The relentless revolution: a history of capitalism (26 page)

The threat from old enemies faded slowly—at least in the imagination. Paine continued to lash out at England’s aristocrats while the new industrialists were consolidating much greater power than they had had. Ordinary laborers lost a lot of liberty in this era. In the nineteenth century factory owners, newly solidified into a powerful class, exercised control over them through their right to hire and fire at will and without cause. Making private property the premium social good, they rejected the idea that freedom is just as precious to workers as to themselves. Because it took laws to protect workers trying to organize on the private property of their bosses, owners have often treated workingmen’s campaigns as attacks on liberty. For others, the protracted battle between labor and management over safety, wages, hours, and working conditions has called into question the linkage of economic and political freedom that once appeared unproblematic when capitalists were fighting against an entrenched landed class.

During the eighteenth century the cumulative effect of capitalist practices could clearly be seen as forming a system. Production was organized to return a profit rather than provide for the survival of the society. Individuals using their own resources made the decisions about how to use those resources without much interference from public authority. The sum of decisions became an economic reality of great significance in the setting of prices. Information coursing through an informal communications network in the form of prices or rates of interest or rents then influenced other participants’ choices. Employers rather than craft customs organized the work to be done. Personal power accrued to those who made money through the impersonal workings of the market. The powerful hierarchies of the church and the landed class continued to exert influence but frequently had to yield to those with power in the economic realm.

We could say that industrialization had a foot in slavery when we follow its course in the United States. Then slavery played a strategic part in the transformation of the textile industry, the leading sector in both the American and British economies. In the nineteenth century the American North and South formed a compatible economic relation. Northern manufacturers supplied clothes, timber, and tools to southern planters, who concentrated their capital on producing cotton, which was the leading export for the nation for the first five decades of the century. Without the profits from southern slavery, the American economy would certainly have developed more slowly, but there would have been nothing inherently unprogressive about a slower pace.

The restrictions on the freedom of wage earners were often difficult to see, but the chains of slavery were only too visible. I began this chapter linking the exploitation of slave labor in the Caribbean sugar plantations with the inventions that led to the Industrial Revolution. Driven by the same profit motive and drawing on the same funds, both material and cultural, the two had similarities, but by the end of the eighteenth century, they had diverged sharply. Industrial innovations took place at home in the midst of one of the most fertile intellectual periods in history; slavery flourished out of sight, in remote and backward areas, but not quite out of mind. Sensibilities further divided them. At home the abundant proof of social progress of which the marvelous machines were part awoke the sleeping conscience that had made possible the Atlantic slave system.

The cause of furthering human rights sprang, as if from nowhere, to animate two generations of reformers in the eighteenth century.
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Dozens of new propositions about men and women and their unfolding nature clamored for attention. The possibility—over time, the probability—of favorable change danced before all eyes in the abundance in the food stalls and the cornucopia of fabrics, china, books, tools, and trinkets shown off in shopwindows. Where once nothing had seemed more certain than that the past would endlessly repeat itself, now all awaited what would come next.

In the midst of this moral ferment a new spirit of humanitarianism infected the popular imagination in Western Europe. Curiosity created new commitments, and these inspired organizations that in turn launched political campaigns. Polemical pamphlets, memoirs of slaves, testimony from those involved in the trade pushed to the fore the vivid image of African men and women in chains. The contradiction between fighting for freedom while holding on to slavery was embarrassingly obvious to leaders of the American Revolution and their British opponents. They had after all justified their break with Great Britain on a universal right to “life, liberty, and the pursuit of happiness.” Four years after the Declaration of Independence, the Pennsylvania legislature abolished slavery. Under the Articles of Confederation, Pennsylvania was actually a sovereign state, so it became the first government to demonstrate that an institution as old as the Bible could be ended peacefully through the action of a democratically elected legislature.

Every other northern state followed Pennsylvania into this new era. By 1801 the Mason-Dixon line, which began as a surveyor’s line between Pennsylvania and Maryland, had become the symbolic division of free and slave labor in the United States. The gradual abolition laws of the northern states mandated freedom for those slaves born after a certain date once they had reached the age of twenty-five or twenty-six or twenty-eight. Even in the South, antislavery societies flourished until the 1820s, when profitable cotton cultivation sustained slavery for another forty years. Unlike the British with a statute that applied to their island possessions far from home, northerners freed slaves living in their midst. Far fewer slaves existed in the northern states than in the South, but it is estimated that enslaved men and women composed a quarter of the working population of Manhattan. When New York law denied legitimacy to holding human beings as property, it constituted the largest peaceful invasion of private property in history. It took the American Civil War to complete what Pennsylvania had begun with the passage of the Fourteenth Amendment to the federal Constitution in 1868. If one ever wondered whether ideas had any force in the workaday world, the campaign to end slavery should still any doubts.

Today there are fascinating experiments in capitalism shaping up around the world, but originally and for at least three centuries capitalism came from the West. Its momentum carried Europeans and their modes of operation around the world. Once capitalism was a full system with cultural values and social habits enhancing its power, it was poised to crush any opposition to its expansion. The qualities of Western Europeans—openness to novelty, aggressiveness, tenacity, ingenuity, and sense of superiority—became sharper under the grindstone of success. This is the Europe that the rest of the world knows, admires, and fears. It is also the culture that nurtured natural rights, democracy, and a humanitarian sensibility.

THE ASCENT OF GERMANY AND THE UNITED STATES

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N THE EARLY
nineteenth century public attention was riveted upon Napoleon Bonaparte’s armies carrying revolutionary ideas across the continent of Europe. But British industrialization gathering steam during the same years would be the more lasting revolution, building as it did on two centuries of advances in agriculture and trade. An integrated, modern economy was in the making. The benefits of Britain’s technical breakthroughs didn’t materialize into higher standards of living until well into the century, but the country’s prosperity was pretty evident. Almost two-thirds of its population had found jobs in manufacturing, retailing, or transportation, swelling the urban population. London became the glittering world capital of finance, trade, and fashion with a civil society enlivened by association meetings, demonstrations, the theater, and popular magazines, big and small.

Even shorn of its continental American colonies, Great Britain retained its preeminence as a seaborne power with colonies in the Caribbean, Canada, Singapore, Australia, and India. Contemporaries captured its global reach when they observed that “the sun never sets on the British Empire.” Industrialization was creating a new incentive for controlling raw materials that could be brought home to be worked up into finished goods. Its continental American colonies lost to an independent United States, Britain turned its attention to India, which enhanced the importance of its naval station in South Africa.

Yet this nineteenth-century chapter in the history of capitalism will not focus on British success but rather tell how Germany and the United States were able to pass Britain and take a commanding lead among world economies. It is in many ways a perverse tale, for Great Britain had established free trade and worked assiduously to bring other countries into the global commerce revolving around its banks and products. Germany and the United States fought the magnetic pressure Britain exerted by erecting tariffs to protect its industries, creating what Max Weber described as the “closed national state which afforded to capitalism its chance for development.”
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Those who move into untrod territory rarely move straightforwardly. Without maps or visual cues, they wander about, running into cul-de-sacs and lingering around dry wells. Having gone where no one else has been, the innovator has less fear of competition. When others decide to follow the successful trailblazer, their trip is more direct. In the case of Germany and the United States, modernizing their agriculture and industry became part of a push to create a nation. Their forward motion announced that capitalism was not an English aberration but rather a new stage in world history. By the beginning of the nineteenth century people had begun to anticipate that there would be further changes, that the future would not mindlessly replicate the past.

The pressure Britain’s neighbors (and rivals) felt to follow its lead was acute, for that most ancient of political strengths, military power, now depended upon industrial capacity. First Britain’s challengers had to figure out how to get their hands on their marvelous machines, leaving them with little choice but to engage in industrial espionage. Societies that enjoyed sufficient isolation from the Western European center of wealth and war making could ignore British gains, and they did, unless they were drawn into the British Empire. Those closer could not.

Once Britain’s spectacular new machines could be seen, it was possible to imagine replicating them. Such an appropriation had haunted private investors as well as British officials, but theirs was too open a society to be very successful at keeping secrets. The steam engines that revolutionized old ways of making tools and spinning cotton attracted spies from France, Germany, even Britain’s quondam colonies in America. All these countries had the same task: to discover what was turning conventional artisanal shops into manufacturing plants of unprecedented productive power. Britain prohibited skilled workers to emigrate, but the French had actually persuaded close to a thousand factory operatives to emigrate over the course of the eighteenth century.
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Nor could patented machines be exported legally, but the Germans smuggled in machines or bought them in Belgium. Americans with good memories inspected British plants and later copied them. Sometimes workers, slipping out of the country, duplicated in their new homes the lineups of machinery that had changed the face and pace of British manufacturing.

Many countries set up spinning mills, but England’s success, it turned out, involved more than machines. The dexterity and efficiency of English managers and workers had to be imitated as well. And that was a question of culture, something a good deal harder to copy. No other country came close to matching England’s output of textiles, the major product of the early Industrial Revolution. Even though wages everywhere else were considerably lower than they were in Great Britain, neither France nor Germany succeeded in exploiting that cost advantage. In 1811, 40 percent of all cotton spindles operated in Great Britain. Canada and the United States, which also had high wages, operated another 22 percent of the spindles, and the remaining 39 percent were spread through Germany, France, Russia, Belgium, Switzerland, Italy, Spain, Portugal, Austria, India, Japan, China, and Mexico! It was an amazing record, a triumph of machine design and worker expertise.
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During roughly the same period, 1780 to 1830, English population doubled while its total industrial output increased by almost 300 percent—an astonishing growth rate especially since much of that time Britain was at war with France.

The inventiveness that began with a crude steam engine in 1701 continued without pause in Great Britain. By 1851 Queen Victoria herself was ready to celebrate the ingenuity of her people. With Prince Albert as sponsor, a great exhibition of “the Works of Industry” opened in a stunning building made of glass on an iron frame. Inside the Crystal Palace, visitors could examine thirteen thousand contrivances gathered from the world’s collieries, docks, offices, kitchens, factories, and laboratories. The exhibition’s implicit heroes were the “inventors,” “artists,” and “authors” who emerged as new romantic figures. The more enduring impact from such an arresting display of the fruits of industry came from a new perception of time. It began to seem that all mankind had been moving inexorably toward great technological achievement. Contemporaries in the nineteenth and early twentieth centuries were still so dazzled by the marvelous machines of their era that they could not imagine that their forebears hadn’t been straining to get to the machine age as fast as possible.

History books began describing industrialization as a universal human goal. The past that used to enthrall Europeans, such as the glories of ancient Greece or the ardor of the Crusaders, slipped into the shadows. Writers treated those unlucky enough to have been born before the modern era with condescension. People spoke of industrialization as a destination, like a great city, toward which men and women had long been moving, even though they could no more anticipate what came after them than we can the events in the twenty-second century. This historical perspective didn’t fade until the late twentieth century, when writers began to refer to “postindustrialism.” Modernity having been reached, it became obvious that human life went on with new aspirations and concerns.