In a very interesting article ‘Industrial Revolution Comparisons Aren’t Comforting‘ economist Tyler Cowen analyses the consequences of the revolution on labor and wages. In particular it shows that real wages actually went down during the period of adjustment for the average worker.
I am fond of historical comparisons and parallels and this recommended article is a very interesting analysis. One important and interesting quote: “By the estimates of Gregory Clark, economic historian at the University of California at Davis, it took 60 to 70 years of transition, after the onset of industrialization, for English workers to see sustained real wage gains at all.” And Tyler Cowen compares the situation to the actual stagnation of wages since the late 1990s in developed countries.
One element of worry is of course that the Industrial Revolution led to the development of certain ideologies which led to revolutions and political instability and volatility – and much suffering.
Are we watching the same evolution now? This might be an issue to watch closely. I am not as optimistic as Tyler Cowen that this time we should be less extreme and more reasonable: the inclusion of developed countries in the Fourth Revolution will create substantial new sources of instability.