I haven’t writing for awhile, mainly because of doctors appointments, (that senior thing again) and going away for the Thanksgiving Day thingy. Now all that is past, so I thought I would write about one of my favorite topics, as the title explains. It should be a quick and easy read, however. As Elizabeth Taylor said to each of her 7 husbands – I won’t keep you long.
The subject is capitalism, which every single person is involved with, whether they like it or not. Or more explicitly, those that have been victims to the many downsides of capitalism. Capitalism, as we know it today, was kicked into hi-gear by what historians refer to as the Industrial Revolution; which is generally accepted to have taken place from the mid-18th century thru the mid-19th century. Although, of course, the Industrial Revolution has been ever on-going. The latest manifestation, for about the last 30 years, has been in the electronics industry with the proliferation of home and business computers, I-Pods, tablets, and, of course, the latest consumer craze – grossly overpriced cell phones.
To set the mood, picture that since the beginning of time until late into the 1700s, the societies of most of Europe and North America were rooted in agriculture. Farming was the primary industry throughout both continents. Farmers would grow their own food, and what was considered excess would be sold in local markets. Whatever manufacturing that existed at the time, such as the production of clothing, tools, furniture, and horse drawn carriages, etc., were often made in people’s homes or small workshops. But the Industrial Revolution remarkably and dramatically changed all that. It started in England, where a previously manual labor-based economy transitioned into a machine and factory-based type of mechanization. It then spread to North America with the mechanization and factory creation of the textile industries, the development of iron-making techniques and subsequently steel, and the increased development and use of refined coal. Trade expansion was dramatically increased through the introduction of canals, improved roadways, and, of course, railroads. The development of all metal machine tools in the early 1800s facilitated the manufacture of more production machinery in an ever increasing proliferation of factories. Production of goods began shifting from a manual labor-based effort, to that of factory machinery- driven assembly lines. The world began changing in profound ways.
The Industrial Revolution marked a major turning point in human history. The cost of producing those products that were on the market at that time dropped significantly with the introduction of factory mechanization. People who had known nothing farming all their lives began moving off farms and into cities where most factories were located. As small as pay scales were for factory workers at the time, they were still better than eking out a meager and back-breaking existence by continually tilling the land. In fact, average income began to experience unprecedented sustained growth. In the two centuries following 1800, the world’s per capita income increased over 10-fold from where it had been from the previous 10,000 years. As Nobel Prize winner Robert Lucas wrote: “For the first time in history, the living standards for the masses of ordinary people began to undergo sustained growth. Nothing like this economic behavior has happened before.”
That’s the good part of capitalism. Now for the bad. The fundamental cornerstone of capitalism is based on a few people with extraordinary talent exploiting the masses that don’t have similar talents. Exploitation is the very foundation of capitalism. For example, in the 19th century, a guy named John D. Rockefeller came to understand that energy was the very lifeblood of the Industrial Revolution. He further came to know that oil could be a relatively cheap and plentiful source of energy to fuel factories and homes. The rest, as they say, is history. He founded a giant oil discovery and refining empire starting with Standard Oil, and made billions (in today’s money.) While his employees who often put their lives on the line drilling for or refining oil, earned chump change. Same with Andrew Carnegie. To be fair, though, both John D. and Andrew, in later life, set up charitable trusts and started giving away their money almost as fast as they made it.
Other bad examples abound and are too numerous to list them all. For instance, sweat shops sprung up like weeds where textiles were manufactured. They employed mostly women, who had to slave over sewing machines, in the most narrow confines of non-ventilated of spaces. Since the air on these factory floors was both stale and hot, they weren’t called sweat shops for nothing. Children were often employed in these sweat shops, as young as six. It wasn’t until Teddy Roosevelt became President in the early 1900s, that Congress finally passed legislation prohibiting the employment in these sweat shops of anyone under the ripe old age of 14. Since safety regulations were non-existent back then, it was not uncommon for fires to break out in these sweat shops killing many workers. Or how about coolie wages, which I assume most of you have heard of. Coolie wages got it’s name from what workers who built transcontinental rail lines in the 19th century were paid. Most of these workers were immigrants from Asia (mostly Chinese) and were paid little more than slop that was passed off as food and sleeping quarters, for their back-breaking labors. Needless to say, life expectancy among the working class did not extend into longevity.
The institution of slavery, particularly in the South, and in the British territories was based on obtaining the cheapest of labor costs, a fundamental principle of capitalism. The picking and manufacture of cotton was the prime industry of the American south, and slavery offered plantation owners the lowest possible labor costs. That’s why it took a bloody civil war to get rid of it. In today’s world, much, of course, has greatly improved in terms of wages and working conditions for virtually all workers. But millions of what would be well paying jobs in the U.S. have been shipped overseas where labor is far cheaper, in accordance with the rules of capitalism. That’s why the American economy is limping along with high unemployment. Average per capita income has steadily headed downward for middle-class families for the last 30 years, not only here, but in most of Europe as well. Perhaps the leaks in capitalism’s well-crafted dike have sprung into gushers.
Well, I’ve kept you longer than I intended, but I would like to mention one other thing. The new catholic pope, Francis, very recently came out with a paper critical of capitalism. He specifically mentioned “trickle-down economics” as being particularly injurious to the poor. Or to those who, for whatever reason, cannot function well in a capitalist society. And here, all along, I thought trickle-down economics was the cornerstone of the Republican Party’s platform.