Saturday, 23 November 2019

The Guardian confuses capitalism with feudalism*, yet again.

* For clarity, I bracket feudalists; corporatists and monopolists together, i.e. those sources of income which require the protection of the government.

'Capitalism' on the other hand, isn't an '-ism'. It's just normal human nature expressing itself. People invent and use labour saving devices, those are true 'capital'. (Clearly, some really large scale labour-saving devices, like the National Grid or the road network can only be provided by the State, but they are still capital).

People like having nice stuff, so they want to earn as much as they can for a given level of risk or effort (or minimise risk for a given level of income etc). Somebody else has got to make that nice stuff. People like to keep their earnings rather than seeing them siphoned off in tax or rent or by a monopolistic employer. Human nature.

Sorry for the length of this footnote :-)
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The article is headed: It’s not thanks to capitalism that we’re living longer, but progressive politics.

In recent years prominent pundits including Steven Pinker, Jordan Peterson and Bill Gates have invoked the progress in global life expectancies to defend capitalism against a growing tide of critics.

Pinker is a decent sort (even though he's based his whole career on padding out one chapter from a Jared Diamond book); Peterson is a right wing lunatic; and Gates is a monopolist-corporatist masquerading as a capitalist.

It’s a familiar story. The prevailing narrative is that capitalism was a progressive force that put an end to serfdom and set off a dramatic rise in living standards. But this fairytale doesn’t hold up against the evidence.

Serfdom was a brutal system that generated extraordinary human misery, yes. But it wasn’t capitalism that put an end to it. As the historian Silvia Federici demonstrates, a series of successful peasant rebellions across Europe in the 14th and 15th centuries overthrew feudal lords and gave peasants more control over their own land and resources.


Those serfs wanted to run their own small businesses (farms). Life under feudalism (or Communism) is miserable and there is no point in working any harder than you are forced to. So this was a revolt by people wanting to run their own small businesses for their own benefit i.e. a revolt by capitalists against feudalists.

The fruits of this revolution were astonishing in terms of wellbeing. Wages doubled and nutrition improved. It was a period of dramatic social progress by the standards of the time.

Hardly surprising. Capitalism works better than feudalism.

Then the backlash happened. Upset at the growing power of peasants and workers, and angry about rising wages, a nascent capitalist class organised a counter-revolution. They began enclosing the commons and forcing peasants off the land, with the explicit intention of driving down the cost of wages.

Those weren't capitalists, those were feudalists re-asserting themselves.

With subsistence economies destroyed, people had no choice but to work for pennies simply in order to survive. According to the Oxford economists Henry Phelps Brown and Sheila Hopkins, real wages declined by up to 70% from the end of the 15th century all the way through the 17th century.

Yes, the employers in towns and cities took advantage of the cheap labour (most quite cruelly so, but if all your competitors do it, you have to do it as well). Better to eke out a miserable living in a town that starve in the countryside.

Famines became commonplace and nutrition deteriorated. In England, average life expectancy fell from 43 years in the 1500s to the low 30s in the 1700s. In short, the rise of capitalism generated a prolonged period of immiseration.

For sure, we've established that. Successful peasants' revolt = wages doubled and nutrition improved. Feudalists re-assert themselves = the opposite happens.

He's also jumping the gun a bit here. The industrial revolution started sometime after 1760, depending how you define or measure it.

Drawing on a wide range of studies, Szreter shows that populations directly affected by industrial growth in Britain experienced a steady decline in life expectancy, from the 1780s through the 1870s, down to levels not seen since the Black Death in the 14th century.

Yes, that was because of poor nutrition (see above); employers exploiting the cheap labour that the feudalists had turfed off the land (see above); and appalling living conditions in towns and cities...

It wasn’t until the 1880s that urban life expectancies finally began to rise – at least in Europe. But what drove these sudden gains? Szreter finds it was down to a simple intervention: sanitation.

Agreed.

And yet progress toward this goal was opposed, not enabled, by the capitalist class – libertarian landlords and factory owners refused to allow officials to build sanitation systems on their properties, and refused to pay the taxes required to get the work done.

Their resistance was broken only once commoners won the right to vote and workers organised into unions. Over the following decades these movements leveraged the state to intervene against landlords and factory owners, delivering not only sanitation systems but also universal healthcare, education and public housing. According to Szreter, access to these public goods spurred soaring life expectancy throughout the 20th century.


OK, broadly correct.

Democracy is inherently a good thing, and it leads to universal healthcare/education which are clearly also good things (why the government should get involved in these rather than 'leaving it to the markets' is a separate topic). But proper free-market capitalism (as opposed to corporatism and cronyism) is part and parcel of democracy, each requires the other. I don't think it's possible to have one without the other. PR China is a totalitarian system which does not have free-market capitalism; it has crony capitalism.

But the interventions that matter when it comes to life expectancy do not require high levels of GDP per capita. The European Union has a higher life expectancy than the United States, with 40% less income.

The '40% lower' appears to be true. GDP in Europe has flat-lined since 2008, in the USA, it rebounded quite nicely, so well done them! (glossing over the fact that incomes/wealth are even more unequally distributed in the USA than in Europe, so median American is not better off than in 2008 either). I think the point here is that European countries spend on average 8% of GDP on price-regulated healthcare. For a similar level of service, the medical-industrial bloc in the USA is allowed to charge two or three times as much.

Costa Rica and Cuba beat the US with only a fraction of the income, and both achieved their greatest gains in life expectancy during periods when GDP wasn’t growing at all.

So why are people trying to flee Cuba and get to Florida, and not the other way round?

So let’s give credit where credit is due: progress in life expectancy has been driven by progressive political movements that have harnessed economic resources to deliver robust public goods. History shows that in the absence of these progressive forces, growth has quite often worked against social progress, not for it.

How is Cuba 'progressive'? LOLZ.

He's missed the point anyway; the optimum is proper democracy and proper free-market capitalism, where the government restricts itself to doing what it does best (e.g. providing; or subsidising and  regulating privately-provided universal healthcare and education) and lets the private sector to do what it does best (anything it wants, basically).

We do not know what the Industrial Revolution would have looked like if it hadn't been fuelled by cheap labour/peasants driven off the land. Factories would have had to offer much higher wages to tempt people off the land, for a start, so it might have been slower, but with much more favourable outcomes for all concerned.

21 comments:

George Carty said...

Wouldn't an exploitative employer be monopsonistic rather than monopolistic?

George Carty said...

How do you feel about the notion that the industrial revolution itself may have been based on economic injustice? Not just the case you mentioned of the enclosures, but also regarding pollution:

Wasn't there a case in 18th-century England where the owner of an apple orchard sued a factory for polluting the atmosphere (and thus damaging his trees), with the orchard owner losing the case essentially on the grounds that the jobs and wealth provided by the factory were so important that the orchard was acceptable collateral damage?

Bayard said...

"As the historian Silvia Federici demonstrates, a series of successful peasant rebellions across Europe in the 14th and 15th centuries overthrew feudal lords and gave peasants more control over their own land and resources."

Yes, but not in England, but England followed the same pattern of progression as the rest of Europe, in fact England was probably less feudal. So that's bollocks.

"And yet progress toward this goal was opposed, not enabled, by the capitalist class – libertarian landlords and factory owners refused to allow officials to build sanitation systems on their properties, and refused to pay the taxes required to get the work done."

That's bollocks, too. You only have to look at all the waterworks and sewage works built in the C19th during the heyday of capitalist power, to see that it is. This article is boringly parroting the "stupid, grasping and lazy capitalist" myth. Yes some of them were like that, but there were plenty of others who had a conscience and could see it was better for everyone, including them, if their workers had decent houses to live in and weren't dying like flies from disease. What i being ignored here is that, since the dawn of civilisation, cities have always been less healthy than the countryside, so whenever you get a transfer of population from the latter to the former, life expectancy goes down. No capitalists required.

Sobers said...

Anyone who thinks working on the land at the time of the Industrial Revolution (whether you were the owner of the land or just a feudal peasant) was more pleasant than working in a factory has never done a days hard graft with a spade and rain running down the back of their neck. The reason employment in factories took off was it was a) better paid than peasantry, feudal or otherwise, b) less back breaking work and c) provided more consistent pay/returns.

Edward Spalton said...

Looking at the ebbing and flowing of prosperity and life expectancy set forth in this article, it would be interesting to factor in the effects of climate change. Generally speaking, times of high and rising temperatures appear to have been times of rising prosperity and longer life spans. It is easy to forget that almost everyone lived only one failed harvest away from malnutrition until very recently in historical terms.



Piotr Wasik said...

@MW, re: Pinker, which chapter :)?

MikeW said...

@Sobers,

'The reason employment in factories took off was it was a) better paid than peasantry, feudal or otherwise, b) less back breaking work and c) provided more consistent pay/returns.'

Or - that the political and gradual econoimic changes to 'Feudalism', in the previous 100 years had seen the creation of a landless, new, 'unemployed' class of 'internal migrants'; the 'vagabonds' (whatever the worried Tudor masters wanted to call the class they had created. And could now see wandering about, uncontrolled, their once 'content' kingdom).

And it was this growing mass of displaced, once never 'unemployed', Feudal labour, that could be put to work in the new factories. So, on Revolution 'take off', it was not wages on the land Vs wages in a factory. It was wages of both sectors against subsistance or starvation for a an ever growing number of former, poor Sods of the land.

@MarkW,

Never thought of this last bit, can I call it an 'Industrial Evolution' thesis?

.....Factories would have had to offer much higher wages to tempt people off the land, for a start, so it might have been slower, but with much more favourable outcomes for all concerned.

:)

benj said...

UK population history

http://chartsbin.com/view/28k

Well, something happened. A thriving capitalist economy needs social/economic justice and visa versa. Not rocket science and confirmed by observation.



Mark Wadsworth said...

GC, no I mean a monopoly. He can charge his customers £200 for one hour of your time but only need to pay you £40. To be honest, it's not the employee who is being stiffed, it is the customer.

GC, we didn't worry about pollution in those days.

B, first part - agreed.
Second bit about benevolent industrialists like Cadbury or Titus Salt who built whole nice villages, agreed. But were they in the majority? I doubt it, or else they wouldn't be so famous.
Third bit - cities are unhealthy - agreed.

S, you imply that being a peasant was no better than being a serf, which is nonsense. If they were the same, why did the serfs want to be emancipated?
For the rest of your comment, I refer you to MikeW's reply below.

ES, yes, that occurred to me, but then it's going to get even more complicated.

PW, the chapter where he says that there is a historic trend to governments and society to become less violent. Maybe it was only a few pages in a chapter on something else.

MW, thanks.

Mark Wadsworth said...

Benj, nice one.

The Stigler said...

Absolutely. I wish I could find a link to the paper, but democracy depends on industrialisation. It's about the balance of power of individuals vs state.

As the wealth produced is more about individual skill, and less about natural resources, the individuals get the power, rather than the lords. They have the power. So, the lords have to treat them better. Eventually, this led to democracy.

You can see the pattern in undemocratic countries. The Middle East and Venezuela, despite being very different in many ways, are undemocratic because so much is about the land (with oil under it). It's why post-colonial democracy in much of Africa never stuck. It was still agricultural. Why is Egypt becoming more democratic? More industry is moving there. You also see industrialisation bringing democracy at various times, like in South Korea and Taiwan. It isn't a co-incidence that that happened once those countries got it.

It's also why I really am not too bothered about China. Yes, a lot of it is crony and corrupt, and it's going to take time, but it's moving in the right direction. More people are moving from paddy fields to factories.

I also think the article is rather dishonest about the industrialists. They were mostly pro-reform. They didn't like the feudalists, either. Often because the feudalists got in the way, tried to stop the competition.

Mark Wadsworth said...

TS. Agreed. We can argue about how many big industrialists were pro-reform. I think it was a minority rather than a majority.

Bayard said...

"Second bit about benevolent industrialists like Cadbury or Titus Salt who built whole nice villages, agreed. But were they in the majority?"

No, as you point out, but I was talking about lack of opposition to improvements, rather than active paternalism.

Having actually done manual farm work in my youth, I agree with Sobers. It is very hard work for very little money. You don't have to be a serf, or even a peasant. You just have to grow up in the countryside where farm work represents almost the only form of employment. I dare say there was an element of "the grass is greener", but then there always is.

Sobers said...

"you imply that being a peasant was no better than being a serf, which is nonsense. If they were the same, why did the serfs want to be emancipated?you imply that being a peasant was no better than being a serf, which is nonsense. If they were the same, why did the serfs want to be emancipated?"

Being a peasant might be a bit better than being a serf, but being a paid worker in a dry factory with a far more consistent income than farming allowed was far superior to being a peasant. You only have to look at how people in China and other developing nations today prefer to work in sweat shop factories over the paddy fields to see that.

There is a common fallacy that 'working in the fields' was some sort of rural Utopian idyll, when in reality it was nasty backbreaking work that never ended, diseases were rife and the income/food supply subject to the fickle whims of the weather and diseases. Life in the factories was undoubtedly grim, but not as grim as life on the land. Hence why people chose the Industrial Revolution over the Agrarian Life that preceded it. It wasn't some 'capitalist/aristocratic plot' it was personal self interest that drove people into the factories and mills.

Edward Spalton said...

I can confirm Sobers’ comments from direct observation. Our family had an animal feed mill. One of our customers was a widow lady with two middle aged sons and the farm was not really big enough to keep them all, so they got into debt. Being honourable people they wanted to pay it off, so we arranged for one of the sons to come and work in the mill, paying off the debt at so much a week. He loved it. He was working inside and there were people to talk to. Having found his feet, he looked a bit further for a job and got a place with the local parks department where his brother eventually joined him. The farm became a part time enterprise.

L fairfax said...

I thought that the industrial revolution started because of high wages and cheap energy
https://voxeu.org/article/why-was-industrial-revolution-british
"Second, the growth of cities and manufacturing increased the demand for labour with the result that British wages and living standards were the highest in the world."

Lola said...

"Yes, the employers in towns and cities took advantage of the cheap labour (most quite cruelly so, but if all your competitors do it, you have to do it as well). Better to eke out a miserable living in a town that starve in the countryside. You've been reading too much of that jaundiced old proto-socialist Dickens' output.

And you are correct. There is no such thing as 'capitalism'. Capitalism was that old fraud Marx's straw man.

(On a sadder note it's at times like these I do so miss the contributions of DBCReed...).

Lola said...

I don't think industrialists objected to emancipation. More it was landowners. The qualification for having the vote was land ownership. Hence lots of towns have streets named 'Freehold Road' which was where a local could buy a big enough share in a piece of land to qualify for the vote - forty-shilling freeholders. Lots of these were sponsored by richer people and building societies.
e.g. https://en.wikipedia.org/wiki/Freehold,_Greater_Manchester see 'history.
https://en.wikipedia.org/wiki/Forty-shilling_freeholders

Shiney said...

@Lola

I miss ol' DBCR - what happened... anyone know?

ontheotherhand said...

BTW What makes Jordan Peterson a right wing nutter? More precisely, what arguments does he make that are extreme and mark him out as a right wing idealogue?

Sticking my neck out here, but I've read his book, listened to his podcasts,and watched the famous Cathy Newman "so what you're saying is" interview, and I don't think the issues that he discusses make him a nutter. He worked for the left wing New Democratic Party in Canada when he was young. He always insists that the right and left need constant dialogue because we need to find a way to help the bottom part of society, and stop the right getting captured by tyrants (including crony capitalists)who extract rents by force rather than earn them through competence. He explains that without the "openess" trait more common on the left, we would not benefit from the regeneration that comes from bringing in new challenging ideas, and society would go stale. He doesn't support the part of the left that splits society into ever more groups of Oppressors vs Oppressed. He recently worried about the UK having police monitoring Twitter for hate as something Orwell might have imagined.

Lola said...

OTOH. The 'left' need to demonise JP as his logic destroys their reason to be. What he says dooms them and their ambitions. Once they accept he's correct they are dead in the water. Hence they need to attack him, not his ideas and arguments. SOP for the 'left' (or the 'right' for that matters).