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The ethics of capitalism

     The ethic of capitalist hedonism, its origin and rise to dominance 
                 
Satisfaction of wants: utilitarianism and neo-classical economics 
                      The capacity to satisfy wants
                      From the satisfaction to the manufacture of wants- the movement to capitalist hedonism
                           Advertising – the liberal entrée  
                          
 Analysis and recapitulation of the implications of capitalist hedonism
                      Endnote 

        Social Darwinism, neo-classical economics and natural rights - a note

                         
        Footnotes               

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  The ethic of capitalist hedonism, its origin and rise to dominance (2006)

Synopsis

Hedonism is the ethic in which pleasure is the chief virtue. Capitalist hedonism reflects the dependence of capitalism upon that ethic in order to generate the mass demand essential for its operation and survival.

The essay traces the history of the present dominance of the ethic – from the nineteenth century ethic of satisfaction of wants which derived from utilitarianism and neo-classical economics. Utilitarianism taught that the maximum satisfaction of wants accorded with social utility and could best be achieved in a free market. Neo-classical economics reinforced utilitarianism by holding that ‘value’ did not exist independently of the market and was equivalent to its price in that market.

These propositions were urged at a time when, through industrialisation and mass production, there was an increasing capacity to satisfy wants. The industrial system  depended upon expanding demand. Henry Ford explained the relationship between mass production and mass consumption: “ [ Mass production] starts with the conception of a public need for a commodity even though the public may not be fully aware of the need. The experience of the Ford Company has been that mass production precedes mass consumption and even creates it.”

 Consumer credit and advertising were seen as the two ways of guaranteeing demand.

Mass advertising became possible with the rise of the mass media which originated in the new literacy of the working classes and through its association with advertising. Both the media and advertising depended upon each other : the former upon advertising  revenue and the latter on  access to the wider public through which it could stimulate demand.

Advertising went beyond information as to the availability of goods and services to the establishing of a consumer culture which would result in a demand where none previously had existed. In this it relied upon the attitude of consumer hedonism in material goods.

As Benjamin Barber explained in relation to Coca Cola, “ the one reason you must not consume soft drink is to quench your thirst. Water could do that.” Rather you must drink it “ because it makes you feel young, sexy, important, ‘in’ etc.”

The essay elaborates upon this and the consequences of the ethic of consumerism. 

     
Introduction

Capitalist hedonism is an ethic with two components. First, it approves wants and their satisfaction in a free market: the value of these wants is their market value and, other than that, there is no discrimination between them. Secondly, it is an ethic in which the creation, stimulation and multiplication of wants is approved and the productive system is geared to those ends.

It is this latter aspect which is critical to modern capitalist hedonism.  Historically, this second element came later and is more or less identifiable with the twentieth and present century. It is convenient to break up the consideration of the two components and deal first with the satisfaction of wants.

Satisfaction of wants, utilitarianism and neo-classical economics

The ethic of the satisfaction of wants is associated historically and in substance with utilitarianism or, more precisely, a combination of utilitarianism and neo-classical economics.

Bentham, the father of utilitarianism, held human beings to be essentially self-interested. In this he was going back to the psychological egoism of Hobbes.  “Nature”, he maintained, “had placed us under two masters, pleasure and pain.”*  Pleasure is desirable for its own sake and the pleasures of two or more people are equally good: ‘each of us is to count for one and none for more than one’.

Utilitarianism, at least in its original Benthamite form, made no attempt to distinguish between the quality of pleasures. Accordingly, all wants as reflections of desired pleasures were important and all wants were equal.*

Utilitarianism is not an ethic of conduct. It is an ethic of consequences. Conduct is only good or bad causally and incidentally. It is not good or bad in itself. Only consequences are good or bad depending upon the extent to which they maximise pleasure or otherwise. It is because utilitarianism is concerned only with consequences that it is able to avoid any attempt to define any ultimate criterion of universal rightness or wrongness.

All of this points to the conclusion that the maximum satisfaction of wants accorded with social utility, the highest good.

But how was maximization to be achieved?

It was the economists, classical and neo-classical, who resolved this difficulty. In effect, what Adam Smith said was that, given the appropriate framework of law and order, such that contracts are enforced and property respected, maximum economic satisfaction would be obtained by the freedom of individuals to promote their own self-interested economic activity. As producers and owners of the means of production they should be free to use their property in what seemed to them the most appropriate way to maximise their reward. The interests of individuals would be harmonised by the impersonal mechanism of the market. In this way the classical economists had shown that freedom of contract accorded with social utility.

In the reverse direction utilitarianism influenced economics in supporting the proposition that wants had no intrinsic value. Jevons and the neo-classical economists accepted the importance of the market but took it one step further. For them, the value of anything only exists insofar as it has been exchanged in the market. Value was the ratio of exchange. In this respect Jevons differed from the classical economists Smith, Ricardo and Mill who thought value was intrinsic to a thing and represented the labour incorporated into it.

Detached from utilitarianism, the maximum satisfaction of demand through the free operation of the market, as advanced by the neo-classical economists, was simply a value free economic method. But when linked to utilitarianism it became the means to attain the goal of social utility, the greatest happiness of the greatest number.

Utilitarianism had thus ‘ethicalised’ neo-classical economics. To interfere with the operation of such a system was not merely economically unwise but morally wrong.

This link between utilitarianism and neo-classical economics is not mere conjecture. In the opening sentences of his work, The Theory of Political Economy, Jevons wrote that “ the theory which follows is entirely based on the calculation of pleasure and pain, as it were at the lowest cost of pain…Jeremy Bentham put forward this utilitarian theory in the most uncompromising manner…”

Accordingly, it was in this way that the maximum satisfaction of wants in the market place became accepted as the highest social good.

Such an ethic is not in itself the ethic of capitalist hedonism but it is the essential foundation for it.

In summary the essential elements of the ethic were:

(a) Wants are good.  To want is a natural expression of mankind’s desire for pleasure. Abstinence, as contemplated by Saint Francis of Assisi or the Mahatma Ghandi, is unnatural and harmful;

(b) Wants do not differ intrinsically in value as to the thing wanted. As Bentham said, “ pushpin is as good as poetry”. Accordingly, the ethic only rarely excludes any particular want from the potential range of those justifiably capable of satisfaction;

(c) The want of each individual is equal to the want of every other.  “Economic theory has long insisted on the homogeneity and insatiability of wants. There is no proof that an expensive woman obtains the same satisfaction from yet another gown as a hungry man from a hamburger. But there is no proof that she does not. Since it cannot be proven that she does not, her desire, it is held must be accorded equal standing with that of the poor man for meat. Doctoral aspirants in economics will risk failure if they assert otherwise.”*;

(d) Social utility, the greatest happiness of the greatest number, is produced by the maximum satisfaction of wants. It was Bentham who enlarged mere personal hedonism as an ethic into social utility. There was, he believed, no rational ground for preferring the happiness of any one individual, even oneself, to that of any other. Hence, the greatest happiness of the greatest number was the sole object of conduct;

(e) Maximum satisfaction of wants is achieved through a free market in goods and services so that each producer, seller and consumer pursuing his or her own wants without external impediment, will produce the maximum satisfaction of wants;

(f) It follows, so it is argued, that the free market is the only means of achieving social utility and that wants have value only by virtue of their market value: that is, their monetary equivalent reflected in the market price where the market is free. Wants not reflected in the market have no value or at least are without ethical significance as being unrelated to the sum of human happiness;

The capacity to satisfy wants

The ethic of the utilitarians and economists described above coincided with changed material conditions ushered into Europe by the industrial revolution. Modes of production and attitudes towards consumption interact so that any change in the one will be reflected in the other. The ethic of satisfaction of wants paralleled an increased capacity to satisfy them.  And so an ethic that the maximum satisfaction of wants equated with social utility, the highest good, and that this could only be achieved through a free market, harmonised with the remarkably enlarged capacity to satisfy wants following the expansion of world trade and the industrialization.

This uniquely enlarged capacity to satisfy wants took place at the same time as utilitarianism evolved with the important neo-classical economic gloss placed upon it.  Satisfaction of wants became generally if not universally encouraged and accepted. It was a popular ethic. It affirmatively approved the gratification of human desires provided they were expressed in the market-place. And it did this at a time when the expanding middle class was able to enjoy this in a way never previously possible.

This is not to disparage, without acknowledging its benefits, an ethic which so emphatically approved economic production expanding the satisfaction of human wants.  It meant in time that millions were to escape poverty and its crippling limitations.  It meant freedom of movement and capacity to travel.  Medical science gave human beings a degree of health and longevity which they had never before experienced or even dreamt of.  There was thus a new capacity to satisfy genuine, long-held human wants.

From the satisfaction of wants to the manufacture of wants – the movement to capitalist hedonism

Late nineteenth century capitalism proceeded from an ethic of the satisfaction of wants to one which affirmed the maximising of wants to be satisfied.  The essential feature of  contemporary consumerism is that the multiplication of wants is not merely economically desirable but morally acceptable. With this there continued the 19th century neo-classical proposition that the value of a want was to be determined exclusively by its price in the market. 

In the survey of technological change in the endnote the advent of the motor car is described. What emerged from the automobile industry as each car ‘rolled’ off the assembly line was a new method of organizing industrial production—‘mass production’. Henry Ford who wrote the first article for the Encyclopaedia Britannica on this topic said, “to the motor industry is given the credit of bringing mass production to experimental success and, by general consent, the Ford Motor Company is regarded as having pioneered the movement.”

Mass production involves many elements that had become part of production since factories and industrialisation had been introduced. It was their ‘packaging’ which made the system a new phenomenon. “The essential features of mass production (1) manufacture of standardised commodities; (2) long production runs; (3) continuous plant operation; (4) use of specialised production and material-handling equipment; (5) plant arrangements minimising material handling and based on the particular sequence of operations required for the production of the standardised product; (6) division of labour to the point where most production workers perform short and simplified operation sequences repetitively; (7) systematic planning, direction and control of manufacturing operations.

When these characteristics are present, output per time period and per worker are both high compared with output rates obtained by small-lot, custom production in plants having non-sequential layout and little specialization and jobs and equipment”*

As the author of the article on mass production in the 1958 edition of the Britannica wrote, “Clearly mass production implies mass consumption. Urbanisation, widening of educational opportunity, reduction in inequalities in income .. induce homogeneity of tastes and patterns of consumption both impel production for a mass market and are impelled by it.”*

So far we are still in the world of the satisfaction of wants. But Henry Ford’s comment points in a new direction. “It (mass production) starts with the conception of a public need of a commodity, even though the public may not be fully aware of the need. The experience of the Ford company has been that mass production precedes mass consumption and even creates it”.[italics added]

It was evident to producers guided by the profit motive that profits depended upon the demand for goods and services and that the severest constraint upon demand was shortage of cash – purchasing power, together with the ethical importance placed upon thrift which was still in the 19th and even well into the 20th centuries, a survival of the protestant ethic.*  These obstacles were overcome.*  Consumer credit – the financing of the consumer by instalment purchasing began in the mid-nineteenth century. Through it purchasing power was increased without being accompanied by any significant increase in the cost of production. The Singer company became the pioneer in the 1860’s of hire purchase trading. The sewing machine had certain merits for hire purchase. It was an asset with a long life and thus could provide effective security. It was also directly productive, giving a tangible income to the hirer whilst the instalments were being paid off. Traders in pianos, furniture and household equipment followed Singer.*

Advertising – the liberal entrée

Advertising was instrumental in the movement from satisfaction to the creation of wants.

Advertising was justified – and the justification continues to be claimed to this day – that only through advertising is consumer sovereignty effectively vindicated. Advertising provides information about products and their characteristics which enable consumers to make rational choices among competing goods.

Neo-classical economics depended crucially upon the assumption that consumers wants will be signalled accurately to sellers. That could only come about if consumers knew the nature and availability of products. Utility was the reason for human wants. It was therefore necessary that each prospective consumer could judge accurately the use that would be derived from the purchase of the product.

All of these considerations assumed a knowledgeable and rational buyer carefully calculating the utility of the product in question. Advertising thus had a respectable ancestry. It ensured that the rational man/woman of Millian utilitarianism would be adequately informed. Some neo-classical economists, such as Alfred Marshall, recognized that advertising might go beyond drawing the consumer’s attention to opportunities for buying.  The general equanimity about this was based on the doctrine of marginal utility and the natural limits to wants which that doctrine involved. It was supposed that the reason for wants was use – utility and only utility – and that no utility had any preference to another. But if this were so and utility was the only reason for wanting, demand for a product would diminish progressively with each purchase of it until the anticipated use was fully met and at that point demand would cease. One car for a small family may be necessary, a second convenient, a third , in point of utility, superfluous. In the light of this theory the want for cars would then cease.

The truth is that wants for goods and services are not confined to utility.  Thorsten Veblen was the first economist, or among the first, to maintain that the theory of marginal utility was fallacious. If the consumer could by purchasing an additional product, especially one of apparently superior quality, acquire a certain status through its conspicuous display, the potential demand would become extremely elastic. The more one has the more one wants and the greater the satisfaction obtained by getting it. Moving ahead in time from Veblen one might instance the yuppies of England and America and les golden boys of France as observable examples of this phenomenon.

Conspicuous consumption only exemplifies the fact is that wants are socially and culturally conditioned and are not confined to utility, at least in the strict sense. Adam Smith perceived this and defined “necessaries” as “not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the poorest order to be without.” He pointed out that the Greeks and Romans lacked linen shirts but “in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, nobody can well fall into without extreme bad conduct.”*

What advertising did was recognize this. It sought to manufacture wants by re-directing those social values and social attitudes which conditioned wants. A want must be created to have that ‘third car’. To do this meant harnessing ordinary human greed, envy and desire for status but more than that it involved a society in which more cars – and expensive cars – conferred status. It was the function of advertising to produce this. That is, it was the function of advertising to confirm the linkage between status and the acquisition of material goods. Its object was to transform social values so that acquisition and not thrift should be respected.  Even altruism needed to be commercialised.*

A want might arise naturally through an instinctive need such as hunger, thirst or sex. These are so generalised that ordinarily they can only form a specific want if activated by some external stimuli or from pre-existing habit. Such external stimuli might be naturally occurring as when, on a hot day, we see somebody with a glass of cool water or enjoying an ice-cream. Naturally occurring stimuli are however too limited, random and unpredictable to form the foundation for demand in a capitalist economy. It became the first object of mass advertising to create artificial stimuli and thereby generate specific wants for a product or service. In doing so advertising would often draw upon generalised human needs such as hunger and thirst but even more upon basic emotions such as sex, greed and envy. In this it was aided by the human tendency first noted by Rousseau for human needs to multiply with the generation of our wants.

In this context, Benjamin Barber has described the contrast between wants for soft drink and water. (The example is particularly apposite because Coca Cola was one of the first international corporations to engage in demand creation.)

“Now thirst cannot be manufactured but taste can. The world’s thirsty can drink water …. If they drink beverages that earn someone else an income, consumption has to be associated with new ‘needs’, new tastes, new status. You must drink because it makes you feel (your choice): young, sexy, important, ‘in’, strong, sporty, smart, with-it, cool, hot (as in cool), athletic, right on, part of the world as in we-are-the-world as in we-Americans-are-the-world; in sum, like a winner, like a hero, like a champion, like an American, which is to say, above all, fun-loving … The one reason you must not consume soft drink is to quench your thirst. Water would accomplish that….”*

One difficulty faced advertising from the outset.  Although mass production met the needs of a mass market it did involve that goods produced by competing firms were relatively standardised. The market had become “flooded with mass produced goods which were virtually indistinguishable from one another.”*  Advertisers, if they were to be effective, had to make a distinction in favour of their customer. Thus arose the importance of brand or image: “image-based difference had to be manufactured along with the product.”  The utility of the product or differentiation based on use tended to become secondary to its brand association.

Many products to be sold are not intrinsically interesting. Shoes for example. So the message transmitted by advertising becomes less about the products and more about life-styles or, more precisely, about the linkage of the product to an agreeable and socially acceptable life style. One of the earliest of these was the highly successful tobacco advertisement of Marlboro Man living in Marlboro country.*

Advertising thus detached the message from the relatively boring product and focused it on the brand. It is the brand that is sold often by being identified with the agreeable life style mentioned above. Nike illustrates this. In 1972 Nike manufactured sneakers in Oregon with an annual return of 3 million dollars. A market for sneakers only to satisfy the demand of athletes was thought, no doubt rightly, to have natural limits. Direct advertising of sneakers confined to the virtues of the product would not have been able to expand the market for sneakers beyond those limits. What was necessary was to market ‘Nike’, the brand, and associate it with an attractive life style – sport. The Nike image was therefore identified with Michael Jordan the world’s greatest basketballer. Potential demand expanded from those who played the sport to those who watched it. Satisfaction of the needs of walking or running became irrelevant to the message. The brand linked the consumer to the sport and to winning.  As Nike’s Communications Manager explained, ‘we are not a shoe company, we are a sports company’.  What was marketed was the ‘image of sports, victory, sex…’.*  As a result, today 40 % of all shoes sold are athletic shoes. Nike’s world-wide sales are 3 billion dollars.

To achieve its objectives advertising needed access to the masses.  This in turn required the media.  This was so from the inception of advertising.

In England a new generation emerging after the Great Exhibition of 1851 had great curiosity but little education. Compulsory education was introduced in the latter part of the 19th century.  By the 1890’s there were a large number of half-penny morning newspapers. The Daily Mail was the first and most important. By the first world war its circulation had reached a million. “Mr Lipton’s groceries could be marketed only through an advertising medium which reached right out into society down to the poorest sections of the community.”  Advertising and the media thus formed an alliance which lasts to this day. When we speak of advertising we must emphasise that it is mass advertising to which we refer. Mass advertising not only allowed products to be widely known but ensured that social attitudes upon which wants were derived, would be formed.

Advertising and the media are each dependent upon the other. Radio and television are unlike ordinary businesses.  They do not earn profits by producing goods or services for which they are paid by the consumer of those goods and services. Television and radio consumers pay nothing for the programs which they see or to which they listen. Both industries are exclusively dependent upon the advertiser for their revenue (although no doubt the advertiser’s revenue is reflected in the price of goods and services advertised).  Each depends upon the willingness of the advertiser to buy ‘time’ or ‘space’. The advertiser’s interest in any ‘time’ he might buy from, say, a television station has nothing to do with the quality of the program as such but only with the extent to which it will sell the customer’s products.

Programs must therefore have nothing in them which would detract from the desirability of acquiring material goods and services. They must encourage the acquisition of material possessions by emphasising the utility of the product but also the status its possession will give and the similarity of lifestyle to the famous one would thereby enjoy.*

The acceptance of this ethic and its relationship to the acquisition of material possessions was very much influenced by the increasing wealth among the middle class in the western world.  “A twenty-five year boom set in among the industrialised countries after 1945. Highly developed consumer goods, often by-products of war-developed technologies – in energy, in electronics, in transport, in synthetics – added enormously to the range of power-using machines available to the citizen, particularly the automobile … This surge in demand began gobbling up resources and increasing requirements of materials and energy at an unprecedented rate. The economy responded rapidly to these signals. New energy-producing equipment, was installed, materials mobilised, sold, used, junked. World trade doubled each decade.*

Advertising expenditure rose concurrently from 39 billion US in 1950 to 130 billion dollars in 1990 and to 200 billion dollars in 1998. In the process it has become omnipresent, taking a new variety of forms – info-commercials, sponsorship, sport participation, theme parks – seeking to penetrate every aspect of culture.

The multiplication of wants thus agreeably grew with economic prosperity.

Wants, multiplied or otherwise, were not only justified ethically by utilitarianism and neo-classical economics but increasingly by natural rights theory. A consumer’s want was the assertion of his or her ‘right’. Rights had achieved popular recognition. Once the movement for an expanded franchise got underway it became easy for popular feeling to identify the consumer in the market with the citizen in the election place. Both were sovereign. As Galbraith explained, “the economic system places the individual – the consumer – in ultimate command of itself.  This economic theory is associated with a political theory which places the citizen as voter in ultimate authority …”.To interfere with the consumer’s free choice in the market is analogous to restricting the citizen’s sovereignty through limiting his or her vote.

Analysis and recapitulation of the implications of the ethic of capitalist hedonism

Historically, the ethic of capitalist hedonism grew from the older utilitarian ethic of satisfaction of wants. Such an ethic had itself ended the ethical significance once attributed to thrift. Capitalism, originally based on protestant asceticism, had become built upon the very different foundation of neo-classical economics. Max Weber recognized the changed moral and psychological foundations and, in the concluding pages of The Protestant Ethic and the Spirit of Capitalism, written in 1904, made some prescient remarks, foreshadowing the move to capitalist hedonism.*  That ethic and the economic system associated with it, modified by the ideal of social equality, had resulted in the satisfaction of certain basic wants: relief of poverty, basic health and education.   But from an ethic directed to satisfying wants evolved  one in which the wants were to be created. Accordingly, from about the beginning of the twentieth century the productive system, aided by consumer credit and advertising, moved beyond satisfying to creating demand. And the ethic on which it was based departed from utility – in some instances remarkably so.*

An extreme instance is an account of an incident in London in October 2005 and reported by Jonathan Freeland in the Guardian Weekly.*  “ In October (2005) two bankers strode into Umbaba, one of London’s modish watering holes, and asked the bartender to fix them a drink. Not any drink, you understand, but the most expensive cocktail he could concoct. He set to work, blending a Richard Hennessy cognac that sells at 3000 pounds a bottle, Dom Perignon champagne, fresh lemongrass and lychees – all topped off with an extract of yohimbe bark, a West African import said to possess aphrodisiac powers. He called it the Magie Noir – and he charged 333 pounds a glass.  The bankers ordered two rounds for their table of eight. Their final bill for the night 15,000 pounds. Those same men may have invested 200,000 pounds in a Bentley or Aston Martin, or might have paid celebrity hairdresser Nicky Clarke 500 pounds for what the salon calls an ‘aspirational haircut’….. They are the target reader of the newly launched Trader Magazine, with its ads for private jets or five-storey yachts (complete with submarine).”

This is an extreme example but the psychology of departing from utility is recognizeable. The identification of consumption with status in Australia was recently described as follows : “In the more affluent parts of Australia, people are no longer content with a three bedroom house but want one that has five bedrooms, two bathrooms, a double-garage and a granny flat. One small car is no longer enough for some people, who want a large car or a huge four-wheel-drive urban assault vehicle as well as a motor boat for the weekend. Many houses now have two or three TV sets.”*

A characteristic of the utilitarian ethic, which has been retained in capitalist hedonism, is that value is determined solely by monetary demand in the market. It follows from this that the market might reflect a conflict between utility demand and non-utility ‘manufactured’ wants, with the latter prevailing because of its superior monetary power. Global capitalism is indifferent to what is demanded or who makes the demand and it is immaterial that differences in monetary demand derive from inequality of wealth. What is demanded by the wealthy, or relatively wealthy, has more value. Viagra in the first world is to be preferred to medicines for AIDS in the Third.  Freeland, in the Guardian article mentioned above, drew attention to the fact that “.. the story about the 333 pounds cocktails emerged in the same week as Shelter reported that children were being forced to sleep in kitchens, dining rooms and hallways because of cramped housing affecting 500,000 families in England alone …”

A further consequence arises from the limitation of value to the market.  This often means a preference for private wants to collective, public needs. In a famous passage in The Affluent Society, Galbraith wrote: “The family which takes its mauve and cerise, airconditioned, power-braked car out for a tour passes through cities that are badly paved, made hideous by litter, blighted buildings, billboards and posts for wires that should long have been underground.  They picnic on exquisitely packaged food from a portable icebox by a polluted stream and go on to spend the night at a park which is a menace to public health”.

In recent times, a worrying concern with the ethic of multiplication of wants is the increase in the number of those ‘wanting’. The concern is perhaps not so recent, only more widespread. In 1972, Barbara Ward and Renee Dubos, wrote a book ‘Only One Earth’* in which they speculated what would happen once the world population then less than four billion should rise to seven billion and “seek American standards of automobile use and add the emissions of three and a half billion cars to the carbon monoxide in the air”. The planet’s population in 2006 was 6.5 billion.*  Jonathan Watts reported in the Guardian Weekly,* that in April 2005, “the number of cars on Beijing’s streets has more than doubled in the past five years, to 2.6 million and is predicted to rise by a further 40% within the next two years.”

We know today that the earth is approaching its limits in certain resources. In 1985 the world consumed 60 million barrels of oil a day, with a further 10 million in reserve. Now its daily use is close to 85 million barrels with only 1 to 2 billion barrels in extra capacity. Experts differ as to whether oil production will peak in the next few years or the next few decades but it seems clear we are reaching the practical limits of economical drilling.

The emission of carbon dioxide from the use of fossil fuels in the generation of energy is presenting the planet with the possibility of irreversible climate change in the near future.*

All of this points to the view that abandonment of an ethic upon which global capitalism has hitherto been dependent – that of the ever increasing multiplication of human wants– has become imperative. The Delphic Oracle’s ethical injunction “ Nothing in excess” has become urgent, some would say terrifyingly so.

September 2006*

 


Endnote

At the end of the 17th century life in Europe was still rural. Wealth came mainly from the soil. Most tools and implements were made of wood. Transport was by horse and sail. Power still came from man and horse; the windmill and watermill were twelfth century innovations.*  For long, the main food for the majority was corn, rice and maize.*

The great sea voyages of Da Gama, Columbus and Magellan were followed by increased world trade, particularly with the east.*  This was to be enhanced enormously when much later the iron steam-powered steam ship was introduced and even later with the refrigeration of foods and other produce to be carried abroad.

Coal was source of the new form of power – steam. From the 18th century the economies of England, America and Europe became dependent upon it. Mines in England had long been plagued with the infiltration of water, especially those dug deep, like the Cornish tin mines. Pumps worked by horses were largely ineffective. The early attempts at the use of steam power by Newcomen (1712) were only partly successful because of the loss of heat caused by the cooling of the cylinder during the condensation process. It was this difficulty which James Watt solved by the use of a separate container for condensing the steam and keeping the cylinder hot throughout the process.

Industrialization was founded on steam power and thus factories were located near the coal mines. But if the coal mines were the foundation of industrialisation, the cotton industry was its exemplar.

Before the 18th century, cotton was a relatively unimportant textile but in that century it replaced wool. Technologically, “the substitution of machinery for individual manufacture was the fundamental change”.*  Production was transformed by machines — John Kay’s ‘Flying Shuttle’; James Hargreaves ‘Spinning Jenny’; Arkwright’s ‘Water Frame’ and Crompton’s ‘Spinning Mule’.  This led to an entirely new mode of organizing labour and producing goods – the first factory being introduced by Arkwright. “The factory’s main features were: all the processes of manufacture are concentrated in a single plant. The larger the factory, the more economic the enterprise, and the larger the machine. The machines are specialised, and driven by non-human power. The workers are directed, and their work supervised by management, for stipulated wages and fixed hours (not piece work) and production was for the general market.”*

And so, factories were able to produce an enormously increased quantity of goods for general consumption at reduced cost. This resulted from machinery and steam, the new source of power.

Steam power also transformed the movement by people, animals and goods with the first steam engine, Stephenson’s Rocket in 1836. Thereafter, railways spread out through England, America and Europe and even to China and Japan by the 1870’s.

By the mid-nineteenth century the industrial era was producing new materials. In the 1850s Bessemer converted pig iron to steel by removal of the carbon impurities and steel supplanted iron. The new era in chemistry resulted in new materials – first, celluloid replacing ivory and then later synthetic materials culminating in plastics .

Electricity followed in becoming a source of power for industrial, domestic and general use.  In 1800 Alessandro Volta discovered that electricity could be generated by chemical action. This was given practical effect in the electric battery. In 1831, Michael Faraday, an English research physicist, found that a wire passing through a field of force from a magnet produced an electric current. Electro-magnetism, or magnet-produced electricity led to the discovery of the dynamo in the 1840’s. In 1876, Gramme, a Belgian electrical engineer, designed a conveniently sized dynamo which led to its more general use.

In the same year, the American Alexander Bell transmitted the human voice over a wire by electric means. Within a very few years there were more than 9000 telephones in the United States. In 1879 Thomas Edison devised the incandescent light which was to illuminate millions of homes, offices and factories throughout the world. In fact electricity had begun to replace gas for public lighting in the middle of the nineteenth century, gas itself being an early century innovation.

Within a relatively short period electricity had led to a range of useful domestic products such as the electric vacuum cleaner in 1907; the electric washing machine in the same year; air-conditioning in 1911 and the automatic clothes dryer in 1938. But the impact of these was trivial compared with the next development, the advent of the radio in the early years of the 20th century. James Clerk Maxwell proved the existence of radio waves (1879); Herz established by experiment that light and radio waves were similar and Rutherford gave effect to these  and transmitted a message three quarters of a mile. Finally, Marconi despatched a message from Cornwell to Newfoundland in 1901 and began the commercialisation of radio.*

Oil was found in Pennsylvania in the 1860’s and within fifteen years that state was producing 15 million barrels a year. Drilling spread to a number of countries. In 1911 Winston Churchill initiated the replacement of coal in the Royal Navy. Nevertheless, coal remained important even as oil became substituted as a source of power.

The culminating invention during this period was the automobile. The four-stroke engine, involving the four strokes of the piston generated by a mixture of petrol and air, was invented by Karl Benz in 1885. Even by the 1890’s a number of cars were around although they were thought of as toys for rich ‘playboys’. Henry Ford was to change that. He built his first successful car at Dearborn in 1896. It travelled only 60 miles on 3 gallons of petrol.*  But he was determined to bring out a car for the ordinary family. And nine years later he did – the Model T a sturdy, almost indestructible car without any frills costing 300 pounds. It was built for everyman and by 1927 Ford had sold 15 million of them.

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Social Darwinism, neo-classical economics and natural rights theory in America
- a note (2006)


In mid-century classical economics was given a specifically anti-humanitarian twist by new evolutionary theories in biology.

The Darwinian hypotheses of the struggle for existence seemed to support the fundamental assumption Bentham, Smith, Ricardo and Mill had made that beneficial economic consequences required free and independent activity by individuals governed only by the law of competition.

Social Darwinism emphasised survival of the fittest and became a leading strain in thought both in England and America for the rest of the century.

Its importance was explained by Keynes in his famous essay ‘The End of Laissez‑faire’ as follows:

"The economists were teaching that wealth, commerce and machinery were the children of free competition ‑ that free competition built London. But the Darwinians could go one better than that ‑ free competition had built Man. The human eye was the supreme achievement of chance operating under conditions of free competition and laissez‑faire. The principle of survival of the fittest could be regarded as the last generalisation of Ricardian economics."

Individualism, utilitarian economic necessity and Darwinian survival of the fittest came together in the writings of Herbert Spencer.* In Social Statics (1850) he proclaimed an extreme individualism asserting that it would be better for smallpox to decimate a country than that individuals in it should be compelled to vaccinate. In Man versus State (1884) he opposed on principle the regulation of health and safety and legislation for compulsory education. In economic theory the neo‑classical model developed by William Jevons and synthesised by Alfred Marshall was predicated upon competition.  In America, Social Darwinism was to prove especially attractive. This was so for two chief reasons.

In America natural rights theory had been predominant. Lockean natural rights were the foundation of the Declaration of Independence and of the American Constitution.  Utilitarianism had never made the same inroad in the United States. Social Darwinism relieved natural rights theory of any need to qualify the economic rights in favour of the weak and unfit. Each of us expresses our superiority or inferiority in the competitive economic struggle through contract. Any restraint upon our contractual capacity is to impose an unwarranted handicap upon us. These ideas were given legal force through the ‘due process clause’ of the American Constitution: ‘ No State shall deprive any person of life, liberty and property, without due process of law..’. The provision was intended originally to be purely procedural, its aim being to prevent arbitrary administration of justice by requiring fair processes. In the nineteenth century it received a new interpretation. Cooley expressed this in his work 'Constitutional Limitations' (1868), stating that the due process clause embraced all the ‘inalienable rights’ contemplated by the Declaration of Independence and among those inalienable rights were property interests. These were to be immune from legislative interference. It was then held that it protected liberty of contract.  In the Supreme Court Mr. Justice Field declared that it followed from the natural rights of man laid down in the Declaration of Independence that every person should have an indefeasible right to pursue any business unhindered. The effect was a line of decisions upholding absolute freedom of contract. Any legislative attempt interfering with that was struck down as invalid. Prominent examples were Lochner (1901) 191 U.S. 45 in which a New York law limiting employment in bakeries to ten hours per day was held invalid as contrary to due process and Adkins (1923) 261 U.S.525 in which the Minimum Wage Act passed by Congress for the District of Colombia was invalidated.

There was another reason for the distinctive attractiveness of Social Darwinism in America. The protestant outlook and ethic survived there more vigorously than in other countries of an English background.  The puritan ancestry, the evolution of the protestant sects, the absence of an Established Church and the struggle to open up the West aided this retention of the protestant ethic of individual responsibility, industry and thrift. This of course harmonised with the late nineteenth century development of industrial capitalism in the United States. Social Darwinism could not help but coincide with such an ethic. Perhaps nobody typified this more completely than John D Rockfeller who, throughout his life, was a devout Baptist. ‘God gave me my money’ he said, as he ruthlessly extirpated his rivals through the Southern Improvement scheme on the railroads.

At the close of the nineteenth century Social Darwinian ethics combined with neo‑classical economics.  Whether described as ‘dog eats dog’ or, in George Bernard Shaw’s words, ‘the universal struggle for hogwash’, it represented the antithesis of humanitarianism.

 

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Footnotes



*           David Hume had thought similarly. The sole Trouble Virtue demands is that of a Just Calculation, and a steady preference of the Greater Happiness”, David Hume, An Inquiry concerning the principles of morals, Section, lx.

 

*           Paley echoed this thought when he said, “I hold that pleasures differ in nothing but in continuance and intensity”, Principles of Moral and Political Society, Bk1, Ch.6.

 

*           Galbraith, Economics and the Public Purpose, Pelican.

 

*           Encyclopaedia Britannica (1958) Vol 15, p.36.

 

*           Op.cit p.36.

 

*           The nature of that ethic and its relationship to capitalism was described by Max Weber,” Protestant asceticism… acted powerfully against the spontaneous enjoyment of possessions; it restricted consumption, especially luxuries.(It was though) not a struggle against the rational acquisition but against the rational use of wealth”, The Protestant Ethic and the Spirit of Capitalism, pp. 170-171.

 

*           Economists were also concerned by the limitations of demand and deprecated thrift as a virtue. The most significant work which developed the theory of under-consumption in the late nineteenth century was The Physiology of Industry by J.A. Hobson and A.F. Mummery in 1889 (see the comments by Keynes in The General Theory of Employment, Interest and Money at p. 364) Both Marx and Engels had similar theories. In the 1890’s Engels wrote, “ to the daily growing rapidity with which production can be increased today in all fields of large scale industry there stands opposed the even greater slowness in the expansion of the market for these multiplied products”. Engels did not foresee the implications of consumer credit

 

*           By mid-1988 the consumer debt in Australia was 61 bn. Dollars.

 

*           Adam Smith, The Wealth of Nations, New York Modern Library, 1937, p.821.

 

*           Mothers Day originated in the United States by Julia Howe and was associated by her with peace and disarmament.  It became a national holiday largely through the untiring efforts of her daughter, Anna Jarvis. “Nine years after the proclamation of the first national mothers day in 1914, commercialisation of the holiday had become so rampant that Anna Jarvis herself became a major opponent of what the holiday had become. Mothers Day continues to be one of the most commercially successful holidays”, Wikepdia. Christmas Day involves an ancient tradition of gift exchange. Advertising of it could be simply the alerting of consumers that the day was approaching. It could also in Millian neo-classical terms had been confined to informing customers of the products available. It does those things but the exhortation to buy dominates these possible purposes.” The social importance of christmas giving in American society and the premium placed on costly gifts have social costs. Credit counselling centres see a lot of people in February and March each year as Bills for christmas giving become due.”, Schudson, An Anthropology of Goods,1984, Advertising the uneasy persuasion, New York, Basic Books, pp129-146.

 

*           Benjamin Barber, Jihad v Mc World, Ballantine p.66.

 

*           Naomi Klein, No Logo, p.5.

 

*           1954.

 

*           Barber, op.cit, p.66.

 

*           More recently instead of buying advertising time from media outlets companies have begun producing their own media products programme with specific target audiences in mind. The marketing director of Pepsi, Darren Borg, said that programs allowed advertisers to build a greater relationship with consumers than was possible through 30 second commercials. Pepsi is producing local television and radio shows such as Pepsi Max Extreme Sports. Nike’s advertising agency is developing Ball, a Broadway basketball.

 

*           Ward and Dubos, Only One Earth, Norton, p.24.

 

*           “Since asceticism undertook to remodel the world and took to work out its ideals in the world, material goods have gained an increasing and finally inexorable power over the lives of men as no previous period in history. Today the spirit of religious asceticism – whether finally who knows? – has escaped the cage. But victorious capitalism, since it rests on mechanical foundations needs its support no longer .. In the field of its highest development, in the United States, the pursuit of wealth, stripped of its religious and ethical meaning, tends to become associated with purely mundane passions…. At the last stage of this spiritual development, it might truly be said;’ specialists without spirit, sensualists without heart; this nullity imagines that it has attained a level of civilization never before achieved.”, The Protestant Ethic and the Spirit of Capitalism, Allen and Unwin, p182.

 

*           As is evident in the widespread obesity in western countries due to excessive calorie consumption caused by over-eating.

 

*           December 2-8,2005, p.15.

 

*           Ian Lowe, A Big Fix, Black Inc.p.65.

 

*           Norton, pp 11-12.

 

*           It was 4 billion in 1974; 5 billion in 1987 and 6 billion in 1999. The current projection is for a world population of  8.9 billion in 2050, Wikepedia, Population.

 

*           21/4/2005.

 

*           Carbon dioxide intercepts the earth’s heat radiation and transmits it back to earth. The resulting increase in temperatures can and is precipitating increased melting of the Arctic and Antarctic ice-caps upon which the earth’s present climate is dependent.

 

*           This was written only shortly before the presentation of Al Gore’s, An Inconvenient Truth.

 

*           Braudel Capitalism and Material Life 1400-1800, Fontana, p.xii.

 

*           Braudel, ibid, p 121.

 

*           “Trade overseas spread riches throughout all Dutch society, nowhere was this more evident in the gusto the Dutch brought to eating, drinking and smoking.  … Chinese Ming bowls, seen beside a Dutch-made pewter flagon, came from the Orient on Dutch ships carrying cargoes of spices and teas.”, Age of Exploration, Time Life, pp.42-45.

 

*           Hugh Thomas, A History of the World, Harper and Row, p.247.

 

*           Thomas, op.cit. p.251.

 

*           This was a striking case of the application of scientific principle to practical invention. It was James Clerk Maxwell’s investigation of the properties of electro-magnetic waves that led in 50 years to the telegraph and radio. Looking back over the history of innovation one sees a combination of scientific theory and invention. It is said and with some justice that most of the early inventions, especially in the cotton trade, were the work of ingenious mechanics without any direct inspiration of scientific knowledge, The Age of Progress, Great Ages of Man Series, Time Life, p.30. More exactly between the 18th and 20th centuries there was a constant and interesting interaction between these, with now one (steam power and the cotton industry, the practical inventor) and now the other, (electricity, the scientist – and yet electricity could not have fulfilled its destiny without Edison).Many inventions were the practical translation of scientific knowledge as in the case of Faraday and the dynamo. John Dalton established the atom as the basic unit of chemical combination. Other scientists discovered that the properties of chemical compounds depended not merely on atoms but the patterns into which atoms combine in molecules. From that knowledge synthetic drugs were made such as quinine in 1856. Dyes followed shortly afterwards. What was unique in all this was the adaptation of speculative science to practical problems whichever came first in any particular case – Pasteur’s discovery of micro-organisms, their part in disease and immunisation involved a continuing interaction and cross fertilisation of ideas with industry. Finally, near the end of the 19th century the application of science to industry became systematised with the establishment of industrial laboratories devoted to research and invention. Edison’s laboratory at Menlo Park, New Jersey was the forerunner of these.

            The movement in science and practical invention was an historical exemplification of Francis Bacon’s new idea that the function of theoretical knowledge was to provide for Man’s utility. Seventeenth century science – and Bacon in particular—had emphasised experiment and this provided a natural bridge to the work of practical affairs.

 

*           Machines, Life Science Library p.104.

 

*           See J.K. Galbraith, The Affluent Society, Pelican, pp.58-60.