250 years of Modern Capitalism – A reconstruction of its dynamics

2. The Class Struggle from 1760 to the Russian Revolution

Working more to earn less

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 wage 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 occurred during the subsequent half-century. In fact, the Graph no. 2.1 hereafter shows us that the workers’ real wages stagnated from 1760 to 1855. Worse, already very miserable in 1760, they began to decline by a quarter until 1800, then recovered around 1830 and stabilized until 1855.

Graph 2.1: Real wage of a skilled worker in London (1760 = 100) and Annual working hours (1760 – 2001)

The annual working time increased by almost a third from 1760 to 1830, and then declined only marginally until 1855. Comparing the latter with the real working time in the agricultural and artisan society of the Ancient Regime, this degradation is all the more spectacular when considering that: “the farmers before the industrial revolution, effectively did not work more than 1,800 to 2,000 hours per year, due to the idle periods. The effective working time of the artisans was probably somewhat longer: about 2,300 to 2,600 hours per year (…) With 15 to 16 hours per day, and 6 days a week, the worker of the beginning 19^th Century passed on average more than 4,200 hours at his work place, and effectively worked for about 3,500 hours.” (Bairoch, 1997, Volume 1, p. 620). Moreover, these already very eloquent estimates do not take account of the long duration of daily commuting by foot, for a non negligible part of wage workers who still lived at the countryside and worked in the towns (see the report by doctor Villermé below). It is thus no exaggeration to affirm that the first century of industrial revolution has virtually doubled working times, and that the diminutions of the second half of the 19^th. Century have only very marginally attenuated this degradation. In reality, only after the subsequent reductions of working time after the First World War we see annual working times that are shorter than during the period of the Ancient Regime!

But the industrial revolution has introduced another degradation, the over-exploitation of child labor at a low age. Certainly, their work has always existed, but never [before] under the inhumane conditions induced by capitalism, because “the beginnings of the industrial revolution are characterized by a lowering of the first working age… (…) … children below the age of 8 or even 6 years were commonly employed … (…) … in the first phase of the industrial revolution, the work time of the children was the same as that of the adults, namely 14 to 16 hours per day. (…) Children forced to sleep at their work places, in a corner of the workshop, or in a summarily adapted factory hall, were not isolated or rare cases, because the distance between the domicile and the work place, and the duration of the work, often made commuting impossible. The lecture of the different reports on the situation of the working children at the beginning of the 19^th Century is succession of nightmarish images.” (Bairoch, 1997, Volume 1, p. 614 – 615) And for what salary? “They work for ridiculous wages (…) … to quote only one significant example: in the spinning mills of Lancashire (England) around 1830 the remuneration of children under 11 years was six times less than that of an adult unskilled worker. A day’s wages of a child could buy a little less than a kilo of bread! Thus a revenue insufficient to feed and cloth it. This poses a question: Why then send these children to work? Simply because the wages of the father (and even of both father and mother) were insufficient to maintain a family with 2 or 3 children.” (Bairoch, 1997, Volume 1, p. 615 – 616)

In addition to this physical and physiological over-exploitation of the wage earners, there are also the leonine labor regulations, which are similar to a prison regime made up of almost permanent psychological bullying and harassment. So, while the hourly wage of an unskilled worker around 1850 was 2 pennies, the fines provided for in the regulations of a textile factory in Lancashire (England) were “2 pennies for anyone absent from their workplace or talking with another person; 2 pennies per tranche of 5 minutes of being late; 3 pennies for each curse or indecent word… (…) The owners wanted all their workers to wash themselves every morning; but they are obliged to wash themselves at least twice a week: Monday morning and Thursday morning. If this was not the case, a fine of 3 pennies was levied for each offense.” (Bairoch, 1997, vol. 1, pp. 622-623).

Moreover, to all these miserable and debasing work conditions a terrible degradation of the housing conditions is added. Certainly, the latter were far from excellent at the countryside, but these were incomparably better than the cramped slums in which several families had to pile up. This is how the report by doctor Villermé describes the housing conditions of French workers in the middle of the 1830s: “I have seen … of these miserable lodgings, in which two families slept each in a corner, on straw thrown on the floor and contained by two planks. (…) … I have to say that in several of the beds that I have just spoken of, I have seen individuals of both sexes and of very different ages resting together, most of them without a shirt. Well, the cellars are not the worst. The worst lodgings are the attics, in which nothing protect tenants from temperature extremes; because the tenants, as miserable as those who live in cellars, are equally deprived of means to maintain a fire to keep themselves warm in winter. To conclude with, I would not provide a complete idea of the lodgings implied without mentioning that for those who live in several districts of which I spoke, and this sometimes applies to hundreds of individuals, there are only one or two of those toilets indispensable to the cleanliness of the towns.”

Finally, in addition to these miserable living and working conditions for the workers’ families and their children, there is the scourge of growing unemployment resulting mainly from a galloping urban demography (¹) 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. (²) Thus, the unemployment rate increased from 3.6% to 10% between 1760 and 1842, see Graph no. 2.2:

Graph 2.2: Unemployment in %, GB/UK (1760 – 2016)

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 on the labor market among them, due to a growing unemployment that will allow the employers to keep wages as low as possible and to impose a sharp increase in working time. In these miserable conditions, it is of no surprise that the number of poor people grows strongly during the first century of savage capitalism. By the way, in 1834 England adopts a new Poor Law in order to face up this influx.

The index of Gini, which measures the degree of inequality in the redistribution of the national income (Graph 2.3, Milanovic 2019), confirms the dynamics that we have established for the first times of the industrial revolution: the inequalities grow for two centuries (1688 – 1867), and subsequently inverse until the First World War, but without seeing a noteworthy amelioration, since in 1913 the inequality in the redistribution returns to what it had been at the beginning of the industrial revolution. The redistribution of wealth only becomes more egalitarian between the First World War and the end of the ‘Thirty glorious Years’. Ever since, the neoliberal policies again deepen the inequalities.

Graph 2.3: Gini’s index of the available revenue per capita in the UK (1688 – 2010). Source: Milanovic, 2019.

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. And this is still without considering the interdiction 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.

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. 1.1) and according to Allen’s calculation (see the following Graph no. 2.4), since our index is multiplied by 1.82 from 1760 to 1855 and the other by 2.6 from 1770 to 1855. (³)

Graph 2.4: Share of wages, profits and land rent in national income, GB, 1770-1910, constant prices 1850, (Allen, 2007)

[Undoubtedly, the stronger variation with Allen results from subtracting the land rent from the gross profits.]

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. (⁴) 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 2.5 (Allen, 2007).

Graph 2.5: 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 (⁵): 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. 1.1); 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. 2.4); and c) the stabilization and subsequent drop of the profit rate from 1860 to 1890 (Graph no. 2.5).

However, 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. 2.1). The wages’ share drops and the profits’ share rises from 1890 to 1910 (Graph no. 2.4); since, the rate of surplus value soars from 1895 to 1917 (Graph no. 1.1), as does the profit rate from 1890 to 1910 (Graph no. 2.5).

Nevertheless, in spite of the halt to the degradation of the condition of the waged workers and a first amelioration, 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 abstract from the particular dynamics proper to each of its two sub-periods (1760-1855 for savage capitalism and 1855-1917 for colonial capitalism), one cannot but observe that the real improvements of the conditions of the working class 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 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).

Concerning child labor, despite the social conquests of the second half of the 19^th. Century, it is still very widespread. Its reduction will only be significant at the end of the 19^th. Century “at the time when primary education, made compulsory in all countries, progressed”, we learn from Paul Bairoch (1997, vol. 1, p. 616-617). Thus, if the Factory Act of 1833 has prohibited the employment of children under 9 years of age and has limited working time at 8 and 12 hours for 9 to 14 year olds and for 14 to 18 year olds respectively, “This legislation remained however very timid” and “only applied to the textile industry”, he details. Also the case of the Belgian coal mines in 1880 needs to be mentioned, where nearly one-fifth of the underground miners are children under 16 years of age! In the United States, it was not until 1914 that the first steps were taken to limit child labor, and it was not until the New Deal of Roosevelt for an effective law to be passed in 1933!

As for social safety nets, social security measures and retirements schemes, the first concessions are timid and only come at the end of this period. There remain the legal rights that have been wrested away in hard-fought struggles, but whose practical provisions are rarely followed in practice, because there is still no such thing as a genuine labor inspection, accompanied by effective legal constraints. In this way, the [aforementioned] English Factory Act of 1833 provided only for a body of four inspectors in charge of monitoring its application!

These deplorable living and working conditions are to have a strong impact on the life expectancy at birth, which offer a different point of view of the socio-economic and health status of a population at a given time (Graph 2.6). 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 modern capitalism, but of a very shortened life because of these conditions!

Graph 2.6: Life expectancy at birth, UK (1760 – 2018) / Real wage of a skilled worker in London (1760 – 2001). UK 1760 = 100

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 19^th Century and rises significantly only in the 20^th Century (Graph 2.7). (⁶)

Graph 2.7: Median male body length in various countries (1820 – 2013)

Finally, an evident sign of the still very miserable condition of the wage earners, despite the some hard-won improvements from the last third of the 19^th. Century, is their increasingly massive emigration from Europe to supposedly milder airs, especially between 1881 and the First World War, i.e. during the period assumed to be the least worse for the working class. To measure its importance, let us look at the assessments of economic historians: one million Europeans have emigrated overseas between 1500 and 1800, another million between 1801 and 1850, but 41 million between 1851 and 1915, eight-tenths of which, or 33 million, [emigrated] during the three decades before the First World War (Bairoch, 1997, volume 2, p.169-185). Who, whereto, why and did they stay or return?

They are mainly English + Irish (40%), Italian (16%) and Germans (14%) who fled their country to go mainly to the United States (70%), Argentina (10%), Australia, Canada and Brazil (6% each). With the exception of the South American countries, only two million of Europeans have parted to what will become the future Third World (Africa and Asia) between 1800 and 1914. These candidates for emigrants are of course attracted by better life prospects abroad, but they have most often been forced by their miserable conditions in their country of origin. And if it was a success for some, for many others it was everything but an Eldorado, because the majority of them work in low-level jobs in the countries of arrival, and a significant proportion have returned, in the order of 40 to 45%, as they were unable to improve their daily lives. We are therefore very far from the image of Épinal, of the Uncle from the Americas who has made a fortune!

Translation: H.C., August 12, 2019. Proofreading: M.R., August 10, 2019. Extended version: August 24, 2019.

Notes

1 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).

2 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)

3 Calculated by dividing the profit share by the wage share from the data in Graph 2.3. This results in a rate of surplus value of 32% in 1770 (19% / 59%.) and of 84% in 1855 (42% / 50%), which leaves us with a multiplication by 2.6 from 1770 to 1855 (84% / 32%).

4 This share of land rent in GDP declines from 22 per cent in 1770 to 7.5 per cent in 1855 (Graph 2.3). It will only be residual throughout the 20^th Century.

5 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) (also in ‘A Free Retriever’s Digest’ Vol.2#6, December 2018 – January 2019).

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

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