Wednesday, March 30, 2011

What Are People Good For? (part 3)

3. The Ballad of John Henry

We've been heading this way for quite some time - almost the entire history of the Industrial Revolution, in fact. For most of human history the vast majority of human beings have had to work the land in some way to provide adequate sustenance. The British Agricultural Revolution changed all that by drastically reducing the amount of workers needed for agricultural production. These displaced workers filed into overcrowded and squalid cities, where they became the surplus labor for the newly emerging method of factory production, powered by England's vast coal deposits and inventions such as the steam engine and the power loom.

Factory work came to dominate the world in the nineteenth and early twentieth centuries. The earliest factories, like Richard Arkwright's cotton mills were actually set up to produce textiles. The steam engine kicked off a race to develop more and more mechanical devices to do work, while the emergence of precision tooling and measurement meant that these inventions could be mass produced on a huge scale by relatively few workers. The application of steam powered engines, and eventually electrically powered engines, allowed a few workers with machines to do jobs that would have taken years of human labor. It has been estimated that a single barrel of oil contains the equivalent of ten years of human labor. Henry Ford pioneered the application of mass production and interchangeable parts (both prior inventions) to sophisticated mechanical devices like automobiles, and engineers like F.W. Taylor strived to eliminate waste and create maximum worker efficiency in the new science of industrial production. Inventions such as the electric light allowed factories to run 24 hours a day.

In the 1920's, The Technocracy Movement pointed out that as workers became more efficient, less of them were needed. As the amount of goods per worker increased, small amounts of workers could produce massive amounts of goods; enough for everybody and more than people could reasonably purchase. With such a surplus of goods, they argued, prices would have to fall, destroying the purchasing power needed to consume those goods. Their grim analysis seemed to be proven right when the nation's economy went off the rails in 1929, even as the United States was still flush with oil and coal and factories stretched from coast to coast. The Technocrats' radical solution was to plan economic production by putting engineers in charge, and to mass produce goods based on available energy reserves rather than money capital, distributing them without the burden of a price system. The Technocrats noted that the price system only functions if food and goods are reasonably scarce, not abundant, and that business interests would prefer scarcity to abundance, as it leads to higher profits. They also pointed out that the incredible efficiency of the production line meant that were far more workers looking for work than there were jobs available. It's worth noting that this analysis was made well before the advent of advanced robotics, bar codes, or digital computers, and when almost half of all Americans still lived on family farms.

While it had its supporters, the Technocrats' radical solution, with it's quasi-socialistic undertones alienated much of the general public. The American people were not willing to abandon democracy and put engineers in charge. Unfortunately, it also meant that their astute analysis of the wage and employment situation fell by the wayside. The economy's woes were blamed entirely on an errant financial market, with the underlying problems swept under the rug. The nation turned instead to Roosevelt’s New Deal, which advocated government creation of jobs to provide opportunities to the unemployed and pump purchasing power back into the economy (based on the work of Keynes). It did not address overproduction and fundamental labor surpluses, however, and the nation lingered on in the doldrums of the Depression for a decade.

We all know what happened next. World War 2 came along and the government seized control of the economy and provided full employment. Essentially, what they did was similar to what the Technocrats advised, only they needed a war to make it happen. Goods were rationed. Prices were no longer a problem, as the government was picking up the tab, and overproduction was not an issue since the end result of all these products was to be blown up. Factories worked overtime, and full employment was achieved. The United States' massive weapons production was decisive in defeating the Axis powers, whom they could vastly outproduce.

After the war was over, there was a very real concern that the economy would just go right back into the depression it had emerged from. The solution proposed by the nation's political and corporate elites was to create a consumer economy - a large middle class paid well enough to afford the vast economic output produced by the nation's factories and generate enough economic activity to put everyone to work. The middle class would be encouraged to consume by advertisements beamed into their homes by television, and this was coupled with vast suburbanization which required new house construction, automobiles, roads, furniture, household appliances, services, conveniences, schools, supermarkets, etc. The nation's factories, the only ones to emerge unscathed from the war, dominated world production and provided stable, well-paying employment for millions with excellent benefits. The nation became dependant upon housing starts and automobile production, which still dominate economic discussion to this day.

Yet there was some unease. The novelist Kurt Vonnegut, who was working in the newly created field of corporate public relations for General Electric in 1952, was given a tour of a factory where an early computer operated milling machine was cutting rotor blades for jet engines and turbines, something extremely difficult for traditional machinists to accomplish. The experience prompted him to pen his first novel, Player Piano, depicting a world where all labor was displaced by machines, and conflict ensued between the engineers and managers who ran production, and the displaced laborers who found themselves superfluous to society. The novel deals more with the moral issues presented by this society, rather than the practical ones. Indeed, Vonnegut's displaced workers are fairly well cared for by a generous welfare state that would be impossible to imagine in the America of today. Vonnegut's extreme scenario was consigned to the realm of speculative fiction. The American economy at the time was booming, and any displaced factory workers and machinists easily found new jobs as salesmen, office workers, carpenters, radio announcers, ad copywriters, franchise owners, truck drivers, etc. During this time one income was sufficient to maintain a comfortable lifestyle, and concerns about overproduction and automation were quickly forgotten.

Please read Part 1 of this article

Please read part 2 of this article

Please read part 4 of this article

Please read part 5 of this article

Please read part 6 of this article

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