The "punk rockers" of the pre-capitalist era
By Chris Clancy
Amazon recently announced that sales of their e-books were now greater than combined sales of both their hardcover and paperback books.
Bad news for the traditional book publishing industry.
Inevitably, jobs will be lost. The more jobs which are lost the more news it makes – this is understandable. However, what doesn't make the news is what happens afterwards. This is the slow trickle of those who have been displaced - back into the workforce - satisfying new or newer needs. These needs are paid for with the extra money which purchasers of Kindle-like products now have available.
This is how an economy grows. This is where prosperity comes from. Joseph Schumpeter described the process as "creative destruction".
It was this process which paved the way for the onset of the Industrial Revolution - about two hundred years ago.
Prior to this the lives of the masses was indeed grim.
This was simply the way things had always been.
So how was it that such a world, one which had existed for millennia, gave way in a mere two hundred years, to one in which the poorest people in our society can now enjoy a standard of living which the pre-capitalist 1% could only have dreamt of?
And more importantly, why did the damned thing take so long to happen?
History provides the answers to both questions.
Without the invention of the printing press – some six hundred years ago – we'd still be living in a pre-capitalist age. The printing press, like Kindle, was an example of creative destruction. The production of hand copied books ceased and the whole industry disappeared.
But just think about what replaced it?
The impact of Gutenberg's invention is, and always has been, incalculable.
Wiki puts it as follows:
Nobody would dispute this.
But, in spite of the incredible growth in the development, dissemination and diffusion of knowledge and ideas, nothing much changed for the masses. Life for most was still a subsistence existence.
The field of study of these new wave philosophers was termed "political economy", and they in turn became known as, "economists".
As things turned out, their most fertile ground proved to be America. This was no "happy" accident.
Many of the Founding Fathers were steeped in the works of these philosophers. When they broke free from England they also broke away from the "Old Order".
The Constitution was specifically designed in order to try and ensure, amongst other things, small government, enforceable private property rights and an unfettered free market system.
Given the opportunity, the American people went for it. As time passed, the result for most working people was an almost continual process of betterment.
Milton Friedman went straight to the heart of the thing:
It is this system which the liberals have almost destroyed. They kicked things off with LBJ's Great Society back in the 1960s – this is when the actual decline began– this is when the rot set in. Its legacy has been a social disaster – a massive and unsustainable culture of dependency - bread and circuses.
Liberals simply cannot, or will not, accept that their ideas are fundamentally flawed. Under the Obama administration they have been woefully exposed. The system has stagnated – no-one knows what's coming next – least of all them.
Result – "Regime Uncertainty".
Any more of it and the system could well collapse.
Then what? Well …
Private property rights would be the first thing to go. Without them it wouldn't take us too long to start back on the road to where we'd come from.
The journey would be terrible and the destination even worse.
Chris Clancy lived in China for seven years. Most of this time was spent as associate professor of financial accounting at Zhongnan University of Economics and Law in Wuhan City, Hubei Province. He now lives in Thailand where he spends his time reading, writing, lecturing and, whenever he gets the chance, doing his level best to spread Austrian economics.