Lewis suggested that unlimited supplies of labour kept wages down and allowed capitalists large profit margins, thus providing the finance for the increase in capital assets. There is not much evidence for this in the first half of the mid-eighteenth century: population was growing slowly, real wages were increasing, and finance came from agriculturalists and middle-class savers as well as large capitalists. However, in the mid-eighteenth century the investment ratio was around 6-7 per cent, while by 1840 it was much higher. So it remains quite possible that, over the intervening period, a Lewis-like effect on the supply price of labour was a vital component in Britain’s ability to reach this rate of capital accumulation.
Given that labour was not obviously in surplus in the earlier eighteenth century, the most likely reason for a surplus to appear was through population growth. This hypothesis would suggest that, as population grew, there was not enough agricultural work for all the available workers, so rural wages were likely to be depressed or at least not rise. For a small wage advantage workers would move to towns; thus the supply price of urban labour would remain low as it depended on the rural wage. The model calls for labour to be mobile, and in Britain it was by comparison with Continental Europe, for by the eighteenth century much of Britain’s agricultural population consisted of labourers with no ties to the land. The barriers to their migration were the cost of moving, the risk of moving away from known if ill-paid jobs and an existing network of contacts, and ignorance of alternative opportunities. For all these reasons most migration was short-distance, but it was substantial in volume even before industrialisation.