Arguments about the past are often used as proxies for arguments about the future. It is no surprise, then, that a long-running debate about the Industrial Revolution has flared up as we begin another phase of rapid technological change.The argument concerns whether the industrial revolution was good or bad for workers in the short run (and, by extension, which the AI revolution will be). The discourse in tech circles can be boiled down to this: “Relax: the industrial revolution led to higher real wages and more jobs”. “But don’t you know about ‘Engels’ pause’? Between 1790 and 1840, profits rose but real wages barely budged.” “Ah, but don’t you know that a different measure of real wages tells a different story?” And so on.
I find this argument perplexing — not because there are no lessons to be learned from the industrial revolution, but because I don’t think these databases are the right place to look for them.
For one thing, the data on that era is patchy and unreliable. For another, the industrial revolution in Britain took place against a very different institutional backdrop. There was no universal suffrage, no legal trade unions and no modern welfare state. Indeed, you could argue these were eventual social responses to the industrial revolution. It is hard to see why we should expect the wage-setting dynamics of the past (even if we could agree on what they actually were) to repeat themselves today.