Thread: They chose to fail.

Originally Posted by machinehead61

Well friend, if you are a student of history, you're a very selective student.

I know all about Cambodia, China, etc. I used to be a member of the John Birch Society - if that means anything to your history knowledge. I left them because of their extreme aversion to the whole story. An open mind is a dangerous thing: you might actually learn something new if you read other views.

The two most dangerous words to a conservative are compromise and balance.

They always take them to the extreme. No middle ground. Their way or the highway. To them all compromise is evil and always leads to the slippery slope of totalitarian government.

History contradicts you.

Unlike you, who would have let the rest of the Irish starve to death rather than change direction and in your mind - slip into a totalitarian state - England/Ireland did change course after realizing they had made a horrible mistake that had created the worst human disaster in the 19th century. Ireland would never suffer another famine of that proportion again.

You need more history lessons in the consequences of laissez faire gone wild which you apparently never learned and how these were corrected by COMPROMISE/BALANCE by the intervention of government in the market to correct those excesses.

If the government hadn't, revolution would have.

I DO NOT EXAGGERATE.

EARLY GOVERNMENT REGULATION

Trade practices, prices, and wages in English industry were subject to a high degree of government regulation from the eleventh to the nineteenth century, first by the medieval guilds and, after the fifteenth century, by an all-powerful national government in the hands of the Tudors. Much the same was true in France where, following regulation by the guilds, Colbert instituted, in the middle of the seventeenth century, a series of national acts regulating practically every detail of economic life.

GUILDS
The merchant and craft guilds in the Middle Ages made regulations to control all sales and production within the town or city. Markets from the eleventh to the sixteenth century in England were mostly local. These guild rules or fair trade practices forbade usury, speculation, cornering of the market, or profiting by resale at a higher price. The guild in each line of business established a fixed "just" price for the product, and journeymen workers had to be paid a set "just" wage. The quality of the product was maintained by regulations governing the materials to be used, the hours of work, and working conditions in the master's shop, together with the requirement that the worker serve a certain period of apprenticeship in order to qualify as a master or member of a particular guild. These municipal rules of the guilds - mostly the common law of that time - were enforced upon all business establishments by the guild wardens.

Under the guild system there was a fair degree of economic and political equality. Every master craftsman was a worker who possessed his own productive equipment; none was permitted to become merely a middleman or a capitalistic employer. Each master had to produce his own wares - from raw material to finished product - and the products were sold directly to the consumer from the master's own home, which served as a store, workshop, and dwelling. Under these circumstances, no one producer could obtain a major share of the local market. Each businessman had to make his product himself and to sell it at the established "just" price; he could not introduce a change in the technique of production without the permission of the guild. With such restriction on competition and avarice, each guildsman was practically assured of some work, and there was no unemployment problem.
Along with a large measure of economic security, the medieval craftsman had personal pride in his product - though it was a long time before cobblers discovered that there is a difference between the left foot and the right foot. The craftsman got personal satisfaction in creating and selling a praiseworthy product. The guilds also played an important part in the social life of the town, and guild funds were used to assist widows, orphans, and the poor.

Richard A. Lester, Duke University
Economics Of Labor, 1941
p. 51-52

Please note the duration of the guild system: from the eleventh to the nineteenth century.

For about 800 years this was a stable economic system complete with no history of cyclical economic depression, epic starvation, nor genocide.

By comparison, how long did classical capitalism last until society got sick of it and decided to intervene?

"That free markets alone will not bring about the economic millennium is evident from the experience of England and France during the first half of the nineteenth century, when the doctrine of laissez faire was tried and found wanting. The period from 1810 to 1840 stands out in European history as the epoch during which there was the least amount of government intervention in economic affairs. The leading men of the time argued that the market forces of demand and supply should have free reign to work their magic. They thoroughly believed that complete freedom for individual initiative and self-interest would result in the greatest social good, and they were convinced that any government interference or labor legislation would be both vicious and futile, because it would run counter to "natural law". So firmly were the people of England convinced of these economic superstitions that they repealed all laws safeguarding the workers, restricting the spread of factories, and limiting the rise of capitalism.
From bitter experience, however, the English soon learned the limitations of markets as final arbitrators of economic matters. Before long Parliament was forced to pass a new set of labor laws called Factory Acts in order eliminate the most glaring evils and abuses that developed under this "natural order" of laissez faire.

An understanding of this epoch in economic history is so important for a student of labor, as well as for advocates of the individualistic ideal who oppose labor organization and legislation, that this chapter is devoted to a discussion of labor in England during the early nineteenth century and the failure of laissez faire as an economic policy....

This theory of laissez faire – let the market, not the government, control – along with the doctrine of economic harmonies, was adopted by Adam Smith directly from the Physiocrats, some of whom he had known personally. Smith believed that when “all systems of preference or of restraint” are completely abolished, “the obvious and simple system of natural liberty establishes itself of its own accord,” and he thought that each man pursuing his own self-interest is “led by an invisible hand to promote an end which was no part of his intention” - the general welfare of the nation. It is easy to understand why parts of the Wealth of Nations soon became the businessman's bible, though not the part in which Smith pointed out that high wages increased the efficiency of labor so that “where wages are high, we shall always find the workmen more active, diligent, and expeditious than where they are low.”.....

Under the early factory system in England, the employment of women and children was the foundation of certain branches of industry. Three independent estimates for the years 1833, 1835, and 1839 indicate that almost half of the factory workers in England were children under the age of 18 years of age – one quarter of the workers in the cotton mills were under 14 years of age. About 55 percent of all factory employees in the 1830's were women, and nearly one half of the female employees were under 18 years of age. In woolen, silk, and flax mills, 70 percent of all “operatives” in 1839 were women. A census of 1841 showed that 27 percent of the workers in British mines (coal, iron, tin, etc.) were under 20 years of age, although only 3 or 4 percent were females......

The normal working day for women and children as well as men was from 12 to 14 hours for six days a week, and at rush seasons factories sometimes ran day and night on one shift. Children, who in rush seasons worked 18 hours a day with only four hours for sleeping, often fell asleep at meals “with the victuals in their mouths.”.....

Working weeks from 72 to 108 hours for children tended to deform their bodies and legs and made workers old at 40. To force child laborers to perform their stint, foremen sometimes strapped them. Children of six, seven, and eight years of age worked in coal mines where, for 12 or 14 hours a day, girls in their teens, crawling on all fours, would drag a car or tub of 300 or 400 pounds of coal by chain attached to a leather band around their waists.....

The well-known French economist, J. B. Say, from his travels in England in 1815, declared that a worker with a family, despite efforts often of a heroic character, could earn no more than three quarters, and sometimes only one half, the sum needed to support his family. According to a writer in 1820, real wages (wages reckoned in commodities) had fallen 33 percent from 1760 to 1820....

It was from 1795 to 1835 that the problem of pauperism reached its most extreme and acute form, and that the term “labouring poor” became such a common expression.”.....

England had become, to quote Disraeli,”Two nations: between whom there is no intercourse and no sympathy; who are as ignorant of each other's habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets;....THE RICH AND THE POOR.”.....

In 1814 a crises, accompanied by an avalanche of commercial failures, shook the English market. Thereafter there were depressions in 1819-1820, 1825-1826, 1836-1837, and the early 1840's, and in 1847-1848 there was a great crash. That period became known as the “hungry forties.”.....

Laissez faire proved to be no cure for business cycles and depressions.

Richard A. Lester, Duke University
Economics Of Labor, 1941
p. 50-66


"Upwards of a million of human beings are literally starving and the number is constantly on the increase.....It is a new era in the history of commerce that an active and increasing trade should be the index, not to the improvement of the condition of the working classes, but to their poverty and degradation."

P. Gaskel
Artisans And Machinery, 1836

“Of course, this pervasive social and political unrest reflected not merely material poverty but social pauperization: the destruction of old ways of life without the substitution of anything the labouring poor could regard as a satisfactory equivalent. But whatever the motives, waves of desperation broke time and again over the country: in 1811-13, in 1815-17, in 1819, in 1826, in 1829-35, in 1838-42, in 1843-4, in 1846-8. In the agricultural areas they were blind, spontaneous, and in so far as their objectives were at all defined, almost entirely economic.

As a rioter from the Fens put it in 1816; “Here I am between Earth and Sky, so help me God. I would sooner lose my life than go home as I am. Bread I want and bread I will have.”

In 1816, all over the eastern counties, in 1822 in East Anglia, in 1830 everywhere between Kent and Dorset, Somerset and Lincoln, in 1843-4 once again in the east Midlands and the eastern counties, the threshing machines were broken, the ricks burned at night, as men demanded a minimum of life. In the industrial and urban areas after 1815 economic and social unrest was generally combined with a specific political ideology and programme – radical-democratic, or even 'cooperative' (or as we would now say, socialist), though in the first great movement of unrest from 1811-13 the Luddites of the East Midlands and Yorkshire smashed their machines without any specific programme of political reform and revolution.....

But essentially, what held all of these movements together, or revived them after their periodic defeat and disintegration, was the universal discontent of men who felt themselves hungry in a society reeking with wealth, enslaved in a country which prided itself on its freedom, seeking bread and hope, and receiving in return stones and despair.....

“Wretched, defrauded, oppressed, crushed human nature lying in bleeding fragments all over the face of society”, wrote the American, Colman, of it in 1845. “Every day that I live I thank Heaven that I am not a poor man with a family in England.”

Can we be surprised that the first generation of the labouring poor in industrial Britain looked at the results of capitalism and found them wanting?”

Eric J. Hobsbawm
The Pelican Economic History of Britain
Volume 3, From 1750 to the Present Day
Industry and Empire, 1969
p. 94-95

............................................Death Rate per 100,000 men 1863
................................Age 25-35..........Age 35-45..........Age 45-55
Agriculture in
England & Wales..............743...................805...... ..............1,145

London Tailors.................958...................1,26 2.................2,093

London Printers...............894..................1,747. ...............2,367

Karl Marx
Capital, 1906 (1st American Edition)
p. 509


None so blind as those who refuse to see.

I will attempt to save you from drowning in your economic ignorance.

Steve

Bang that drum. The dead tell no lies ... they are dead. And the mansion building continues.

Originally Posted by Cudorp

Of coursed the fiat system worked during the colonial times. The American colonies only had to trade with Britain, making fiat currency irrelevant. commodity backed currencies help deflate prices, and I don't really see how it can be taken advantage of.

Honestly I have a whole lot more research before I can even come close to forming an intelligent decision. I've a lot of reading to do first. My biggest concern right now is how tightly the money supply is managed and dollar devaluation.