Industrialisation & labour

When a country industrialises, it pulls workers from the farms and agricultural sector to a city or industrial core and draws upon some of the various economies to eventually drive some degree of prosperity. Such as the economies of scale, economies of agglomeration, and efficiencies coming from technical advancements whose costs are maintained by concentrating a lot of labour in a small space – a factory with a single line shaft for example.

The benefits of industrialisation and the surpluses of products do not naturally go towards the workers. As long as there’s influx of workers from the rural areas, wages are held down. And living conditions in cities were really bad. The means by which the masses gained affluence was usually not by the benevolence of the capitalist but the fact that government, industry associations and other influences pushed up labour standards and the bargaining power of labour. Public investments in infrastructure, education, healthcare helped to improve quality and sustainability of labour.

Jobs are ways to increase production; but they are also a means of distribution in the economy. Unfortunately, they are not always distributing the spoils of the economy in a sustainable way that helps us thrive. Because there will be a time when industrialisation and economies drive out labour in favour of capital. Imagine when goods can be produced purely by capital. Then employment no longer is a relevant metric; rather, ownership of capital determines ability to consume. Labour cease being a valuable factor of production.

More significantly, market economics tend not to provide a good way to distribute income (and by extension, wealth), even if it allocates limited or scarce resources well given most (but not all) context. Public economics helps to plug the gap; but we need more and better brains there to work out all the learnings we need outside a market-based dogma built over the decades of market triumphalism. The point of industrialisation we are at calls for a different paradigm towards jobs, production, consumption and distribution.