Rescuing capitalism

Under capitalism, the rich try to become richer. In the process, they provide jobs for workers and products for consumers, stimulating the economy. As businessowners compete with one another for customers and for workers, they try to achieve the best balance of price and quality for their products. They try to find the right wages to pay their workers, high enough wages to keep the best workers, but low enough wages to keep their products affordable.

The Industrial Revolution offered a glut of workers because the population was growing, agricultural workers were being pushed off their land, and machines were making it possible to accomplish more work with fewer laborers. Socialists (and other enemies of capitalism) recognized the problems that the system contained; they saw the poverty of the working class. At the same time, industry and the growing population of the cities led to other problems not directly due to capitalism, such as pollution and disease. Blaming all these problems on capitalism, socialists assured their audience that changing economic systems would fix these problems and would offer workers a better life.

Karl Marx predicted that the workers would violently overthrow business owners, along with political and religious leaders and others who supported the status quo. He further predicted that the overthrow would happen earliest at the places where the Industrial Revolution began—the British Isles, followed by western Europe. Marx could not foresee a response to capitalism that would fix its problems from within. But certain things were already happening in Marx’s lifetime that would rescue capitalism from its dangers by improving the lives of the working class.

Even Moses and the prophets pronounced laws against greed, oppression, and unfair practices. They denounced cheating weights, scales, and measures; they spoke against mixing the chaff and the sweepings with the grain. According to the Bible, government represents God’s authority among people to enforce the laws, to protect the people, to limit the power of greed and other sinful tendencies. Governments in western Europe used their authority for the good of the people. They inspected stores and businesses to make sure their practices were fair and honest. They restricted pollution of the air, land, and water, establishing sewage treatment plants, water purification plants, and other needed responses to the pollution caused by industry and by urbanization. Governments placed limits upon the age of factory workers; they also limited the number of hours that could be required of workers. In many ways, governments used the force of the law to reduce the problems within capitalism, industrialism, and urbanization—and they did so without seizing the means of production, without taking farms and factories and stores out of the hands of their capitalist owners.

God’s law demands perfection. Human law cannot mandate the same level that God requires. Food contamination laws permit a small amount of insect parts, rodent hairs, and other contaminations; reading those permissions can be stomach-turning. Questions are raised, and will always be raised, about how much regulation is necessary and how much is too much. The political system exists to address such questions, and negotiation and compromise will always be part of the answer to these questions.

Perhaps the most important laws prompted by the Industrial Revolution were those that permitted workers to organize labor unions, leaders who represented the workers and negotiated with business owners for higher salaries and better working conditions. At first, business owners tried to break the unions, but governments supported the unions and insisted that business owners hear their demands and negotiate with them for the good of the workers. This process, unexpected by Marx and other revolutionary socialists, preserved capitalism in western Europe and North America. Eventually, much of the rest of the world would be persuaded to follow the same economic system. People turned to capitalism because it works. J.

Labor Day

The industrial revolution changed the world. One thousand years ago, Chinese technology created a new and better version of steel. Over the centuries that recipe spread, until it reached the British Isles, where iron and coal were abundant and were near each other, and where transportation by water made it easy to distribute what was manufactured. Labor-saving devices such as mechanical spinners and looms allowed increased production, and what happened in Britain began to happen in other European countries, in North America, and eventually throughout the world.

Capitalism had already begun to develop in medieval Europe. Workers formed guilds which controlled each craft, putting the power of production into the hands of workers. Along with the guilds came financial leagues which led to modern banking and a new financial system. With the industrial revolution came a new form of capitalism. Only those who had access to wealth could buy the new machines. Now workers came into the factories and worked for the investors instead of working at home and controlling their own careers. Following the precepts of capitalism, investors and factory owners paid as little as they could to workers and got as much work out of them as possible, thereby keeping prices low for their customers which allowed them to gain a profit.

Many people realized the problems implicit in the system of capitalism. Even Adam Smith, who wrote the book defining and defending capitalism, explained that workers needed to be treated well to produce a better product—and to be the customers that the factories required. Karl Marx was not the first thinker to attack capitalism, but he offered the most dramatic solution. He complained that the system was rigged to keep the many workers under the control of the few people who had wealth. Government and even religion, he said, always took the side of the wealthy few against the many workers. Marx predicted that the workers would rise in revolt. They would overthrow the wealthy few, along with government and religion, and create a new and fairer system. For a time, the government would own and control the factories and farms on behalf of the people (socialism). After a while the government would wither and die and the people would own the factories and the farms. They would distribute the wealth they produced according to the workers’ needs, and each worker would willingly labor according to his or her ability (communism).

Marx said that the revolution would begin in the countries where the industrial revolution began and would spread as industry had spread. When it had reached the entire world, then the conversion from socialism to communism could happen. Marx did not foresee any way the workers could achieve their goals of proper wages and decent working conditions without violent revolution. He did not foresee any way that capitalism could be preserved.

Marx was wrong. Workers in Europe and North America found ways to organize themselves into unions which could speak to the owners of factories on behalf of all the workers. Christian sensibilities took the side of the workers and implored factory owners to treat them better—fair wages, fewer hours of work, better and safer working conditions. Swayed by Christians and by the growing power of the labor unions, governments began making laws to require the workers in factories to be treated properly. Child labor was gradually abolished, work hours were regulated, and inspectors were sent into factories to guarantee the safety of the workers. Although there were exceptions, generally governments required factory owners to permit their workers to form unions that would negotiate with the owners for the good of the workers. Socialism and communism were not necessary. Capitalism, under limited government regulation, could be preserved, with investors and customers and workers all benefiting from the system.

In the United States we celebrate workers and their contribution to the nation and the world with a holiday called Labor Day. Unlike Memorial Day (which was originally May 30, until it was moved to the last Monday in May), Labor Day has always been celebrated on a Monday, the first Monday in September. Originally that Monday was meant to be a time when workers would parade through the streets of the city to be recognized by their fellow citizens. It was, naturally, an extra day without work for the laborers, a day when they could gather with their families and those of their coworkers in picnics and other festive occasions. Labor Day weekend has become the social end to summer, as Memorial Day weekend is the social beginning of summer.

Every Memorial Day a few people speak out about the importance of recalling the reason for the holiday. Memorial Day is not just about cook-outs and the beginning of summer. On Memorial Day we remember soldiers who lost their lives fighting for their country. I have written such reminders myself. Scolding Americans because we have forgotten the meaning of Labor Day happens far less often. Of course we should be grateful to those workers whose labor improves our lives. We might not go into factories and shake the hands of laborers there, but each of us can mark this Labor Day weekend in some appropriate way. Be kind to the restaurant workers and grocery store workers you encounter. Thank them for doing their jobs. Think of those other laborers who do not get time off for the holiday—police officers, fire fighters, hospital workers, pastors, and all those expected to continue working on a holiday weekend.

Labor Day recognizes workers. It also reminds us of a process—the way labor unions, governments, and Christians concerned about the lives of factory workers combined to assist those workers. Along the way, they rescued capitalism from the danger of revolt. We continue to debate how much regulation is necessary and which laws hinder capitalism excessively. We should debate these things. On Labor Day, though, we also rejoice and are glad for the good things we have because of the work of our neighbors. J.