Michael Perelman: The Dysfunctionality of Slavery and Neoliberalism

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By Michael Perelman, a professor of economics at California State University, Chico who also writes at Unsettling Economics

We are all patriotic.  Let’s start with the Star Spangled Banner.

You all are familiar with some of it, but perhaps some of you may not know this particular stanza: Don’t worry, I won’t sing it:

“No refuge could save the hireling and slave from the terror of flight, or the gloom of the grave.”  Keep in mind that the militias referred to in the Second Amendment seem to have been the groups that hunt down escaped slaves.

The elevation of slave owners’ property rights easily morphed into the expansive property rights of those who hired wage labor.  This power allowed capitalists to call upon the state rather than militias of slave captors to keep workers’ rights and wages in check.

This arrangement supposedly served the public interest because low wages mean high profits, which, in turn meant increased investment, which translates into shared prosperity, presumably even including otherwise downtrodden labor — a bourgeois version of the unity of opposites.

Despite the neoliberal obsession with wage suppression, history suggests that such a policy is self-destructive.   Periods of high wages are associated with rapid technological change.   For example, after the scourge of the Black Death, which eliminated about a third of the population of Europe, the surviving workers were in a better bargaining position in terms of both wages earned and rents paid.  Rapid technological change emerged as a means to cope with workers temporary advantage. The historian, Richard C. Allen, makes the case that wars in the late 18th century removed significant portion of the labor force, again creating higher wages. The combination of higher wages and the availability of cheap fossil fueled another burst of rapid technological change, which we now know as the Industrial Revolution.

Another historian, H. J. Habakkuk published a book identifying the long-standing domestic labor shortage as the central force pushing the early United States to industrialize so fast that it rapidly caught up with England.

The geography of the United States provided a natural experiment for testing Habakkuk’s theory.  The southern states, unlike their northern counterparts turned to a more primitive remedy for its labor shortage in the form of African slaves.

Slavery was not unknown in the northern states, but they did not put much of a dent in the northern labor shortage.

Frederick Law Olmsted, famous for designing New York’s Central Park and also a correspondent of Karl Marx, toured the southern states reporting on their technological backwardness.  Recent research does describe significant technological advances in the South in developing machinery to help prepare cotton for sale, but the South remained technologically backward relative to the North, because southern industry was unprepared for modern development.

This split between the North and the South spilled over into a destructive form of economic theory.   The South was adamant about ensuring a weak government, fearing that public sentiment might eventually encourage the government to abolish slavery.

Toward that and, the southern states were able to effectively shape the Constitution in a way that would guarantee a weak central government and special political powers for the southern states.  For example, the Electoral College gave disproportionate power to the lightly-populated slave states.  Counting slaves as 3/5 of a person, although one without a vote, added to South’s the representation of the in the House of Representatives.  Including Senate seats in the Electoral College gave large and small states alike had two more votes, further adding to the Southern advantage.

On the ideological front, the South adopted a shallow, but rigid libertarian perspective which resembled modern neoliberalism.   Samuel Johnson may have been the first person to see through the hypocrisy of the hollowness of southern libertarianism.   Responding to the colonists’ complaint that taxation by the British was a form of tyranny, Samuel Johnson published his 1775 tract, “Taxation No Tyranny: An answer to the Resolutions and Address of the American Congress,” asking the obvious question, “how is it that we hear the loudest yelps for liberty among the drivers of Negroes?”  In The Works of Samuel Johnson, LL. D.: Political Tracts. Political Essays. Miscellaneous Essays (London: J. Buckland, 1787): pp. 60-146, p. 142.

By the late 19th century, David A Wells, an industrial technician who later became the chief economic expert in the federal government, by virtue of his position of overseeing federal taxes. After a trip to Europe, Wells reconsidered his strong support for protectionism.  Rather than comparing the dynamism of the northern states with the technological backward of their southern counterparts, he was responding to the fear that American industry could not compete with the cheap “pauper” labor of Europe.   Instead, he insisted that the United States had little to fear from, the competition from cheap labor, because the relatively high cost of American labor would ensure rapid technological change, which, indeed, was more rapid in the United States than anywhere else in the world, with the possible exception of Germany. Both countries were about to rapidly surpass England’s industrial prowess.

The now-forgotten Wells was so highly regarded that the prize for the best economics dissertation at Harvard is still known as the David A Wells prize.  His efforts gave rise to a very powerful idea in economic theory at the time, known as “the economy of high wages,” which insisted that high wages drove economic prosperity.   With his emphasis on technical change, driven by the strong competitive pressures from high wages, Wells anticipated Schumpeter’s idea of creative destruction, except that for him, high wages rather than entrepreneurial genius drove this process.

Although the economy of high wages remained highly influential through the 1920s, the extensive growth of government powers during World War I reignited the antipathy for big government. Laissez-faire economics began come back into vogue with the election of Calvin Coolidge, while the once-powerful progressive movement was becoming excluded from the ranks of reputable economics.

This environment ushered in the short-lived roaring 20s, which were followed by the Great Depression and the reemergence of a strong central government under the New Deal and World War II, which opened the door for Keynesian economics, which has some affinity with the economy of high wages.  Keynesianism enjoyed a few decades of strong influence until the dynamism of the Golden Age petered out, in large because of the economic distortions created by the Vietnam War.

With Barry Goldwater’s humiliating defeat in his presidential campaign, the famous Powell Memo helped to spark a well-financed movement of well-finance right-wing political activism which morphed into right-wing political extremism both in economics and politics.  Symbolic of the narrowness of this new mindset among economists, Milton Friedman’s close associate, George Stigler, said in 1976 that “one evidence of professional integrity of the economist is the fact that it is not possible to enlist good economists to defend minimum wage laws.” Stigler, G. J. 1982. The Economist as Preacher and Other Essays (Chicago: University of Chicago Press): p. 60.  In short, neoliberalism was surging ahead and the economy of high wages was now beyond the pale.  These new conditions gave new force to the southern “yelps of liberty.”   The social safety net was taken down and reconstructed as the flag of neoliberalism. The one difference between the rhetoric of the slaveholders and that of the modern neoliberals was that entrepreneurial superiority replaced racial superiority as their battle cry.

One final irony: evangelical Christians were at the forefront of the abolitionist movement.  Today, some of them are providing the firepower for the epidemic of neoliberalism.

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  1. jgordon

    This all looks super speculative and full of ideological non-sequiturs. I’d appreciate relevant references so I can see where this stuff is coming from. For example:

    Rapid technological change emerged as a means to cope with workers temporary advantage.

    My immediate thought was, that doesn’t look right. I wonder how he came up with that. A reference would be helpful there to dispel my doubts.

    1. guest

      Well, there is another interpretation of the consequences of the Black Plague on labour — most prominently argued by Evsey Domar: it led to a considerable restriction of labour mobility, enforced by employers who would lose from the new conditions. As consequences, a reinforcement of guilds in Western Europe and the systematic application of serfdom in Eastern Europe.

      Those historians postulate that whenever large disparities between available and required manpower arise (basically zero unemployment), labor choice of employment is forcibly curtailed — via the whole range of measures from slavery, serfdom, residence permits (Russian propiska and Chinese hukou), and obligation of guild membership — so that labour largely loses its new bargaining power based on scarcity.

      Whether this process is historically more accurate than accelerated technical development — I do not know.

      1. Demeter

        If I recall correctly, the Plague did not affect Central Europe…population was sparse and spread out. The Plague hit urban areas….with mobile populations. Feudalism kept people from moving.

        1. guest

          The territories of Poland and former Czechoslovakia were not affected much, but Ukraine, Russia and Romania (where serfdom and even slavery where from then on predominant) were devastated just as the rest of Western, Southern and Northern Europe.

        2. armchair

          There were at least enough Black Plague deaths in at least one part of Czechoslovokia to create the Sedlec Ossuary a church with human bones of 40,000 to 70,000.

          1. guest

            I found that Wikipedia actually has a map showing the spread of the Black Death.

            Just as I remembered, (today’s) Poland was largely spared. It appears that a part of Germany and another in Ukraine were free from plague as well.

            As for what was Czechoslovakia, its northern half was indeed spared, but the southern part fell victim to the pandemic.

            A territory around Milan and around Bruges seem to have escaped the plague too — which to me is quite surprising: those places were important trading cities then, and I wonder how they managed to avoid contagion with all the traffic that must have been going on.

            1. sam s smith

              According to Barbara Tuchman, Milan escaped the plague in the 14th century due to some pretty draconian quarantine measures. Any house with plague victims in it was sealed up, with both the living and the dead inside.

      2. Ulysses

        I wrote a hasty little series of posts on the Ciompi Revolt, the first, European, proto-industrial worker-led revolution that happened in Florence, beginning in 1378. I was too swept up in Occupy activities at the time to write a very thorough introduction to the series, unfortunately. The timing of the revolt, involving a generation of semi-skilled wool industry workers who had only known a labor market that reflected the ravages of the Black Death, was certainly not coincidental!


        1. sufferin'succotash

          The Ciompi uprising falls into a pattern of events in mid and late 14th century Europe, along with the Jacquerie Peasant Revolt in France in 1356 and the Peasant Revolt in England in 1381. All three uprisings were triggered by reactions against higher taxes (I believe that was the case in Florence): the Poll Tax in England and tax increases to pay the ransom of France’s King John the Good (captured by the English at the Battle of Poitiers). But, the background for all three was attempts by serfs or workers to exploit opportunities for advancement opened up by the population losses caused by the Black Death, opportunities being frustrated by upper-class efforts to restrict social mobility. Of course all three uprisings failed, but in the end serfdom did die out in much of Western Europe by the 1400s.
          Serfdom in Eastern Europe is another matter altogether.

          1. Ulysses

            There are tremendous differences between the peasant uprisings in rural, agrarian England and France, and the urban Ciompi revolt– in a part of Italy with far more advanced commercial development, rates of lay literacy, political participation outside of the noble classes, etc., than anything known to northern Europe at the time.

            The Florentine Ciompi themselves, while indignant at the higher taxes being squeezed out of their poor contadini cousins in the hinterland, were not motivated to revolt by any sudden increase in their own tax burdens. They were most upset by the continued unwillingness of the wealthier guilds, the Arti Maggiori, to allow meaningful participation in city government by the far less affluent members of the Arti Minori.

            My friend John Najemy has written a useful piece, Guild Republicanism in Trecento Florence, that serves as a good introduction to the political background of the Ciompi Revolt:


            The important distinction here is between a revolt led by proto-industrial workers in a commercially advanced city-state, where the nobility had already lost their political prerogatives, and a peasant uprising in an environment that was still largely feudal.

    2. vidimi

      on the contrary, this is very intuitive. when wages are high, owners look to innovation to decrease their costs and increase profits. this can be finding cheaper ways to produce something, relying on less labour, or inventing new processes.

      1. jgordon

        That the sun revolves around the earth and that the earth is flat are intuitive facts as well. Intuitively speaking, without any empirical basis behind them, they are equally as valid.

        1. vidimi

          you’re right that data would be nice and that intuition alone can lead one into all sorts of trouble, but the point was more that “that doesn’t look right” was untrue.

          1. jgordon

            I took one look at the statement and my intuition told me that it was bullcrap. “Intuition” is loaded with a lot of educational, cultural and personal baggage isn’t it?

            1. James Levy

              I had a professor who did his dissertation on the mechanization of shoe production in Massachusetts (sounds dull but he was trying to feed into the very discussion we are having) and he found that the conditions of relatively high pay for male workers in the industry unquestionably spurred the factory owners to make the work semi-skilled rather than craft-oriented and to insert machines to regularize and regulate the working process. That’s only one data point, but it is an interesting one. I was taught in grad school that the lack of skilled workers in America and the availability of cheap land was a major cause for many of the labor-replacing and skill-substitution industrial production methods that were pioneered here. This is not my field, so I can’t say that an overwhelming body of evidence supports that claim, but I heard it from an economic historian and a political economist of different political persuasions, so my guess is it holds some validity.

              1. NoFreeWill

                Certainly Marx agrees with this thesis in Capital and from my readings about automation you get a simple forcing: if labor is expensive, replacing labor intensive processes of production with capital intensive processes will be incentivized. I don’t know why that isn’t intuitive.

                1. EricT

                  What came first the chicken or the egg? How about good wages led to increased demand which led to increased competition which led to improvements into production to get an edge over competitors. No investor builds a factory or improves a production facility unless they have a demand to be satisfied. Take for example items that have low demand but are necessary. Painting steeples come to mind. Steeples don’t always need to be repainted or repaired regularly, so the number of steeple jacks is small, the associated technology has changed little, hence the cost for such a job is expensive. If it was mandated that steeples be regularly maintained or that the number of steeples grew dramatically then demands for efficiency would arise along with improvements. What you are suggesting is that the steeple jack would improve his technology or his labor practices regardless of demand. This doesn’t make sense, if there isn’t additional monies to be made and demand is being satisfied, why make any investments into improvements that might not even pay for themselves. I don’t know why that isn’t intuitive.

      2. theinhibitor

        I think you are right in a sense, but inaccurate in how you use the term ‘innovation’.

        Owners/CFO/CEOs don’t look toward innovation. In fact, companies rarely really innovate. Innovation is done at universities, research institutes, etc.

        Most companies rather look at emerging technologies, and by emerging I mean technologies that have been tested and vetted for probably over 20 years at a university setting. If some innovation of novel and economic significance happens at a university, it may be immediately bought out by a company in the form of a patent or the people involved with the work may create their own company.

        But this really suggests that innovation is a byproduct of government/university funding that really happens (in spurts) in various areas that are, at the time, considered ‘hot’, i.e. cancer research in the 21st century.

        Companies mostly do what I would term ‘dumb research’, that is, trying to APPLY emerging techs to their current setup. Rarely do they actually try to innovate without guidance from a university, as most companies are concerned with short term profits and shareholder value, not long term market cap or otherwise.

        Wages really drive whether a company will invest capital in using technologies to get rid of obsolete jobs, or at least what they assume are obsolete. In manufacturing, this would be replacing assembly workers with assembly robots. In this case, the companies ‘research’ would really just include what type of robots are needed, and how much they cost over a ten year period, and whether not this will increase profitability.

        I think the only place where companies really ‘innovated’ (at least in modern times) was in branding, patent litigation & acquisition, and advertisements.

      3. digi_owl

        “finding cheaper ways to produce something”

        Including breaking down migration and trade barriers so that cheaper labor can be employed.

    3. hunkerdown

      Maybe it doesn’t look right because of the lack of agency. As we see in any labor crunch, workers’ particularized skill can and does constitute the basis for rents, and authority can’t stand being on the “wrong” end of a rental stream.

    4. jrs

      It seems as if anything what is being argued is “high wages” led to technological change because it encouraged employers to automate away the “high wage” jobs. Which of course might be one thing if that new prosperity was shared but it isn’t.

      How any of this really benefits working people long term, other than if wages can be kept continually high as a spur to more and more automation (but doesn’t that process self-correct by means of labor surpluses when jobs are automated away?) I don’t know.

      “Short term high wages are nice so your job can be automated instead” isn’t much of an argument for high wages.

      1. NoFreeWill

        The argument for high wages is that more equitable distribution of wealth creates a better economy for everyone since rich people can’t possibly spend all their money, whereas the middle and lower classes spend their money much faster (the reason the multiplier effect on gov. spending of food stamps, etc. is way higher than welfare for the rich). Also, you know, the children in America who are living in 3rd world conditions and are “nutritionally insecure” aka starving. And it takes a while for the conditions to change technologically such that the automation/capital substitution for labor happens… meanwhile everyone is better off. But that would require creating high wages, which in the current political climate seems nigh impossible: unions are busted, globalization, outsourcing, and immigration have dragged wages down, etc.

        1. NoFreeWill

          And the benefits of technological change generally spill over a bit to the people at large…

  2. PlutoniumKun

    Fascinating essay. One addendum to the issue of 18th Century industrial development being spurred by a shortage of labour – one part of Europe which had no such shortage was Ireland, mainly because there was no military mobilisation during the various wars (the English not trusting Irish soldiers). This led to an enormous burst of wealth among landowners as the could intensively cultivate every square inch of land, and export the food to Britain and elsewhere. The rich legacy of fine Palladian houses around Ireland is a legacy of this time. But this was wiped out by a combination of the Battle of Waterloo (which led to a fall in food prices in Europe as soldiers returned to their farms), and the importation of cheap American wheat and corn to Britain. Many economic historians have questioned as to why the wealth at this time never led to industrialisation taking hold in Ireland in the 19th Century (the minor exception being shipbuilding in Belfast) as there should have been no shortage of capital around with all that wealth. I think the huge surplus of labour produced may well have been one explanation – there was simply no need for capitalists to invest when there was so much cheap labour around, at least until the Great Famine took care of that issue.

    1. barutanseijin

      Why no industrialisation in Ireland? Maybe capitalism isn’t as dynamic & progressive as it’s cracked up to be. It may be dynamic & progressive in some times and places, but it certainly isn’t 100% of the time.

  3. Cassiodorus

    Yeah hm. Food for thought, but it merits critical questioning as well.

    “Periods of high wages are associated with rapid technological change.”

    The neoliberal overlords appear to have given up on technological change as a possible future contributor to their collective prosperity. There are two easy-to-find reasons for this: 1) predatory finance is more lucrative than productive capital these days, and 2) the technological changes to be found in this era of history are not those which restore the profits system in the same way in which those of the 19th and 20th centuries rescued the profits system from its self-inflicted doom back then. See e.g. the writings of Jason W. Moore:


    Capital is just too much in a hurry to wait for technological innovation to rescue the productive sector today, if indeed it can do that at all.

    “On the ideological front, the South adopted a shallow, but rigid libertarian perspective which resembled modern neoliberalism.”

    If the antebellum South resembles neoliberalism, this is because the cult of capitalist individualism was and is deployed in both situations to keep the masses from recognizing any collective alternative to the rigid hierarchies of wealth that dominated the plantation society of the antebellum South as well as neoliberal societies across the globe today. The antebellum South, however, did not exercise “weak government” — rather, strong government was necessary to maintain plantations as prison camps. Today, perhaps, the US prison-industrial complex serves the same purpose as slavery once did.

    ” Wells anticipated Schumpeter’s idea of creative destruction, except that for him, high wages rather than entrepreneurial genius drove this process.”

    “Entrepreneurial genius” never drove the economy in any era of capitalism — rather, entrepreneurial genius allowed and allows one to be a beneficiary of capital accumulation. High wages are useful to the capitalist system insofar as they allow capital to appropriate the consumer society which satisfies its circulation needs in a way in which a society of low wages can’t. (Didn’t Henry Ford recognize this?)

    Capital is not, however, going to discover consumer society twice.

  4. Clive

    I have to laugh (actually, it’s more of a groan; if I didn’t I’d cry) at what has happened quietly and almost imperceptibly at where I “work”. So unobtrusively did it sneak in, it is now impossible to remove its tentacles.

    With the fashionable fad for outsourcing and offshoring, labour has become ridiculously cheap (obviously in the offshore locations more so, but real incomes have also fallen onshore so the same effect is present, albeit to a lesser degree).

    As someone put it, management can find people to do the same job cheaper. They can’t do it as well, but they can do the job. The snag has been in what precisely constitutes the “not as well”. Put simply, it needs more people to do the same job and the spans of control are narrower. The people are cheaper, so the overall cost seems lower. But hidden, unbidden, in this change to labour sourcing and organisation, is a new cost, the cost of co-ordination.

    Management information “proves” that the cost of delivering X- or Y- task is lower. But the overhead costs aren’t the same as the costs allocated to delivering whatever task is supposed to be being delivered so didn’t initially show up (or not quite so blatantly or seemingly risk becoming such a pernicious long term problem).

    These overhead costs are now sufficiently large enough to start attracting attention. There’s two basic types: people and systems. People are needed to keep an eye out for the resources who are doing the actual delivery of the task. Often the resources need very detailed explanations of what they are supposed to be doing. Sometimes they get conflicting requests and it is not within their span of control to resolve the conflict themselves. A few have realised that they can do as little work as they want by trying to hide behind the “Permit Raj” which has been created and so overseers are needed to stop that happening (as far as it is possible to stop it happening).

    Speaking of the Permit Raj this is of course the other cost. A cottage industry had to be started off by management to try and move the things along the myriad of steps needed to complete a work package that had to be salami sliced into ever thinner tasks. The more outsourcing and offshoring, the more need emerged for that cottage industry to be industrialised as it didn’t take long for everyone to realise they could game the system by blaming the system. But economies of scale are hard to come by in irregular, beskpoke one off deliverables (each piece of work is different so how it gets broken down and allocated is different every time). So the workflow sausage machine has more and more complexity built in, in an attempt to cope with the underlying complexity.

    The solution is of course obvious, but impossible to implement under current management orthodoxy: What is needed are fewer but more flexible / skilled / knowledgeable / “good” i.e. expensive people. The kind of people who, once you have them, you know you have them and you don’t really want them to leave if you can help it. The kind of people who you need to treat in a not completely shabby way. So that’s never going to happen.

    Okay, eventually something will have to give and the bureaucracy will become unmanageable. But just because something will have to end sometime does not, of course, mean it is going to end soon. Conversely, the pressure to lower wages still further (on the now vastly increased headcount) increases.

    1. jrs

      I think the experience of stuff being produced by outsourced work that simply doesn’t work and not just in some subtle hidden way but obviously so is nearly universal at this point.

    2. Nathanael

      It ends by corporate bankruptcy, traditionally, as a new company arranged along different lines outcompetes the old one.

    3. EricT

      That’s why ford switched its allocation of offshore IT work from 90% overseas, 10% in house, to 90% in house and 10% overseas. They found no advantages to farming everything out to outside producers. The lower price tags for development, required additional resources to provide the same level of quality an in house project would already have. Oh, and I love the reason of plausible deniability, its so much easier to blame an outside vendor than to accept responsibility for a bad project.

  5. guest

    Often the resources need very detailed explanations of what they are supposed to be doing.

    I strongly object to calling people “resources”.

    But to your point: this is exactly why IT Indian companies were the most enthusiastic about getting CMM certifications at level 5 — and the very first to achieve them back in the 1990s. This is the level when work processes are documented with so much detail that they can be repeated with no regard to the experience of the workforce carrying them out. After some initial training, every employee is interchangeable and can do the job. This is also a necessity, as employee turnover is massive — one just cannot depend upon experienced old hands there.

    Did your organization experience a frenzy of process formalization, ISO-9000 or CMM re-qualifications recently? This is related to outsourcing and offshoring.

    1. Clive

      Sorry, yes, I hate the “resources” label too. But that is what we are called and what we are by cultural enforcement here in the lovely workplace encouraged to use as a description (and it is, dispiritingly, the standard term in the industry) so I reluctantly parroted it to aid reader understanding. Perhaps we should formally declare it an “un-word” in acknowledgment of its barstadisation.

      And yes, the CMM level gazillion accreditation was widely trumpeted as an emblem of how the outsourcing vendors would be a great fit organisationally… Do you think they were by chance peddling BS ? I’m shocked, just shocked…

      1. guest

        I know exactly what you mean, because I also worked in an environment where employees were routinely called “resources”. During project meetings, I always made a point of using “person” or “employee” or “engineer”, but the prevalent terminology was to utter things such as “for the next project phase we need 5 programming and 3 testing resources”.

    2. Disturbed Voter

      Within IT operations, the same process obtains … in our case … Comptia certification. In some cases the certification has been beneficial in rounding out the skills of some employees, in other cases it is profoundly useless to specialists, whose work isn’t covered in the material. “1984” is already here, but the technology works less and less (but does that matter in a Potemkin Village of deception and intimidation?) behind the scenes, as the technology becomes ever more complicated, mean-time-between-failure shortens, and labor savings are attempted by degrading the real skill set of the technicians required to maintain and operate it, in favor of the false security of certification? Think of it as the digital equivalent of infrastructure neglect, by civil engineers who have never built anything themselves.

      1. hunkerdown

        At this point, a certification shows only that you’re willing to sacrifice money and time for people and causes that don’t deserve it, and you can sit still for a few hours at a time.

  6. Jim in SC

    There is a lot wrong with the historical analysis in this essay. Samuel Johnson was a hypocrite, given that England drove the slave trade right up to the time that he made his comment. As for slavery being ‘not unknown in the North,’ the infrastructure of New England and New York would not have been built without them, given that free laborers were incentivized by cheap land to build their own homesteads rather than hire out their labor.

    But lets look at more recent history. Europe has had far higher wage rates than the US for a generation or more, but they have been, in comparison, an innovation backwater. Looked at another way, the US, despite lower wage rates, has been the fountain of innovation for the world. The professor will have to look somewhere else to find the source of this innovation.

    1. SPenfield

      One swallow does not a spring make.Are you suggesting that globally there is no positive relationship between wages and innovation?

    2. Code Name D

      Let’s not forget there are other competing explanations. Better communications and education systems for example. Moving from oppressive societies to more open societies has also been noted. Warfare or its potential is probably the strongest theory to date.

      1. vidimi

        neither is there any meat on that other assumption that euro wages are much higher than american ones

        1. hunkerdown

          Americans fixate on wages because, without all the public welfare goods available in sane societies, Americans must cobble their compound together mostly from what pay they take home.

        2. cripes

          vidimi – perhaps its more accurate to say that wages of the lower quartile of workers in northwest europe are higher than the same quartile of american workers. Which pisses ME off if nothing else. Also mandatory paid sick, vacation and holday raises the real wage oh, 20% over american counterparts.

    3. jgordon

      Just adding that I find it to be incredibly convenient, not to say suspicious, that slavery went out of vogue in the north at the exact same time that industrial machinery powered by fossil fuel energy became a lot more efficient at getting things done than unskilled labor.

      I have a strong feeling that in the era of declining available energy and deindustrialization slavery will be making a big come back–even in the “enlightened” North. That’s outside of the slavery of minorities that is already taking place in the prison industrial complex today I mean.

      1. NoFreeWill

        Don’t forget the actual slavery practiced in Florida tomato growing operations, and many other places around the world (recent articles on fishing in SE Asia for example).

    4. Michael Perelman

      Regarding Samuel Johnson, his point was that the Southerners were emphasizing the importance of liberty, unlike those in the British slave trade, which was, to be fair, on the way out

      1. William C

        And indeed Johnson criticised England for its treatment of black slaves long before the War of Independence so it is unfair to call him a hypocrite.

    5. hunkerdown

      Hypocrisy is a charge rooted in authoritarianism and conformism. I don’t see what all that moral purity woo-woo, the forcible recontextualization of a single statement into some overwrought system of polite violence, has to do with its validity.

      Also, f— innovation. Innovation has no purpose but to sell unnecessary crap to people better off without it. Why doesn’t anyone like to talk about “invention” anymore? Is doing something useful incompatible with the desperate hustling of the overcaffeinated creative class? (Yes.) Is doing something useful incompatible with a debt-driven economy? (Yes.)

    6. James Levy

      Are you actually coming here and telling us the Erie Canal was dug by slaves? Or the railroads of New England? Jesus, man, own up to it–you’re from South Carolina. You want me to quote chapter and verse from the Nullification Crisis or the Secession delegates of 1860? Spreading the blame around may make you feel better, but spare us the righteous denunciations of everyone BUT your ancestors. You don’t have a moral leg to stand on.

    7. O6

      Johnson was many bad things but in this case not a hypocrite. His personal servant Francis Barber was a freed slave to whom Johnson lest the bulk of his (rather small) estate. Johnson believed in ‘subordination’ and ‘deference’ but also in freeing slaves.

  7. JCC

    Europe, an innovative backwater compared to the US? I’ve seen no proof of that over the last 30 to 40 years.

      1. hunkerdown

        They created the surveillance state and turned the Internet into an enclosed shopping mall. Go, team.

  8. Rosario

    The article may be onto something but it is a bit simplistic. War leads to innovation, as do catastrophes. Also, what innovation are we talking about? Revised and/or novel algorithms/consumerism that are possibly/probably unnecessary but innovative more or less (the current convenience/app economy with Uber, AirBnb, etc.), or innovations involving massive levels of government investment that are indisputably huge leaps for the species (Bell Labs research, NASA research, etc.). The former is capable of execution on a small scale (i.e. individuals or small partnerships) with huge financial rewards because of the inflated market and low overhead, the latter requires large scale (i.e. hundreds or thousands of people working toward the same goal/goals) and the financial rewards are not very apparent and risk is high (thus the need for the government prop).

    In the initial decades of the cold war the USSR was hugely innovative on many scientific fronts (see space research, physics, and chemistry). The honest would admit their levels of innovation surpassed the United States for many years. As a result, the USA government responded by funding massive research projects of its own (we realized there was a big difference between innovative consumer products and major advances in science and technology). Many of these advances are taken for granted today, but consider where the risk was fronted, on the government end. Using a specific comparison, do we want iWatches or renewable energy? If both, we need a better balance.

    1. jrs

      We need innovation in the way we run society. This one doesn’t work. It’s a larger part of people’s problems than any lack of apps or other consumer do-dads.

      We need innovation in conservation, but there’s a 1000 forces aligned against that as Buckminster Fuller saw. And we also need renewable energy.

  9. Citizen-Patriot

    One final irony: evangelical Christians were at the forefront of the abolitionist movement. Today, some of them are providing the firepower for the epidemic of neoliberalism.

    Umm… can you elaborate?

    If you mean that evangelical Christians in society are predominantly aligned with the Republican Neoliberal Camp, then the above quote makes sense. However, that is not to say that the evangelical Christian block does not care about issues of social justice. On the contrary, the most vocal and staunch proponents of the weak or marginalized, are organizations with Christian or religious conviction. (See below)


    However, it is that same conviction to protect the weakest and poorest that holds the willful destruction of innocent human life as the slavery issue of the day. I challenge any politician running under the democratic banner to take a vocal stand against abortion, and see if they don’t find a host of new allies within the evangelical Christian block.

    1. hunkerdown

      People who demand control over the parasites in other people’s uteri ought to be driven OUT of an open society, not bargained with, especially since the whole abortion controversy was manufactured 40 years ago precisely to prevent common cause between Christians and the left.

      Also, just who finds the concept of bringing MORE evangelicals into the explicitly neoliberal party, brimming with cultural demands and a commandment directly from Up There to sell sell sell, of any use or interest, other than perhaps the Democratic wing of the authoritarian party?

      Maybe being American is the problem, not the solution.

  10. Michael Perelman

    Your comments were very interesting.
    Regarding the black death, the most commonly mentioned result was indeed the tightening of feudal controls to provide the labor supply. New technologies seem to have been another response. These two strategies are not mutually exclusive, Suggesting the coexistence of the northern and the southern responses to labor scarcity..

    Standard microeconomics, as well as common sense, support analysis behind the economy of high wages, Similar thinking supports the idea that a carbon tax would create an incentive to develop fuel-saving technologies. Today, a third option is open to capital: directly or indirectly employing labor from other countries.

    During the time of David A Wells, transportation and communication costs were still relatively expensive, significantly reducing the threat of offshoring.

    If anything has undermined the logic of my argument, it would be the breakneck speed of the development of laborsaving technologies — so much so that labor scarcities have morphed into labor surpluses.

    1. jgordon

      When I was a kid people would tell me, “don’t go out in the cold and wet weather, you’ll get sick.” That was commonsense. Of course, whenever someone would say that the little voice in my head would go, huh? getting cold and wet equals getting sick? That’s nonsense.

      But it wasn’t nonsense, it was commonsense. And evidently economics is a profession built entirely on such commonsense. Come on, there’s a place in our culture for the humanities. If we just admit that economics has more in common with the study of literature and astrology than physics, plenty of universities would still give economists a forum to spread around their non-empirical commonsense to unsuspecting students. And wouldn’t that be better on the conscience?

      1. hunkerdown

        Common sense is just a shared belief. It has nothing to do with correctness, truth or reliability. People keep genuflecting toward conformity as an idol and it looks silly.

        1. Chris

          Yes, but then again common sense isn’t very common

          Don’t ask me why, just my own observation over many years

    2. Jeremy Grimm

      Innovation as used in the post has two components. The first is the invention. The second is application of the invention.

      Measuring innovation by counting patents captures the first meaning. Innovation has no impact if the advances are never applied. I recall reading (I don’t remember where, perhaps the Economist) that Great Britain of the 1970’s and 1980’s produced considerable discoveries and innovations that never found their way into processes or products. The Romans including the (Greeks as part of the Empire) reached a level of knowledge in science, mathematics and engineering which raised the question why so little of this knowledge lead to applications they seemed so close to — the standard example of this is Hero’s engine. Looking East, China’s invention of gunpowder provides another striking example.

      This post focuses on process invention more than product invention. “Cost of labor” speculations have been used to explain why the Romans didn’t build steam engines — they didn’t need steam engines as long as they had plenty of slaves. Isn’t this post using an old argument about substitution of goods (sorry about calling human labor a “good”). In the case of innovation, the substitution good doesn’t yet exist, leaving opportunity for some inventor and entrepreneur to take advantage of the opportunity.

      Innovation and growth aren’t quite so simple as all that. A saying related to product rather than process innovation, I heard from disgruntled Lucent employees who tried in vain to purchase ATT unix computers in the late 1980’s: “Bell Labs could invent a way to cheaply achieve human immortality … but unfortunately the marketing arm of ATT would not be able to successfully sell it and bring it to market.”

      High wage levels don’t necessarily lead to growth through innovation, (invention and application). Speculating again — high wage levels might lead to specialization in high quality products and/or high tariffs to protect the local market for such higher cost goods. (I think Japan did something like this to build their industry after the second world war — although I cannot explain what japan did in these terms — certainly not solely in these terms.)

      I am skeptical that raising wages in the United States would have much impact on growth — unless there were some way to compel those high wages to lead to greater equity in the distribution of wealth and incomes — hardly a given in the present world.

      1. hunkerdown

        Linux didn’t need that much of a marketing arm. A POSIX to BYO-hardware bridge sells itself.

        And, besides that, “innovation” in computing is only exciting because it imposes costs, just like the useless front lawn far too many of us in suburbia are stuck with. “Innovation” means your perfectly good software will stop working without warning in a couple or three years when some perfectly good API gets deprecated in favor of the new shiny. We need only look at the persistent storage API mess to see why “innovation” on the web is a tax on time.

        WHATWG needs to disband, the W3C needs to adopt all their recommendations as their own, and they need to then never have more than one technical meeting every year. Whigs and their moronically tautological approach to the fourth dimension, grumble…

        1. Jeremy Grimm

          I guess I need to explain a little more about one of my examples. Many ATT employees were more than sold on the virtues of Unix, enthusiastic to support an affiliated company, and well pleased with the performance of ATT Unix personal computers which many used as issued by Lucent. One fellow I spoke with was at the point of “losing” his desktop computer to get hands on an ATT Unix system. He had $$ in hand but in spite of all his efforts (gargantuan in my world view) he was unable to obtain and ATT PC from ATT internally.

          I agree that Linux didn’t need much marketing — I run Linux. Yes, innovation in software is by and large not innovation in any sense of the word. Rather Windows innovation is really creative obsolescence to continue their market. I’m worried about Linux as it tries to compete with Windows and in the process creates versions like the latest upgrades of Ubuntu that, at least to me, are less attractive, less useful, and since I run on very old processors, extremely aggravating in their use of horsepower to mimic Windows stupidity. But … your comment is non-sequitur, (please! no offense). [I share your impression of software “innovation”, still work with “C” and Perl and remain mystified by the draw of Java, “Patterns” and other object-oriented neologisms for libraries and well-written code.]

          You were supposed to question my last statements about wages and equity and why they didn’t impact growth/innovation ==> monopolies/cartels dictate price and there is no “free market” competition. [Actually I think we can have innovation WITHOUT growth. We can do more with less. We can build things to last. We can measure the growth of our knowledge. As matters stand at present — consider the tremendous growth in the economy which might attend a huge increase in slow but relentless terminal cancers. Think of all the growth in our GDP!]

  11. casino implosion

    I think people misunderstand what liberty meant to the apologists of slavery. To them, the idea that it was hypocritical or inconsistent to desire liberty while enslaving others would have made no sense. One either rules, or is ruled–no other option exists.

    1. Jim in SC

      Beginning, as far as I know, with Plato, innovation has not always been considered a good thing. The South was capable of innovating: it made the first functional (or dysfunctional, as it sank) submarine when war made it necessary. But innovations in general were not necessarily considered good, as they threatened the hierarchical social system. England dealt with such problems earlier, and the landed gentry class was largely impoverished by free trade, plus post WW1 inheritance taxes.

      John C. Calhoun considered slavery a stabilizer of the social order. He couldn’t have anticipated the impact of labor saving machinery such as John Deere’s plough, Cyrus McCormick’s reaper, and nitrogen fertilizers. The bullseye was on the backs of Southern planters before slavery was destroyed by war: but they were blissfully unaware. In another generation, the decline in the value of labor thanks to labor saving devices would likely have brought the end of slavery.

      1. juliania

        Plato? I would think the dialogic manner of pursuing wisdom would be an innovation of the highest measure, not to mention his admittedly underwhelming attempts to instruct the rulers of the day in virtuous conduct. (At least he tried.)

        Plato, in presenting his hero, Socrates, even upholds in “Meno” the innate wisdom of the slaveboy, something his pupil Aristotle bent over backward to deny. Your point would perhaps be made starting with Aristotle, who held slavery to be a natural condition. And he was tutor to Alexander, a point I find not in his favor.

        1. Jim in SC

          I would argue that many are slaves to their desires, and the new slave holders, who sell the goods to satisfy these desires, are simply more subtle than the old ones. The most pliable slave is the one who doesn’t realize he/she is one.

          In fact, people who are resistant to being sold what Madison avenue tells them they want are eventually financially independent. (It’s probably politically incorrect to say ‘rich.’)

        2. Jim in SC

          You imply that Plato was making a point about the equality of the human condition with his comments about the slaveboy. I don’t think so. His point was an epistemological one: knowledge is but remembrance.

          Plato’s preferred form of government was an aristocracy. If he was against slavery, I don’t know it.

    2. James Levy

      I’ve heard variations of this argument, especially from Gary Wills in his apologias viz. Thomas Jefferson, but I have a hard time buying it. The idea seems to be that liberty was something one owned, like cattle or a shotgun. Liberty was a proprietary condition, not a universal grant of equal rights. Liberty was seen as something that divides, not something that unites all men under the same condition of existence. This seems to me a very sad, small-minded and blinkered view of people and reality. It’s a variant of the “I’ve gots mine” “I’m all right, Jack” snark of a greedy, self-satisfied elite. It’s what philosophers used to posit as license, which was selfish and irresponsible, as apposed to freedom, which was a responsible state that took account of others and their rights. When right-wingers hit me with the “liberty” spiel, I know what they mean is “my right to do what I want and fuck you.”

  12. ogee

    I just don’t like all the assumptions that need to be made to keep these point comparable. There is too much mollycoddling of concepts here to try and make these arguments seem academic. Really, things are the way they are because of chaos and a striving towards order, by those that can. Nothing is happening in a vacuum. And no group is actually homogenous.
    a couple of points on American evolution. Everyone had “issues”. Sure the south had a slave culture. So did England. England only abolished slaves on british soil in 1805,whereas the slave ships were making the rounds from Liverpool for decades afterwards.So, british money was still being made by “slavery”, they just weren’t housing them on british soil.
    many notable technological advancements in new England in the 18th century, like textile manufacture, was the result of stolen/copied technology. There is no more “why” needed. Sure there were lots of innovation, but really people filled a need. It happened And the big difference at the time between the north and the south, was climate. People these days go about in their air conditioned lives from car to office. They don’t understand how un-hospitable southern heat can be. But the land is good. the growing season is long. It made more sense for the plantation owners to want to keep the slavery option , whereas the northern ports had the immigrant labor pool to use and throw away. All these “capitalists” were all about control. They each sought control over what they could.
    This is why the north had a hundred years of building infrastructure in its cities before the south did. It wasn’t until air conditioning that made the south a productive place like the north was. It was that time, that led to the advance of technology. The head start to grow cities, attract people, build things, institutions, factories, etc. The north started in the 18th century. The south began getting on board in the 19th century.
    There were evangelical abolitionists and there were hangings of uppity blacks after church.. (up until the 1960’s) There were northern capitalists who needed the slave labor to get their goods cheap. There were scions of many of the blueblood families/fortunes of today who made money from slavery, genocide, selling liquor to Indians for animal skins and land, importing/trading opium, stealing, war profiteering, taking land and killing the people who lived there .etc. You name it. And today you still have cities like new York and boston where mobsters run the back rooms, and control contracts for services. And wall street fraudsters who are knighted by the media as masters of the universe. There are shams everywhere.to this very day. Look at academics who pretend to be furthering discussion , but really are only bloviating to pad their publish summary.
    There were good people everywhere., but the cultures the world over have ALL been part of some great evil at one time or another…and all of that is kinda like, “no shit”
    So technology moves forward when someone can make more money that way. Well duh. But I would say, Yes. It is all dysfunctional, and yet this is what we are.

  13. Mark Arthur

    The copy needs another proofreading before being committed to the ages. Sorry to be the nazi…

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