The Engels pause

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The name Robert Allen gave to the period, roughly the 1790s to the 1840s, in which British output per worker rose substantially while real wages for most workers did not — the gap accruing instead to profits and to the reinvestment that built the capital stock. It is called after Friedrich Engels because his 1845 account of Manchester described exactly this pattern, and because the pattern is the empirical heart of the argument he built on it. The claim is important for two opposite reasons. It concedes to the pessimists that a generation of workers genuinely did not share in growth for something like half a century, which is not a rounding error in anybody's lifetime. And it concedes to the optimists that the stagnation ended: real wages rose strongly from the middle of the century onwards. What it does not settle is whether the pause was the mechanism of accumulation — growth requiring suppressed consumption — or an avoidable consequence of who held power, and that question is still argued. The underlying wage and price series are themselves contested, since they rest on incomplete records and on assumptions about the cost of living.