Reflecting on this empirical finding reported in Gregory Clark‘s forthcoming book, Tyler Cowen rightly asks “What’s a small recent blip in the data?”:
…unskilled male wages in England have risen more since the Industrial Revolution than skilled wages, and this result holds for all advanced economies. The wage premium for skilled building workers has declined from about 100 percent in the thirteenth century to 25 percent now.
The book is A Farewell to Alms: A Brief Economic History of the World, and it will be published by Princeton University Press. The quotation above is from page 298 of the book’s first draft. I am very eager to read it!
Being forever bombarded, as we are, by the huffing and puffing and pontificating and posturing of politicians and pundits who see disaster looming in every downward bounce in the data — especially when these bounces occur when their party is out of power — it’s important to keep in mind the enormous benefits that open, entrepreneurial, competitive markets have delivered to humankind. And because even the most wisely defined and carefully collected data ceaselessly blip up and down from their trends, the burden of proof for allegations that any current downward blips signal a departure from the trends of the past few centuries in market-oriented economies should be placed squarely and very heavily on the shoulders of those who make such allegations.
Don’t miss Tyler’s column in today’s New York Times, in which he elaborates more on Greg Clark’s forthcoming book.
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see http://www.econlib.org/library/Essays/macS1.html
Macauley on Southey
"…There is the best reason to believe that the annual mortality of Manchester, about the middle of the last century, was one in twenty-eight. It is now reckoned at one in forty-five. In Glasgow and Leeds a similar improvement has taken place. Nay, the rate of mortality in those three great capitals of the manufacturing districts is now considerably less than it was, fifty years ago, over England and Wales taken together, open country and all. We might with some plausibility maintain that the people live longer because they are better fed, better lodged, better clothed, and better attended in sickness, and that these improvements are owing to that increase of national wealth which the manufacturing system has produced. "
I saw your debate tonight against Thea Lee. It's too bad they couldn't pit you against someone who could flat-out disagree with you; Ms. Lee had to change the subject to have anything to debate.
It's also too bad that you couldn't use Powerpoint (which is a product of the format of the debates, not the techonolgy in the room, I assure you!) but is there any way you could post your slides? I am really interested in the data you were talking about.
All in all I didn't learn much (I'm well versed in free trade issues and Ms. Lee did not really say anything new or interesting) but I'm glad you came to Bucknell! Hopefully you opened some minds.
Adrian,
I hate to burst your bubble, but I'm Glaswegian and write from Glasgow.
The adult male life expectancy rate in Glasgow is in decline – in some parts of the city, it's now 54.
54!
http://www.guardian.co.uk/medicine/story/0,,1691741,00.html
There are a number of reasons why that's the case. A culture of poor diet and lifestyle exists in many quarters.
However, the major cause of this decline is poverty – not the welfare state's joke poverty but real, in your face grinding poverty.
It is impossible not to conclude that the decline in incomes caused by the annihilation of the west of Scotland's heavy industries, in particular a shipbuilding sector which was the world leader for nearly a century, has aggravated this appalling statistic.
Forty years ago a less academic boy could walk out of school on Friday and begin training as a tradesman on Monday – not now.
Again, there are a number of reasons why that's the case. The Scottish shipbuilder had an almost unique ability to shoot themself in the foot when it came to aggressive trade unionism.
But the fundamental reason was that shipowners started buying ships from Poland and Korea the production of which were subsidised by those countries' governments, while the British government would not engage in such practices. That was neither fair competition nor an open market. The comparative advantage enjoyed by the Poles and Koreans was artificial.
Now, the only alternatives for the less academic are lower wage but equally tradeable work like call centres. The 'skills' they learn will not save them from the global labour arbitrage, and in any event few have the aptitude to either sell or serve – so we now have a working population which just drifts from call centre to call centre. It's not because these people are lazy or shiftless – it's because they have been shoehorned into particular types of jobs in which they cannot be productive.
Glasgow is Europe's call centre capital, with one centre for every 2,000 of its population. Do you believe that that's a good foundation for increasing wealth? I don't.
Where is our Buchanan?