Poverty, policy, and industrialization : lessons from the distant past

Pessimists say industrialization increased poverty; optimists say it did not. The authors argue that how much industrialization eradicates poverty depends on the form industrialization takes. It is not economic growth by itself, but the processes and policies associated with different growth regimes which make the poor poorer. The authors address two questions : 1) what happened to the proportionate share of the population living in poverty, and to the living standards of the poor, during nineteenth century industrial revolutions?; and 2) why did poverty statistics behave the way they did? Modern economic growth may erode traditional entitlements that serve as safety nets in preindustrial societies. It may be convenient to think otherwise, but typically the poor in preindustrial European and North American societies were not supported by the family and private institutions. Much of the responsibility for the poor lay with the state and other formal, statelike institutions that intervened in food markets. Where laissez-faire policies were adopted during the Industrial Revolution, as in America and England, many of the poor (especially the extremely poor) became more vulnerable to adverse conditions.