ABSTRACT
In the 80 years or so after 1780 the population of Britain nearly tripled, the towns of Liverpool and Manchester became gigantic cities, the average income of the population more than doubled, the share of farming fell from just under half to just under one-fifth of the nation’s output, and the making of textiles and iron moved into steam-driven factories. So strange were these events that before they happened they were not anticipated and while they were happening they were not comprehended. In 1700 a percipient observer of Britain looking towards 1780 might have anticipated its enlarged foreign trade and more active workshops (as, in fact, Daniel Defoe had); in 1860 he might have anticipated the competition of new industrial nations or the application of science to factory and farm during the half-century to come, and by 1900 he would at least have comprehended these events happening (as, in fact, the economist Alfred Marshall and others did). Yet in 1776 Adam Smith predicted a Britain of merchants, farmers, and artificers increasing their incomes at a moderate pace through specialization and trade-after which national income increased in eight decades by a factor of nearly seven. In 1817 David Ricardo predicted that landlords would swallow whatever the increase would bring-after which rents as a share of national income fell, 1801 to 1861, from about 17 percent to about 8 percent. And in 1848 Karl Marx, in the midst of economic events belying his prediction, predicted that monopoly capital would swallow all-after which the share of labor in income rose, and the real wages of the exploited classes increased in ten or fifteen years by some 15 percent and in fifty years by 80 percent. The British economy from 1780 to 1860 was unpredictable because it was novel, not to say bizarre.
