Shifting Labor Income Shares in the First Industrial Revolution
Shifting capital and labor income shares were a dynamic element in early industrial revolutions. Allen (2009) identifies “Engels’ Pause” as the period that aligns with the First Industrial Revolution’s installation period.1 Allen shows the UK economy passed through a two-stages evolution—remarkably similar to the installation and deployment periods—characterized by fluctuations in profitability, real wages, productivity, and capital investment.
Allen asserts that the prime movers of the First Industrial Revolution were 18th-century UK technology innovations, including mechanical spinning, coke smelting, iron puddling, and the steam engine. After 1800, the revolutionized ...
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