Tag: Industrialization

China’s Rise Is Normal

On June 17, 2024

China used trade protection and cheap wages & grabbed industry from the leading industrial power exactly the same as the US did with Britain.

The tech/science lead follows the manufacturing floor, with some delay, this was, again, the same with Britain & the USA.

The dynamics of industrialization are well understood at this point. The first books to read are “Bad Samaritans” and “Wealth and Democracy”.

Unlike Japan or South Korea, China has a larger population than America (same as America vs. Britain) and is has a large land mass and plenty of resources. In fact, it has slightly more land area than America.

Initial industrialization in England is an interesting story and still hotly debated. Later industrialization waves are mostly all the same. (The USSR is an exception, as are city states.)

Big leaps, as opposed to adaptations of existing models almost always come from states in hot competition, and among them the peripheral states usually win (Britain, for example, is peripheral to Europe.) The biggest tech surges in Chinese history came during warring states periods.

I’m very impressed by China’s rise and the West’s sheer incompetence in enabling it, but it’s not a huge leap the way the industrial revolution was. It’s just an extension of a previously existing model.

Japan’s rise was more impressive than China’s, as the first non-European nation to pull it off. But as an island nation with limited population, they were sharply limited. They made 2 runs at the US, one a war, one industrial, and neither let them become the foremost power.

The West was very good at keeping everyone but client states from industrializing. Even Japan needed British aid (the first time), then America’s (the second time.) But the West got stupid under neoliberal “end of history” ideology & let China run the playbook, thinking it wouldn’t challenge the West. Oops.

Americans probably should have learned from the Western experience with Japan. The British enabled Japan’s rise only to have Japan attack British possessions. Without American aid, that loss would have been permanent. But China is a continental power w/a massive population. The stupid was epic.

A radical change in economic model hasn’t happened yet, and seems unlikely to before ecological and economic collapse puts an end to the viability of the current model. Looking at Chinese cities with the 7 lane highways is instructive. It’s just a better version of the same old

A complete change of the permission system will be necessary for radical economic change. No one in power, whether in the West or China, wants that or can even imagine it.

Who knows, radical economic change might happen in China when collapse really starts biting. After all, they have the manufacturing base. But usually it happens at a periphery or in a tight area with multiple competing states.

This stuff is fairly well understood. However it’s not economists who put the pieces together, it’s sociologist and historians and even some anthropologists. Economists have done more damage to the West than astrologers did to Chinese dynasties. MBA factories get an honorary mention. (They mostly weaponized economic theories, as when they noticed economic theory saying that high profits come from not competing.)

One of the most instructive trends right now is watching so many people screaming about population collapse, when what the world actually needs is a lower population. (We could have avoided that necessity, but the window is closed. Sometimes you have to act at the right time.)

All people who yell about lower birth rates can imagine is economic growth through population expansion. Anyone who thinks that way can’t create a new economic model, they’re stuck in the old one. (Elon Musk is a good example.)

People who can’t even understand population overshoot are incapable of the thinking required to deal with the world’s actual problems.

We’ll talk about permission systems at a later date. As noted, they’re key.

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The Transition to Capitalism

By Ian Welsh

On April 16, 2020

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One of the most important things to understand about industrial capitalism is that the lower classes didn’t want it.

Peasants did not leave the land voluntarily. They were forced off, often violently, in a series of enclosures, through which their millennia-old rights to use the land were taken together.

This was a vast, albeit “legal” (because bills were passed that made it legal), seizure of property rights. Property is just rights, and those rights were taken from the peasantry and free farmers and given to the lords.

The justification for this was that “enclosed lands are more productive,” but detailed study has found this was only somewhat true: Commons fields were about 80 percent to 90 percent as productive, and their productivity increased at the same rate as enclosed fields. For some crops, common fields were more productive.

With the the fields enclosed, the peasantry lost control of capital (land is capital). They couldn’t grow their own food, raise sheep for wool, chop down trees for fuel, and so on.

They were thus forced off the land, into the city slums, and had to work for industrialists, six and a half days a week, 12 hours a day on average. They died younger, there was far more disease, they were maimed often, and they lived worse.

They knew this. They resisted. They hated.

Capitalism, among the many things that it is, is the concentration of capital in the hands of a few people. That means access to capital is removed from most people. Most people must now work for someone else. In some times and places that work is nice, at others it is not, but it is a loss of control and choice.

Peasants and free farmers in Britain had far more control over what they did and when than factory workers. In fact, they had more control than most modern American workers do today.

Yes, they had to engage in demeaning status rituals from which we are largely exempt, but they had a type of freedom most wage slaves don’t.

The choice for most people today is to choose their master, not to choose to have no master. The local gentry or nobles did not supervise the peasants most of the time, they let them get on with their work, took their share of the proceeds, and got a certain number of days of work from the peasantry.

But they were not close-supervising them.

Again, we tend to compare today with then, but this is the wrong comparison. The comparison is then (peasant/yeoman) with then (factory worker). The first was so far superior to the second as for there to be no comparison.

Was all of this disempowerment, this removal of capital from everyone but the few, necessary for industrialization and its benefits? Did people have to be forced off the land and into satanic mills, where they worked like dogs and died young?

Or was there a better path, which we did not take?

And what are the results today? The results are, in fact, that fewer and fewer people have control over capital or the means of production, and the rest of us have to do what those people say, not just for a month or two every year and here’s a share, but for five or more days a week, with intrusive monitoring and micro-managing bosses.

They control the capital. We do what they tell us to, negotiating only who wields the whip.

That’s capitalism.

Did it have to be that way?

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Did the Industrial Revolution Require Land Clearances, Slavery, Genocide, and Empire?

By Ian Welsh

On January 27, 2016

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The Leninist argument is that imperialism, industrialization, and capitalism were intertwined. It did not make sense to discuss capitalism or industrialization without discussing Empire, and all its crimes. It is also the common argument that land clearances, in which commons rights were taken away from peasants and serfs, often by law and force, were required to create the industrial workforce.

This is because the early industrial workforce was a terrible place to work and live–and the phenomenon is not temporary, by most measures. It was true for between a hundred and a hundred and fifty years. Maybe longer. You worked longer (six and a half days a week, 12 hours a day was common in certain periods), you lived in urban filth, ate less, were sick more, grew to lower height if born into this, and died younger.

So, clearance was bad for the people who were cleared. I trust I don’t have to explain why European Imperialism was bad for most everyone else. Granted, European Imperialism predates the Industrial Revolution (but not the commercial, wind, and water revolutions), but it goes into overdrive during the Industrial period, and the gains of previous periods are definitely used to support the Industrial Revolution.

There are two questions to answer with regards to the clearance issue. First, whether or not clearances were necessary for the agricultural revolution to occur. With no agricultural revolution, there’s not enough food for expanding city populations.

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The orthodox answer to this question is, “No.” But recently, a scholar, Robert C. Allan, went through the agricultural records and compared enclosed field to non-enclosed field production. Common fields were usually somewhat less productive than enclosed fields, but their gains increased almost as fast as enclosed fields did, and were even higher for certain crops (for instance, as with nitrogen fixers, like clover).

In other words, no, the agricultural revolution was not predicated on field enclosure–it just would have happened slightly slower in a non-field-enclosure scenario.

The second question concerns wages for workers, and is trickier. Allan argues that the Industrial Revolution happened in England for a simple reason: The coal was right there and could easily be shipped to factories. Shipping coal was hellishly expensive, and early steam engines were massively inefficient. Industrialization didn’t start in, say, Paris, because it lacked the resources. In Paris, it was cheaper to use more labor rather than to use coal.

Field enclosures made labor cheap in England. Without them, there are a lot less desperate workers, and a lot less desperate workers means higher wages and better treatment of workers (no one’s leaving the peasant village to go work 78 hour work weeks). Higher wages could make steam-driven factories unprofitable. No profit = no revolution.

This is an empirical question, and I don’t see the data to indicate the answer one way or the other. The theoretical point of view is this: Land clearances forced the cost of labor down. The higher wages are, the more you want to use capital (like equipment), not workers. In such a case, again, the Industrial Revolution happens, but it happens closer to Newcastle to keep the cost of coal down, and it is slow to gain traction due to profitability concerns. Once stabilized, however, the incentives for increasing machine efficiency of the machines faster could quite possibly have accelerated the Industrial Revolution faster than how it actually played out. Hard to say, but the argument is sound.

Now, for Empire.

With a very few exceptions, the main one being the USSR, every country which has industrialized, including Britain and the US, has done so with mercantalist policies, that is, behind trade barriers of some sort or another. They become free traders when their industry is well-established, not before.

Mercantalism does not require imperialism, but imperialism can augment mercantilism. When the British invaded India, India had more factories than England. Soon, they didn’t. India was a vast market for British manufacturing and provided raw materials.

The South in the US provided much of the cotton, through slave labor, as did Egypt and various other places which were conquered or absorbed through imperialism. (While the US South was, no, not under British control during this period, the Native Americans were cleared from it by European imperialism and disease and the slaves were brought over on European ships.)

Imperialism provides two things: Markets and cheap supplies for the factories. Even the Chinese opium/tea trade is related. Tea reduces appetites and enables people to work longer, and the British, even with the agricultural revolution, are somewhat underfed. Minus six half-day weeks, of course, they would not need so much food, but they do. (Ever done hard, manual labor all day? I have. I ate A LOT.)

There is clearly a benefit from Imperialism for industrialization under capitalism.

Could industrialization have happened without forcing open these barriers to British exports and without cheaper commodities like cotton, acquired through slave labor, plantations (which require shoving small farmers off the land), and so on?

What would have happened if we didn’t conquer, pillage, and enslave so many people? What would have happened if we didn’t deliberately retard their economic development? If we didn’t kill so many of them?

Perhaps they would have been more prosperous. Granted, many tribal societies have little use for money, but as the Hudson’s Bay experience shows, if you provide goods they really want, they’ll go out of their way to get what you want in return. And India, despite vast numbers of peasants, had vast mercantile cities and trade long before the British, Portuguese, and so on, arrived.

The commodities wouldn’t be so cheap, and Britain may not have gained so near a monopoly in early industrial manufacturing, but other societies would have also been richer–which means more purchasing power. Richer people can pay more.

The British still would have had that huge advantage: Coal near the manufacturing areas and near the coast. It’s an island. You can get what you manufacture to the sea easily, and you can use coal because the coal is near the sea too (everything is near the sea in England, from the Continental point of view).

This scenario suggests that England would have still industrialized first, and the Industrial Revolution still happens in Britain. Is it’s pace slower? Faster? I suspect slower at first, faster later. But it is more humane, and it leads to a better world.

If China and India had industrialized at a faster, more organic pace than they did; if they had been dragged along closer behind, standards of living would have risen faster. But standard of living is negatively correlated to the number of children.

A world in which all (or at least most) boats rise together, with England in the lead, but not excessively so, is one with a lot less of a population problem and a lot less of a poverty problem.

It may just be that being complete bastards to virtually everyone was not required for industrialization. It may be that we would have lived in a vastly better world.

It may not, of course, but I think the argument for “Being Assholes Wasn’t Actually Necessary” is pretty strong.

And I think it’s fairly important, because it’s at the heart of the whole “Is other people’s suffering required for some people to live the good life?” question.

(This is part 3 of a semi-series. Read part one on “The Death of Capitalism” part 2 on “What Capitalism is and part 4 on “How The Rational Irrationality of Capitalism Is Destroying the World”.)

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What Is Capitalism?

By Ian Welsh

On January 26, 2016

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The responses to my article The Death of Capitalism made something clear:

Most people don’t know what Capitalism is.

We’ll need two definitions.

Market: An economic arrangement in which price signals direct people’s actions.

Markets are old. There were markets in Sumeria thousands of years ago. Nonetheless, Sumerian society was not Capitalist. Most people were farmers, living on the land. They produced their own housing, their own food, and their own clothes. They bought some goods on the market, sold grain on the market (there was a very active market in loans denominated in grain or silver), but most of their needs were met through non-market methods.

Some people in that society (arguably) had their lives regulated by markets. There were money-lenders, urban inhabitants, merchants and traders, specialists, and so on who used money to buy what they needed. There were other such people who were essentially feudal lackeys; you might be a market scribe working for money, or you might be a palace or temple scribe.

The primary financial markets, by the way, were run out of temples.

But the rule is this: Most people in most agricultural and pre-agricultural societies produced what they needed, generally as part of an extended family, a tribe or some other arrangement. Sumeria was more mercantile than most agricultural societies.

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Capitalism: An economic system in which people are directed towards particular actions by price signals from markets AND in which they obtain the necessities (and luxuries) of life from markets.

You may measure HOW capitalist a society is by how many people cannot create their own necessities as part of a relatively small group.

Now, let us return to markets. A market says:

Do more of what makes more money
Do less of what makes less money
Stop doing that which is losing money

This is an oversimplification, but it’s less of an oversimplification than it seems. Take Amazon, for example: Amazon did not make a profit for many years. However, the decision makers at Amazon (Bezos, senior exectives, etc.) made plenty of money from Amazon.

What matters is not whether fictional entities are making money, or even if all human beings are making money, but whether decision makers are making money.

Prices are not set solely by markets, they never have been and they never will be. Governments lean on prices through direct and indirect subsidies, taxes, and so on. Roads are a subsidy for trucking, auto-manufacturing and a host of other businesses, for example. The US interstate highway system was the death-knell for the hugely powerful railroads that preceded it.

This is true despite the FACT that, if you include all costs, shipping people and (especially) freight by rail is cheaper. The final price, as it effects the individual decision makers responsible for those individual, economic decisions, is what matters.

Markets are a way of telling people what to do and what not to do and how much of either.

The more money a person makes doing something, the more they try to do of that something (including hiring workers to do it for them).

If a decision maker’s profits are not aligned with social utility, well then, capitalism does not produce results with social utility. Bankers make a lot of money. Their businesses lost so much money the entire world economy could barely contain the damage and trillions of dollars were required to bail them out. So why do bankers keep doing what they were doing? Because they are still, personally, making money.

So what if a few brokerages and banks went out of business? Their executives are still rich.

Capitalism is dis-empowering. Serfs and peasants, for all we sneer at them, could support themselves, because they had access to the land they needed to do so. They spun their own clothes. They raised their own houses.

Peasants and serfs were better off than the industrial workers who replaced them. There is a reason land clearances had to be done by law and force: The peasants and serfs didn’t want to leave. They weren’t stupid, they weren’t fools–they knew they lived better than the people working six and a half days a week, ten to 12 hours a day, in the new factories amidst cities and towns, choking in their own filth before modern sewage was put in place.

Capitalism forces most people to base their decisions on price (salary, comissions, hourly wage vs. goods they buy) levels. It takes away their ability to support themselves without working for someone else.

Capitalism is the concentration of the means of production in the hands of a few people.

This is why it is called Capitalism. Capital is what allows you to make other things. Land can be capital. Machines that make things, even machines as simple as a spinning wheel, are capital. You add labor to capital and you have products.

(It may be, with the rise of the sophisticated automation we call robots, that capital will be able to make capital soon, with little to no human intervention.)

Capitalism removes productive capacity from most people so they can’t support themselves. It orders the behavior of almost everyone through price signals.

Capitalism is a way of making decisions about what people should do, what products should be created, how they should spend their time and so on.

Because Capitalism is one of two major decision making methods in our society, and has been for the most important societies (starting with Britain) for hundreds of years (in varying forms; there are different types of capitalism), it is fair to judge capitalism by the results produced by those societies, especially the economic results.

Capitalism is NOT synonymous with industrialization, but most industrialization (outside the USSR) occurred under capitalism. Capitalism made the decisions about how to industrialize which were not driven by the internal logic of industrialization itself (too big a topic to go into in this article) or by government.

Capitalism fed back into government, however, because pricing matters. That coal was cheaper than solar for most of history (until about last year) mattered. In theory, we could have overridden that decision and said, “At X times the price is worth it and the sooner we make more the sooner the price will drop,” but in practice we did not.

We went with the flow.

Social choices, including those made by government, modify market signals. But when you live in a Capitalist society, you think first about VALUE as PRICE, even though the two are very different. The price of your life can be determined very accurately by life insurance charts (future expected earnings, discounted).

I doubt you consider the insurance market’s valuation of your life as the actual value of your life. If you do? Congratulations! You have splendidly adapted to the mandates of capitalism and markets.

Having read this far, and considered what you have read, next time someone yammers on about capitalism, you will know what they should be talking about. Because most people don’t know what capitalism is, despite living in it, you will also know, perhaps, what they are not talking about.

Capitalism uses markets as the main method to determine human economic behaviour and removes humans’ ability to support themselves without engaging in the market.

Note the second characteristic listed: Removing humans’ independent means of support. In many cases, this had to be done by force. In others, it was done through blandishments. In both cases, the end result was a reduction in effective power for individuals who do not CONTROL capital–who are not capitalists (ownership is not always control).

To a remarkable extent, people are Skinnerian behavioural machines. Markets are one of the main methods used to condition people, to create their personality, to create them.

To control them.

To control you.

Under Capitalism, virtually everyone is subject to that control and conditioning, on penalty of living a miserable life, or, indeed, of death.

(This is part 2 of a semi-series. Read part one on “The Death of Capitalism” and part 3 on “Did the Industrial Revolution Require Clearances, Genocide and Imperialism.” and part 4 “How The Rational Irrationality of Capitalism Is Destroying the World”.)

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