An article from Forbes.com
by Yaron Brook and Dan Watkin
The nineteenth century, many people believe, was an era in American history when workers were forced to toil in sweatshops twenty-eight hours a day for starvation wages. It was only when governments intervened, either directly on behalf of workers or indirectly by empowering unions, that conditions improved.
The facts tell a different story—one that reveals the unmatched power of capitalism to improve human life.
Remember the historical context. As Ayn Rand observed, “Capitalism did not create poverty—it inherited it.” For much of human history, the vast majority of the population was mired in poverty. All too often, the average individual lived in unimaginably wretched conditions. It was only in the nineteenth century, and then only in the West, that the masses started to enjoy prosperity.
Keep that in mind when you hear about living and working conditions during the nineteenth century. Because it’s true—by today’s standards, the living and working conditions of the time were often miserable. But by the standards of everything that had come before, they were not. For the men and women working those jobs, they were often a godsend.
Remember also, the population of the time was growing at a rate never before seen in human history—so fast that early economists like Malthus wrung their hands over whether such growth could be sustainable. How did the West actually sustain those growing numbers? Only through the rising productivity made possible by capitalism. Many of the workers who manned the factories would not have been able to survive at all in the era before capitalism.
Indeed, two basic facts speak more loudly than any statistical study could. First, factory owners did not have the power to force workers to labor in their factories; all they could do was offer work at a given wage to people who were free to accept the offer, or reject it and look for work elsewhere. Second, people flocked to those jobs, emigrating to the cities from America’s farms and from abroad.
How, then, did conditions for workers improve? Just as businessmen had to compete for customers, offering better products and lower prices, so they had to compete for workers, offering them better wages and better working conditions. This process of competition led businessmen to bid wages up to reflect workers’ productivity: the more productive workers became—the more…..(Read more)