After þe Steampower Economy...

A transcript of a clip from Ilari Mäkelä's "On Humans" podcast...

Ilari Mäkelä: On Humans

Discussions on the science & philosophy of what it means to be human

<https://on-humans.podcastpage.io/>

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2023-05-31 Season Highlights ~ Did Marxism Become Outdated in 1870? (with Brad DeLong): <https://on-humans.podcastpage.io/episode/season-highlights-did-marxism-become-outdated-in-1870-with-brad-delong>

2023-03-12 Human Condition in the Long 20th Century; Or How Economics Changed Everything ~ Brad DeLong: <https://on-humans.podcastpage.io/episode/18-human-condition-in-the-long-20th-century-or-how-economics-changed-everything-brad-delong>

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ILARI: INTRODUCTION: DeLong is the author of Slouching Towards Utopia, The Economic History of The Long 20th Century <bit.ly/3pP3Krk>. The book contains a lot of interesting things, but our discussion focused on DeLong’s claim that 1870 was a kind of watershed moment for humanity at large – a moment when the modern corporation and industrial research lab made the invention of new technologies something of a standardized, routinized part of everyday life. 

It was something that, DeLong claims, allowed lonely geniuses like Nikola Tesla to have a team around him for the first time – a team which would ensure that his lack of managerial and social skills would not be a hindrance to technological invention. Tesla would invent. George Westinghouse and the rest would execute, produce, and distribute. Humans had invented inventing. And with this, the world started its long escape from poverty – first in the West, then in the rest of the world. 

Now this is all very fascinating, but there was a particularly interesting moment in the discussion where DeLong argues that this really became a problem for Marxism, because Marxism was explicitly based on the economic model of early 18-hundreds, the steam power economy. 

But before jumping straight into the issues with Marxism, we start by discussing DeLong’s claim that there was a lot of truth in Marx’s and Engels’ thoughts and that in order to be rich before 1870, one pretty much had to run an “extraction and exploitation and machine.” 

So here is one more time, Brad DeLong:

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 ILARI: I've heard you say that before 1870s, most people didn't get rich, and if you did want to be rich, the only way to do it was to run an extraction and exploitation machine. Why?

BRAD: Well, how else? Maybe if you have a better idea for a water pump, you can build one for yourself, but if it really is that much better of a water pump, other people will look at it and will immediately copy it. And so you won't be able to sell your services as a maker of water pumps for very much. And in addition, if you do start a very profitable commercial industrial enterprise, wheeling some kind of trade secrets for, you know, how to make textiles actually better than anyone else in the neighbourhood, well you then become a very soft target in a world in which your property rights are very entangled with jurisdiction in the sense that the rich are usually the judges as well.

ILARI: So when Marx claims in the mid-18-hundreds that capitalism is an extraction and exploitation machine, he is kind of right about the capitalism of the time?

BRAD: Yes. You know, I mean, property is theft. When Proudhon said it was very close to being true. How would any individual actually manage to get rich without having their hooks into what is basically a force and fraud, exploitation and domination regime? A regime in which thugs with spears collect taxes from the peasants and in return offer nothing useful except possibly protection from the next group of thugs with spears miles away; and in which the thugs with spears have their accountants and propagandists there to explain that this is how much you owe them. 

And, you know, you could of course get rich through mercantile adventures, but those always had a quasi-military edge. You know, at the very least, you need caravan guards and lots of, and nasty caravan guards because they move from place to place carrying valuable goods in an environment of very uncertain law and order and next to no law enforcement. And you know, it very much has to be the case that every one of their caravans is sufficiently well armoured that no local bandit or even no local landlord, or no local prince will think it worthwhile to simply take it, kill them all, and pretend he doesn't know what happened to them

ILARI: And people like Westinghouse are able to not run an exploitation extraction machine, but get rich by investing in inventions that will help everyone. Is that right?

BRAD: Yes. 

ILARI: I do appreciate the picture as I find it frustrating when people just use the term capitalism to describe everything that has happened in the, in the money world for the past, whatever, is it 300, 500 or years or something, and assume that what British East India company is doing with guns must be the same thing as what modern capitalism is always about. 

BRAD: Yeah. And it is puzzling. For Friedrich Engels, it was pretty clear that you had feudalism and then you moved over the course of 700 years or so to capitalism and, you know, feudalism taught hierarchy and respect God and to stay in your place and your life is very much like of your grandparents. And you know, you have obligations to those who everyone else and some of them of obligations to you. And society is static. And then, Engels said, by 1700, we moved to better technologies, craft and mercantile technologies, and a commercial society. Now, you were probably a free person and you had to find a place in a network economy and find someone to buy things from and someone to sell things to – usually to sell your labour to. And you were an individual with rights who entered into contracts with others and was formally free. And so you should probably have some say in the government as well. But the market prices at which someone from the lower classes could trade were not very advantageous and they stayed poor. And the system told you it was your fault because you weren't sufficiently industrious. But actually, Engels says, that's not the case. That commercial society was an extraction machine just like feudalism, but one where the extraction was kind of hidden behind the fiction that we were just trading things. 

Then Engel said, here we are now moving into steam power and it's obvious that production is social. You know that we're all playing an essential role in something much, much bigger than ourselves, which is our collective knowledge and our collective organization. And you deserve to own what is produced since none of us individuals are essential at all for any piece of it. And so since we're all humans together, since we all have this incredibly complicated division of labour, since only the division of labour itself is valuable, well, we should all dress in identical blue denim overalls, call each other comrades, and share things equally. And we should have a free society of associated producers where we rotate through the administrative jobs, because, after all, capitalism has simplified the administrative jobs so much that all you have to do to them is know how to add, subtract, multiply, divide, and issue receipts. 

And that was what Engel said would be the shift from feudalism to capitalism to socialism – that it would be the form of the technology of the steam power age that would teach people that socialism was the obvious thing to do, just as it was the network commercial trading economy of the capitalist age that had taught people that, you know, market economies and private property were the things to do.

The problem is it didn't stop with steam power. You know, the extremely large working industrial working class all doing very similar jobs side by side because you have to work near the steam engine. Instead, society dissolved during the second industrial revolution into a much more fragmented and diverse one, in which different industrial interests were fighting over the surplus against each other, rather than it being that everyone was a worker subject to the steam engine of a capitalist.

ILARI: And was it more diversified partially because of Tesla and electricity allowing the transfer of power more locally? 

BRAD: Yes. With the coming of these new technologies, with the coming of the oil age, of the electricity age, of the chemicals age, all of a sudden it was no longer as obvious to people that they were just one worker among many. They might be skilled workers who were in this particular industry. And so it became possible to think it was not their bosses in control who were disadvantaging them, but rather that their sector did not get sufficient respect, or had had a tariff adversely imposed on it. But then from the second industrial revolution economy, we moved on to the mass production economy, which is a different thing too, but which underpinned a great deal of the rise of social democracy.

But then the mass production economy was succeeded by the global value chain economy, and now it looks like we're headed into the info-biotech economy. And each of these really is a different mode of production. And each is a mode of production that teaches people different things about how society should and ought to work. And calling them all capitalism and saying, we really all should be wearing identical blue overalls and sharing things equally and recognizing our common humanity as cogs in the production process – you know, the lessons that Engels said, steam Power Society was teaching and was rightly saying so – causes a great deal of confusion.

They tried to solve it yet people tried to solve it by talking about late capitalism. Right. The problem is people started talking about late capitalism in 1905. And by now we're what, still later, late, post, late-late capitalism...