- Life expectancy for females increased by 24 %.
- The alphabetic rate, which was 64 % for men and 55 % for women in 1851, improved in almost a universal 97 % by 1900.
McCloskey writes: “Because he produced two and a half times more than his grandfather who produced in 1780, the average man in 1860 could buy two and a half times more goods and services.”
Remember: Nothing in History had ever happened before.
The birth of capitalism in America
America’s industrial revolution is often called “gold -plated”, and the most successful entrepreneurs of the period are often called “Barons of Robbers”. In a popular high school history text, Howard Zinn writes:
The usual people who lived from gold -plated age … experienced enormous difficulties and losses …. While becoming poorer, the rich became richer …. and so went to industry after industry – smart effective empires, hiring,
However, Gramm and Bordeaux find that far from limiting production and price rise, the reverse happened in the alleged monopoly industries. Between 1880 and 1890, the production of these industries increased by 175 % – seven times the increase in real GDP during this period. Prices in these industries have been reduced three times faster than the total consumer price index.
As in England, the industrial revolution in America has led to broad economic benefits for the population as a whole.
- Between 1865 and 1900 per capita income in the US almost tripled.
- The actual annual earnings for workers who did not report increased by 62 %.
- Between 1860 and 1900, life expectancy increased by 13.7 %.
- Infant mortality decreased by 34 %.
- From 1870 to 1900, the rate of illiteracy decreased by 47 %.
And, as happened in England, these changes were unprecedented throughout human history. The authors write:
Average daily working hours on production facilities declined and life staples, food, clothes and shelter – became much more abundant, higher in quality and significantly cheaper. The cost of food, textiles, fuel and home furniture was reduced to dollars adapted to inflation by 45 %on average.
The progressive season
There are two myths about the time that followed the gold -plated season.
The first myth claims that in the late 19th century and early 20th For centuries, the American economy has been dominated by great confidence that has abused workers and consumers to pursue monopoly profits. The second claims that the government responded to these abuses by protecting the public with strict regulations in an otherwise Laissez-Faire economy.
The case is the meat. In the Muckraking book of Upton Sinclair The jungleThe author describes the “piles of meat” overlapping with “the dried rat manure” – which were subsequently poisoned by the workers and wrote with other meats that were subsequently sold to consumers. Responding to Sinclair’s revelations, Congress passed the 1906 meat inspection law – designed to protect the public from such abuses, although there is no significant health event associated with meat consumption at the moment.
However, as Gramm and Boudreaux rightly point out, Chicago meat packaging houses really supported the legislation! The reason: Law restrictions were restrictions that could easily be adapted or already followed, but they would increase the costs (and perhaps departing from businesses) their smaller competitors.
In other words, a law that is supposed to have reacted to the dog-eating dog competition was in fact a vehicle that protects the acquired interests against competition from smaller opponents.
Something similar happened with the Committee of Trade Trade (ICC) – the first federal regulation. The complaint by customers was that the railways were involved in price discrimination – charging different rates (per mile) to different customers. For the railways, the problem was to cut prices (including secret discounts) from competitive companies. And that produced what they considered to be devastating competition.
Thus, such as packagers, the railways supported the federal regulation of their industry. The organization never banned price discrimination, although the Outlaw Cutthroat competition with the ban on secret discounts. Overall, the railways benefited. Over time, the regulatory authority has expanded to railway competitors – for example, the benefits of federal regulation.
By the time of the Carter’s administration, economists have been convinced that the ICC was acting as a cartel card for loaders instead of protecting consumers. That is why Republicans and Democrats supported the liberation of the ICC and other federal regulatory organizations.
Far from protecting the public from the exaggerations of capitalism, our progressive era has given us government regulations designed to help producers, not consumers, in the market.
