250 years of Capitalism: A reconstruction of its dynamics (Part 1)

A Work in progress

I pre-suppose, of course, a reader who is willing to learn something new and therefore to think for himself. […] Every opinion based on scientific criticism I welcome.” Karl Marx, Preface to the First German Edition of Capital.

Taking up a longstanding concern of Marx’s he was unable to fulfill, the following presents the first part of an article series treating 250 years of Capitalism at the hand of examined statistic sources on its economic dynamic, in order to draw out its perspectives.

Updates and the subsequent parts of this series will be published on  special pages on this blog and announced on the blog roll. The original version in French language is published at the ‘Capitalisme & Crises Économiques’ website.

The editor


In the hell of the workshop of the world, which is 19th Century’s England, Marx and Engels developed their critique of capitalism and became involved in the first expressions of the workers movement. Engels began to do this in 1845 in his book The Condition of the Working Class in England, and a few years later Marx analyzed all its aspects in Capital. But the latter’s concern is private” and has existed “for a long time”: to construct graphs illustrating the evolution of the main economic indicators he has developed, in order to mathematically determine the essential laws of the [economic] crises: “I submitted here to Moore (1) a story with which I have tussled around privately for a long time () you know the tables where prices, discount rates, etc., etc. are represented in their fluctuations during the year, etc. by zigzag curves that go up and down. I have tried several times – to analyze the crises – , to calculate these ups and downs as irregular curves, and I have believed it possible (I still believe it is possible, with sufficiently studied material) to determine the essential laws of the crises mathematically from there. Moore, as said, takes the case as not feasible until further notice, and I have decided to give it up for the time being” (Letter from Marx to Engels of May 31, 1873) (2) The paucity of the statistical apparatus of his time and Marx’s poor health did not allow him to continue his attempts and carry them out. This contribution attempts – at least in part – to fill this gap “with sufficiently studied material for the country under examination: England. (3)

1 The translator of the Communist Manifesto in English.

2 Marx/Engels, Der Briefwechsel, Bd. 4 (1868 – 1883), p. 398 (DTV Reprint from MEGA, Berlin 1931).

3 The sources of the data on which this article relies, and the necessary indications on how they are presented, can be found in the Annex to this series. As these are published sources, they can be consulted to check the author’s calculations and graphs in order to complete, correct or contradict the proposed analysis. [editor’s note]

Graph 1.1 - rate of surplus value GB 1760 – 2001
Graph 1.1: Rate of Surplus Value 1760 – 2001, GB (Index: 1760 = 100)

1. The Class Struggle from 1760 to the Russian Revolution

The rate of surplus value from 1760 to the present

If we look at the century and a half that has elapsed since the beginning of the industrial revolution until the Russian revolution of 1917, it must be noted that – according to Marx’s analysis – the English ruling class manages to amass fortunes thanks to a nearly threefold increase in the working class’s exploitation rate, which multiplied by 2.58 from 1760 to 1917, from the index 100 to the index 258 on the foregoing Graph no. 1 of the rate of surplus value. (4)

What are the driving forces behind this powerful accumulation of wealth? Is it carried out according to the modalities of the analysis traced by Marx in Capital? Does the 20th Century confirm or contradict his analysis since the rate of surplus value is almost halved during the sixty years from 1917 to 1974 (from index 258 to 142)? These are the main questions that motivate us in this first exercise to illustrate his book. (5)

Working more to earn less

Since the beginning of the industrial revolution, the reduction of working time and the maintenance or increase of real wages (purchasing power, i.e. with inflation deducted) have been the main focus of the wager earners’ struggle to reduce their exploitation. And for good reason, the latter first saw their living and working conditions deteriorate for almost a century before a slight and slow improvement [followed] during the subsequent half-century.

In fact, the Graph no. 2 hereafter shows us that the real workers’ wage stagnated from 1760 to 1855. Worse, already very miserable in 1760, it began to decline by a quarter until 1800, then recovered around 1830 and stabilized until 1855. The annual working time increased by almost a third from 1760 to 1830, and then declined only marginally until 1855. Undoubtedly, the slogan of the ruling class at that time was: “work more to earn less” to paraphrase the formula of former French President Sarkozy.

Graph 1.2 - GB real wage of a skilled worker in London 1760 - 2001
Graph 1.2: Real wage of a skilled worker in London / Annual working hours (1760 – 2001)

And this is still without considering the frequent labor by children aged from six to eight years old; the prohibition of demonstrations and coalition building (trade unions, strike funds, mutual societies, cooperatives…); the arbitrariness of the employers who can dismiss at will and without compensation, while workers are liable to prison if they leave their employers; the right to vote limited to a minority of rich men; etc.

Moreover, in addition to these miserable living and working conditions, there is the scourge of growing unemployment resulting mainly from a galloping urban demography (6) and, subsequently, from the bankruptcy of small craftsmen as a consequence of competition from capitalist production and an exodus of rural people dispossessed of their land and/or impoverished by the prohibition of access to the commons. (7) Thus, the unemployment rate increased from 3.6% to 10% between 1760 and 1842, see Graph no. 3 hereafter: without any social and legal protection, and still too few in number to be able to impose a balance of power in their favor, these first wage workers are subjected to the horrors of competition among them, a competition induced by this growing unemployment that will allow the employers to keep wages as low as possible and to impose a sharp increase in working time.

Graph 1.3 - Unemployment in % GB 1760 – 2016
Graph 1.3: Unemployment in %, GB/UK (1760 – 2016)

Profit share and profit rate

This first century of savage capitalism is therefore confounded with increased work, for a miserable wage, carried out in atrocious social conditions and a lack of political and social rights. Its operating logic is still largely based on increasing absolute surplus value, where profits are mainly increased by extending working hours and lowering or maintaining low real wages in a context of increasing unemployment. This explains the doubling of the rate of surplus value during this first century of savage capitalism, both according to our calculation (see Graph no. 1) and according to Allen’s calculation (see the following Graph no. 4), since our index is multiplied by 1.82 from 1760 to 1855 and the other by 2.5 from 1770 to 1855. (8)

Graph 1.4 - GB wages-profits-ground rent 1770-1913
Graph 1.4: Share of wages, profits and land rent in national income, GB, 1770-1910, constant prices 1850, (Allen, 2007)

This excessive exploitation of waged workers – an exploitation that goes as far as their physiological exhaustion, since the average life expectancy of a worker in Liverpool is only 25 years in 1860 – results in a decrease in the wages’ share in GDP (from 60% in 1770 to 45% a little before 1860) and a corresponding increase in the profit share (from 20% to 50%). It should be noted that the latter also increases following the decline in the share of land rents resulting from the progressive domination of capitalism over the remains of the land aristocracy. (9) This doubling of the exploitation rate of wage workers largely compensates for the increase in the organic composition of capital during this first century of savage capitalism, since the profit rate progressively increases from 10% in 1770 to 24% in 1860 (with a maximum of 25% around 1875) as shown in Graph 5 (Allen, 2007).

Graph 1.5 - GB Profit rate - real and nominal (Allen)
Graph 1.5: GB, Profit rate, real (1770 – 1913) and nominal (1800 – 1860)

Big sacrifices for meager results

This phase of savage capitalism ends around the middle of the 19th Century, when we witness a reversal of the trend, as capitalism enters its typically colonial phase: (10) instead of continuing to grow, annual working time begins a slow decline until 1917, albeit it remains still higher than at the beginning of the industrial revolution; similarly, real wages stop stagnating and increase slowly and modestly from 1855 to 1901, but then decline significantly until the First World War, following a counter-offensive by the English employers (explanation below). They have nevertheless increased by a factor of 1.54 in sixty years (from 1855 to 1914). In addition, a decline in unemployment occurs between 1842 and 1873, from 10% to 2.8%, certainly, only to rise again, but to a lower level (5%). Finally, the first basic social rights are wrested away, such as limiting the work of very young children (declared prohibited under the age of nine in the textile industry in 1833), the restriction of the daily working time for women and children (to 10 hours a day in 1847), the acquirement of the right to organize in trade unions in 1875, etc. This reversal of the trend is the result of social resistance that develops as the working class grows in number and concentration. This explains a) the capping of the rate of surplus value from 1855 to 1872 and its subsequent slight decrease until 1895 (Graph no. 1); b) the stabilization and subsequent rise of the wages’ share, respectively the stabilization and drop of the profits’ share from 1855 to 1890 (Graph no. 4); and c) the stabilization and subsequent drop of the profit rate from 1860 to 1890 (Graph no. 5).

At the end of the 19th Century and the beginning of the 20th (1895-1917), there is a counter-offensive by the English employers to restrict the concessions granted during the previous four decades and to restore their profit rate (Grey, 2018). It succeeds partially, helped by a restoration of unemployment at the turn of the century, since real wages fall from 1901 to 1917 (Graph no. 2). The wages’ share drops and the profits’ share rises from 1890 to 1910 (Graph no. 4); since, the rate of surplus value soars from 1895 to 1917 (Graph no. 1), as does the profit rate from 1890 to 1910 (Graph no. 5).

However, if we look at the entire century and a half from the beginning of the industrial revolution to the outbreak of the Russian revolution (1917), and if we ignore the particular dynamics during its two sub-periods (1760-1855 for savage capitalism and 1855-1917 for colonial capitalism), it must be said that the real improvements in working class conditions are very meager, especially in view of the enormous sacrifices made to achieve them, and compared to what the workers succeeded to obtain after the First World War. In fact, despite the fierce struggles to reduce an excessively long working time, it is still higher in 1914 than it was at the beginning of the industrial revolution! More than a century of struggles has failed to recover the sharp increase in working time by nearly 800 annual hours imposed by the employers from 1760 to 1830. As for the real wages, after a decline and stagnation for a century, they have increased only very slightly and slowly until the First World War. Unemployment, although fluctuating between 3% and 10%, has been almost permanent from 1760 to the First World War (5.5% on average). Finally, with regard to social safety nets, social security and pensions the timid progress is minimal, and has only come about at the very end of this period. There remain the legal rights that have been obtained in hard-fought struggles, but whose practical provisions are rarely followed in practice. A significant fact attesting to the still miserable conditions of the wage earners after 150 years of capitalism: millions of them are still pushed to emigrate on the eve of the First World War, in search of a less worse life. Thus, from 1861 to 1914, 45 million people emigrate from Europe to the United States (28 million), Canada (5 million), and Argentina (2 million)… (Chalmin, 2019)

The same is true for life expectancy at birth, which offers a different point of view of the socio-economic and health status of a population at a given time (Graph no. 6). It evolves very weakly during the first century of savage capitalism (from 36 to 41 years of age from 1760 to 1865) and only progresses by about ten years thereafter until the First World War. It should be noted, however, that the evolution reproduced here is that of an average population, combining all social classes; the life expectancy of a worker is obviously lower! Thus, in the workers’ cities par excellence of the English industrial revolution, Liverpool and Manchester, it is only 25 and 29 years respectively in 1860 (Szreter & Mooney, 1998), whereas it has already reached 41 years for the average English population! Similarly, the life expectancy of a worker in France in 1913 is barely ±35 years, whereas its average population already reaches an age of 53 years (Leridon, 2012). This is a measure not only of the misery of the living and working conditions of the workers during the first century and a half of capitalism’s existence, but of a very shortened life because of these conditions!

Graph 1.6 - UK Life expectancy since birth 1760 – 2018
Graph 1.6: Life expectancy from birth, UK (1760 – 2018) / Real wage of a skilled worker in London (1760 – 2001)

This state of endemic poverty in the working class world will change significantly after the revolutionary explosions following the First World War, and even more radically after the Second World War, given the much faster growth in real wages and of the reduction in working time. Thus, if life expectancy rises only by 14 years in one century and a half (1760-1914), it will rise twofold in less time: by more than 31 years in 104 years (1914-2018).

This multi-secular evolution is confirmed again if we observe variations in male body length. Thus, the median length of men generally declines, or remains stable, during the first century of savage capitalism. It slightly increases just since the last quarter of the 19th Century and rises significantly only in the 20th Century (Graph 7). (11)

M.R., May 2019

Source: 250 Ans de Capitalisme, forthcoming at: Capitalisme & Crises Économiques

Translation: H.C. Proofreading and corrections: M.R., June 2019.

Graph 1.7 - Median body length (1820 – 2013)
Graph 1.7: Median male body length in various countries (1820 – 2013)


4 In the total wealth created annually (the national product), the rate of surplus value (also called the exploitation rate) measures the share between what belongs to the employer (the surplus value) and what belongs to the employee (his salary), in other words: rate of surplus value = surplus value / salary = (national product – salaries) / salaries. It is a measure of the degree of economic exploitation of wage labor (to distinguish from the degree of physical exploitation like stress or occupational risks).

5 This contribution therefore has only a limited objective, which complements Marx’s Capital and the more qualitative works of Marxist and other historians of the industrial revolution and the development of capitalism, works to which the reader should refer in order to have a complete vision.

6 This first century of industrial revolution was characterized by a strong demographic growth resulting from a widening gap between the birth and death rates: while the former increased from 3.4% to 4.2% between 1760 and 1876 and then stabilized at a high level (3.6%) until 1876 (the date of its rapid and continuous fall), the mortality rate fell from 2.9% in 1760 to 2.1% in 1876 (Source : Our World in Data).

7 Free access to forest resources, grazing rights on fallow land, etc., all of which enable many poor farmers to survive in the countryside. Read in this regard the excellent contribution of J.M. Chevet (1996) on the agricultural revolution in England. (French language)

8 Calculated by dividing the profit share by the wage share from the data in graph 4. This results in a rate of surplus value of 32% in 1770 (19% / 59%.) and of 81% in 1855 (42% / 50%), which leaves us with a multiplication by 2.5 from 1770 to 1855 (81% / 32%).

9 This share of land rent in GDP declines from 22 per cent in 1770 to 7.5 per cent in 1855 (Graph 4). It will only be residual throughout the 20th Century.

10 For a more detailed description of the productive orders that pace the life of capitalism, we refer to the article Crisis – Conflicts – Struggles – Populism (Part 1) on this blog, or in ‘A Free Retriever’s Digest’ Vol.2#6 (December 2018 – January 2019).

11 Olson, R. S. (2014). ‘Why the Dutch are so tall ?