Hayek pointed out that the historical discontinuity that appeared during the era that we loosely call “industrialization” was that people came to expect economic progress rather than stagnation as the natural course of things. Regular people up through the 18th century could expect to see no economic progress during their lifetimes. Today, we are disappointed when economic growth is slower than we expect. FULL ARTICLE
Source link: http://archive.mises.org/9931/the-myths-of-capitalisms-history/
The Myths of Capitalism’s History
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From “What’s Really Reactionary?”:
Leftism’s identity as a reaction against liberal modernity has now been all but DNA’d with the rise of postmodernism. As Stephen R. C. Hicks explains:
And so now the Left’s targets include liberal individualism and liberal rationalism — i.e., not just the Enlightenment’s concept of freedom, but also its concept of reason.
Postmodernism’s origin in socialist fideism gives the lie to the fundamentalist notion of the “tendency of naturalistic rationalism to decay into postmodern irrationalism” (Phillip E. Johnson, the Designer’s advocate) — and points to, once more, that damning testament to the reactionary nature of the Left: its affinity with conservative anti-liberalism.
Even from the beginning, Marx and Engels’ critique of capitalism was less revolutionary than repetitive — of the ideas and sentiments of Disraeli, Carlyle, Coleridge, Cobbett, Oastler, Southey, and Ruskin. As Nathaniel Branden writes:
These, mind you, were the British conservatives. We’ll avoid the too-fine point and not even mention their Continental counterparts.
Despite the calculated disclaimers of some, the fact remains that Leftists have always found in traditionalist and “right-wing” figures inspiration (e.g., Stalin, Ivan the Terrible; Mao, Hitler: “Look at World War II, at Hitler’s cruelty. The more cruelty, the more enthusiasm for revolution.”) and alliances (e.g., Stalin and Hitler, or on a social-democratic scale, the aforementioned feminist-fundamentalist intercourse). In contemporary matters, David Horowitz (Unholy Alliance) has documented the growing convergence of values and goals between Leftist zealots and Islamic jihadists. And as Walter Olson recounts, postmodernism has now found in conservatism, not merely an enemy-of-my-enemy ally, but a virtual soul mate on the other bank of the Endarkenment. The efficacy of science? Mr. Johnson might be a tad chagrined to learn that postmodernism has come to the same conclusion as religion’s premodern irrationalism: “Science must be ‘humbled’” (Noretta Koertge), specifically, its objectivity must be challenged in relation to the race/class/gender (or religion, for the anti-Darwinists) of its practitioners. The dignity of the independent man? The individual who defies his assigned tradition/culture, who thinks for himself and acts upon that judgment, is derided as a “self-inventing” and “narcissistic” rebel (by traditionalists), a “sellout,” “assimilationist,” or “Oreo” (by multiculturalists). The advance of Western civilization? Its spread is seen by both conservatives (e.g., John Gray) and multiculturalists as an assault on the “authentic” tradition and community of non-Western peoples. And of course, the value of Western liberalism? In their rejections of “tolerance,” authoritarian conservatives such as Harvey Mansfield and Robert Knight are practically disciples of Herbert Marcuse. Finishing with a flourish, Olson gives us Joseph Bottum, who, after detailing parallels between “radicals” Foucault, Derrida, and Frederic Jameson and medievals Eckhart, Cusa, and St. Bonaventure, concluded: “What believers have in common with postmoderns is a distrust of modern claims to knowledge.”
READ THE ENTIRE ARTICLE.
Could we have another dark age? Could we tell our incredulous grandchildren about how men once flew through the air or sped along highways many times faster than a horse can run? Will we tell unbelievable tales about rusty machinery that once calculated and produced a seeming paradise? When you are a very old man, will the youth laugh and shake their heads at your crazy stories about “the good old days?”
What would it take for us to find ourselves living a post-apocalyptic dystopian novel? Could combating global warming reduce the carrying capacity of the world to the point of sudden widespread social collapse? Could global hyperinflation paralyze industrial infrastructure so quickly that chaos ensued? Could creeping totalitarianism reach a tipping point where all nations rapidly degenerated into intractable civil wars all of the sudden?
Maybe everything will be fine. But there are signs that a perfect storm of instability is brewing. We can trace the origins of the rise and fall of nations, and we see that almost every factor is presenting itself today. Truly it is the best of times but there are growing portents for the worst of outcomes. Such excitement!
“People weren’t forced out of an idyllic rural life and into the dark satanic mills of industrial England”.
Apart from the fact that it wasn’t idyllic, just ordinary, oh yes they were. In England it took the form of the later stages of the Enclosure of the Commons, in Scotland the Highland Clearances, and in Ireland evictions. It’s documented. I’m sure Kevin Carson can provide material on it for anyone who doesn’t want to research it for themselves.
I suppose the author wants to paint a picture of children happy to leave the terrible farms for a wonderful life in the factories? That tales of long 16 hour days, very hard work and little pay were Socialist lies? That every child who went to work into factory left and had a long, cosy, middle class life?
And the talk of pushing people into a new Dark Ages. Please! There are plenty of ‘survivalists’ at the LewRockwell site hoping and banking on this happening. (After all they don’t want the money they poured into tin cans to go to waste.) Should these people take any blame by saying “this economic downturn is the last straw and the end is nigh”? Besides some are quite happy at the thought of modern society going belly-up as it allows for a ‘fresh start’.
Agrarian life was harder than working in a factory. That is why people moved to the city. Americans have little understanding of economics and they are going to suffer unnecessarily from unfettered government expansion. Once productive members of society fully realize that the government is going to confiscate the fruits of their labor, they will choose to stop producing. Tax revenues will fall and the economy will shrink. Entitlement transfers to nonproductive Americans will strain the ability of the government to perform its essential duties. Massive borrowing and printing of fiat currency will cause inflation, unemployment and loss of prosperity.
Capitalism, free markets and contract law advance prosperity. Detractors may call it “trickle down economics, but they do not understand. They are going to get a refresher course. Capital, the source of economic growth, will flee the US until we get new political leaders.
“Agrarian life was harder than working in a factory. That is why people moved to the city.”
No, actually. Agrarian life worked out harder when there were added workloads, e.g. from taxes, rents or mortgage payments, but self sufficient conditions actually involved quite short average hours of fairly hard work (with seasonal peaks). So, many people went from farms to cities to get away from additional burdens – but in any case, many weren’t given the opportunity to stay but were driven off the land.
P.M.Laurence is quite correct, there were force evictions. Especially the Highland clearances and those in Ireland.
It is a more difficult question though whether the enclosure of land in England can be considered in the same way. What happened there was mostly that improved methods led to less demand for labour.
The relationship of all this to the industrial revolution is also complex. It occurred at the time of a growth in population. So it is not a matter simply of people moving from one form of work to another. There was also an increase in the number of workers.
“One of the most remarkable facts about the world of the last century or so is that people came to expect economic growth as the natural course of things.â€
That’s an extremely important point. In addition, Westerners view their wealth as normal and poverty as unusual, so they look for causes of poverty instead of causes of wealth. That’s why economic history is so important. The standard of living of mankind changed very little from the first man until the advent of capitalism in the Dutch Republic of the 16th century. For most of Europe the change didn’t occur until the industrial revolution after 1800.
Until 1800, almost no differences in wealth existed between nations (except for the Dutch). All nations were equally poor. Within nations, the middle class was tiny, as was the wealthy class. Something like 90% of all people on the planet lived on the edge of starvation. Famines and mass death were common. After 1800, Western nations escaped the poverty that had been natural and common to mankind for millennia while the rest of the world has remained trapped in its natural state.
As for the specific instance of England, PM Lawrence is right. The enclosure movement needlessly created mass poverty and those forced from their farms had no choice but to enter the factories. Still, the early factory owners weren’t monsters. The original factory working conditions were similar to those of working on a farm. Hours were set by what people were used to working in agriculture, and children worked in factories because they had worked on the farms. The reformers of the day found the conditions appalling because they had never had to work for a living. But as the number of factories increased and businesses had to compete for the best labor, factory owners were forced to improve working conditions to attract that labor.
> Until 1800, almost no differences in wealth existed between nations (except for the Dutch)
That is doubtful. Adam Smith, and several others, observe significant differences.
> The enclosure movement needlessly created mass poverty and those forced from their farms had no choice but to enter the factories.
It is difficult to make a clear case for either of those views. To begin with it was quite rare for people to be forced from their farms. Enclosure provided a more efficient form of farming to strip farming.
Current: “That is doubtful. Adam Smith, and several others, observe significant differences.”
Yes, between European countries that had adopted capitalism and those who didn’t. The Dutch were the first to develop, then the English and the rest of Western Europe. Smith used the Dutch as his example of the country that best exemplified his system. The industrial revolution began in the Dutch Republic. But it didn’t begin to affect large groups of people until after 1800, and the big differences between nations didn’t appear until after 1800.
Current: “To begin with it was quite rare for people to be forced from their farms. Enclosure provided a more efficient form of farming to strip farming.”
You’ll hear pretty soon from PM Lawrence about the enclosure movement. He and I think it created massive dislocations of people. Yes, the farms after enclosure were more efficient, but enclosure still caused needless poverty.
But as the number of factories increased and businesses had to compete for the best labor, factory owners were forced to improve working conditions to attract that labor.
Not only that, but children working in the factories was a temporary condition. As productivity and incomes increased in the factories, the parents were eventually able to make enough money so that the children didn’t have to work, eventually leading to the status quo we modern people are so familiar with, and which we consider “normal”.
Current: “That is doubtful. Adam Smith, and several others, observe significant differences.”
fundamentalist: “Yes, between European countries that had adopted capitalism and those who didn’t. The Dutch were the first to develop, then the English and the rest of Western Europe. Smith used the Dutch as his example of the country that best exemplified his system. The industrial revolution began in the Dutch Republic. But it didn’t begin to affect large groups of people until after 1800, and the big differences between nations didn’t appear until after 1800. ”
Adam Smith says otherwise. He says in WoN Vol 2 p. 870-71 that in his time the poorest English could afford shoes, but the poorest French could not. He says the poorest Scots men could afford shoes, but the women couldn’t.
Now, I’m not claiming he was necessarily right. However, there is a real controversy over the idea you are proposing. That before the industrial revolution the conditions across europe were broadly similar. Greg Clark certainly says that they were. However many disagree with him. Sudha Shenoy though that industrialisation was a very long process that spanned a much greater timeframe than normally supposed.
fundamentalist: “You’ll hear pretty soon from PM Lawrence about the enclosure movement. He and I think it created massive dislocations of people. Yes, the farms after enclosure were more efficient, but enclosure still caused needless poverty.”
This is something entirely different from what you are discussing. It certainly did create dislocations. However it is for the most part an exaggeration to say that people were “forced from their farms”. For the most part new techniques caused a drop in the need for farm labour.
The “needless poverty” idea is very dubious. What was the alternative to enclosure? It was to continue with strip farming. The question here is would that have prevented poverty? Certainly it would have prevented poverty of some farm labourers at the time. It is by no means certain that it would have prevented poverty overall.
Current: ” That before the industrial revolution the conditions across europe were broadly similar. Greg Clark certainly says that they were. However many disagree with him. Sudha Shenoy though that industrialisation was a very long process that spanned a much greater timeframe than normally supposed.”
I don’t disagree with you and I’m sure Adam Smith was right. The Dutch launched economic progress and became the first nation to escape Malthusian cycles. The English followed and then the French and others. In Smith’s days there were some differences already among European nations. But those differences in his day were minor compared to the huge differences apparent between Western Europe and the rest of the world after 1800.
As for enclosure, Wikipedia writes: “During the period of parliamentary enclosure, employment in agriculture did not fall, but failed to keep pace with the growing population.[11] Consequently large numbers of people left rural areas to move into the cities where they became labourers in the Industrial Revolution…Land enclosure has been condemned as a gigantic swindle on the part of large landowners, and Oliver Goldsmith wrote “The Deserted Village” in 1770 deploring rural depopulation.”
Socialists probably have exaggerated the extent of misery caused by enclosure, but maybe capitalists refuse to see it. I guess it depends on which history you choose to read.
By libertarian standards, the peasants owned the land by right of use. If divided into privately owned parcels, it should have been divided among those who farmed it. Instead, it went to the nobility because they had the power.
Socialists try to blame capitalism for the enclosure movement, but it was clearly nothing but the nobility exercising their right to theft that they had always known. The nobility had always stolen from, raped and murdered peasants with impunity.
Nice comment and discussion thread, everyone. I’m very impressed. Thanks for bringing up the point about enclosures: to the degree that land reform was forced expropriation, then yes, there were some forced relocations. I think there was more pull than push, though; I refer interested readers to Donald/Deirdre McCloskey’s work on the open fields and enclosures and to Greg Clark’s recent book “A Farewell to Alms” for a very interesting and detailed statistical account of the whole thing (NB: I don’t fully buy the Malthusian story Clarks is telling, but his data work is incredible).
Regarding Professor Carden’s research tip: the germane section of McCloskey’s online article collection is entitled “(4.) Open Fields and Enclosure in England.” Here’s the link: http://www.deirdremccloskey.com/articles/index.php
fundamentalist: “By libertarian standards, the peasants owned the land by right of use. If divided into privately owned parcels, it should have been divided among those who farmed it. Instead, it went to the nobility because they had the power.
Socialists try to blame capitalism for the enclosure movement, but it was clearly nothing but the nobility exercising their right to theft that they had always known. The nobility had always stolen from, raped and murdered peasants with impunity. ”
Let us be clear, we are talking about the 18th and 19th centuries we’re discussing here. The nobility had not “stolen from, raped and murdered peasants with impunity” for a long time.
To be clear. The nobility had taken the land they owned by what could be called “original theft”. Their ancestors or ancestors supporters stole it. However by the 18th century that was a long time ago.(How long ago depends on the land in question, some was stolen in the 17th century during the civil wars, but AFAIK, not much). Individuals and groups had then traded that land (and other goods) afterwards.
Saying that it should have been split amongst the peasantry is rather like proposing something similar today. Such as proposing that the capital stock of the US be split equally amongst its population.
Between 1235, when the Statute of Merton gave Lords the power to seize wastes, and 1500, almost half the land in England had been enclosed, many historians estimate. By 1700, nearly 70%. Is it possible that the enclosure movements have been over-emphasized by anti-capitalists, like the Hammonds (1911), and doomist Malthusians? Enclosure, for sure, was an old story predating Industrialization.
And, depending on what moments in the centuries of enclosure are referenced, one can find times when the King and/or Parliament tried to limit enclosure. Sometimes enclosure issues were wrapped-up in the power struggles between Parliament and King, between local loyalties to clans (Scotland) vs. the Crown (or Parliament), or even more complex struggles as many power centers vied for control, e.g. add religious authority ….
There is a confusion between the two meanings of enclosure.
The first is enclosure of land previously common land or wasteland. Some of this was rather like theft but took place well before the 18th and 19th centuries.
The second is the conversion of areas that used the strip farming system into a set of enclosed fields. It is this that happened in the 18th century. It is this sort of enclosure that is relevant to the discussion.
In the part of England where I come from the strips (the rigs and furrows) can still be seen in a lot of fields.
A couple of sidenotes….
One of the groups that won the most out of 18th century enclosure was the Anglican church. In the days of strip-farming each farmer paid a “tithe” to the church – a tax. In those religious times people were quite prepared to pay that in most cases. Though some thought some tithes unfair at the time.
The church successfully persuaded parliament to exchange their tithes for land. Had the tithes remained in time they may well have been seen as unfair taxes. They were in other countries and in places in Britain where they remained. But the Church escaped this problem by acquiring land in exchange.
On relative poverty….
I’m very dubious of this idea that the world was quite equal before industrialization. Most of the supposed evidence for it rests on dubious economic theorising. For example Greg Clark supposedly holds the Malthusian position. However, he has recently admitted that different cultures encourage different birthrates. This he says leads to different malthusian equilibria. This doesn’t really make sense. It is a fudge to justify a dubious theory.
I don’t think that the assumptions of mainstream economics that allow long term equilibria actually existed in history. Certainly they don’t in modern times. I doubt though that they ever did.
I’m not saying that there was progress from some date far in the past. Or that there was no regression. I’m saying I don’t believe the supposed equilibrias or equalities some describe.
Current wrote “…there were force evictions. Especially the Highland clearances and those in Ireland. It is a more difficult question though whether the enclosure of land in England can be considered in the same way. What happened there was mostly that improved methods led to less demand for labour.”
The thing is, though, that commoners’ rights were eaten away at the same time. If peasants had still had those, more of them would have been able to keep going on the land – and they would have cost less as labour.
“The relationship of all this to the industrial revolution is also complex. It occurred at the time of a growth in population. So it is not a matter simply of people moving from one form of work to another. There was also an increase in the number of workers.”
Roughly speaking, it was the increased purchasing power of people in towns that made it worth landlords’ while to make their land more labour-productive. Without those markets the landlords would only have freed up land and labour by doing that, without getting any return from it.
Fundamentalist wrote “Still, the early factory owners weren’t monsters. The original factory working conditions were similar to those of working on a farm. Hours were set by what people were used to working in agriculture, and children worked in factories because they had worked on the farms.”
Only, the hours were set year round at the peak of seasonal agricultural work.
Current responded to Fundamentalist’s “The enclosure movement needlessly created mass poverty and those forced from their farms had no choice but to enter the factories” with “It is difficult to make a clear case for either of those views. To begin with it was quite rare for people to be forced from their farms. Enclosure provided a more efficient form of farming to strip farming.”
Here, Current is introducing the very confusion he tries to clear up later, conflating the Enclosure of the Commons that we have been discussing with enclosing strip farms. It is a red herring. The loss of commoners’ privileges and resources did indeed make it a lot harder for peasant lifestyles to remain viable. In any case, enclosing strip fields is only more efficient if some conditions are met:-
- If you are talking about freeing up valuable land and labour, i.e. if you are getting a higher proportion of output to those inputs and those inputs are valuable. But it was the seaparate loss of peasant self sufficiency that made agricultural labour cost more, and the rise of the towns that made more efficiently obtained outputs more worth having (e.g. selling grain to make gin).
- If the land has not recently been reclaimed from forest. When it has, it is too hard to work without oxen drawing heavy ploughs which can only conveniently work long strips because of the difficulty of turning them around (that’s before tractors etc., of course).
So it isn’t an absolute but depended on 18th century conditions.
Fundamentalist brings out “Smith used the Dutch as his example of the country that best exemplified his system. The industrial revolution began in the Dutch Republic. But it didn’t begin to affect large groups of people until after 1800, and the big differences between nations didn’t appear until after 1800.”
It is important to note that trade and industrialisation did not increase food supplies until the middle and late 19th century respectively (accessing new lands and introducing artificial fertiliser respectively), but only moved food resources around. That didn’t increase supply until new lands came on stream but just moved food from mouth to mouth, e.g. in the first instance the Repeal of the Corn Laws only brought food from France to England. That’s not to say that new methods and crops didn’t increase supplies, just that (apart from sugar from slave colonies, which came in before this period) that had nothing to do with trade and industrialisation.
Current replies to Fundamentalist’s “You’ll hear pretty soon from PM Lawrence about the enclosure movement. He and I think it created massive dislocations of people. Yes, the farms after enclosure were more efficient, but enclosure still caused needless poverty.”:-
‘This is something entirely different from what you are discussing. It certainly did create dislocations. However it is for the most part an exaggeration to say that people were “forced from their farms”. For the most part new techniques caused a drop in the need for farm labour.’
With respect, the loss of a body of commoners’ rights/privileges tipped the balance. Here’s how it worked. With those rights, wages didn’t need to provide 100% of subsistence, so they could fall lower than that and agricultural labour was cheap. Once those were gone, wages (not in cash but in kind, mostly) had to go up, and those who couldn’t find that work at those wages had to look elsewhere. The new techniques only made sense in the context of more costly labour and outside markets for the crops, herds and flocks. Without the former, old methods would still have paid, and without the latter, it would have made more sense just to keep production lower.
‘The “needless poverty” idea is very dubious. What was the alternative to enclosure? It was to continue with strip farming. The question here is would that have prevented poverty? Certainly it would have prevented poverty of some farm labourers at the time. It is by no means certain that it would have prevented poverty overall.’
Bait and switch – Current’s own switch from the Enclosure of the Commons.
Art Carden writes ‘I think there was more pull than push, though; I refer interested readers to Donald/Deirdre McCloskey’s work on the open fields and enclosures and to Greg Clark’s recent book “A Farewell to Alms” for a very interesting and detailed statistical account of the whole thing (NB: I don’t fully buy the Malthusian story Clarks is telling, but his data work is incredible).’
This is an issue of classification. That “pull” is to a town lifestyle from a rural one – but a rural one carrying added burdens, e.g. rents, and with fewer resources for self sufficiency. Those in turn relate to the real wages consumed in towns. Properly speaking, that part of the pull should be classified as a push.
Fallon wrote “Between 1235, when the Statute of Merton gave Lords the power to seize wastes, and 1500, almost half the land in England had been enclosed, many historians estimate. By 1700, nearly 70%. Is it possible that the enclosure movements have been over-emphasized by anti-capitalists, like the Hammonds (1911), and doomist Malthusians? Enclosure, for sure, was an old story predating Industrialization.”
No. The earlier phase mostly happened in Tudor times, driven by the export market for wool, and was analogous to the Highland Clearances but with even fewer places for the dispossessed to go. But there was still a significant later phase, and this really made a difference at the margins – which means it set conditions across the board.
Current wrote “There is a confusion between the two meanings of enclosure. The first is enclosure of land previously common land or wasteland. Some of this was rather like theft but took place well before the 18th and 19th centuries. The second is the conversion of areas that used the strip farming system into a set of enclosed fields. It is this that happened in the 18th century. It is this sort of enclosure that is relevant to the discussion.”
Wrong – this is his own bait and switch. The Enclosure of the Commons did indeed matter, with a material later phase going on in the period under discussion. There were even satirical rhymes about it, e.g. English folk poem, ca. 1764.
‘One of the groups that won the most out of 18th century enclosure was the Anglican church. In the days of strip-farming each farmer paid a “tithe” to the church – a tax. In those religious times people were quite prepared to pay that in most cases. Though some thought some tithes unfair at the time. The church successfully persuaded parliament to exchange their tithes for land. Had the tithes remained in time they may well have been seen as unfair taxes. They were in other countries and in places in Britain where they remained. But the Church escaped this problem by acquiring land in exchange.’
Absolutely wrong.
Tithes were commuted for cash payments made by the freeholders, becoming paid by the landlords who got the money out of rent increases, so the peasants still ultimately paid but tithes became hidden. They became visible again after some land reforms when peasants got freeholds but the cash payments were still attached – so payment was due as originally, but not in kind, so with the higher visibility came more problems in bad seasons. Then tithes were commuted for payments from the central government, followed by other changes over time. But the Church never got its land by giving up tithes. There are a lot of other issues as well, like encumbrances on glebe land (e.g. at Aston Cantlow).
Hello. For my personal take on contemporary “virtual land enclosure,” using British acts from the sixteenth century onwards, please see my essay, “Feeling Confined Lately?” on http://www.stuartkurtz.blogspot.com I have other commentary on social issues. Thank you.
Stuart Kurtz
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