Tuesday, May 17, 2016

The Fundamental Reality of Our Times, Four Ways

It's an insider's joke that politics is all about Four Point Plans, as in "my four point plan will reduce inequality by 50 percent. Why do the politicians do it? Because we are all Slaves, and we want our kindly Masters to ave us from the Persians and tell us what to do. But the basic reality of our times is this.
Point 1: Per capita income has gone up from $3 in 1800 to $100 right now. There has been nothing like it in human history. Ever.
But why? Why did it happen now and now in Roman times? Or Babylonian times? Economic historian Deirdre McCloskey in her "Bourgeois Trilogy" writes that the reason is that only in the last five hundred years have individuals been allowed to try out their ideas for "betterment" without being stomped on by the ruling class.

You can see how the normal way works, because any time someone comes up with a new idea everyone stomps on them for a fool or a knave. And the established interests run to government to stamp it out. Right now we have the established scions of the educated ruling class running around trying to frighten people about "fracking."

Yes, but unregulated capitalism created cruel and unjust inequality. So government had to step in and fix it.
Point 2: Go and read Point 1.
Really, what difference would a war on inequality make? Let's say that, in the days of $3 per day we could have helped the poor. Actually we did, starting in 1598 with the Elizabethan Poor Law. But it didn't make a blind bit of difference to increasing overall prosperity. Not until advances in textile technology in the 18th century made it possible to make cheap textiles for the poor. About that time population started increasing and people started expecting to live better than their parents -- when the Poor Law was being eviscerated. So you tell me, what possible contribution could helping the poor and reducing inequality do in helping get from $3 per day to $100 per day.

Yes, but what about slavery and feudalism and all that?
Point 3: Go and read Point 1.
It is interesting to me that anti-slavery agitation began at exactly the moment that capitalism and the Great Enrichment began to take off. Before that nobody seemed to have any problem with slavery. Merchants of Venice and Genoa had no problem transporting Circassian slaves from the Crimean port of Kaffa to the harems of the Middle East. Dutch and Anglo-Saxon had no problems transporting West-Africans to the sugar plantations of the West Indies. Vikings had no problem carting Brits off the slave markets of Dublin, Ireland. Also, nobody seemed to have any problems with slavery in the Soviet Union or in Maoist China. Or in Castro Cuba. Or in Khmer Rouge Cambodia. And US liberals don't seem to have a problem in taxing ordinary labor about 25 percent so they can play Lady Bountiful and give it back after buying a few votes.

My feeling is that the war on slavery was not so much a great moral crusade as a slow realization that slavery didn't pay. That's what the West Indian slave-owners decided. They found it better to relax their slave-driving to encourage the slaves to work more creatively.

At any rate, it is clear that leftist societies require a vigorous and ruthless neo-slavery just to keep operating in the economic basement. Just look at Venezuela right how.

Yes, but without wage and hour laws and safety regulations and labor law where would we be?
Point 4: Go and read Point 1.
What part of wage and hour laws got us from $3 per day to $100 per day? Back in the day of $3 per day, human lives were pretty cheap. You could easily get another starving hod-carrier when the last one wore out. But when you are inventing department stores in Paris in the 1850s you start to think that you need to pay your good salespeople a cut above the rest, because a good salesperson is hard to find. When you are Henry Ford expanding Model T production you advertise $5 per day because you need to attract labor to Detroit. And now the giants of the internet want the sharpest minds in the world working for them.

And as for labor law, you only see labor unions in a fight against decline. What about the Great Railroad Strike of 1877? The workers were striking against wage cuts. And why were the railroads cutting wages? Because of the Depression starting in the Crash of 1873. The railroads were broke. Same with the industrial unions in England in the late 19th century. They went on strike against wage cuts issuing out of low prices and heightened competition on industrial goods in the international market. So what part of union agitation got us from $3 per day to $100 per day?

The fact is that government always and everywhere responds to the demand for protection. From foreign invaders, from domestic criminals, and from the vicissitudes of the creative destruction of the Great Enrichment from $3 to $100 per day. But usually its protection doesn't make a blind bit of difference except to confirm the privileged in their privilege.

So whenever ruling class activists come up with new ways to increase their power there is only one question to ask.

How would this have got us from $3 per day to $100 per day? Let alone get from today's $100 per day to $1000 per day?

In the last 200 years of the Great Enrichment we have gone from $3 per day to $100 per day and more. There has been nothing like it. Ever.

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