Despite these extremely long hours, legislation regulating the working hours of adults did not come into existence until the mid-nineteenth century (recall that some attempts to regulate child labour had been in place since the late eighteenth and early nineteenth centuries in some countries). One of the earliest to control adult working hours was the 1844 Factory Act in Britain. This act, among other things, restricted the working hours of women over 18 to 12 hours and banned them from night work.[143] Although not legally stipulated, the socially-acceptable working hours of adult male workers was also reduced to 12 after this act was introduced. The 1847 Factory Act, which came into force the following year, restricted the working day for women and children to 10 hours. However, various legal loopholes were exploited by many employers to minimise the impact of such legislation. For example, many employers did not allow mealtimes during the working day – between 9am and 7pm.[144]
In the USA, restrictions on working hours were first introduced at the state level. Massachusetts introduced pioneer legislation in 1874, which limited the working days of women and children to 10 hours.[145] It was not until the 1890s that such legislation became common across the US. Around the turn of the century, some states also restricted the length of the working day in special industries (like railways and mining), where fatigue led to major accidents. However, before 1900 ‘the collective impact of such legislation was not impressive’, especially because many conservative judges tried to limit its application. In 1905, for example, the US Supreme Court declared in the famous Lochner vs. New York case that a 10-hour act for bakers, which was introduced by the New York state, was unconstitutional because it ‘deprived the baker of the liberty of working as long as he wished’. As late as 1908, an Oregon law limiting women laundry workers to 10 hours’ work a day was contested in the Supreme Court, although in this case the Court upheld the law.
It was only around 1910 that most US states ‘modified the common-law tradition that a worker accepted the risk of accident as a condition of employment and was not entitled to compensation if injured unless it could be proved that the employer had been negligent’.[146] However, at the time safety laws were still very poorly enforced, and federal industrial accident insurance was not established until 1930 (see table 3.4).
The information on other NDCs is more fragmentary, but it seems reasonable to say that even minimal regulations on adult working hours and conditions did not come about in many NDCs until the late nineteenth, or even the early twentieth, century.
As early as 1848, France had a law limiting female working hours to 11 a day, yet the French elite was still strongly opposed to any regulation of the work of adult males in the early twentieth century. None of the Scandinavian countries had laws regulating hours of adult female labour before the start of the First World War. In Italy, the female working day was restricted to 11 hours in 1902, although a compulsory weekly rest day was not introduced until 1907. In Spain, it was not until 1904 that the rest day (Sunday) was established, while Belgium also only introduced the rest day in industrial and commercial enterprises in 1905.[147]
It was only well into the twentieth century that we begin to witness ‘modern’ regulations on working hours. In Spain, an eight-hour working day was introduced in 1902 – relatively early given its level of development - at regional levels, but this was not widely established until 1919. In Sweden, a 48-hour working week was introduced in 1920. Denmark also made the eight-hour working day compulsory in 1920, but agriculture and the maritime industry, which together employed about one third of the labour force, was exempt from the law. Belgium introduced a 48-hour working week in 1921 and a 40-hour week in 1936. It was only with the Fair Labour Standards Act in 1938 that the maximum working week of 40 hours was implemented in the USA.[148]
3.3. Institutional development in developing countries then and now
Given our discussion in this chapter, what can be said about institutional development among now-developed countries (NDCs) in the past? I realize that a generalization in this context is hazardous given the Institutions and Economic Development I I I paucity of historical records (especially for the smaller countries) and the differences across countries. Nevertheless, such a generalization is necessary for the purpose of the present book, and I will attempt to address the question in this section.
I do this by first providing snapshot pictures for three different stages of development in the NDCs (section 3.3.1). I look at: (i) 1820, for the early days of industrialization even in the most advanced NDCs; (ii) 1875, for the height of industrialization in the more advanced NDCs and the beginning of industrialization in the less developed NDCs; and (iii) 1913, for the beginning of industrial maturity in the more developed NDCs and the height of industrialization in the less developed NDCs. In the following section, I point out that the process of institutional development in the NDCs has been slow and uneven (section 3.3.2). I then compare levels of institutional development in the NDCs in earlier times with those that are found in today’s developing countries (section 3.3.3). I conclude that contemporary developing countries actually have much higher levels of institutional development than the NDCs did at comparable stages of development.
3.3.1. A bird’s-eye view of historical institutional development in NDCs
In 1820, none of the NDCs even had universal male suffrage. When, if at all, the vote was extended, it was only to men with substantial property – and often to only those over 30. In all these countries, nepotism, spoils, sinecures and sales of office were common in bureaucratic appointments. Public office was often formally treated as private property, and in most countries salaried professional bureaucracy in the modern sense did not exist (Prussia and some other German states being notable exceptions).
Existing property rights had to be routinely violated to make room for new property rights, particularly in new countries like the USA. Only a handful of countries had patent laws (the UK, USA, France and Austria) and the quality of these laws was still very low, with virtually no checks on the originality of the inventions for which patents were sought. The emergence of something even approximating the ‘modern’ patent law had to wait another decade and a half, until the 1836 revision of the US patent law.
Limited liability, a key institutional condition for the development of the modern corporation, was not a generalized institution in any country, and was therefore a privilege rather than a right. Even those countries with the then most developed corporate financial systems did not have regulations demanding external audits or full information disclosure in place. Bankruptcy laws, if they existed at all, were highly deficient, covering only a limited class of business; moreover, they were restricted in their ability to ‘socialise risk’ by ‘wiping the slate clean’ for the bankrupts. Competition law was all but non-existent, a limited and poorly-enforced example being Article 419 in the French Penal Code legislated in 1810.
145
Garraty and Carnes 2000, p. 607; all the information in the rest of the paragraph comes from ibid., pp. 607-8.
147
Kuisel 1981, p. 4 (France); Engerman 2001, appendix 1 (Scandinavian countries); Clark 1996, p. 137 (Italy); Soto 1989, p. 591 (Spain); Dechesne 1932, p. 496 (Belgium).
148
Soto 1989, pp. 585-6 (Spain); Norborg 1982, p. 61 (Sweden); M0rch 1982, pp. 17-18 (Denmark); Blanpain 1996, pp. 180-2 (Belgium); Garraty and Carnes 2000, p. 764 (USA).