Inequalities and industrialisation

Alex writes*

Inequality in Europe changed with 19th century industrialisation. At that time, wealth was concentrated amongst the upper echelons of society, but the industrial bourgeoisie used their profits to join the landed aristocracy [pdf]. 

Work in cities led to rapid urbanization of Western Europe throughout the 19th century. Terrible conditions led people to call for more rights. This was first met by deaf ears, but the Communist Manifesto of 1848 mobilised the workers to call for decent working and living conditions. Stronger labour rights meant less working hours for children  and reasonable salaries for adults. Politicians in Western Europe supported such reforms to compete with rising social democratic and socialist political parties. Germany’s Bismarck, for example, enacted laws in 1883-84 that compensated workers for sickness and accidents. The development of labour rights led to political rights. Voting rights in Germany were granted universally in 1919 under the Weimar Republic.

The changing norms in society led to new institutions, the labour rights movement, universal voting rights, and the welfare state. These changes increased economic development as prosperity benefited more people. Changing norms in Germany and Sweden (where men could vote in 1919 and women in 1921) gave rise to notions such of “Gemeinschaft und Volk” or “Samhälle och Folk” (Community and People), which led to institutions such as “Folkhemmet,”  a political idea that presented the Swedish welfare state as a home for the people and means of development.

Bottom line: The normative changes that Europe has experienced throughout the 19th and early 20th century are largely due to industrialisation. Wealth inequalities and a growing workforce demanding more labour rights led to a more equal distribution of wealth. Hence a shift from solely economic growth to better economic development. These labour rights then further translated into voting rights, changing values, and a welfare state that would protect workers and citizens from the hazards of life. 

* Please help my Growth & Development Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Author: David Zetland

I'm a political-economist from California who now lives in Amsterdam.

One thought on “Inequalities and industrialisation”

  1. Hey Alex,

    The change in society brought on by the Industrial Revolution is undeniable, as the increases in urbanization, workers rights, and other phenomena paved the way to the more modern society that we know today. Important to keep in mind however, is that this change has not been as gradual as you present it to be with labour rights translating into voting rights. While pioneers such as Bischmark did change values and laid the groundwork for the welfare state, the societies of the late 19th century were just as unequal as those of the acien regime before the French Revolution. Societies were economically very unequal which until that time still translated into being politically unequal as well, with the industrial nations still being limited access orders which weren’t about to gradually change. Therefore, it is important to keep in mind the importance of big shocks to the system, in this case, the elephant in the room is WW1. This both bankrupted many of the industrializing nations and spurred demands for more participation in society, while damaging the power of the old elite. These ideas are part of the wider debate on how institutional change happens (Shocks vs incremental change) and are worth exploring further.

Leave a Reply

Your email address will not be published. Required fields are marked *