In an off-list posting a few days ago, Eva Durant said:
>However, there were free market sytems in history,
>in England in early capitalism, and in the US also
>(probably elsewhere, too) they produced the
>Victorian poverty and child-labour etc in unregulated
>factories and inspite the minimal state interference,
>they run out of markets, overproduction and competition again
>produced poverty.
>I know, you have similar argument for my marxism in
>USSR etc, however, I can list the reasons why it didn't
>work. Can you tell me, why was actually necessary
>for state intervension to make the "market system"
>survive? E.g. without state intervension to establish
>humane conditions in workplaces and making
>unions more or less part of the establishment,
>mass social upheaval was avoided - for
>some periods of time. So - why weren't your free markets
>working for everyone - when they had more chance than ever,
>with relatively captive markets, slave-like workers and no
>regulation?
Capitalism, in the form of monopoly capital able to dominate markets and
dictate the conditions of production, consumption and exchange did not
emerge as a serious force until the invention of machines and industrial
techniques which enabled mass production in a central location - the
factory. I would argue that it was not free-markets that enabled the rapid
growth of monopoly capital, but rather technology as embodied in the steam
engine and the various spinning and weaving machines of the latter part of
the 18th Century. The steam engine was invented by James Watt in 1764. By
1785, was being applied to the driving of spinning machinery. In 1767,
Richard Arkwright invented the spinning throstle. Engels referred to the
throstle and the steam engine as the most important mechanical inventions of
the 18th Century. More and more machines were invented - Samuel Compton
invented the mule, a combination of the jenny and the throstle, and so forth.
The establishment of the factory as the primary place of work created
tremendous social upheaval. Among the earliest goods produced by mass
methods for the mass markets were textiles based on wool. In rural Scotland
one can still find the remains of the houses of the many thousands of
crofters who were cleared off the land to make way for sheep. Much the same
thing took place in England on a larger scale. These "clearances" and
"enclosures" happened not because of free markets, but because of
class-based entitlements in which a very few people owned all of the land
and crofters and peasants owned nothing. If the landowners wanted to move
people off the land, there was nothing to stop them. Where did the peasants
and crofters go? Many emigrated to the New World, but ever so many others
moved to the burgeoning cities of western Europe where they became grist for
the satanic mills of the rapidly expanding industrial revolution.
People did not choose to work for the satanic mills, but they had to accept
the terms of the mill owners to survive. Gradually, however, throughout the
19th century, a balance began to be achieved. The displaced proletariat
became the urban working class which developed considerable political clout,
inspiring the state to establish a system of legally protected rights and
entitlements. As the industrial economy grew, reforms were initiated and
unions emerged as a powerful countervailing force. The ultimate result was
a society which functioned as mutually hostile camps, capital on one side,
labor on the other, each with political power, and each pushing its
interests. State intervention should, I think, be viewed as the product of
this uneasy balance, at times favoring one side, at times the other, but
always striving for a compromise. Of course, not everyone was included in
this. Poverty was endemic among the latest immigrants and dispossessed who
did not know the language and who were not connected to the system.
Would there have been a revolution without state intervention? Yes, quite
likely. But my argument is that a revolution was indeed taking place, for
the most part quietly and bloodlessly, and state intervention was its
product. The state itself was at stake. If it had not changed, the result
would have been chaos. We should not overlook that revolution did happen in
Russia and might have happened in Germany and other nations in Europe.
I believe we are now moving into something new and different. We are not
sure of what it is, but we have labeled it "globalization". It too would
appear to be the product of a critical change in technology - technology
which has permitted overleaping of national boundaries and which permits
production to take place and markets to be accessed almost anywhere in the
world. The assembly line and supermarket have become global. There is no
question but that this change favors capital over the individual as both
worker and consumer and, moreover, takes away much of the power of the
nation-state as intervener. Monopoly capital is again ascendent.
Nation-states will need to work cooperatively if they are to impose some
semblance of order on the emerging international economy. Whether they can
do so effectively remains to be seen. I must admit I am skeptical.
Ed Weick
