Tuesday 24 May 2011

Fast Following

Despotism and Universal Avarice

Despotic states produce universal avarice. When rules concentrate on exacting the maximum amount from those they control, their subjects become notably avaricious too, and respond by consuming, hoarding, and hiding the fruits of their labor, and by failing to produce nearly as much as they might. And even when some people do manage to be productive, chances are that in the end their efforts will merely enrich their rulers. The result is a standard of living far below the society's potential productive capacities.

Late in the tenth century, an iron industry began to develop in parts of northern China. By 1018, it has been estimated, the smelters were producing more than thirty-five thousand tons a year, an incredible achievement for the time, and sixty years later they may have been producing more than a hundred thousand tons. This was not a government operation. Private individuals had seized the opportunity presented by a strong demand for iron and the supplies of easily mined ore and coal. . . . Soon these new Chinese iron industrialists were reaping huge profits and reinvesting heavily in the expansion of their smelters and foundries. Production continued to rise rapidly. The availability of large supplies of iron soon led to the introduction of iron agricultural tools, which in turn rapidly increased food production. . . . But then it all stopped as suddenly as it had begun. By the end of the eleventh century, only tiny amounts of iron were produced, and soon after that the smelters and foundries were abandoned ruins. What had happened?

Eventually, Mandarins at the imperial court had noticed that some commoners were getting rich by manufacturing and were hiring peasant laborers at high wages. They deemed such activities to be threats to Confucian values and social tranquillity. Commoners must know their place; only the elite should be wealthy. So, they declared a state monopoly on iron and seized everything. And that was that. As Winwood Reade summed up, the reason for China's many centuries of economic and social stagnation is plain: "property is insecure. In this one phrase the whole history of Asia is contained." Rodney Stark, The Victory of Reason, p.71f.
Ah, yes. Clearly we can see the stupidity of the Chinese. But the same folly is present in our day. Property is fundamentally insecure, made subject to the rapacious extractions of government, through taxation, to maintain socialist ideals of equality and harmony. Consequently, the whole society is avaricious; our economic culture is one of under-production and over-consumption. Sure, historically the Chinese acted stupidly under the regime of Confucian "ideals". But we are fast followers, showing that we have learned nothing. Our soft-despotism is just as destructive, just as deadly, just as avaricious.

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