Re: -Reply: What is Economics?

[Jim Devine <JNDF%LMUACAD.BITNET@xxxxxxxxxxxxxxxxx>]

In response to Greg Ransom's Hayekian vision, Bruce McFarling
writes:
"The only problem here is that what you are
describing is technological progress, and technological
progress antedates civilization, while even under
civilization markets were not critical distributive
institutions within local economies until
relatively recently: say, the last 500 years or so.
       "One of the reasons for confusing market
insitutions and their consequences with technological
growth is the exponential illusion: exponential growth
looks like its accelerating, when in fact all that has
happened is an increase in the base: there appears to
have been faster growth over the last 500 years, while
market-oriented nations have come to dominance..."

I'd like to agree with Greg for once. I don't think the
rapidity of change, technological and institutional, under
capitalism is an illusion.  Under feudalism, there were
severe barriers to technological change, so that the
tranformation of agricultural techniques was very slow.
First, the serfs controlled the actual work in most cases
(or they were forced to work on the lord's desmesne, which
hardly encouraged tech. progress). But the serfs didn't
have the resources -- or in most cases, the incentive --
to innovate.  Second, the lords were competing on mostly
the military level, so that their surplus went to build
up armies and castles, etc. Military technology improved
(if that is the right word for something so disgusting)
much more rapidly than agricultural technology. The armies
were also useful for keeping the serfs down. The lords
usually tried to raise their surplus by squeezing the
serfs, working them harder rather than introducing new
technology (which they would have little control over).
This helped produce "Malthusian crises" such as that
of the mid-1300s (the Plague), since food supplies didn't
increase quickly.  This in turn shook up the feudal order
at set the stage for the establishment of capitalist
property rights in England (and small peasant property
in France, etc.)

Once capitalist property rights were established, then
the acceleration of technological change could start,
as capitalists plowed back their surplus-value (profits)
into accumulation. Here the feudal reticence about
technological change gave way to "damn the torpedoes,
full speed ahead" attitude. Technical change occurs
rapidly and often anarchistically, with the only
relevant criterion for its introduction being
profitability. The issue of whether it's actually good
for humanity or not is irrelevant to the profit
calculation. As we write, profitable technology is
destroying the ozone and encouraging global warming.

Of course, in this era of big government (military
Keynesianism and all that), the government has
promoted technological change as part of international
competition and the power of business in telling
the government what to do.

sincerely,

Jim Devine
jndf@xxxxxxxxxxxxxx or jdevine@xxxxxxxxxxxxxxx
Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA
310/338-2948 (daytime, during workweek); FAX: 310/338-1950
"No society can surely be flourishing and happy, of
which the greater part of its members are poor and
miserable. It is but equity besides, that they who
feed, clothe, and lodge the whole body of the people,
should have such a share of the produce of their own
labor as to be themselves tolerably well fed, clothed
and lodged." -- Adam Smith