BRITISH WELLBEING 1780-1850: A new measure of the impact of industrialisation on income, health, working time and inequality
- 30 Mar 2016
A new composite indicator of changes in income, health, working time and inequality in Britain for the period 1780-1850 clearly points to a steady increase in wellbeing over the whole period. But it also shows that wellbeing growth did not accelerate after the Napoleonic wars, which is when some historians argue that benefits in terms of real wages started to trickle down to the working classes.
According to research by Daniel Gallardo Albarrán, to be presented at the Economic History Society’s 2016 annual conference in Cambridge, there are two reasons for this. First, in the period of wage stagnation before the 1810s, health gains contributed to wellbeing growth. And second, when wages start to rise, health stagnated because of rapid urbanisation and its associated maladies.
Is industrialisation the fastest way to improve people’s wellbeing? Based on the recent rise of China and other Asian economies that have improved the lives of millions in only a few decades, the answer to this question appears to be a simple one. But past experiences from some of today’s developed countries look rather different as the case of nineteenth century Great Britain suggests.
Great Britain was the cradle of the Industrial Revolution and therefore the first one to benefit from more efficient production techniques. But the consequences of this process for workers’ wellbeing is hotly disputed.
For almost two centuries, scholars, social reformers and writers (among others) have been divided between those who argue that the new systems of production and associated urbanisation improved (optimists) or worsened (pessimists) the condition of the British working class in the first years of the Industrial Revolution.
Recent research in economic history has greatly sharpened our knowledge of the nineteenth century working classes in crucial wellbeing dimensions such as income, health, working time and inequality. But scholars have been unable to reach a consensus with regards to the development of welfare during this period.
One of the reasons for this lack of consensus is that most of this new research has approached the study of these four welfare elements separately. But this can be problematic if they do not show the same trend over time (as is the case) because we would have to cherry-pick those dimensions that we think are the most important.
To overcome this problem, we need a new approach on this topic, namely a composite perspective on welfare in which its different elements are weighted according to theoretically defined principles.
Drawing on the data produced by a large number of scholars, this study creates a new composite indicator of British wellbeing for the period 1780-1850 that combines income, health, working time and inequality. The result of this exercise clearly points to a steady increase in wellbeing throughout the whole period. Actually, the new index shows a doubling of welfare during the considered 70-year time span.
This finding might a priori support the optimists’ case. But a decomposition of the forces driving this process reveals that wellbeing growth did not accelerate after the Napoleonic wars, which is when the optimists argue that benefits in terms of real wages started to trickle down to the working classes. The reason for this is twofold:
First, in the period of wage stagnation before the 1810s, health gains contributed to wellbeing growth.
And second, when wages start to rise, health stagnated because of rapid urbanisation and its associated maladies. Working time and inequality contributed negatively to wellbeing, although their relative importance was substantially lower than that of income or health.
What lessons can be draw from this exercise?
First, when looking at multi-dimensional concepts such as wellbeing, the analysis of its dimensions separately should be complemented by a more comprehensive approach that can tell us new things about their joint evolution.
Second, health plays a very significant role in this debate. Actually, not considering health gains would underestimate wellbeing to the same extent as if we did not take into account gains in workers’ income.
And third, development paths and their consequences for the population are manifold. Policies concerning the distribution of income, the provision of public goods that affect public health and education are key to understanding why some populations have benefitted more than others in the complex process of modernisation. A process that can be better understood with a composite perspective.
Revisiting a long-standing debate: British industrialization and well-being
Daniel Gallardo Albarrán
University of Groningen