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In the early 1700s many believed that wealth was land, precious metals and gems. In Britain a Scottish political-economist named Adam Smith (1723-1790) proposed a new and broader way of looking at wealth. He saw wealth in the great variety of goods that people traded and consumed - a view that became part of modern economic thought.
Before Smith, many believed that without poverty people would not want to work in the mills and at other jobs, that everyone would be lazy and pursue leisure as did many aristocrats. The view prevailed among conservatives that the poor were poor because God meant them to be so. In Britain the Protestant ethic held that God looked with favor upon people of wealth and success in business. Smith, on the other hand, believed that more wealth to common people would benefit the nation's economy and society as a whole.
In his book The Wealth of Nations, published in 1776, Smith described wealth produced in a self-regulating market. It was self-regulating because people produced according to what people would buy and people consumed according to what they wanted and could afford. Freedom to trade was part of the self-regulating market - a freedom believed in by some Frenchmen in the 1700s using the phrase laissez faire.
Competition was a part of the self-regulating market. If a grocer charged too much, people could go farther down the street and buy from someone trying to attract more customers by selling at a lower price. Smith was opposed to business people joining together to stifle competition and maintain higher prices. He favored government intervention to prevent this, to prevent various dishonest practices and to promote matters that benefited society. Smith saw competition in the market place as better discipline than poverty. Competition he saw as creating incentives for efficiency.
And Smith he saw greater efficiency in labor specialization. Greater productivity, he believed, created greater wealth for society as a whole.
One of Smith's followers was Jeremy Bentham (1748-1832), an Englishman twenty-five years younger than Smith. With Smith he stood apart from those preaching the benefits of self-denial. He wanted betterment for common people and put a political and democratic spin on Smith's economics, describing everyone as best judge as to his own advantage. He advocated legislating laws that protected common people from criminal offenses, that created fire departments and agencies that fought diseases. He favored government stimulating the construction and maintenance of roads, bridges and the like. And he believed that laws should be passed that provided people with guarantees against starvation. In response to those who were supporting the status quo with talk about natural law, a contract between ruler and ruled, and liberty, in his book Principles of Morals and Legislation, he asked, What liberty? And liberty for whom? Laws, Bentham believed, should be made for "the greatest good for the greatest number" - a point that was labeled utilitarianism.
Bentham was popular among people in Europe, and he was influential in the United States. His point of view won him recognition in France as a citizen in 1792, the third year of the French Revolution.
Another Englishman influenced by Smith was David Ricardo (1772-1823). Smith had focused on benefits to society as a whole, without favor to people of different economic classes. Ricardo expanded on the benefits of free trade. If Portugal was more efficient producing wine than England and England more efficient in producing cloth, it was in the interest of both if they traded rather than Portugal throwing up a barrier against English cloth for the sake of its own cloth industry and Britain throwing up a barrier for the sake of its own wine industry. This has been called the theory of comparative advantage, which Ricardo wrote about in his 1817 book The Principles of Political Economy and Taxation.
Ricardo was a successful stockbroker and a man of wealth who dabbled in economic theory, and he focused on conflicting interests among classes of people of different economic classes. He was influenced by Thomas Malthus (1766-1834), a British clergyman and economist. Malthus wrote an Essay on the Principles of Population as It Affects the Future Improvement of Society - published in 1798. Malthus proposed that increasing amounts of food would be accompanied by increasing rises in population, leaving common people always on the edge of insufficient food. Ricardo combined Smith's view of economics with this view of common people barely surviving.
In his Principles of Political Economy, published in 1817, Ricardo described people pursuing their individual advantage as beneficial to the economy but he saw increases in population as allowing employers to bid wages lower than they could if competition for workers were greater. The price of food was always rising, however, and industrialists frequently had to raise wages to the level that allowed their workers to survive - subsistence wages.
Ricardo saw the economy as favoring those who charged rent. He saw wage earners as struggling on subsistence wages and the profits of industrialists as squeezed while landlords were lolling about in comfort and gaining all the reward.
James Mill (1773-1836) was a Scotsman who became one of Britain's leading liberals. He began his career as a scholar of Greek. Then he became a journalist, historian, philosopher and an economist. He was Jeremy Bentham's friend and ally in support of democracy. Mill was critical of Britain's governance in India, and his three volumes entitled the History of British India, published in 1817, resulted in changing British rule there. His Elements of Political Economy was published in 1821. Following his contemporary, Ricardo, he considered population growth as a problem, and he proposed that the value of a commodity depended in part upon the amount of labor that went into producing it.
The son of James Mill, John Stuart Mill (1806-73), followed his father's liberal leanings. In his book On Liberty, published in 1859, John Stuart Mill, tempered his support for democracy with a concern about the rights of individuals to express unpopular opinions. He proposed that politics advance the ability of people to pursue self-development and individuality, and in this he also supported women's rights. In economics he emphasized the importance of production and scarcity rather than distribution. He saw the production of commodities from nature's scarcities as the biggest challenge. He saw the distribution of produced goods as governed merely by culture. He favored government involvement in the economy but rejected socialism. He believed that economic activity based on private property and the free market had not yet been adequately tried. Some struggle and challenge, he believed, would work better than the dreamed of bliss of an economic utopia.
In Britain and France, more people were living in rural rather than urban areas, but the industrial revolution was underway - "industrial revolution" a phase invented in France in the 1820s. Urban areas were growing in size and factory workers were growing in number. These changes were accompanied by new ideas, beginning with Adam Smith and extending to socialists, which were to spread across the globe.
Factory owners were struggling for advantage against competitors and getting as much work as they could from their employees, including little children. Children as young as six were working in factories. A lack of labor laws left workers without protection as to working conditions and hours of work. Stories arose of children as young as ten being whipped for not working fast enough or some other infraction of the factory owner's rules. And the twelve-hour day was common, for children as well as adults.
A few people saw a better future. Some of them were encouraged by advances in technology and predicted central heating, air conditioning and artificial lighting. Some others predicted a new world improved not only by technology but also by better social organization.
Count Henri de Saint-Simon (1760-1825), was an aristocrat who had served as an officer with the French in the American War of Independence. He was interested in material progress and proposed the building of a canal to connect the Pacific and Atlantic oceans. He was devoted to science and rationality and looked with disfavor upon church support for the status quo. He wanted scientists to replace theologians and a new moral code built on reason rather than miracles. He wanted justice and equal opportunity rather than inherited wealth and idle aristocrats. Eschewing the traditional place for women as described by the churches, he wanted emancipation for women. He wanted public education in order to make people as 'talented' as they could be. He took that big step toward socialism by favoring planning rather than an economy that he saw as anarchistic. Saint-Simon is known for being first to use the word socialist or socialism. He wrote four books but gained little attention, except during the French Revolution, when he was imprisoned for nine months. After his death in 1825 some noticed his writings and became followers. They emphasized the creation of a society in which each person was ranked according to his or her capacities and rewarded according to his or her work.
Robert Owen (1771-1858) was from Wales, and like Saint-Simon, he believed that life could be better for common people. He married the daughter of a conservative Presbyterian owner of a squalid textile mill at New Lanark, in Scotland. In 1799 Owen took control of the mill. He ran his mill intending to produce goods to sell but also intending to create an orderly community of productive citizens. He looked after the health of his employees and provided them with better food and housing. He set up a community school for their children. He provided his workers with a comfortable existence, and his mill was among the most profitable in the industry. In ten years, New Lanark was attracting worldwide attention. Writers visited New Lanark, as did ladies of wealth interested in the betterment of humanity. Skeptical business men came, and also Grand Duke Nicholas, the future Nicholas I of Russia. At Lanark they saw the homes of workers in neat rows along streets without trash strewn about, and they saw no children running wild during weekdays, as children did in other communities.
Owen paid wages that were higher than paid by other mill owners, but still the workday at Lanark was long, and some children ten or older were still working the factory - up to 10 hours and 45 minutes per day. People were not excepted to have a lot of free time for frivolity. His factory doors were open rather than his factory a prison for children, and there was no corporal punishment.
Owen toured Britain, making speeches and arguing for a "new moral world," a cooperative world, without "the bitterness of divisive sectarian religion," and his criticism of the Church of England annoyed many. In general, other industrialists kept to their ways of getting as much out of their employees as possible, and governments posed no laws to force them to do otherwise.
In 1824, Owen moved to the United States to build there what he planned as a community of the future. He purchased 30,000 acres in the state of Indiana, and he called his place New Harmony - a place that he wanted free from religion, private property and crime. Settlers came. And following the news of New Harmony, people created copycat communities elsewhere in the U.S. and in Britain and Ireland.
There was conflict at New Harmony between those who believed in their individuality and those who advocated conformity. There were complaints about some whose cooperation did not involve sufficient work. And the kind of work that was being done was not enough to sustain the community economically - New Harmony failed to attract an adequate number of workers with skills. Owen's multitude of reports to explain the deficient production helped little. The community had, in the words of one observer, "plenty of storekeepers, clerks, committeemen and rangers [but] few smiths, artisans, and farmers."
By 1828 New Harmony had been reorganized five times and Owen had lost four-fifths of his fortune, including that which he had received from the sale of the mill at Lanark. He disbanded New Harmony, blaming the failure on people not having acquired "those moral characteristics of forbearance and charity necessary for confidence and harmony" - virtues that he had hoped would develop at New Harmony.
Owen returned to Britain, and there, in 1833, he pursued his dream of a cooperative and harmonious society. He created the Grand National Consolidated Trade Union. Industrialists remained uncooperative and organized opposition to his union. Government and the courts were also opposed, and in two years, when Owen was sixty-four, his new union failed. In 1835 another of his efforts, the Association of All Classes and All Nations, failed.
Followers of Owen, meanwhile, had been creating consumer cooperatives. Their original purpose was to collect funds to start their own Owenite communities. Interest in the communities had faded, but they found cooperatives for consumers beneficial, and from this the consumer's cooperative movement developed.
Fourier (1772-1837) believed that the factory system was a phase, and he looked forward to its passing and the passing of laissez-faire liberal economics, the passing of unhappiness and chaos and the passing of Bentham's utilitarianism. Human nature, he believed, had been created by God, and he wanted a community that respected nature and that was tied together by love and a singular devotion to God.
He published his plan in 1829 in his book The New Industrial World (Le Nouveau Monde Industriel et Sociétaire). His plan was to organize people into what in his native French he called Phalanstères (phalanxes). Each was to be a community of 1,620 persons with its own production facilities and farming, with a great hotel-like dormitory at the center, divided between first class, second class and third class depending on one's wealth, with as much privacy as one could afford, including having meals brought to one's room. Everyone would work a few hours each day, doing what suited him or her best. Recognition would be given to the best producer in each field of endeavor. He expected each of his communities to be profitable, the profits to be divided among the community, whose members would be encouraged to be both workers and shareholders.
Fourier had only a tenuous connection with reality. He liked numbers and predicted that his ideal world last 80,000 years, 8,000 years of which would be an era of "Perfect Harmony." Enough people took his writing seriously enough that several of his communities were created in the United States. But none were a success.
Proudhon, (1809-1865) saw himself as less utopian than other socialists. He favored non-violent “revolutionary” that caused a gradual disappearance of state government and monied bosses. He was known for saying that property was theft, but he had modified his view, deciding that free people ought to have enough property to assure their independence. He was utopian, however, in favoring a society based on cooperation. Competition, Proudhom believed, was the root of evil.
Proudhon was opposed to indoctrination. In an 1846 letter to Karl Marx, Proudhon wrote:
Let us not, merely because we are at the head of a movement, make ourselves the leaders of a new intolerance, let us not pose as the apostles of a new religion, even if it be the religion of logic, the religion of reason.
Not believing in organization, Proudhon belonged to or led no political organization. His influence was as a journalist for various newspapers that had the People in their title - the Voice of the People, for example. In June, 1848, he was elected he as a deputy to France's Constituent Assembly, but he was isolated. He proposed a cooperative enterprise called a "Bank of the People," and, being against government involvement in the economy, he opposed National Workshops. During the upheaval and raising of barricades that June in Paris - called the June Days - he was disturbed by the violence. He had always disliked violence, and he proposed resolution to the June conflict through peaceful conciliation.
It is unclear what Proudhon's thoughts were regarding uncooperative (criminal) behavior in his cooperative society. Perhaps he thought that cooperation could be enforced through vigilante justice.
Karl Marx was thirty during the June Days of 1848. He had his own newspaper and had written his Communist Manifesto a few months before the June Days uprising, but his manifesto was being read by few. And in May, 1849, he was driven out of Germany. He went to Paris and was driven from there, ending that year in London, where he was to remain until his death in 1883.
Karl Marx was the son of a Jewish lawyer who had converted to Lutherism. Karl was brought up in the tradition of the Enlightenment, and, in his graduate essay while a teenager, Marx had written that human nature was such that a person could achieve fulfillment only by working for the perfection and welfare of others. He studied philosophy at the University of Bonn and acquired a doctorate of philosophy at the age of twenty-three, and for his dissertation he compared the Greek philosophers Democritus and Epicurus.
As had David Ricardo, Marx added class conflict to Adam Smith's world of economics. And he disagreed with John Stuart Mill about production and distribution, seeing a connection between how goods were distributed and how production was organized.
Marx denounced utopianism. Rather than a plan to be superimposed upon society, he believed, as had Proudhon, in working for social change within conditions rising out of history. Influenced by the philosopher Hegel, Marx built upon Hegel's view of humanity passing through stages of social development. He removed God from Hegelism and created historical materialism. He believed in organizing industrial workers, and he based his revolution on appealing to the new and growing class of industrial workers.
His division of society into classes was essentially a reference to economic classes, the relations of people to production, a division between those who sold their labor to others versus those who bought the labor of others and owned machinery, and those who owned land upon which others worked, those who worked for landlords and those who worked their own land.
The factory system, he believed, was a product of a history of man's inhumanity to man. He saw enough state force against people mobilized for political change that he was firm in his rejection of the view of rival socialists - from Owen to Proudhon - that change could be realized through peaceful discussion.
He separated himself from religion. He saw religion as offering people "an illusory happiness" that distracted them from seeking relief from oppression. Marx believed in science. Science was popular among the "enlightened" of his time, and he tried to arrive at his conclusions about society through empirical observation, creating what was to become known as scientific socialism. Trying to be scientific he studied economic development, seeing growth in the size of companies and bigger concerns driving smaller concerns out of business. His detailed study of wages covered a period when real wages (purchasing power) were falling. Had his study extended to a broader span of time it would have indicated that real wages in the long run were rising. Believing that real wages were diminishing and adhering to Ricardo's belief in subsistence wages, Marx believed that the growing misery among working people would eventually make them want to overthrow the "ruling class." Every economic depression in a century of cyclical depressions was to be taken by followers of Marx as the coming of socialist revolution.
Marx made a detailed study of economic crises, describing the production of goods surpassing consumption. He described economic depressions as a creation of poor economic organization and a problem in distribution. Believing that economic chaos was inherent in capitalism he did not foresee no remedy to boom and bust economics.
In a detailed study, Marx produced his Labor Theory of Value. It described exploitation of workers in the form of employers not paying workers in wages the full value of that which they had produced, the difference being profits for the capitalist. With socialism, he proposed, the workers would be the power behind the state. The workers would be the new "ruling class" and there would be no exploitation because the profits from the state-owned factories would be spent for the working class.
Marx disliked anarchism. He saw need for order, at least until socialism was firmly established and economic classes faded away.
There was an authoritarian aspect to Marx’s revolution. The workers would be the new "ruling class." The world would see this authoritarianism in what would be done in the name of that big abstraction, the working class, and in the name of history. But Marx's ultimate goal was the removal of authoritarianism. Marx believed that with the working class in control of the state and with landed aristocracies and capitalists a part of the past, economic classes would fade away, making the state – an authority that compels – no longer necessary. And with advancing technology there would be an enough for a distribution of goods on the basis of "from each according to his ability, to each according to his needs." This was the communism that would be the goal in socialist China and Russia in the 20th century.
Blanqui was from southeastern France and had given up on his study of law and medicine to become a political revolutionary. At the age of twenty-five he fought with distinction in the revolution of 1830, which brought to power the liberal monarch Louis-Philippe, and he won a decoration for his services. He turned against the monarchy of Louis-Philippe and spent years in prison, until February 1848. Upon his release he showed himself to be an effective organizer and leader of men, moving colleagues away from Jacobin policies to policies that were socialist, until he was jailed again in May where he remained for more than ten years. During these years, Blanqui formulated his socialist philosophy, believing as Marx did in the proletariat (urban workers) becoming the ruling class and denying the bourgeoisie the freedom to exercise its power. And he believed that organized violence was needed to overthrow the bourgeoisie.
By 1870, after eleven years of freedom, he was leading a secret army of about 4,000. In March 1871 came another uprising in Paris ( known in recent times from the musical Les Miserables). Blanqui was arrested, but his army fought alongside others at the barricades against the established order. From the failure of revolution in 1871 came a separation of those who followed Marx and those who followed Blanqui.
During the uprising Marx wrote of France's "collapsing bourgeois society" as "pregnant" with a new society. Then, with the failure of the rising, Marx denounced the repression by France's "bourgeois form of government." He wrote:
Working men's Paris, with its Commune, will be forever celebrated as the glorious harbinger of a new society. Its martyrs are enshrined in the great heart of the working class.
Marx and his collaborator, Friedrich Engels, continued to believe that successful revolution required a readiness for revolution by the whole of a community of workers. Blanqui's followers were not interested in waiting. They believed that a small group of determined revolutionaries could initiate a revolution at any time and succeed. Engels wrote:
If anything is evident, it is the fact that the Parisian proletariat, after the exhausting war, after the famine in Paris, and especially after the fearful massacres of May, 1871, will require a good deal of time to rest, in order to gather new strength, and that every premature attempt at a revolution would bring on merely a new and still more crushing defeat. Our Blanquists are of a different opinion.
It became Marxist ideology that Blanquism was to be avoided, that revolution by a minority would merely be an attempt at a coup and if successful would lead merely to dictatorship. A proper and a successful rising, according to Marxist ideology, involved the mass of the working class, creating a dictatorship not of a few but of the proletariat.
For his support of the 1871 uprising in Paris, Marx became known as the Red Doctor, and little respect was heeded him by the majority of political economists of his time. Marx died in 1883, almost sixty-five. His collaborator and source of financial support, the wealthy Friedrich Engels, died in 1895, also in London.
Recommended Books
The Worldly Philosophers, by Robert L Heilbroner, 1986.
Bentham, by John Dinwiddy, 1989.
Politics and Opinion in the19th Century, by John Bowle, 1964.
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