The Roots of Capitalism - Quareness Series 103rd "Lecture".

Recently we have been treated to a rebranding of capitalism (by our Irish singer Bono at the 2019 World Economic  Forum get-together in Davos, Switzerland) as enabling an amoral rather than immoral system for human societies...somewhat akin to a "neutral" computer operating software...which has spawned great material progress but needs regulation "to tame the beast". Is this a reasonable view?

It has been reasonably argued that the origins of modern capitalism lay in the enclosure movement in England, when wealthy elites walled off the commons and systematically forced peasants off the land in a violent, centuries-long campaign of dispossession...a period of English history enabling the abolition of the ancient "right to habitation" which had guaranteed ordinary people access to the resources necessary for survival. As a result the peasantry found themselves subject to a new regime whereby they had to compete with each other for leases on newly privatised land in order to survive. And in order to retain their access to leases, farmers had to find ways to extract more and more from the earth (and from labour) even if it was vastly surplus to need...not doing so would likely have meant losing their own leases and possible starvation. This same imperative of ever-increasing productivity was also soon at work in the industrial sector...shedding light on how the birth of such capitalism required the creation of "scarcity". And this ongoing constant creation of artificial or real scarcity remains the engine of the juggernaut to this day. 

European colonisation spread this same process across the world e.g. where the native peoples relatively content with their subsistence lifestyles had to be "encouraged" to do back-breaking work for the invaders' benefit. And the method deployed was the familiar home-grown one of forcing them off the land or to pay taxes in European currencies which could only be acquired in exchange for labour...

scarcity again and again brought into action as the engine of capitalist expansion. Crucial for the capitalist agenda was that this scarcity was artificially created through elite accumulation backed up by State violence. There was no actual scarcity given that the same land and forests and resources remained just as they had always been before they were enclosed/locked, after which "amoral" appropriation people had no choice but to participate in the juggernaut in order to regain access to the means of survival.

In modern times the force of scarcity tends to take the form of a constant threat of unemployment...unless we are ever-more productive at work, we may lose our jobs to those who may be more productive. As productivity rises, however, less hired labour is needed and so workers get laid off and find themselves potentially without means of survival...victims of artificial scarcity. And in order to reduce unemployment the capitalist State must then find ways to grow the economy so as to create new jobs. This paradox inevitably leads to "across the board" demands from all sectors of society for growth/jobs i.e. scarcity creates recruits to the ideology of growth.  

But it seems the problem of scarcity never gets resolved...whenever scarcity has looked about to be solved, it has always quickly been produced anew. And the cause of this recurring "mystery" may be that capitalism transforms even the most spectacular productivity gains not into readily available lasting abundance and human freedom, but into scarcity. Is it a reasonable view that the ideology of capitalism - a system that generates immense abundance for consumption - in reality relies on the constant production of scarcity?

This conundrum was first noticed back in 1804 courtesy of the Scottish peer James Maitland, and became known as the Lauderdale Paradox which pointed out that the only way to increase “private riches” was to reduce what he called “public wealth” (the commons) by enclosing things that were once free so that people have to pay in order to access them. To illustrate, he noted that colonialists would often even burn down trees that produced nuts and fruits so that local inhabitants wouldn’t be able to live off the natural abundance of the earth, but would be forced to work for wages in order to feed themselves. Indeed his was the first controversial work to draw attention to the economic consequences of a budget surplus or deficit and its influence on the expansion or contraction of the economy, and was thus the basis of the later Keynesian economic theories since widely applied.

It seems reasonable also to argue that the widespread modern mania/push for privatisation (of education, public utilities, welfare, etc.) reaches its apogee in contemporary "austerity" i.e. the desperate attempt to restart the engines of growth by slashing public investment in social goods and social protections, chopping away at what remains of the commons so that people are again forced to increase their productivity if they want to survive. Indeed it would appear that the whole point of such austerity is to create scarcity thereby inducing suffering for the sake of more growth.

Does it have to be this way or can we halt the madness where everyone is forced to contribute unnecessarily to expanding the juggernaut of production, the output of which must in turn find an outlet in the form of ever-increasing consumption and/or waste? By opening up access to social goods, restoring public services and expanding the commons, perhaps we can ensure that people are able to avail of the things they need to live a good life without having to generate a lot of income to do so and without feeding the never-ending growth machine. As pointed out by Lauderdale, private riches might shrink but public wealth would increase. Whereas austerity may call for scarcity in order to generate this GDP growth, an alternative social policy of steady "degrowth" can call for abundance in order to render such standard measured growth unnecessary. Is this a reasonable view?

“Now is the winter of our discontent.” - per William Shakespeare in his 1593 play Richard III - is perhaps a literal description of a string of difficult winters at that time? Heinrich Bullinger, a Swiss theologian, had written in 1570 that "the spring of this year was like winter, cold and wet, the wine blossom terrible, and the harvest bad" during a period when the European winters had been very cold and the summers unbearably hot. Initially this was thought to be a temporary problem but the extreme weather turned out to continue season after season until abnormal became the new normal. In fact this "new normal" weather continued for over 100 years and became known as the Little Ice Age. 

The religious authorities of Shakespeare's time called for piety from the populace in order to appease God whom they thought was punishing humans for their poor behaviour with the bad weather. Such thinking inspired witch hunts grounded in the notion that burning women at the stake would somehow thaw the frozen winter earth, make the rain fall gently on the crops in spring, and cool the scorching summer sun. Whilst this "remedy" obviously failed to "correct" the situation, it took quite some time to transform people's ideas on how to address the crisis...but it did so eventually.   

During the 17th century, a new way of looking at the world began to take hold...

instead of God watching over all, the planet now tended to be viewed as a kind of clockwork mechanism that followed natural laws which we could discern through experimentation and observation. Scientists were starting to exchange information, botanists to disperse plants across continents and in a Europe struggling to grow grain, new crops such as potatoes and tulips were introduced which proved to be the basis of new dietary habits and new markets. And this in turn transformed economies with the rich getting richer, the poor getting poorer, and the early appearance of a tiny middle class. 

By the time the weather became temperate again (around 1700) our modern notions of the free market with its own logic were well "bedded in". Indeed it's precisely these "market forces" which had and continue to have incentivised the behaviour leading to our widespread exploitation of natural resources. In this "new" approach to growing food and wealth prompted by the Little Ice Age, we might yet see the snake eat its own tail.

There's no known consensus on what caused the Little Ice Age. Some think it may have been the result of increased volcanic activity that influenced ocean salinity which in turn altered deep-sea pressures and the world's weather. Others have argued that the increased volcanic activity was the result rather than the cause of the extreme climate. Whatever the truth of the triggers, the recorded history tells us it was a time of crisis in Europe where necessity proved to be the mother of invention, prompting exploration and innovation and laying the foundations for a whole new way of life. Inevitably, of course, there are upsides and downside to "progress" which we can readily see for example in the growth of bustling ports and sophisticated cities where markets as well as arts and publishing thrive(d), and in the excess exploitation of resources, both natural and human. As they say - unlearned history tends to repeat itself - and we may today be facing into a major transformation of our own, forced by difficult circumstances? If so, based on history, we'd need to be well aware that things could get worse before they get better.

Looking back at that time we can see the struggles of an evolving continent leading Europeans to rely on mass international exploitation (such as colonisation and slavery) in order to cope with the new circumstances and to feed their own starving populations at home. Thus did they manage to grow large amounts of wealth that in turn led to Europe's ascendency. Of course the wealthy also squeezed the poor for profit on their own turf, with landowners across the continent incentivised to eliminate the public commons and replace the small scale model of farming with a big business one of food production for export on a grand scale from the country to the growing cities. 

The earlier feudal social and economic system had rested on a base of land ownership and local grain production. However, when temperatures declined enough to disturb this set up, the entire social model fell into decline and thereby forced Europe to think of alternative ways of ordering and organising things. And this drove the newly landless villagers into the growing cities where they had to sell their labour for a pittance. Meanwhile, the wealthy boosted their fortunes with speculation in markets that now offered investment in new commodities.

It would be both misleading and unrealistic to see this "luck" of the wealthy as an ongoing guaranteed state of affairs.The tulip mania saga of the late 16th and early 17th centuries provides us with a sobering tale. During the late 1500s a merchant from Ottoman Constantinople sent the flower bulbs to a Dutchman who gave them to his cook, thinking they were onions. The latter threw them out as garbage upon realising that they weren't edible. However, come the spring when the trash heap blossomed, the Dutch merchant sent these specimens on to the famed botanist Charles de l'Ecluse in Leiden where they surprisingly survived the extremely harsh winter of 1593. The delighted botanist in turn then sent these new-to-Europe flowers to his friends having named them after the Turkish turban. The blooms quickly became such a sensation that the price of a single tulip bulb could match that of a well-appointed country house. A bouquet of tulips became the must-have accessory for any fine home in the Netherlands and beyond, inspiring “breathless buying and selling”. Nevertheless the tulip bubble burst suddenly and inexplicably in February 1637, leaving many investors destitute and driving some to suicide. The bulbs were deemed practically worthless again and tossed aside as they had been earlier...a worthy illustration of the perils of stupidity in the one-track thinking likely to emerge cyclically in free market economies.

Could it be that just as extreme weather in the past created new pressures that prompted novel economic models which brought unexpected riches and risks, and created unquantifiable human suffering due to exploitation, so too will any future transforming of our climate? Where there is pressure from climate change (real or perceived) on economic and social structures, on natural resources and social cohesion, could we be facing into an era of upending societies and creating fear with a shift in weather patterns as well as exacerbating the need for change? Though they didn't know it at the time, Shakespeare and his contemporaries were on the verge of a revolution driven by the pressures extreme weather can create. Today we could be seeing the start of our own winter of discontent? On a more optimistic note, perhaps the current phase of Earth's climate change will drive the next great evolution of ideas? We might gain new metaphors and new understandings of the planet, just as with the past transformation of Europe from a rigid religious outlook to a more rational minded society? At the very least we'll probably get to rethink again our cultural metaphors, as well as humanity’s place within the great scheme of things...perhaps a good thing in itself?

Sean.

Dean of Quareness.

March, 2019.

Footnote: - We can truthfully say that science is settled only to the extent that we have practically applied our theories about a system to that system, and the application then works...and it's not “settled” to any further extent than that. If we’ve never done anything with our purported knowledge, except tell that we “know” it, it’s not really “settled” at all. The manner in which we apply our “understanding” is the dividing line between what we really know about a system and what we only think we know. For this reason perhaps we can safely conclude that most of our socalled climate scientists know little if anything of what they think they know...because they have never been able to reliably put their theories about climate to any demonstrably useful result?

The core question here is whether or not humanity can now thrive without incessantly high levels of GDP.