July 18, 2011

The Eminently Real Free Market (XVII): Sketchy Stories (6): If I Had a Hammer: Hayek on Tool-Ownership

Before turning to Hayek, we urge upon our visitors a paper that highlights aspects of the enclosure movement that the pro-life “angle” of our post of yesterday’s date crowded out.
That 2007 paper, “Chesterton and Belloc: A Critique,” was jointly authored by Marcus Epstein, Walter Block, and Thomas Woods. Tom linked to it today on his blog where, once again, he generously linked to three posts on ours. We cannot recommend that paper too highly, as it not only complements but supplements what we have attempted here on this question. It belongs on any reading list preparatory of our eventual examination of Distributism.
Because Mr. Ferrara has bound himself to Hilaire Belloc’s century-old historiography, he cannot countenance research that puts the origin of the enclosure movement in England (a) a full century earlier (and therefore before the Industrial Revolution that allegedly evacuated the fields and pauperized their former proprietors) and (b) in a common law context of private agreements predating the statist parliamentarian process that popular writers traditionally focused on. And so, the authors of that paper write:
J. R. Wordie [in a 1983 paper published in a peer reviewed journal] has concluded that by 1760 some 75 percent of English land was already enclosed and that contrary to the earlier [but superceded scholarly] consensus [which Mr. Ferrara & Co. presuppose to be true], it was not during the eighteenth century but during the seventeenth that “England swung over from being mainly an open-field country to being a mainly enclosed one.” Thus, the bulk of enclosure had long since been accomplished by the time Belloc and other distributists seem to have thought it was busy creating the industrial proletariat. Moreover, the tenants themselves often initiated the enclosure, again contrary to the impression Belloc left, and even parliamentary enclosure operated on the basis of consensus.
We close this preface to Hayek’s contribution with a quote from Tom’s post (entitled, "Propaganda, Meet Modern Research"):
The enclosure movement was in fact not a single movement and was in some cases not a “capitalist” phenomenon at all, so it’s not clear what Ferrara would have proven by citing it even if he had gotten the history right. But, as usually happens when you ignore the past 50 years of scholarship, he got it dreadfully wrong. (I guess those PhD’s who blurbed the book hadn’t read much about this, either.)
Now, about the “propertyless paupers” of Mr. Ferrara’s solicitude, Hayek wrote in his own contribution to the previously cited volume:
Discussions of the effects of the rise of modern industry on the working classes refer almost always to the conditions in England in the first half of the nineteenth century; yet the great change to which they refer had commenced much earlier and by then had quite a long history and had spread far beyond England. The freedom of economic activity which in England had provide so favorable to the rapid growth of wealth was probably in the first instance an almost accidental by-product of the limitations which the revolution of the seventeenth century had placed on the powers of government; and only after its beneficial effects had come to be widely noticed did the economists later undertake to explain the connection and to argue for the removal of the remaining barriers to commercial freedom. “History and Politics,” F. A. Hayek, ed., Capitalism and the Historians, The University of Chicago Press, 1954, p. 14. (Available through Amazon or the Mises Bookstore.)
Self-interested lords may have intended only to assert their own interests against the monarch, but they unleashed a wave of "beneficial effects" that many beyond them enjoyed. The prescient among them, including some economists, thought it would be good to "roll out" the idea of limited government even further. But Mr. Ferrara's emphasis on tool-ownership--"the few . . . in possession of the means of production”--is a Distributist “tell” that merits a comment (in advance of a fuller examination later).
We know there are environmentalists who prefer fewer human beings enduring a subsistence-level (but environmentally “sustainable”) standard of living to more people enjoying better and longer lives at the “expense” of nature. Can it be that Distributists prefer numerically fewer serfs who at least owned their own tools, to many factory workers, if they had to choose between these two scenarios?
But what about those tools? Hayek again:
The actual history of the connection between capitalism and the rise of the proletariat is almost the opposite of that which these theories of the expropriation of the masses suggest. The truth is that, for the greater part of history, for most men the possession of the tools for their work was an essential condition for survival or at least for being able to rear a family. The number of those who could maintain themselves by working for others, although they did not themselves possess the necessary equipment, was limited to a small proportion of the population. The amount of arable land and of tools handed down from one generation to the next limited the total number who could survive. To be left without them meant in most instances death by starvation or at least the impossibility of procreation.
In short, there is an intimate connection between human economic productivity and human biological “reproductivity,” and one is a function of another. Hayek continues:
There was little incentive and little possibility for one generation to accumulate the additional tools which would have made possible the survival of a large number of the next, so long as the advantage of employing additional hands was limited mainly to the instances where the division of the tasks increased the efficiency of the work of the owner of the tools. It was only when the larger gains from the employment of machinery provided both the means and the opportunity for their investment that what in the past had been a recurring surplus of population doomed to early death was in an increasing measure given the possibility of survival.
It is hard not to hear in Hayek’s reference to “a recurring surplus of population” an implicit answer to Scrooge’s unwanted Christmas Eve visitor who informed the miser that many poor men “would rather die” than avail themselves of whatever assistance could be gotten from the “prisons” and the “workshops.” Scrooge coldly rebuffs him with “If they would rather die, they'd better do it, and decrease the surplus population.” Ironically, what members of Scrooge’s class had been doing for the past century, whether they intended to or not, whether their moral character mirrored or diverged from Scrooge’s, was effectively ensuring that great numbers of human beings, once deemed “surplus,” would no longer be “doomed to an early death.” Hayek elaborates upon the pro-life import of this development:
Numbers which had been practically stationary for many centuries began to increase rapidly. The proletariat which capitalism can be said to have “created” was thus not a proportion of the population which would have existed without it and which it had degraded to a lower level; it was an additional population which was enabled to grow up by the new opportunities for employment which capitalism provided.
An historical movement that enhanced human fruitfulness, enabling a heretofore doomed “surplus” of human beings to “grow up,” may be called “Satanic” only in propaganda that trades on the ignorance of its target audience.
In so far as it is true that the growth of capital made the appearance of the proletariat possible, it was in the sense that it raised the productivity of labor so that much larger number of those who had not been equipped by their parents with the necessary tools were enabled to maintain themselves by their labor alone; but the capital had to be supplied first before those were enabled to survive who afterward claimed as a right a share in its ownership. Although it was certainly not from charitable motives, it still was the first time in history that one group of people found it in their interest to use their earnings on a large scale to provide new instruments of production to be operated by those who without them could not have produced their own sustenance.
But everyone knows that capitalism is nothing but the concentration of wealth in the hand of a few to the detriment of the many . . . or so goes the Marxist-Distributist fractured fairytale. That’s their story, and they’re sticking to it.
To Be Continued