Indiana University Press, Tenth and Morton Streets, Bloomington, IN 47405 • 1990 • 194 pages • $25.00 cloth
While there are many reasons for the “anti-capitalist mentality” so prevalent among intellectuals (and, in somewhat less virulent form, among the general public), distortions of our economic past must surely rank prominently among them.
As F. A. Hayek put it in Capitalism and the Historians, “Few men will deny that our views about the goodness or badness of different institutions are largely determined by what we believe to have been their effects in the past . . . . Yet the historical beliefs which guide us in the present are not always in accord with the facts; sometimes they are even the effects rather than the cause of political beliefs. Historical myths have perhaps played nearly as great a role in shaping opinion as historical facts. Yet we can hardly hope to profit from past experience unless the facts from which we draw our conclusions are correct.”
More reliable accounts of the past must supplant these false historical beliefs if our endangered heritage of economic and political freedom is to be revived. This is so even in an age in which the opposite of economic freedom—socialism—seems to be almost universally discredited. Without a real appreciation of capitalism’s virtues and achievements, the only substitutes offered for presumably defunct socialism will be obnoxious “new” versions of the “mixed economy,” unnecessarily burdening denizens of both the East and the West for numberless years to come. So by all means, let’s get the history right.
In this slim but fact-packed volume, economist Clark Nardinelli observes that many historians regard child labor as symbolic of the ravages of the Industrial Revolution. Following the lead of contemporary factory-system critics like Richard Oastler, they often begin with an arbitrary moral assumption—that child labor is immoral or exploitative on its face—and squeeze the facts to fit that assumption.
“The study of child labor and the industrial revolution has, I believe, paid too little attention to the economic reality of that labor,” Nardinelli writes. “Child labor can easily be the outcome of family decisions to improve the well-being of children. The important decision with respect to child labor, moreover, may not be between working and not working but between working at home and working away from home . . . . Under the conditions of the early industrial revolution, child labor may well have made children (and the family) better off.”
This possibility was never even considered by many of the earliest critics of child labor in the factories. With proto-Marxian outrage, Richard Oastler compared the situation of working minors to that of slaves: “. . . Ye are compelled to work as long as the necessity of your needy parents may require, or the cold blooded avarice of your worse than barbarian masters may demand! . . . Ye are doomed to labour from morning to night for one who cares not how soon your weak and tender frames are stretching to breaking.” Oastler’s lurid charges have had a sweeping influence on the perceptions of later writers.
But support for these claims comes mainly from the 1832 Report of the Select Committee on the Bill for the Regulation of Factories, recounting testimony that we now recognize to be skewed in favor of the prosecution. The Committee, led by M. T. Sadler, a pal of Oastler’s, was originally supposed to hear evidence from both critics and supporters of the British factory system. But instead, only antagonistic witnesses—carefully coached by Oastler—were allowed to be heard, and their horror stories remain “the basic indictment of child labor in early industrial Britain.”
In a later inquiry, held in May 1833, factory overseer John Redmen offered more favorable testimony. He recognized instances of mistreatment, but contended that “generally they are as well treated in mills as anywhere else. Those parents who look after their children now, and place them now with masters who treat them well, will manage them well when they are turned out of the mills at six o’clock: those parents who now place their children, for the sake of higher wages, with spinners who ill treat them, rather than with neighbors or friends, will, I suppose, treat them in the same way as they do now, that is, neglect them.” This kind of testimony has exerted considerably less influence among historians, perhaps because, as Hayek argues, political beliefs have indeed shaped historical ones.
There is no evidence that parents typically sent their children to work out of arbitrary greed or negligence; rather it was a matter of survival. In this connection Nardinelli cites the work of David Vincent, whose study of working-class autobiographies concluded that their authors “believed that their parents made them labor because they could not afford to do otherwise, and that as children they were simply trapped in the poverty of the family and the class into which they had been born.” There/s evidence that the increased productivity and opportunities of the factory system made it possible for more children and parents to survive than would have in a more primitive economy. Furthermore, despite long hours by today’s standards, children working in the factories were usually assigned peripheral and relatively easy tasks. It could be a much tougher slog out in the country, where the hours were certainly no shorter.
Although he is sound and scholarly on most points, the author plunges into muddy waters when he tries to prove something about exploitation with statistics. He notes that for many critics, if a child has to work at all he is being exploited, whether or not his earnings mean the difference between life and death. Their assertion implies that how children were actually treated in particular cases is irrelevant.
But his own “neoclassical” definition is no improvement: “According to the neoclassical definition, economic exploitation exists when the value of the worker’s marginal product (that is, what the worker adds to the revenues of the firm) exceeds the wage rate.” Nardinelli himself concedes that measuring the marginal productivity of child labor is a dubious chore, but his premise is wrong in any case. Wage rates on the market are determined competitively. Of course they are related to the marginal product of the labor; that’s why a CEO tends to be paid more than a clerk. But whether “exploitation” exists has to do with behavior, not with meeting the requirements of some academic formula that presupposes the evil of “excessive” capitalist profit. (Especially since the values can be plugged into the equation only after wages have been paid and profits have been earned—with the profits coming later, if at all.) When the text strays from common-sense economics it can be annoying and wrongheaded, but there are only 10 or 12 pages here that are completely useless.
The only other problem, for the general reader. is the sheer inclusiveness of the argument. Because Nardinelli has apparently absorbed all the extant literature on the subject of child labor in the Industrial Revolution, he sometimes deals with arcana that could be of interest only to fellow academics. But, on the other hand, he covers many areas about which solid information is urgently needed. He shows that anecdotes by themselves reveal little without an understanding of which direction the trends are going, and what the historical context is; and he unveils that context. Despite its rather dry tone, Child Labor and the Industrial Revolution is a clear and important contribution to setting capitalism’s historical record straight.
David M. Brown, a free-lance writer, is also the managing editor of the Laissez Faire Books catalog, and the publisher of a monthly newsletter on culture and current affairs.