By the early 19th century, it appeared that
democracy had triumphed over divine right.
The French Revolution had been a misstep, of course, but you can’t make
an omelet without breaking eggs, and boys will be boys. Besides, you know . . . foreigners. And even the
French had some good in them, e.g.,
Alexis de Tocqueville and what many authorities consider the first great work
in sociology, Democracy in America.
Appearances, however, were deceiving. While the political theory of democracy was
well-developed, it contained a serious omission. It relied for its survival on widespread
access to the ballot, not on widespread access to what made the ballot
meaningful: ownership of the means of production.
Obviously, if you want to be productive, you must own the
means of production. There are, however,
only two means of production available to humanity: labor and capital. (You can include what nature provides or God
drops from heaven as a separate means of production if you like, but you’d be
wrong. Even gathering manna from heaven
required work — labor — and some sort of capital, such as baskets to carry it,
to make it a “production” for consumption.
That’s why the Israelites were told to gather twice as much the day
before the Sabbath so they wouldn’t have to break the Sabbath by working.)
The problem was that, while the political revolution was
advancing democracy, the Industrial Revolution was advancing technology. Unfortunately, few economists and (as far as
we know) no politicians acknowledged the fact that the effect of technology is
to displace labor from production. Human
labor that everyone owned naturally was rapidly being displaced by capital as
the predominant form of production — and most people did not have access to
capital credit, whether based on existing accumulations or the present value of
the capital project to be financed.
A very unstable situation was being created. People who had political power were losing
economic power. Almost everyone who was
not a slave owned labor that could be productive, but fewer and fewer people
owned capital other than land — and land is finite.
In the United States economic development was hampered by
the love-hate relationship with banking in general, and central banking in
particular. The availability of cheap
and even free land offset this to some degree, but the situation could not
last. The Civil War gave a great impetus
to the rapid growth of industry and commerce, along with the construction of
infrastructure, to meet the demands of the war effort.
As the goal was not to promote economic growth per se, but to win the war, ownership of
the suddenly expanded industrial and commercial enterprises became concentrated
in relatively few hands. In the East,
increasing numbers of workers owned nothing, not even their dwellings. The rapid growth of commerce and industry
ensured that the situation de Tocqueville had noted, that there was little
difference between a factory or store owner and the workers, became a thing of
the past.
Orestes Brownson characterized the Civil War as a struggle
between the industrial and commercial capitalism of the North, and the agrarian
capitalism of the South. With the North
triumphant, greater numbers of people began to be forced into the wage system,
and socialism took root a generation after it began spreading through Europe.
