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6 - Labor Demand and the Industrial Revolution

Published online by Cambridge University Press:  16 November 2021

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Summary

The Demand for Labor Theory

Adam Smith observed that “poverty seems favourable to generation,” a phrase that Marx quoted from The Wealth of Nations (1776). The whole Smithian passage is as follows:

Poverty, although it undoubtedly discourages marriage, does not always prevent it. It even seems that it is conducive to procreation. A poor undernourished woman from the Highlands often gives birth to more than 20 children while an elegant lady gorged with food often fails to give birth to one, and generally runs out of two or three. (Smith [1776] 1995, 117)

Smith also observed that in the free-market economy under his scrutiny, “the demand for those who live on wages therefore naturally increases with the growth in national wealth, which could not otherwise increase.” In the eighteenth century, children worked in factories, so Smith connected the demand for their labor with their multiplication:

Work is compensated so well that a family with many children does not represent a burden for parents but a source of well-being and prosperity and therefore, the liberal remuneration of work is as much the effect of wealth as the cause of population increase. Protesting against it means complaining about the effect and cause (both necessary) of greater public prosperity. (Smith [1776] 1995, 111–12 and 119)

Since the division of labor boosts the social product, the remuneration for all production factors can increase, thus allowing population growth (Smith takes for granted the necessary food). As we have seen, also Malthus (1836) said that in the Speenhamland system, labor demand is the cause of population increase, which in turn increases subsidies and other expenses for dependent children.

The root of population dynamics in labor demand was therefore recognized by classic economists but was then forgotten by the neoclassic authors, with the exception of Alfred Marshall. Curiously, in a letter from 1909 (cited in Folbre 2001, 12), Marshall attributed the “problem” of reduced births in England to the selfish desire of women to resemble men—which proves how even apparently aseptic macrohistorical reasoning about the population can be based on visceral feelings related to women's sexual difference and the sex's social role, or gender.

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Publisher: Anthem Press
Print publication year: 2021

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