The previous industrial revolutions produced great new wealth from increased productivity, but distributed only by politics: collective action producing new public policy.That's right - the wealth was produced by human invention and creativity but distributed by political means. That is so very important. Capitalism does not "create wealth" for everyone, and the belief that it does can only be accomplished by intentionally creating historical amnesia.
The future need not resemble the past, but it’s a likely scenario. The technopians, like Marc Andreessen (@pmarca on Twitter) vividly describe the wonders of the future, but actively deny the political action probably necessary to realize it. They’re brilliant, educated people. How could they ignore this history? The simple answer: they’re not stupid; they believe that we are stupid.
The advent of the first two industrial revolutions produced great wealth, but concentrated in few hands — with massive unemployment and poorly paid workers in unsafe conditions. This resulted from policy, not happenstance, as the 1% bitterly fought efforts to change the Gilded Age political system and distribute the bounty of America’s material and technological riches. This, plus a financial system run by and for the 1% (e.g., creditor-friendly deflation) produced incredible (and unnecessary) hardship accompanied by economic instability.
As a result America’s second industrial revolution started and ended with decade-long depressions (the Long Depression and Great Depression), with frequent use of violence to suppress workers (see this list of private and State violence against unions).
Due to our sanitized children’s history, Americans know little of our history between the Civil War and WW1 (other than the cowboys). We cannot see the sad real history behind our fables (e.g., see “Little Libertarians on the prairie“), let alone learn from it.
Change came only when the Progressive and New Deal reforms laid the foundations for the prosperity of the post-WW2 middle class.
Technopians confidently predict widespread prosperity, but omit the collective action that produced a happy ending in the past. They rely not just on our amnesia, but on propaganda: a religious-like faith in technological progress. The parallels with past “opiates of the masses” are obvious.
It’s one of the oddities of our generation that we must spend so much time dealing with beliefs that future generations might find difficult to even understand. Such as American exceptionalism, libertarianism, and techno-utopianism.
While we shadow-box, Andreessen and his peers take us back to the future. A new Gilded Age rises around us...Amazon shows us the future in many ways. E-monitoring of workers; every step, including time in the bathroom. Executives thinking every day about ways to prevent workers organizing for better wages and conditions. Extensive use of temp labor to break links between workers and their actual employers. An inspiring story of technology intelligently applied to destroy the middle class and benefit the 1%.
This is done very intentionally by the Republicans and Libertarians who literally rewrite the past to portray the nineteenth century as a sort of golden age for everyone, where everyone was getting richer and the average person was better off because there was no government at all, not because working people fought and died for every little scrap. Naked Capitalism provides an example:
One of the first great strike waves of this country occured on the railways in 1877; in that strike, US federal troops repeatedly opened fire on strikers battling with the monopolistic railways, killing twelve people in Baltimore, killing twenty-five in Pittsburg, and using troops throughout the country to break the strike. Local police in Pittsburg had actually supported the strikers because public opinion so supported the strike, but President Hayes made sure federal troops were used to defend the railroad monopolies.In fact, not only does wealth not trickle down under capitalism, it's hard to think of a single benefit we enjoy today that capitalism is responsible for without either leverage from the working classes wringing concessions for a more just and equitable distribution of their own productivity, concerns from the elites about social stability, or fear from the elites that they were just a bit too relentless in breaking the working classes.
In July of 1892, Carnegie Steel declared war on the Amalgamated union of iron, steel and tin workers as they went on strike. A private Pinkerton army marched against the union’s position armed with Winchester rifles–seven strikers died and three Pinkertons died from return fire…
Unions found that if they struck, the government would issue an injunction and members would be jailed; if they called for a boycott, they’d be bankrupted by the courts* or threatened with imprisonment. At the same time, attempts by unions to use legislation such as limits to the working day or minimum-wage laws were voided by the courts (until 1937 and the New Deal). Unions found that whether through the ballot, through a strike, or through speech and boycotts–the employers and government would attack them.
In 1912, a massive strike in the wool mills of Lawrence, MA showed where employer violence overstepped its bounds and backfired. Despite the deployment of the militia and the arrest of strike leaders, the company could not break the strike. In order to survive economically, unionists planned to send their children to supporters in other states. The company and its supporters declared that no children would be allowed to leave the city. When the strike committee undertook to take the children to the railway station, the police and militia surrounded the station, the police closed in and began to beat mothers and children mericilessly. Despite the jailing of 296 strikers, public protest and continued resistance forced the company to raise wages although the union was never recognized.
Possibly the most bloody attack on unionists was Ludlow, Colorado in 1913 where J.D. Rockefeller and his Colorado Fuel and Iron Company had state militia and hired special deputies attack and try to crush coal miners there. Conflict ranged for months until the militia opened machine-fire on a tent city of mineworkers family and then soaked tents in oil and put them to the torch. Women and children huddled in pits to escape the flames; in one, eleven children and two women were found burned to death at the hands of the militia.
For example, in Carbon Democracy, Timothy Mitchell points out that the reliance on coal in the Industrial Revolution gave coal miners leverage to get concessions for a more equitable society, leading to the flourishing of democracy:
Coal provided the essential link between industrialization and democratization because it gave power to the workers, especially miners, to sabotage industrial production. The “new political instrument” in the hands of the workers was the general strike, made possible by the material linkages of the energy system that connected the dispersed power of workers and increased the vulnerability of the owners of industrial capital. The concentration of large numbers of workers at the endpoints and main junctions of the conduits that transported large volumes of coal gave workers a new kind of political agency. This agency, for Mitchell, derived not from the workers’ organization and political alliances, or from the development of “new forms of political consciousness” or “repertoire of demands”, but from their ability to slow down or interrupt the flows of coal, providing workers with “an effective way of forcing the powerful to listen to those demands”. The network of material linkages that connected subterranean chambers to the factories that depended on steam or electric power gave the miners the “technical force” that connected their demands to the demands of other workers: “Workers were gradually connected together not so much by the weak ties of a class culture, collective ideology or political organisation, but by the increasing and highly concentrated quantities of carbon energy they mined, loaded, carried, stoked and put to work.” (p. 27). The workers could achieve democratic gains (the eight-hour day, public pensions, the right to vote, the right to form labor unions and political organizations, and the right to strike among other rights) as long as they could sabotage the flows of coal. The switch from coal to oil in the industrialized countries, a process spanning almost the first half of the 20th century, constituted the main mechanism that capitalists and their governments employed to undermine the power of industrial workers, curtailing far-reaching democratic gains and eroding the ones already won by the struggles of workers in the age of coal.Arch-conservative Otto von Bismarck invented the modern welfare state back in the nineteenth century to allay worries about the spreading of socialism. The British, when recruiting for the Boer war, realized they had crippled their working-age population to such an extent that the Empire was actually threatened by the lack of available troops. Only then did that fear cause them to begin instituting reforms:
The long period of conservative government between 1895 and 1905 had meant a slowing of reform. In 1900 it was estimated that 30% of the population lived on the edge of starvation. There were also great inequalities of income and wealth. A working class family lived on about 18 shillings a week while a middle class family spent £10.Meanwhile, in the United States:
During the Boer War the medical condition of the working-class recruits was a cause of grave concern and more attempts were made to improve the nation’s health.
In 1906 a Liberal government was elected with a massive majority. It introduced a large number of social reforms. These included:
A basic social welfare service had been created which greatly improved the conditions for poorer people in British society. To pay for this social reform the Liberals increased the taxes on the rich.
- Medical tests for pupils at schools and free treatment provided (1907).
- Workers were compensated for injuries at work (1906).
- In 1908 a pension of five shillings was introduced for those over 70. This reform was of great significance as it freed the pensioners from fear of the workhouse.
- In 1911 the government introduced the National Insurance Act that provided insurance for workers in time of sickness (reform was twenty years behind Germany). Workers paid a four penny weekly premium.
- Unemployment benefit was introduced into certain industries (e.g. Shipbuilding).
These reforms were resisted by the Conservative dominated House of Lords. The crisis caused by their rejection of the 1909 budget led to the Parliament Act that ended the veto of the House of Lords.
[A]fter the Civil War, the lords came back. Capitalists used the railroads in ways that empowered them to reconstitute their power. The big difference is that the new lords were not so much lords of the landed estates as they were lords of industry. A man named Barber was the lord of wooden matches in this country. A man named Havemeyer was the lord of refined sugar. John D. Rockefeller was the lord of kerosene and oil. And we would pay tribute to these men who had captured control over these industries.Yet the tale told by the Right is that of happy, prosperous workers universally getting ever richer and more prosperous because of the lack of government before World War One. Only after the "evil" Woodrow Wilson and Franklin Roosevelt were able to expand government and introduce socialism into America did things start to fall apart. They rely on us to buy into this mirror-inverse view of history so that they can continue to build their Neofeudal society without resistance.
But it wasn’t merely a matter of higher prices. These men also had direct control over all the people who worked in these industries. If your special skill was knowing how to refine sugar, Havemeyer’s monopoly really limited your career opportunities. There was no open market for your labor. So I don’t use the word “lord” just for effect. In the plutocratic era, Americans really found themselves back in a semi-feudal society. It was a very direct kind of personal control that was often exercised. If there was a lord of that industry, you really could not challenge that person because your career could be crushed in a moment. It’s a little like that in Silicon Valley today, as we saw when the Feds discovered the labor agreement Steve Jobs created to control the salaries and futures of all the little tech dudes. And yet, the American people did rise up. We saw a whole series of rebellions. You had the Grangers, the Populists. And then anti-monopolism sort of became institutionalized in the Democratic Party during the days of William Jennings Bryan. But the culminating moment was the election of 1912.
And, of course, our modern American "middle class" is entirely an invention of the government after the Great Depression and demobilization. Yet the Republicans/Libertarians tell us to just get government out of the way and we'll all be better off. How's that worked out for last forty or so years?
George Orwell said it best, "Who controls the past controls the future. Who controls the present controls the past."
Finally, it seems at least one wealthy person is not a sanguine about the possibilities for revolution as Tyler Cowen is:
Nick Hanauer, internet entrepreneur, has a message for his fellow "zillionaires": the revolution is coming.
Mr Hanauer, an early investor in internet retail giant Amazon, says like many of his fellow one-percenters, he owns his own yacht, multiple homes and private jet. He says he acquired all his wealth by seeing the potential of the internet and acting on it. Now, he writes in Politico magazine, he sees a different kind of future, and the outlook for people like him is not a bright one:
If we don't do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn't eventually come out.
Do you think the US is special or different, he asks. You're wrong. No nation is immune, he says - just ask the Russian tsars or the French aristocracy.