2 - The high-wage economy of pre-industrial Britain

Summary

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 eighteenth 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 today's standards; however, the main point of this chapter is that British workers were more prosperous 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 classical economists. Their language is part of the problem, for they usually spoke of wages being at ‘subsistence’. The term is loose and misleading.