15.6. Reasons for Extreme Poverty

The Industrial Revolution strictly defined, that is, the use of machines and the factory system, did not cause poverty. In many “modern industries”, the workers were enabled to produce large quantities of articles at low prices, and thus could receive good wages. In many cases, new – metal – tools came into use, which made life easier for the workers.

The causes of the cases of extreme poverty were:

  1. excess of persons in some industries/occupations, which caused competition between the workers at the levels of wages or of working hours;
  2. employment of children and women, which added to the number of persons looking for work;
  3. the absence of a “floor” in wages or in working conditions (worse, after the New Poor Law prohibited outdoor relief);
  4. the fact that many people, instead of selling their days, sold the articles that they produced, to an impersonal market;
  5. competition in the market (retail or wholesale) between products, on the basis of prices offered;
  6. the impossibility in general, for the authorities to enforce minima of wages, working conditions, or of ages of children employed (even if they had wanted to).

The principal concept here was of absolute competition, through prices of products and through levels of wages. Note that in the eighteenth century, there was not much competition, because the people worked in agriculture, in artisan work, or in personal service, and the income was informally regulated by the idea that the person had to earn enough to eat. In the nineteenth century, a large proportion of the population was “making things”; their income was constrained by the market for their products.

“The diminution of the intervals of work, has been a gradual encroachment. Formerly an hour was allowed for dinner; but one great manufacturer, pressed by his engagements, wished his work-people to return five minutes sooner. This abridgement was promptly adopted at other mills. It was found also that breakfast and “drinking” [afternoon refreshment], might be taken while the people were at work. Time was thus saved; more work was done; and the manufactured article consequently could be offered at a less price. If one house offered it at a lower rate, all other houses, to compete in the market, were obliged to use similar means. Thus, that which was at first partial and temporary, has become the established period; and the unfortunate artizans working before in excess, have since had to carry labour to a still greater and more destructive extent.”

(Thackrah, 1832, p. 82)

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