Happy Labor and Capital Day
Capitalism is economic democracy – every penny is a vote
Tomorrow is Labor Day when America honors labor, as work is a noble activity. However, as the greatest capitalist nation ever, we should also honor and celebrate capital. When capital alloys with labor, it puts labor on steroids making work more productive and remunerative and allows workers to escape poverty.
Child labor in England circa 1840 |
The natural condition of man always has been and remains poverty. Throughout history, labor alone resulted in grinding poverty. It is only when capital fueled the industrial revolution, beginning in England in the mid-nineteenth century, that the masses escaped poverty. Subsequently, extreme poverty has been reduced by over 90% and is on the verge of elimination – attributable entirely to capitalism.
The few remaining poverty-stricken places on our planet result from insufficient capital investment for a variety of reasons. Most are impoverished by obeisance to collectivist, anti-capitalist ideologies. Some remain destitute because they repel capital by not respecting property rights and the rule of law. Yet others impose confiscatory taxation, currency controls and mind-numbing regulation.
Beginning of the Industrial Revolution
Most Americans rightfully have a phantasmal view of the early industrial revolution. They conjure Dickensian images of child labor amidst poor working conditions, long hours and low pay. What is unseen however is the devastating rural poverty the people fled to seek work in the factories. Although their lives in the cities were bleak, by their own calculus they were better off than the conditions they escaped.
The start of the industrial revolution was fueled by capital and was a godsend to humanity. Although Dickens’ books paint a grim picture of life in the mid-nineteenth century, nascent capitalism unleashed powerful forces that soon would change the world. Beginning circa 1840, capitalism ushered in a new golden age for workers. Wages exploded; life expectancy and literacy soared; child nutrition and mortality improved; and child labor receded while school enrollment surged. There has never been a comparable period of prosperity – and it continues to this day.
It wasn’t that long ago that America was a developing country. Child labor was not uncommon even in early twentieth century America, particularly in mining and agriculture. My uncle began work in the Pennsylvania coal mines when he was nine years old because children with lithe bodies could crawl into small spaces. I worked 50 hours per week while in high school. The first child labor laws in the USA were not enacted until 1938; but by then they were moot largely because parents already had removed their children from the labor force as soon as humanly possible.
Capitalism Gets No Respect
Despite capitalism’s astounding success, it gets no respect from the media and academia; a majority of young Americans believe socialism is superior. There are many reasons for this, but the principal one is false comparisons. Ideal socialism is compared to actual capitalism. Ideal socialism has never existed and can never exist because it is contrary to human nature. When actual socialism (Venezuela, Cuba, North Korea) is compared to actual capitalism, it is no contest. Capitalism also beats socialism in theory and morality – see my post of 3/24/19 at www.mllg.us.
Capitalism has created a cornucopia of wealth unprecedented in human history. Extreme poverty is virtually eliminated. Every metric of human and environmental well being is favorable and improving. Inequality is shrinking as the poor are getting richer at a faster pace than the affluent. Average folks live better than monarchs a few decades ago. Luxuries a short time ago are selling for ridiculously cheap prices at Walmart. None of these miracles was created by government or socialism.
“The great achievement of capitalism is not to provide more silk stockings for princesses but to bring them within reach of the shop girl,” Economist Joseph Schumpeter
Capitalism benefits humanity just by focusing on its business. The best metric of a business’ value to society is its profit. Capitalism benefits humanity far better than if it set out to do good or if government taxed it in a misguided attempt to do good. The best metric to measure the progress of civilization is the rate at which it creates new wealth. The more new capital, the better society is innovating, creating jobs, efficiently allocating resources and responding to people’s needs and wants.
Labor Day should be expanded to include capital. Just as Labor Day honors and celebrates workers, Labor and Capital Day would also honor and celebrate those capitalists who had an impossible dream, took great risks and had the will to see it through to fruition. The horn-of-plenty that is America resulted from both labor and capital. Let’s honor and celebrate both. Happy Labor and Capital Day 2024!
© 2024 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com