Last week we looked at the question whether the rich, as F. Scott Fitzgerald claimed, are different. We concluded that today the rich are, indeed, different . . . but not as human beings. Rather, what makes the rich different these days is access to money and credit which enables them to buy advanced technology which can and usually does outproduce human labor at a quantum level.
This is not some secret government plot or capitalist conspiracy, but — believe it or not — simple common sense, and the way things worked out as a result of the fact most people did not have access to money and credit when the new machinery was invented.
Given the cost of a machine producing far more than human labor that was less than or equal to the cost of wages of people producing less than the machine, human beings lost out every time. This was not cruel or heartless on the part of employers, although there were certainly all-too-frequent instances of cruelty and heartlessness. This is even more evident in a labor-centered economy with slavery. For every beneficent slave owner who treated his human chattels well, even kindly and with consideration, there were a dozen who oppressed them with inhuman ferocity, even sadism.
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| People buy more goods of equal quality at a lower price |
Replacing human labor with technology is neither cruel nor heartless, in and of itself. The simple fact is someone who uses relatively inexpensive machinery to produce a loaf of bread which sells for one dollar is going to sell more bread than someone who employs relatively expensive human labor to produce a loaf of bread of the same quality which sells for two dollars. Ultimately, the employer of labor will not be able to compete with the employer of machinery and will either purchase machinery or go out of business.
Why did the workers not purchase the new machinery? Whether something is produced by means of one’s labor or by means of one’s machinery, it is still a marketable good or service and the owner, whether of labor or capital, is entitled to the full stream of income.
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| Kirkpatrick Sale |
There was no animus against machinery per se. The cosmic or mythical meaning assigned to the revolt of the Luddites and their clones in the late eighteenth and early nineteenth centuries is modern opinion superimposed on people who would have been completely baffled by their presumed status as “rebels against the future.” (See Kirkpatrick Sale, Rebels Against the Future: The Luddites and Their War on the Industrial Revolution. New York: Addison-Wesley Publishing Company, 1995.)
Luddites and others were not rebelling against the future but fighting for it. They had no objection whatsoever to machinery in and of itself. What they were protesting was machinery they did not own and therefore deprived them of their ability to be productive and generate an adequate income. Miners did not ordinarily destroy the steam pumps which made their work possible, but weavers did wreck the power looms which made their work impossible.
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| Aristotle |
Without access to the means to be productive, more and more people were alienated from full participation in the common good of society. Like Aristotle’s nominally free but non-owning worker, the modern wage worker had legal and, to a degree, political equality, but this was not supported by social or, especially, economic equality. This created a problem.
What was needed was a realistic vision of a just society which presented a viable alternative to capitalism, characterized by concentration of capital ownership in the hands of a relatively small private sector elite, and socialism, characterized by concentration of capital ownership in the hands of a public bureaucracy. Distributism, a policy of widely distributed private property with a preference for small, family-owned farms and artisan businesses, was one possibility.
There were several problems, however, and one of the biggest problems were grossly inadequate concepts of money, credit, banking, and finance. By assuming only existing money could be used to finance new capital formation, ownership of the new machinery was necessarily restricted to those who were already wealthy. This is evident from Hilaire Belloc’s analysis of the situation in The Servile State (1912):
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| Hilaire Belloc |
Consider in what way the Industrial System developed upon Capitalist lines. Why were a few rich men put with such ease into possession of the new methods? Why was it normal and natural in their eyes and in that of contemporary society that those who produced the new wealth with the new machinery should be proletarian and dispossessed? Simply because the England upon which the new discoveries had come was already an England owned as to its soil and accumulations of wealth by a small minority: it was already an England in which perhaps half of the whole population was proletarian, and a medium for exploitation ready to hand.
When any one of the new industries was launched it had to be capitalised; that is, accumulated wealth from some source or other had to be found which would support labour in the process of production until that process should be complete. Someone must find the corn and the meat and the housing and the clothing by which should be supported, between the extraction of the raw material and the moment when the consumption of the finished article could begin, the human agents which dealt with that raw material and turned it into the finished product. Had property been well distributed, protected by co-operative guilds fenced round and supported by custom and by the autonomy of great artisan corporations, those accumulations of wealth, necessary for the launching of each new method of production and for each new perfection of it, would have been discovered in the mass of small owners. Their corporations, their little parcels of wealth combined would have furnished the capitalisation required for the new processes, and men already owners would, as one invention succeeded another, have increased the total wealth of the community without disturbing the balance of distribution. There is no conceivable link in reason or in experience which binds the capitalisation of a new process with the idea of a few employing owners and a mass of employed non-owners working at a wage. Such great discoveries coming in a society like that of the thirteenth century would have blest and enriched mankind. Coming upon the diseased moral conditions of the eighteenth century in this country, they proved a curse.
Belloc missed the key point, because he did not understand money and credit, as became obvious when he wrote An Essay on the Restoration of Property (1936). It was not the “diseased moral conditions” of the eighteenth century or even that the rich had money. It was, instead, they had access to money creation — a difference we will endeavor to make clear next week.
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