Child labor laws are frequently cited by proponents of government intervention as proof that businesses cannot be trusted to regulate themselves. In a Wall Street Journal op-ed this week, American president Barack Obama is no exception. He refers to child labor laws as an example of “common sense rules of the road that strengthen our country without unduly interfering with the pursuit of progress and the growth of our economy.”

Really?

Capitalism has been blamed for child labor almost since its very inception. Students on both sides of the Atlantic are taught up to this very day that children suffered horribly under the unfettered industrialization of nineteenth century England. Their teachers tend to forget what life was like for the average working man before the Industrial Revolution occurred.

The notion that some “golden age” of simple life and harmony existed in England before it industrialized was first conjured by socialist philosophers Friedrich Engels and Karl Marx. They crusaded against the “dehumanizing” factory system which “alienated” workers from their labor. The rationale of the free market was “cold” in their view; laws of supply and demand, “cruel”.

What the average, uneducated worker had “lost” in reality was a terribly short life, plagued by scarcity and disease. “There was nothing romantic or enviable,” notes Robert Hessen in “The Effects of the Industrial Revolution on Women and Children,” published in Capitalism: The Unknown Ideal (1966), “about a family living and working together in a badly lighted, improperly ventilated and poorly constructed cottage.”

As early as 1697, John Locke had suggested in a report to the Board of Trade that all children over three years of age should be taught to earn their living at working schools for spinning and knitting where they could be fed. “What they can have at home, from their parents,” wrote Locke, “is seldom more than bread and water, and that very scantily too.”

How did children and workers fare under industrialism by contrast? In Human Action (1949) economist Ludwig von Mises reminds readers that, low as factory wages initially were, “they were nonetheless much more than these paupers could earn in any other field open to them. It is a distortion of facts to say that the factories carried off the housewives from the nurseries and the kitchen and the children from their play,” he writes. “These women had nothing to cook with and to feed their children. These children were destitute and starving. Their only refuge was the factory. It saved them,” according to Von Mises, “in the strictest sense of the term, from death by starvation.” Yet this future offered to them, nineteenth century socialists denounced as “inhuman” and “cruel”?

The truth is that industry provided men not born into nobility, for the first time in history, with the opportunity to better their own lives. Up to this very day, that chance is denied to billions of people around the globe. In light of this, historian Thomas Southcliffe Ashton (1899-1968), writing in The Industrial Revolution, 1760-1830 (1948), gave perhaps the most cunning answer to critics of the Industrial Revolution:

There are today on the plains of India and China men and women, plague-ridden and hungry, living lives little better, to outward appearance, than those of the cattle that toil with them by day and share their places of sleep at night. Such Asiatic standards, and such unmechanized horrors, are the lot of those who increase their numbers without passing through an industrial revolution.

Today, of course, life in India and China is much better than is was half a century ago, precisely because after decades of experimenting with socialism, these states have embraced free-market capitalism instead, if only in part. They have opened their markets to foreign products and investment and allowed the best among them, the innovators and the entrepreneurs, to work and trade in relative freedom. Consequently, all of society prospers.

There exists child labor in India and China and working conditions are generally poor, as they were in nineteenth century Britain. But regulation won’t improve those conditions; the market will, eventually. Similarly, government didn’t end child labor.

Hessen points out in his article that the earliest child labor laws in England regulated the hours and wages of those who worked as chimney sweeps — “a dirty, dangerous job which long antedated the Industrial Revolution.” The first act that applied to factory children was passed to protect those who had been subjugated to virtual slavery by the parish authorities, a government body.

As successive Factory Acts were enacted during the first half of the nineteenth century, he notes that the owners of large, modern and safer factories increasingly chose to fire children rather than be subjected to elaborate, arbitrary and ever changing regulations on how they might run a business that employed them.

The result of legislative intervention was that these dismissed children, who needed to work in order to survive, were forced to seek jobs in smaller, older and more out of the way factories, where the conditions of employment, sanitation and safety were markedly inferior.

Those who couldn’t find new jobs were reduced to the state of their counterparts a century before, that is, to irregular agricultural labor, or worse — in the words of Von Mises, to “infest the country as vagabonds, beggars, tramps, robbers and prostitutes.”

Government didn’t end child labor in Britain. Child labor ended when it became economically unnecessary for children to work; when their parents earned enough money to provide for a family. Only the rise of capitalism could make the huge increase in income necessary for that to happen.

Laissez-faire capitalism didn’t create child labor. It ended it.