State of Mankind

A New Way Of Thinking

Industrial Capitalism

Continuing our study of the economic advances of Western Culture, we will now look at the changes that moved Commercial Capitalism into Industrial Capitalism, and the associated benefits and challenges.  Quigley sums up the transition quite quickly:

“In this second stage [Commercial Capitalism], mercantile profits and widening markets created a demand for textiles and other goods which could be met only by application of power to production.  This gave rise to the third stage:  industrial capitalism.”  (Tragedy & Hope, pg. 42)

So the major development that marked Industrial Capitalism was essentially the factory.  There was also a change in the control of the economy from the communities and states that had run mercantilism to the owners of the private firms or partnerships that produced the goods.  Along with this change in control, came a change from the conscious control of mercantilism to the automatic control (not consciously planned) known as “laissez-faire”.  Under this system, companies competed in the market place to sell goods.  Quigley explains the result of this factory system on society:

“The growth of industrial capitalism gave rise to two new classes, the industrial bourgeoisie and the industrial workers (or proletariat, as they were sometimes called in Europe)…

“Under industrial capitalism and the early part of financial capitalism, society began to develop in to a polarized two-class society in which an entrenched bourgeoisie stood opposed to a mass proletariat.  It was on the basis of this development that Karl Marx, about 1850, formed his ideas of an inevitable class struggle in which the group of owners would become fewer and fewer and richer and richer while the mass of workers became poorer and poorer but more and more numerous, until finally the mass would rise up and take ownership and control from the privileged minority….” (Pages 40-41)

The ideas of Marx, though not totally new, came about during this time in their modern form.  This is an important development, as these ideas stick with us today under various names and in various ways.   They are often presented as the alternative to the current system, which is not entirely correct, as few people understand our current situation.  To understand our current situation, as well as past situations, some reasons for Marxist ideas, as well as the reasons that many people look at capitalism so differently, we need to understand somewhat the goals and results of capitalism.  We will look at this now, though we will have to apply it differently to the different stages that capitalism went through in our society.  From Quigley:

“…Capitalism provides very powerful motivations for economic activity because it associates economic motivations so closely with self interest.  But this same feature, which is a source of strength in providing econoimic motivation through the pursuit of profits, is also a source of weakness owing to the fact that so self-centered a motivation contributes very readily to a loss of economic coordination.  Each individual, just because he is so powerfully motivated by self interest, easily loses sight of the role which his own activies play in the economic system as a whole, and tends to act as if his activities were the whole, with inevitable injury to that whole.  We could indicate this by pointing out that capitalism, because it seeks profits as its primary goal, is never primarily seeking to achieve prosperity, high production, high consumption, political power, patriotic improvement, or moral uplift.  ANY OF THESE MAY BE ACHIEVED UNDER CAPITALISM, AND ANY (OR ALL) OF THEM MAY BE SACRIFICED AND LOST UNDER CAPITALISM, depending on this relationship to the primary goal of capitalist activity–the pursuit of profits.  During the nine-hundred-year history of capitalism, it ahs, at various times, contributed both to the achievement and to the destruction of these other social goals.” (Page 43, emphasis mine)

Quigley’s definition here of capitalism, hardly complimentary, does point out what I believe to be the most important aspect of the system–economic freedom of the individual.  He points out very well that capitalism can be a good or a bad force, depending on the individuals involved.  He also points out, many times, the importance of the profit motive.  In our search for principles of the United Order, I believe economic freedom is extremely important, but our rejection of the profit motive for the most part is also extremely important.  For this reason, I generally reject the term ‘capitalism’ in favor of the term ‘free market’.  From David O. McKay:

“The fostering of full economic freedom lies at the base of our liberties.  Only in perpetuating economic freedom can our social, political, and religious liberties be preserved.”

It is interesting to me to note, that when I read of church leaders talking on the subject, they often speak of economic freedom being vital to freedom which is vital to the United Order.  I have yet to find where they encouraged capitalism as a mechanism to make us rich or that we should seek profits as our self interest.  Our interest is (or should be) in building the Kingdom of God on the Earth.

To ask the questions which I think are most vital:  Can we live in economic freedom and choose to live as God would have us live?  Or is the profit motive too enticing and we end up serving Mammon?  As we follow further developments of capitalism (financial capitalism, and monopoly capitalism), we will see that the world has often chosen the latter.  Have their been good results from capitalism in general?  What poor results have come?  How are we to act?  Should we support capitalism for the freedom aspect, or must it be replaced?  What will help us learn the mentality of the United Order?



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