A third adverse side-effect was that workers did not always benefit, fully or immediately, from technologically-induced gains in companies’ productivity and profitability. In the early stages of each industrial revolution, wages tended not to rise in line with productivity, causing labour’s share of the national income pie to fall. 29  This, too, tended to add to popular discontent and damage social cohesion. Labour’s  income share has also fallen in a number of advanced economies over the past few decades. 30  A final side-effect is that periods of technological transition were often lengthy as well as painful. In the first Industrial Revolution, many displaced workers had still to find alternative work by the middle of the th  19 century, with income inequality running high and labour’s share falling. This period is known by historians as “Engel’s pause”. 31  Subsequent industrial revolutions have seen similar, if less long-lived,  pauses. If economic hardship is widespread and social cohesion damaged, a societal response is needed. One such response is the creation of new pieces of social infrastructure – in other words, institution building. Each industrial revolution saw a surge in such institution-building, to cushion the adverse side-effects of technological change on jobs and pay. In this way, the recessionary hit to workers and the economy could be shortened or dampened. Broadly speaking, two such sets of institution emerged. One set equipped workers with the new skills they needed to thrive in a new jobs environment.
Since at th  least the middle of the 19 century, the Bank of England has become one of the key institutional safeguards against recession risk and financial crisis. 41  Indeed, today, those roles are defined in statute. Non-state institutions have also played an important role in protecting those facing the adverse side-effects of economic change. This included many religious, philanthropic and charitable organisations and citizen th  movements that emerged from the 18 century onwards, often as a direct response to hardship brought about by technological change. These institutions offered, and many continue to offer, a combination of financial, housing, training and emotional support to those in need. 39  Clark (2009). Figures refer to government command of output as a percentage of GNP in England. Other 19th century legal changes that supported individuals from adverse side-effects of economic change included recognition of limited liability companies and constraints on the ability of courts to sentence debtors to prison. 41 Anson et al (2017), for example, discuss the emergence of the Bank of England as lender of last resort. 40  11  All speeches are available online at www.bankofengland.co.uk/speeches  11  To mention one, the Young Men’s Christian Association (YMCA) was founded in 1844, at around the time of Engels’ pause. It was established explicitly to meet the housing and social needs of young men who had moved from rural towns and villages to find work in factories in the cities.