In this IEA talk, Dr Stephen Davies, Head of Education at the Institute of Economic Affairs, delivers a lecture on the Industrial Revolution, the Great Enrichment, and what the long history of economic growth tells us about how the modern world came to be. The talk covers the extraordinary transformation in living standards since 1800 — from a world where one in four children died before their first birthday and 80–90% of the global population lived in absolute poverty, to one where that figure has fallen to under 10%.
Dr Davies examines the Engels Pause (roughly 1790–1850), the period when British GDP grew by 46% while real wages rose only 12%, and traces where the missing wealth went — captured primarily by landlords and asset owners rather than workers. He explains how this reversed after 1850, when real wages surged by 123% as deflation took hold, the Corn Laws were repealed, and the elastic labour supply from the countryside began to dry up. The talk also draws a direct parallel between 19th century rural-to-urban migration in Britain and modern global migration, examines the moralistic and romantic literary critiques of industrialisation against what working-class diaries of the period actually record, and closes with the question of why China — as technologically advanced as Europe in the 14th century — failed to industrialise, and what the Ming Dynasty’s deliberate suppression of innovation reveals about how elites throughout history have blocked economic progress.
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