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CASH VALUESMONEY AND THE EROSION OF MEANING IN TODAY'S SOCIETY
By Craig M. Gay
William B. Eerdmans Publishing CompanyCopyright © 2003 The Trustees of the New College Lectures
All right reserved.
Chapter OneSOURCES OF CAPITALISM'S REMARKABLE PRODUCTIVITY
Advanced industrial capitalism has generated, and continues to generate, the highest material standard of living for large masses of people in human history. Peter L. Berger, The Capitalist Revolution
As recently as a couple of hundred years ago life expectancy at birth was only between 30 and 40 years, and prior to the year 1400 it was only between 20 and 30 years. In large part this was because only every other child prior to the year 1400, and only three or four out of five prior to the year 1800, lived to celebrate their fifth birthday. But, of course, they probably did not have much to celebrate with, for as recently as 200 years ago the vast majority of people in the world went hungry most of the time. In pre-industrial Britain, for example, one harvest in six was a complete failure, and even when there happened to be food most people were still crippled by a variety of dietary deficiencies, as well as by constant outbreaks of bacterial stomach infections from the consumption of rotten or poorly prepared foodstuffs. Personal and public hygiene were execrable; chronic and wasting diseases such as malaria and tuberculosis were endemic; and the relatively short lives of our ancestors were often cut even shorter by viral or bacterial infections such as cholera, smallpox, diphtheria and plague. There were almost no medicines and few effective cures for even the most elementary of medical conditions.
In short it was not that long ago - indeed, just a couple hundred years - that our ancestors lived amid conditions that we would consider appalling today. 'If we take the long view of human history,' Nathan Rosenberg and LE Birdzell, Jr observe in How the West Grew Rich: the economic transformation of the industrial world, 'and judge the economic lives of our ancestors by modern standards, it is a story of almost unrelieved wretchedness.' The typical human society, Rosenberg and Birdzell note, has provided only a relatively small number of people with a humane existence, while most people lived in the abysmal poverty that has been the normal condition of most people throughout human history. We tend to forget the dominating misery of other times, they write, 'in part by the grace of literature, poetry, romance, and legend, which celebrate those who have lived well and forget those who lived in the silence of poverty'. The past is often mythologised and bygone eras are often remembered as golden ages of pastoral simplicity, but in fact they were not. Most of us would not have survived long enough to become interested in a book like this, and the few of us who might have survived would, in all likelihood, not have enjoyed the leisure time to read it - and we probably would have been unable to read in any case.
We have come a very long way. As of the year 2000 most people in the world could expect to live into their mid-60s and many even into their 70s and 80s. Astonishing advances have been made both medically and in terms of public and private hygiene. Infant mortality has fallen by more than 50 per cent in both developed and developing countries. Incomes have tripled in both industrialised and developing nations over the last 50 years. Many more people around the world have much more to eat, are better educated, enjoy more leisure, and possess more consumer goods than ever before. In particular, those of us in the West are, for the most part, prosperous, well-fed, healthy, well-educated, and quite astonishingly, comfortable relative to our ancestors. As Rosenberg and Birdzell go on to observe:
[D]uring the last two hundred years there has come to Western Europe, the United States, Canada, Australia, Japan, and a few other places one of 'history's infrequent periods when progress and prosperity have touched the lives of somewhat more than the upper tenth of the population ... In England, the United States, and parts of Western Europe, it became evident early in the 19th century (and later in other countries of the West) that an unusually high proportion of people were becoming better fed, healthier, and more secure than in the ancient Middle Eastern, Indian, Chinese, Greek, Roman, and Islamic civilizations - that is, than at any other time in human history.
And in spite of a few notable exceptions, western-style prosperity and security continue to spread around the world today, lengthening life spans, reducing the incidence of fatal or disabling diseases, improving living conditions, expanding literacy and education, and enhancing privacy and personal choice.
It is true, as Rosenberg and Birdzell point out, that this remarkable transition from widespread poverty to generalised affluence did not occur overnight but developed gradually over a period of several centuries, basically as economic growth just managed to exceed population growth. And it is also true that this transition has yet to occur for many of the world's poorest. Yet considered over the long span of human history, the transition from poverty to generalised prosperity has been sudden and dramatic, and it calls for an explanation. After literally millennia of almost universal poverty, western - and more recently a number of non-western - nations have managed to break free from it. How have they managed to do this?
A number of hypotheses have been forwarded to explain this remarkable transition to generalised affluence, some attributing western-style prosperity to various kinds of misconduct, such as slavery, colonialism, imperialism and the exploitation of labour. Yet as Rosenberg and Birdzell observe, all such hypotheses are plagued by rather significant empirical difficulties. They simply do not explain the facts of western development. In the first instance, all human societies have been characterised by the inequality of wealth and income but only a very few of them by sustained economic growth. It is the latter, then, that begs for the explanation and not the former. And western economic development has not been nearly as labour-intensive as theories emphasising the exploitation of labour suggest. Similarly, theories emphasising colonial exploitation fail to explain why certain colonies - notably the United States, Canada, Australia, New Zealand, Hong Kong, Singapore, etc. - seem actually to have benefited from the arrangement, while others - notably those in Africa - did not. Such theories also fail to explain why a number of nations - most significantly the United States - have managed to grow without colonies. For those nations that did hold colonies, furthermore, there does not appear to be any empirical correlation between the periods of colonisation and those of economic growth. In short, theories attributing western prosperity to misconduct of various kinds - as attractive as they perhaps are for other reasons - have simply not been able to explain the economic data.
Other theories seeking to explain western development have emphasised the importance of western science and technology. Yet while science and technology have obviously played, and continue to play, an extremely important role in western economic development, scientific and technological progress cannot, in and of itself, explain how and why the West managed to grow so rich relative to other civilisations. After all, China and the Islamic nations were actually far more advanced scientifically and technologically at the beginning of the modern era. And the simple transfer of advanced technology from the First to the Third World more recently has not, in and of itself, led to sustained economic growth.
Perhaps those of us in the West have simply been lucky. Perhaps we have simply been the beneficiaries of a series of historical accidents. Although we are undoubtedly fortunate, theories attempting to explain western economic growth in terms of chance events fail to explain why the West has been so consistently lucky, particularly over such a long period of time. As Rosenberg and Birdzell point out, the West has experienced one economic 'revolution' after another, e.g. the Mercantile Revolution from the 15th to 17th centuries, the Industrial Revolution of the 18th century, a second Industrial Revolution at the end of the 19th century with the introduction of electricity and the internal combustion engine and, most recently, the revolution in communications and information. The odds against such revolutionary developments happening in the same places and to the same people by mere happenstance are long indeed.
Some other dynamic has obviously been at work in the West - and increasingly in the East as well - that has somehow led to a significant increase in sustained economic productivity. Rosenberg and Birdzell's contention along this line is that the West grew rich because political pluralism and the relative flexibility of western institutional life created the social 'space' requisite for entrepreneurial activity to emerge and flourish. 'Our general conclusion,' they write, 'is that the underlying source of the West's ability to attract the lightning of economic revolutions was a unique use of experiment in technology and organization to harness resources to the satisfaction of human wants.' Rosenberg and Birdzell call this potent synthesis of experimental technology and economic organisation geared towards enhancing material welfare the West's 'growth system'. The key elements of this system were the broad distribution of the authority and resources necessary for innovation; the lessening of political and religious restrictions upon innovation; and the simple incentive in the fact that the widespread economic use of a particular invention had the potential to make its inventors quite wealthy. The West's growth system yielded innovations in trade and in the discovery of new resources, in production techniques, in organisation, as well as to the introduction of new products, particularly products intended for mass consumption. 'In the three-cornered relations of technology, the experimental economy, and growth of material welfare,' Rosenberg and Birdzell write, 'the experimental economy served as a more efficient link between science and growth than any other society had achieved, and the economy was itself the source of much of its own technology.'
However normal the practical pursuit of improving our material circumstances may seem to us today, it is important to stress that such pragmatic practicality has historically almost always been subject to some kind of religious discipline, for the harnessing of resources 'to the satisfaction of human wants' has almost always been - as, indeed, it still is - subversive of social order. Hence Rosenberg and Birdzell's conclusion begs the question of why the social 'space' that seems to have opened up in the West beginning in the 15th century was allowed to fill so quickly with inventors, entrepreneurs, and other practical people who appear to have been principally concerned with material life, or - as Rosenberg and Birdzell put it - 'a social class with the capacity to effect innovations, with incentives or motives for innovation, with a source of ideas for innovation, and with immunity from interference by the formidable social forces opposed to change, growth, and innovation'. Where did these early 'movers and shakers' come from? How is it that they were allowed to so revolutionise European society and culture?
This, of course, is the question Max Weber sought to explicate in his celebrated essay 'The Protestant Ethic and the Spirit of Capitalism'. Weber saw that the West's growth system could not be explained simply in terms of technical or organisational developments - as important as both were - but that the modern system was animated by an unusual spirit, a disciplined yet supremely practical disposition towards material life. The practical disposition, Weber noted along this line, had historically only managed to surface sporadically during periods of religious 'disenchantment', that is, during relatively brief interludes when religious understanding temporarily lost its ability to police the pragmatic pursuit of material interests. The fact that so much of modern social life - and particularly modern economic life - is shaped by practical and pragmatic concerns, then, would seem to indicate that something is shielding it from religious criticism. Either practicality has somehow received the sanction of modern religious understanding, so that what appears to be purely pragmatic and egoistic behaviour is actually religiously motivated in some way; or religious understanding has somehow been debunked within modern culture in such a way as to give a free reign to practicality and pragmatism. Weber's intriguing contention was that both are, in fact, true of modern economic culture, and that the former gave rise to the latter.
Weber argued that, at a particular juncture in western history, practicality became ethically significant within a fundamentally religious conception of the world. Indeed, Weber's central thesis was that it was the ethical rationalisation of the world wrought within Calvinist Protestantism - that is, the belief that the world should be actively reshaped to conform to the revealed will of God - that gave rise to an essentially new kind of practical outlook, one that was profoundly inquisitive and acquisitive, and yet that was also disciplined and rational and suspicious, as he put it, of 'the spontaneous enjoyment of possessions'.
Weber attempted to capture the gist of this new and supremely practical spirit in the term 'worldly asceticism'. It was, he stressed, the combination of limited consumption with the release of aquisitive activity that first gave rise to practical and rational capital accumulation. And Calvinism's - and particularly Puritanism's - uniquely practical, disciplined, and this-worldly spirit would not simply animate early capitalistic economic development, but it would also stimulate early modern scientific development. Indeed, it would eventually result in the practical rationalisation of all of modern life. 'As far as the influence of the Puritan outlook extended ...', Weber insisted, 'it favoured the development of a rational bourgeois economic life.... It stood at the cradle of the modern economic life.'
Calvinism's powerful synthesis of ethical duty and practicality appears to have been both intentional and unintentional. It was intended to the extent that it followed from the Protestant repudiation of the medieval distinction between 'sacred' and 'secular' work in the world. This meant that Protestants were more comfortable in affirming everyday work in the world than their Roman Catholic counterparts who tended, theologically speaking, to view work only as a kind of necessary evil.
Excerpted from CASH VALUES by Craig M. Gay Copyright © 2003 by The Trustees of the New College Lectures. Excerpted by permission.
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