You might think that by now, EVERYONE has figured out that there is pretty much zero direct connection between hard work and financial reward.
But the Ignorance Party--which calls itself "Tea" Party but is apparently ignorant of the actual meaning of the Boston Tea Party, hence the "new" name--continues to harp on and on and on how it is their high taxes, paying for the luxurious lifestyle of those who receive Federal support, that are their only impediment to greater financial success. According to their logic, if they didn't have to pay such high taxes for slackers, the whole economy would be so much better and they, themselves, would be climbing into the ranks of the well-to-do.
This argument, however, does not stand up to historical analysis. And any philosophical or logical analysis that ignores the evidence from history does so for purely political purposes--because such arguments cannot reference history for evidence.
First, though, let us put to rest the myth that it was the free-market system of early America that accounted for our astonishing economic growth from almost the day Europeans first settled here (those guys at Jamestown actually nearly ruined it, and were literally on a boat heading home when they were rescued, and a few years later, the discovery of a marketable corp--tobacco--saved the experimental colony). What truly accounted for America's fabulous wealth and growth was the fact that it could supply natural and renewable resources to the world at exceptionally low cost because its forests and land were virtually untouched by previous human development. The yields of crops due to fertile soils and the tsunami of lumber, for example, had nothing to do with a free-market. The producers of Europe and Asia could not compete because their soils were worn out with millenia of production and harvesting. Cheap American products filled the breadbaskets of Europe, and the spread of resources and wealth was like the Biblical flood.
The abundance of the "new" continents was so vast that it not only produced fabulously fortunes for Americans, but also for the Europeans connected by trans-Atlantic trade. A quick survey of history finds that even in societies without free-markets, merchants could gain significant wealth through the limited trade available to them (and we must consider Asia and the Middle East in this analysis, not just Europe). The difference America made was that the resources were so vast that the number of people needed to facilitate the movement of these resources grew exponentially. Merchants needed more people to help them, and those people became wealthy. The availability of marketable goods now meant that even those "new" merchants needed more help--and so on, and so on. The "rising tide" that shaped America wasn't built on free-markets--it was built on the flood of goods that provided work for so many more hands. Economic systems designed to benefit the crown and elites did not go away--they also grew wealthier. But their wealth depended on taking full advantage of the opportunities available, and that meant encouraging the growth of the middle-class. No single political economy existed--diverse types co-existed. But all grew in wealth at a rate that seemed unprecedented in history.
The folks who did not grow wealthy during this bonanza were, largely, those doing most of the physical hard work. The enslaved in America, whose labor built the biggest and most persistent fortunes, those of the landed elite in the South, did not eat better or live better for their efforts. Of course, that's no proof of the failure of the free-market. So what about the American working class? How did they benefit from the "rising tide" of the free-market?
In two words: they didn't. The life and lifestyle of an American factory worker did not improve improve because of the free-market. It took labor union, Progressive-era reformers, and the New Deal to bring the working class up to middle-class living standards. Despite the enormous wealth America generated, the hardest working people failed to benefit until they and others stood up to the myth of the free-market.
These workers worked longer hours, in unpleasant and even treacherous conditions, than others. They went home to places that were equally unpleasant and treacherous. Their exposure to disease was not addressed for their sake; it was the risk their epidemics created for everyone that made efforts to improve sewers and other systems imperative.
What people miss in touting the free-market is that it was not the free-market that gave America its greatness. By raising wages for working-class people, this deviation from free-market thinking created vast numbers of new consumers. The demand that these new consumers made for more "stuff" drove the American economy so rapidly that we emerged from the crisis of World War I as a world power.
Of course, the business-minded leaders of the 1920s felt that the Progressives and unions had led the country from its true free-market path. They undid much of the legislation that preceded the growth of the 1890s, 1900s, and 1910s. Curiously, in the 1920s, the gap between rich and poor began to widen at a rate that hadn't been seen since before the Civil War. And, not surprisingly, as companies built stuff for consumers who no longer had the money to buy it, inventories rose. Factories slowed their production. Workers were laid off. Production slowed again. And, as we all know, the economy fell into the greatest Depression it had seen before or since.
It is, of course, ahistorical to assume that America might have weathered the world-wide Depression better had our leaders not made those changes in the 1920s. But it is hard to believe that, knowing the post-war condition of most of Europe, leaders would not have figured out that demand would drop. How and why they could not foresee the compounding effect of taking money out of the hands of American consumers is simply a mystery. Perhaps they, too, were blinded by a myth repeated so oft that they began to see it as fact.
But the Ignorance Party--which calls itself "Tea" Party but is apparently ignorant of the actual meaning of the Boston Tea Party, hence the "new" name--continues to harp on and on and on how it is their high taxes, paying for the luxurious lifestyle of those who receive Federal support, that are their only impediment to greater financial success. According to their logic, if they didn't have to pay such high taxes for slackers, the whole economy would be so much better and they, themselves, would be climbing into the ranks of the well-to-do.
This argument, however, does not stand up to historical analysis. And any philosophical or logical analysis that ignores the evidence from history does so for purely political purposes--because such arguments cannot reference history for evidence.
First, though, let us put to rest the myth that it was the free-market system of early America that accounted for our astonishing economic growth from almost the day Europeans first settled here (those guys at Jamestown actually nearly ruined it, and were literally on a boat heading home when they were rescued, and a few years later, the discovery of a marketable corp--tobacco--saved the experimental colony). What truly accounted for America's fabulous wealth and growth was the fact that it could supply natural and renewable resources to the world at exceptionally low cost because its forests and land were virtually untouched by previous human development. The yields of crops due to fertile soils and the tsunami of lumber, for example, had nothing to do with a free-market. The producers of Europe and Asia could not compete because their soils were worn out with millenia of production and harvesting. Cheap American products filled the breadbaskets of Europe, and the spread of resources and wealth was like the Biblical flood.
The abundance of the "new" continents was so vast that it not only produced fabulously fortunes for Americans, but also for the Europeans connected by trans-Atlantic trade. A quick survey of history finds that even in societies without free-markets, merchants could gain significant wealth through the limited trade available to them (and we must consider Asia and the Middle East in this analysis, not just Europe). The difference America made was that the resources were so vast that the number of people needed to facilitate the movement of these resources grew exponentially. Merchants needed more people to help them, and those people became wealthy. The availability of marketable goods now meant that even those "new" merchants needed more help--and so on, and so on. The "rising tide" that shaped America wasn't built on free-markets--it was built on the flood of goods that provided work for so many more hands. Economic systems designed to benefit the crown and elites did not go away--they also grew wealthier. But their wealth depended on taking full advantage of the opportunities available, and that meant encouraging the growth of the middle-class. No single political economy existed--diverse types co-existed. But all grew in wealth at a rate that seemed unprecedented in history.
The folks who did not grow wealthy during this bonanza were, largely, those doing most of the physical hard work. The enslaved in America, whose labor built the biggest and most persistent fortunes, those of the landed elite in the South, did not eat better or live better for their efforts. Of course, that's no proof of the failure of the free-market. So what about the American working class? How did they benefit from the "rising tide" of the free-market?
In two words: they didn't. The life and lifestyle of an American factory worker did not improve improve because of the free-market. It took labor union, Progressive-era reformers, and the New Deal to bring the working class up to middle-class living standards. Despite the enormous wealth America generated, the hardest working people failed to benefit until they and others stood up to the myth of the free-market.
These workers worked longer hours, in unpleasant and even treacherous conditions, than others. They went home to places that were equally unpleasant and treacherous. Their exposure to disease was not addressed for their sake; it was the risk their epidemics created for everyone that made efforts to improve sewers and other systems imperative.
What people miss in touting the free-market is that it was not the free-market that gave America its greatness. By raising wages for working-class people, this deviation from free-market thinking created vast numbers of new consumers. The demand that these new consumers made for more "stuff" drove the American economy so rapidly that we emerged from the crisis of World War I as a world power.
Of course, the business-minded leaders of the 1920s felt that the Progressives and unions had led the country from its true free-market path. They undid much of the legislation that preceded the growth of the 1890s, 1900s, and 1910s. Curiously, in the 1920s, the gap between rich and poor began to widen at a rate that hadn't been seen since before the Civil War. And, not surprisingly, as companies built stuff for consumers who no longer had the money to buy it, inventories rose. Factories slowed their production. Workers were laid off. Production slowed again. And, as we all know, the economy fell into the greatest Depression it had seen before or since.
It is, of course, ahistorical to assume that America might have weathered the world-wide Depression better had our leaders not made those changes in the 1920s. But it is hard to believe that, knowing the post-war condition of most of Europe, leaders would not have figured out that demand would drop. How and why they could not foresee the compounding effect of taking money out of the hands of American consumers is simply a mystery. Perhaps they, too, were blinded by a myth repeated so oft that they began to see it as fact.
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