Monday, October 11, 2010

THE DARK SIDE OF OUR FREE MARKET MYTHS, III

In class last week we discussed the transformation of America, from agrarian to industrial society. Key to this transformation is recognizing the demographic shift that occurred in just one generation, and how the state helped turn this period into an era of extraordinary opportunity for American industrialists.

Developments occurred so quickly that somebody born in 1845 was introduced to a country where roughly 90% of Americans lived in rural areas. If that person lived to the age of 80 they would have seen their grandchildren living in an industrial America with over half of it's population residing in the cities.


This had a significant impact on American politics in 1925, as cities had to deal with crowding, health, and infrastructure issues. Specifically, America had to become more diligent in the areas of public planning, public health, and public order.



As you can imagine, when the stock market crash hit in 1929 a majority of Americans could no longer feast off of nature's bounty, like early pioneers, because they lived in the cities. Capturing and feeding off of rats and other street vermin is not the same as hunting down and feasting on the deer and fish caught in the countryside.

This new reality posed serious problems during the Great Depression. Astute politicians and policy makers understood quickly that economic depression created entirely new problems when people live on top one another in urban settings. But I'm getting ahead of myself.

The real story is what made industrial America tick.

What Made the Great Transformation Possible
During the Great Transformation of America individual achievements and spectacular events were made possible and driven by the liberties granted by the Constitution, the gift of natural resources, protective tariffs (the highest in the industrializing world), and a very aggressive foreign policy, which we called Manifest Destiny.


While we like to believe that Americans achieved greatness because of hard work and the spirit of entrepreneurialism alone, the reality is the very visible hand of the state and nature's bounty were critical for setting the table for Americans to work hard and get ahead. The moral justification of capitalism draws it's lifeblood from this dynamic mix.

Along the way, there were many problems and issues that had to be dealt with which, as we shall see, required much more than a mythical "invisible hand" to solve.

As the demographic shift in America was occurring, old customs and habits were slowly swept away. A culture that valued familiarity and a handshake was gradually giving way to a world of increasingly distant and impersonal relations. The allure of the West - made possible by an aggressive foreign policy - and a string of economic booms and busts, pushed people across the continent in droves.


In the process, loyalties dissolved, while old forms of control, like familiarity, family bonds, and a sense of community were turned upside down. Practically, this meant that the familiarities of custom and tradition had to be replaced by state mandates and law enforcement as forms of social control.

In this way - and in spite of what contemporary politicians might argue - while we like to say that we want the state off our back, we definitely wanted them on our neighbors back. This was all part of the magic that was America.

Because people on the move were no longer held in check by local customs, traditions, or old family histories, self-starters understood that they could get a fresh start if they were willing to leave their comfort zones. Going to a new town, where no one knew your story, was a blessing for many. Perhaps more importantly, for those that had failed before, it gave life to the notion of redemption that was captured in the Constitution (see especially debtors and bankruptcy).

In the process many Americans took advantage of the opportunities available to make money and get fabulously rich.



From Sam Colt to Andrew Carnegie and John D. Rockefeller, people with great ideas and an organized mind found the right environment to create business empires that became the envy of the world. Along the way, the state made things easier for great wealth accumulation with a living Constitution that breathed life into vibrant public policies that favored industry and wealth creation.

Whether it was clearing Indians off the land, granting homesteaders property rights, building infrastructures, creating public education, subsidizing the railroads, embracing land grant colleges, and providing the legal infrastructures for businesses to become corporate behemoths (the Santa Clara decision in 1886 was particularly important), public policy promoted industrialization. There were no invisible hands here.

But there was a flip - and even dark - side to these developments.

How the Other Half Lived
As many began to point out in the late 1800s, Americans were leaving rural communities in droves. This forced them into cities and crowded conditions that were entirely unfamiliar. Customs and folk wisdom that came from the slower pace of the countryside were quickly lost. Neighbors didn't necessarily look after one another in an urban setting as easily as they did in the countryside.

Worse, as personal bonds disappeared, or never developed, in the cities an impersonal gap emerged between those who worked in America's emerging industrial palaces and those who owned them. Workers were often viewed as cogs in a machine, whose only utility lied in keeping the wheels of commerce going strong. The losers in our rapidly industrializing society were considered more as throwaways than they were viewed as wasted opportunities, a sentiment which photo-journalist Jacob Riis captured in the late 19th century



Driven by a ruthless laissez-faire, government-out-of-the-market, approach to production industrialists believed that the best worker was one who did what they were told, and was left alone to do their job. It didn't matter what they did, or how they lived once they left the job. What mattered was that they showed up and worked.

Those that didn't like their job - the argument went - could always leave. America was a free country after all. America's "survival of the fittest" mantra mandated that you suck it up, or fail trying.


For many at the top of America's economic food chain, if you couldn't hack it you were a loser, plain and simple. Society had no responsibility for your station in life, especially since your station in life was determined by talent, hard work, and individual initiative alone. 

Or was it?

What people often ignore or downplay is that at the time it didn't matter that social mores cast women in a light that gave them one role in society, which robbed them of any real opportunity to compete or live on their own, without being socially stigmatized ...



It didn't matter that children weren't real free agents, and weren't competent to negotiate salaries and fend for themselves in the mines or on the shop floors of America ...





Finally, it also didn't matter that Jim Crow and outright racism robbed an entire segment of American society of their opportunity to compete on a level playing field ...



According to the economic winners of the day, the losers of life deserved their station in life because they were either genetically or racially inferior. And they knew this because, as we shall see, science proved it.

The Junk Scholars of the 19th Century
Among the many intellectuals who helped breathe life into the notion that your position in life was determined by hard work and initiative alone were popular academics, like William Graham Sumner and Herbert Spencer. In fact, while many believe that Charles Darwin coined the term "survival of the fittest" it was actually Herbert Spencer who gave life to the phrase.


It would help him win praise and monetary support from America's wealthiest tycoons.

For his part, William Graham Sumner helped convince America's richest that they not only deserved their place in society because of the hard work that they did, but that "a drunkard in the gutter is just where he ought to be, according to the fitness and tendency of things ..."


These observations were tied to laws of nature, according to Spencer and Sumner, and should not be tampered with. For them, the natural order of "divine right and privilege" we saw during the Feudal Order had been replaced by the natural order of "success or failure" in the America's new liberal republic. Drunks in the gutter, like social misfits, deserved all the scorn and ridicule they had heaped upon them because they were nature's losers.

But the benevolent spirit, and chivalry, were not entirely dead. Because women had a natural place in the society, the state didn't have to concern itself trying to educate their delicate minds. For William Graham Sumner, the state had only one objective when it came to women, protecting their honor.

Herbert Spencer was so adamant about maintaining the proper place of women that he believed society's softer gender should not be allowed to be educated because:


... such brain forcing could lead to nervousness, anaemia, hysteria, stunted growth and excessive thinness.
But this wasn't the worst of it.

The Junk Science of the 19th Century
Franz Joseph Gall (1758-1828) made a name for himself building phrenology, a controversial field of study in 19th century.


The experts in the field argued, to an increasingly wide audience, that you could determine the emotional and personal characteristics of an individual by looking at their skull.

According to Gall the mind is composed of multiple and distinct faculties. Each one determines traits and characteristics from individual benevolence to violence. As a result, the size of each "faculty" in the brain is important because each faculty pushes and shapes the skull in such a way that by measuring skull patterns a good phrenologist could determine whether someone was predisposed towards charity, spirituality, kindness and aggression.


More simply, with the proper training and tools, the surface of the skull was viewed as a good index for reading individual aptitude and personal tendencies.

Over the course of the 19th century phrenologists were able to determine - scientifically, of course - that certain ethnic groups were predisposed towards violence, while others were geared for success because of the shape of their heads. As you can imagine, Western European skulls emerged with the most aptitude and benevolence skull spots (bumps?), while slaves, Eastern/Southern Europeans, Asians, and other groups were deemed to have skull shapes that kept them out of the highest levels of civil society, and far away from success.  

This pseudo science was embraced by many who were looking for scientific justification for their capabilities and acumen in the business world. Similarly, phrenology was supported by those who wanted to justify slavery (it was part of their heritage), and those simply looking to reaffirm their life of leisure in the country club (it's their natural environment).

But the distorted teachings of these "junk scientists" didn't end with phrenology. There would be an even uglier spin-off, which helped justify emerging social hierarchies, and the status quo in America. This school of thought was eugenics.

The Eugenics Spin-Off
Louis Agassiz (1807-1873) was one of the first scholars to give scientific racism intellectual heft. Agassiz argued that each race on earth were separate creations, that were started in diverse geographic zones (called polygenism). These distinct beginnings, according to Agassiz, endowed each race with different and/or unequal attributes.


For this reason, Agassiz argued, each species can be tied or classified by specific climate zones, just like animals and plants. One of Agassiz's great "discoveries" came when he proved the superiority of European stock over all others. Agassiz's spectacular findings should not have come as a surprise to anyone. As a European, it was only natural that he (or someone like him) would make this discovery.

As you can imagine, Agassiz's life work was very popular in the America South, where slave owners were looking for ways to justify slavery and racism (from a Christian perspective, of course; Agassiz was a Christian).




But the eugenics legacy didn't end with simply establishing the superiority of one ethnic groups genetic make-up over another.

The real genius behind eugenics was when policymakers started to buy into the idea that certain genetic groups were predisposed to certain behaviors, and believed that they could purify society. To do this many states in America began to sterilize habitual criminals, lunatics, schizophrenics, and others who had been officially labeled as social misfits.



And, if you're wondering, yes, this is where the Nazis got many of their ideas.



The irony in all of this is that while many of these 19th century scientists drew from Charles Darwin (who was a real scientist) most, if not all, of their work would have been rejected by Darwin on scientific grounds.

Unfortunately, though, the damage had been done.

 Real World Effects ...
One of the most damaging effects that came from embracing the junk science that Spencer, Sumner, Gall, Agassiz, and their followers embraced is that it reinforced certain stereotypes, which perpetuated a biased and unequal system.

We have to keep in mind here that while the Robber Barons of the 19th century were undoubtedly hard workers, competitive, and possessed keen minds, they were successful in part because they didn't have to compete on a level playing field. One half of the population (women) were bottled up by an entrenched belief system that said a women's place was in the home, having babies. Moreover, blacks were systematically excluded, while other ethnic groups were removed from life's great entrepreneurial experiences by the prejudices and biases of the day.

With phrenology, eugenics, and the works pushed out by Sumner and Spencer (and their followers) dominating the day the promises of equal opportunity were distant dreams for many who lived in 19th and early 20th century America. Worse, women, the poor, certain ethnic groups, and people of color were viewed as nature’s misfits who deserved their misfortune.

This was, after all, the natural order of the day. And science was there to prove it. I'll pick up on this, and discuss the social and political reactions that challenged these developments in a post later this week.

- Mark

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