Sunday, January 19, 2014

Capitalism Kills Its Own Market

Monopoly of Production, Distribution and Transport Increases the Subjection of the Many to the Will of an Exploiting Few, So That Economic Freedom Bids Fair to Become Only a Memory.

THE GROWING monopoly of production of goods, and of their transport and distribution through retail trades, is familiar to all of us. We have already seen how unrestricted competition, followed by mergers, puts these affairs into fewer and fewer hands.

Consider the social effects of this: (1) It makes the total goods available arbitrary in amount, that amount being dependent upon the interest or calculations of a few controllers. Suppose an extreme case which has no actual existence, but illustrates the principle. Suppose one man in a community of 1,000,000 men controlled all the land and all the capital: that is, the machinery and the reserves of seed, food, clothing, housing, etc.

It might not be to his advantage or caprice to set men to work save for satisfying his own needs. He could not set them all to work, or even most of them to work, to his advantage, though he might do so out of a desire for the public good. But, it may be said, he would want to sell the goods which he ordered to be produced. Whom would he sell them to? He might try to sell the goods which he ordered to be produced. Whom would he sell them to? He might try to sell them abroad, with increasing difficulty, because nations are more and more keeping out foreign goods. 

Of course, I say again, this is only an imaginary condition. But the smaller the number of people who control production, the nearer you get in reality to this state of things.

(2) Under industrial capitalism, that is under a state of affairs in which a few people control the system of production, and distribution and exchange, and the great mass of people are dependent on them, it pays the controllers to give the great mass of people as small purchasing power as possible. For under capitalism, production, transport, etc., go on for profit. The difference between values produced and the wage cost of producing them is their profit, and the smaller the wage-cost the greater the profit. In other words, “Capitalism kills its own market.” 

Those are the two principal material disadvantages of capitalism as we now have it. They are translated, in the actual world, into the terms “Unemployment” and “Insufficient purchasing power.” So long as control is in few hands—these evils must grow larger and larger. 

But the spiritual disadvantages of control by few and yet fewer men, over the process of production, transport and the reset, are even worse than the material disadvantages.

These spiritual disadvantages take three main forms. First, there is the loss of choice: the individual cannot exercise his free will in taking up this and that which he likes and rejecting this and that which he does not like. More and more, demand does not call forth supply, but supply imposes itself on demand.

There is increasing loss of freedom in selection, and to such lack of freedom man is more and more constrained.

And the second spiritual disadvantage is the counterpart of this: an increasing uniformity in the pattern of existence. It has been well said that “multiplicity is life.” When men are getting the same sort of things turned out in the same way and on the same model by the hundred million, life loses its zest. Complete uniformity is death.

The third spiritual misfortune is this: That the mass of men fall under the will of a few. They not only fall under the will of a few controllers—called “employers” or “officials”—upon whom their wages, and therefore their very existence depends but, conversely, their own wills are gradually atrophied. That is the worst evil of all: the activity of the will is essential to the dignity of man. It is normal to man, and the rejection of it beyond a certain degree of increasingly harmful to man.

Here we ought to distinguish between two things which are often muddled together: voluntary subjection and enforced subjection. Any man choosing a profession surrenders his will in part to the rules of the profession. The sailor and the soldier do it more than the civilian; those in the religious life do it most of all. But if they make that surrender of their own free will, that free will remains intact. It is otherwise when they are compelled to monotony and to dependence upon the will of others.

Now, there is a last evil connected with the growing diminution in the numbers of those who control and the growing increase in the numbers of those who are dependent. That evil is perhaps the worst of all. It is the evil of bad habit. 

When any bad process begins there is, in its first stages, a memory, a tradition, of better things. The old and better state of affairs still possesses what physical science calls “acquired momentum.” So it is with freedom when monopoly of control is growing up. All the older people can remember real competition and a fairly good division of property. The younger people may not remember it, but they hear what their elders remember, and are still sufficiently in touch with the past to have about them the atmosphere of economic freedom, though they have lost the reality of it. 

A human generation is short. When it has lost what it once knew, habit turns the new conditions into matters of course till the new conditions come to seem almost part of the universe. At last it becomes impossible for men to imagine what the older and better state of affairs was like.

Now this habit in any evil, but especially the habit of dependence, is what makes evil permanent; and as things are now going there is a rapidly increasing danger that this condition of dependence upon a few, and of accepting monopoly control over our lives, will become second nature. It we allow that to happen by allowing the gradual decay of individual property and freedom to continue unchecked, it will be impossible to return. That is the real danger when we pass the point after which reform becomes practically impossible because the mind cannot possibly conceive it.

Here in England, where I write, we have had within my own lifetime a striking example of this. When I was young there was a strong movement still in existence for turning leaseholds into permanent property. The object was to transform men who paid rent into men who owned their own houses and farms. Today the ideas has almost disappeared. You get increasing numbers who are supposed to own their houses, but who, as a fact, are paying tribute on loans. Their houses and land are not owned by themselves but by credit societies, and the vast majority, who do not even nominally own their houses, no longer make an effort to do so, nor ask, for a reform of the law which would permit them to do so.

That is only one example. This effect of habit is to be seen on every side, and if we do not bring about a reform in time, the second generation after our own will have forgotten what economic freedom is.

~Hilaire Belloc: In Social Justice, May 9, 1938.

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