Sunday, 4 June 2017

This Joy of Boots (2017)



Before I go on with this blog, I'm going to insert a brief coda to my post on Wells's This Misery of Boots (1907). It's common enough to test Wells's technological predictions against later developments: to set his representation of aircraft, tanks or genetic engineering (say) against what actually came to pass. It might be worth doing this with other aspects of Wellsian speculation, too.

In This Misery of Boots, Wells identifies a real specific problem that speaks to a real general problem. In the UK climate we cannot do without footwear. Footwear, though, is too expensive, and so, Wells notes, everywhere ‘people are badly, uncomfortably, painfully shod, in old boots, rotten boots, sham boots’. This is true even though there are in the UK plenty of raw materials to make boots, and plenty of idle people, many of them unwillingly idle, to provide the boot-making labour. For Wells, this renders the problem of ‘boots’ twofold: the problem of the control of the means of production, and the problem of the organisation of labour. He illustrates this by quoting a letter from an (unnamed) labouring man:
I am a railway man, in constant work at 30/-. per week. I am the happy, or otherwise, father of six healthy children. Last year I bought twenty pairs of boots. This year, up to date, I have bought ten pairs, costing £2; and yet, at the present time, my wife and five of the children have only one pair each. I have two pairs, both of which let in the water; but I see no prospect at present of getting new ones. I ought to say, of course, that my wife is a thoroughly domesticated woman, and I am one of the most temperate of men. So much so, that if all I spend in luxuries was saved it would not buy a pair of boots once a year. But this is the point I want to mention. During 1903 my wages were 25 shillings and sixpence per week; and I then had the six children. My next-door neighbour was a boot-maker and repairer. He fell out of work, and was out for months. During that time, of course, my children's boots needed repairing as at other times. I had not the money to pay for them being repaired, so had to do what repairing I could myself. One day I found out that I was repairing boots on one side of the wall, and my neighbour on the other side out of work, and longing to do the work I was compelled to do myself.
Wells looks around him, and sees ‘great stretches of land in the world, with unlimited possibilities of cattle and leather and great numbers of people, who, either through wealth or trade disorder, are doing no work.’ So he asks this question: ‘Why cannot the latter set to work and make and distribute boots?’

Now: we can say that various places in the twentieth-century tried Wells's standard-model old school socialist solution—viz., taking collective control of the means of production and orchestrating labour according to a centralised plan—and that it didn't work out so well. I don't want, here, to get into the ins and outs of this, although there are a great many ins, and a large though smaller number of outs. But the failure of State Communism, broadly speaking, leaves the problem of Boots untouched. We might thumbnail Wells's issue as follows:

1. Boots are a necessity.
2. Under the free market, poor people cannot afford boots.

Since [2] simply reverts us back to [1], this becomes a small version of the same feedback loop that applies across a range of necessities. You can see why people in 1900 thought Revolution both inevitable and imminent—the inescapability of this ongoing loop must, surely, provoke it to short-circuit, which is to say, to a violent outburst by the poor. And you can see too how a Wellsian socialist would look at that particular loop and say: the weak link is the ‘under the free market’ element. Change that, and you break the cycle of misery.

That's not what happened, though, as we all know. Instead what happened was—again very broadly—that poor people became able to afford boots. Boots became relatively cheaper compared to even the low earnings of the poor. This was because productivity increased to a startling degree, which resulted in greater purchasing power across the board.



I love the typo in the header to that chart (it's from here, incidentally): chickens get cheaper, but proofreaders not, I suppose. Anyway: this does not mean that poverty has been abolished, of course: indeed, as Thomas Piketty exhaustively shows, the global gap between rich and poor has been getting steeply worse since 1975, and is now at crisis levels. But it has meant that Wells's specific problem of Boots was solved without revolution. Robert Fogel [The Escape from Hunger and Premature Death, 1700-2100 (Cambridge University Press 2004)], Stanley Lebergott, [Pursuing Happiness: American Consumers in the Twentieth Century (Princeton University Press 1993)] and others discuss the way steep improvements in productivity have transformed modern life. In 1900 the amount of individual consumption that might be bought with one hour of work amounted to roughly $3.00; this had increased to roughly $22 by 1990 (both numbers measured in 21st-century dollars). One striking stat from Lebergott: ‘a U. S. worker today earns more (in terms of buying power) working for ten minutes than subsistence workers, such as the English mill workers that Fredrick Engels wrote about in 1844, earned in a 12-hour day.’ We might say that this has more to do with the relative cheapening of goods than the relatively enrichment of workers—although when you put it like that you can see that those two positions are, in many respects, versions of one another.

How did it happen? The orthodoxy of free marketeers is that it's competition that drives down prices. Wells would not have been persuaded by this, not least since in 1900 the market for boots had been a zone of unregulated competition for centuries, and people still couldn't afford boots. No: the real-world narrative that actually took us all from This Misery of Boots to This Joy of Boots had much more to do with the rapid technological innovations of the 20th-century, both in terms of new materials and manufacturing processes, and in terms of greatly increasing the efficiency with older manufacturing processes. This leads to the virtuous circle where giving poor(er) people more income expands the economy—because such people are more likely to spend their extra income—in a way that giving rich(er) people more income doesn't, because they're less likely to spend extra income.

The puzzling thing is that Wells, whom we tend to think of as the prophet of new technology, didn't intuit this, or anything like it, as the solution to his Boot problem. Why not, I wonder?

7 comments:

  1. For someone so fascinated by the World State, it's certainly interesting how much he downplays the role globalisation in solving the misery of boots. He briefly mentions a hypothetical free enterprise voyage to South America for leather, but he imagines them shipping it back to Britain for manufacture. Maybe it's political (a socialist pamphlet recommending offshoring cobbling to Malaysia probably wouldn't go down too well), maybe it's cultural (in 1900, it may have been unimaginable that Britain would ever not be the industrial capital of the world), but it's an odd lacuna.

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    1. Yes. It's a curious blindspot in Wells that he envisages, and indeed actively predicts, a World State achieved by political means, but never a neoliberal globalised World State (such as the one we currently inhabit) achieved by economic means.

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  3. the real-world narrative ... had much more to do with the rapid technological innovations of the 20th-century ... and ... greatly increasing the efficiency (of) manufacturing processes. This leads to the virtuous circle where giving poor(er) people more income expands the economy'

    Well, absolutely. But this socio-economic philosophy has a proper name, which is Fordism (as you almost certainly know).
    https://www.britannica.com/topic/Fordism

    And while it seems intuitive to you and I, if you go back and look at the historical record you might be surprised -- or maybe not -- at just how much upper-class rage was directed at Henry Ford in his time for being a 'class traitor' and paying more than the minimum wage.

    This splenetic rage at paying the lower classes anything but the most immiserating wage feasible never dies among the 'economic royalists.' Here in 2017, there was this just last month --

    http://www.seattletimes.com/business/wall-street-balks-as-american-airlines-gives-employees-pay-raises/

    'American Airlines is giving pay raises to its pilots and flight attendants, who have complained they are paid less that peers at other airlines. Wall Street isn’t happy....

    '“This is frustrating. Labor is being paid first … again. Shareholders get leftovers,” wrote Citi analyst Kevin Crissey in a note to clients. Investors showed their displeasure by sending American Airlines shares down 5.2 percent to $43.98....'

    Point being, there's little understanding and clear thinking about how money is created and how the economy works now -- largely because lies and obfuscation best suit the powers that be. As Henry Ford commented: 'It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.'

    And this was back in the days when there was still a nominal gold standard, rather than fiat currency. So I find it hard to fault Wells, who was so insightful about so much else, for not being able to figure out in 1907 what almost nobody had figured out then -- what indeed it took Henry Ford, who would create the Ford Model T in 1908, to figure out.

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    1. This is astute, and very helpful to me: though Fordism (which is to say, industrialized, standardized mass production) is surely only one aspect of the increases in productivity over the 20th-century ... there are also things like raw innovation, and other increases not directly attributable to the assembly line. But, broadly, yes: everything you say about the hostility to increasing workers' pay and financial obfuscation is of course spot on.

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    2. I don't think it's that astute. I do feel that it's always a temptation to say of people in past eras, "well, why couldn't they see it's not like that, but rather like this, as we know today, ?"

      So I wanted to speak up for Wells, who lived in a time when commodity money -- gold-backed currency -- was still almost all of what there was, which would have made the facade of money creation and the terrible power we've given over to private banks much harder to figure out.

      Though, yes, there are always the obfuscations. It's striking how little these change. As with the post-2008 government-imposed austerity programs because "there isn't enough money to pay for those public services" right after those very same governments have magically created trillions to bail out the bankers.

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    3. You are confusing fiscal expenditure by government with the financial transactions of developed countries' largely independent central banks. These "trillions" you refer to aren't real money, akin to distributing new £20 notes by helicopter all over the country for citizens to spend. What's happened is that central banks have purchased hundreds of billions of debt to get the debt off banks' balance sheets, reducing their risk profiles and enabling them to improve their capital reserves and - the reasoning goes - build confidence to lend to the real economy; the ECB is buying commercial debt too now using the same economic model. As banks have much higher capital requirements since 2008, some of the money has been invested in government bonds, pumping up prices and depressing yields to the point that several European countries have negative interest rates on some bonds; some has been invested in equities, leading to asset inflation, especially in the US stock markets; and some has been added to the enormous circulation of cash chasing returns in currency speculation or on deposit. Surprisingly little of the money has found its way into the real economy: banks are so cautious now, and so restricted in their freedom of movement, they really struggle to find companies or mortgage debt they are willing to invest in. We have the same reluctance in many multinationals to invest in the productive economy, so they are "hoarding" trillions of accumulated profits too.

      All of this is quite different from the question of fiscal income and expenditure by the UK Government. "Austerity", a.k.a "Prudence" was absolutely necessary from 2008: the government was spending £4 for every £3 it took in in taxes; the fiscal deficit was over 10% of GDP; the national debt was booming and looks like it will peak at around 90% of GDP, and interest on that debt, even with today's ultra-low interest rates, is still 3% of GDP or 8% of all government revenue.

      It's also arguable that "austerity" has actually been pretty mild: under the governments since 2010, huge areas of their expenditure like the NHS, education and most areas of welfare have been protected in real terms; expenditures on pensions have increased dramatically under the "triple lock"; the nil-rate band for income tax has virtually doubled to £11,500; and although wages are static or falling in real terms, the number of people in employment is the highest ever recorded. The government has actually achieved a remarkable success in bringing its fiscal deficit back below 3%, whilst holding the public services together and continuing to attract investment in its bonds at a time of ultra-low interest rates.

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