Front Page Titles (by Subject) Child Labor and Capitalism - Literature of Liberty, Spring 1981, vol. 4, No. 1
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Child Labor and Capitalism - Leonard P. Liggio, Literature of Liberty, Spring 1981, vol. 4, No. 1 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Child Labor and Capitalism
“Child Labor and the Factory Acts.” Journal of Economic History 40(December 1980):739–755.
The traditional view holds that a ruthless system of market laissez faire depended on and exploited child labor in early nineteenth-century Britain. Without state intervention, beginning with the Factory Act of 1833, the market forces of the industrial revolution allegedly held out little hope of improving the children's wretched condition. Supposedly, the Factory Acts diminished child labor, thereby improving the welfare of children. The economic and historical evidence, however, implies that the Factory Acts merely speeded up an earlier tendency of the market to reduce child labor. The chief causes of the decline in child labor were not laws but labor-saving technological improvements and rising family incomes.
The traditional view is distorted by the one-sided evidence of M. T. Sadler's Report of the Select Committee on the Bill for the Regulation of Factories (1832). But Sadler, the Leeds M.P., coached his witness to paint a lurid portrait of the textile industry which claimed that child labor was the major source of labor in the factory districts. The defense for the other side—the factory owners—was never carried out to balance the picture. During the 1840s and 1860s royal commissions and reformers aroused sympathy to extend legislation to regulate work hours, conditions, and educational opportunities for child miners, chimney sweeps, and virtually all industries. The traditional interpretation draws the unfounded conclusion that child labor decreased because of the legislative regulation rather than because of market innovations.
A close study of the statistical evidence for child employment debunks the belief that the Factory Acts prevented child labor in textile factories from increasing in importance. The apparently increasing proportion of child workers after 1838 actually resulted from the “half-time” system (employing more children but with fewer hours of work required) and from the decline in the implicit “tax” on child labor (the cost to the employers of the providing age certificates and the child education declined). For most of the nineteenth century improvements in labor-saving machinery (such as the self-acting spinning mule which eliminated the need for children to piece together broken threads). Increasing family income and wages further reduced the need for child labor, as did the shift to steam power. The Factory Acts, then did not cause the long-run decline in child labor. In the short-run, however, they may have reduced the proportion of children in the textile labor force.
It is not clear that the overall effects of factory legislation improved children's “welfare,” a controversial and hard-to-measure notion. It is fallacious to assume that simply because legislation may have displaced some children from the factory work force, it thereby removed them from all labor occupations (such as more onerous nonindustrial jobs and the “family economy”).
Children employed in nontextile industries did not undergo legislative regulations until the 1860s and 1870s. They thus provided an opportunity to observe what children's work was like in the absence of factory regulation. The census evidence shows that typically, children under 10 were not wage laborers in the unregulated industries. Nor were older children (up to the age of 14) significant percentage in the unregulated, nontextile factories. “Therefore the hypothesis that all British industry depended on children does not fit the facts.”
Prof. Nardinelli concludes that child labor in textile factories was not growing relative to adult labor even before the Factory Acts. In fact, it was declining without government intervention. “The legislation did not slow the replacement of adult by children; it accelerated the replacement of children by women.” The traditional history of child labor is distorted by concentrating on the early textile industries, a unique case. Originally, textile factories were located in rural areas to take advantage of water power. The rural location, the need for unskilled labor, and the immobility of adults under the Poor Laws led to a greater proportion of child labor only during this early stage of the textile industry. The later development of steam power allowed for urban location and factories to be located in the more populated cities and thereby diminished the need for nonadult labor.