What conclusions for the role of population in economic development can we draw from the British industrialisation experience?

In England, the economic impact of rising numbers was moulded by the redevelopment in the economy. The productive capacity of the nation rose, whilst its structure changed towards the sectors where there were increasing returns and advancing productivity- in manufacturing industry, mining, trade, transport, whilst increasing returns also being made in agriculture, in large measure because of the redeployment of most increments in population away from work on the land. Migration towards sectors in the economy with increasing returns became the crucial aspect of the demographic revolution in Britain. Rising numbers probably allowed it to happen more quickly by providing a rapidly growing labour force rapidly seeking alternative work.

Increasing numbers too, being in employment as paid labour and at higher money incomes usually than agriculture and also not insulated from the market economy in largely self sufficient peasant households, provided the power of a widening internal market. This stimulated economic expansion of the demand side as well as the labour supply side. Non-agricultural work probably offered employment for a greater number f weeks per year than was offered on the land. More paid women’s and children’s work was available in industry. Regions of the country and sectors of the economy with higher money earnings were expanding their labour force faster than the less dynamic regions and sectors. In all these ways the integration of population growth with economic change in the British context increased levels of effective demand.  The combination of rising numbers, extending employment, changes in the structure of employment away from agriculture towards sectors of higher wages and greater volume of work underlay the extension of the domestic market after the 1740s, which remained a principal determinant in the growth of the economy.

Population growth also had other important economic effects. By making greater demands on food supplies, it placed a greater strain on agricultural output and required greater investment in agriculture. Rising numbers also made greater demands on investment generally. Even if no expansion in the amount of capital per head of the labour force took place, more capital would be needed to employ the extra numbers at static levels of technique. This is expansionary in making demands for investment. A mobile population was also qualitatively advantageous: migrant labour flowed naturally to the ‘pressure points’ of the economy where demand for labour was greatest and the supply in particular categories of jobs most lacking. Where population density increased, innovations in transport and other improvements such as in the distributive trades and retailing became more worth while and could pay their way better: almost all advances in retailing and the growth of competition in this sector took place in towns.  

The British industrialisation experience is telling about the role of the population in economic development. We have seen that the population growth provided stimulus for investment in capital goods for increased productivity and future economic growth and divergence into new sectors of the economy such as retailing. It is important to understand, then, that ‘population’ encompasses at least three economic players: consumers who demand, labourers who supply their skills and services and entrepreneurs who respond to the gaps in the market and facilitate the progression of the economy into new sectors.  It is the interaction of these players that defines the role of the population in economic development. It must also be recognised that the population was important to an extent in British economic development, other factors, which could be called upon, are the state of technology for example.