[C]apital, and the question of who owns it and therefore reaps the benefit of its productiveness, is an extremely important issue that is complementary to the issue of full employment….I see these as twin pillars of our economy: Full employment of our labor resources and widespread ownership of our capital resources. Such twin pillars would go a long way in providing a firm underlying support for future economic growth that would be equitably shared. [Letter to The Washington Post , July 20, 1976.]
In order to stop inflation, and to promote domestic economic growth, the following three-fold program, I believe, is imperative: 1) Controls on the money supply through continuing fiscal and monetary measures. 2) A massive educational and action program designed to enlist government, labor, and management collaboration to increase productivity at both the micro- and macro-economic levels. 3) Development of “noninflationary flexible reward mechanisms” for sharing the productivity gains and profit gains with all factors of production/distribution. Well designed and communicated profit sharing programs can play a unique role in helping the United States in its present battle against inflation both as an “organizational” incentive capable of motivating everyone in the company to increase productivity and reduce costs: and as a “flexible reward mechanism” to give all factors of production/distribution the opportunity to earn “more” on a non-inflationary, as-earned, basis directly related to the enterprise’s ability-to-pay.
Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile the excluded are still waiting. [ Evangelii Gaudium, op. cit., §54, Nov. 26, 2013. ]
Under the old social philosophy which had governed the Middle Ages, temporal, and therefore all economic, activities were referred to an eternal standard. The production of wealth, it distribution and exchange were regulated with a view to securing the Christian life of Christian men. In two points especially was this felt: First in securing the independence of the family, which can only be done by the wide distribution of property, in others words the prevention of the growth of a proletariat; secondly, in the close connection between wealth and public function. Under the old philosophy which had governed the high Middle Ages things had been everywhere towards a condition of Society in which property was well distributed throughout the community, and thus the family rendered independent. [ The Crisis of Civilization, Being the Matter of a Course of Lectures Delivered at Fordham University, 1937 . Rockford, Illinois: Tan Books and Publishers, Inc., 1991, p. 107.]
What is clear from [Louis O. Kelso’s ] description is that money is a “social good,” an artifact of civilization invented to facilitate economic transactions for the common good. Like any other human tool or technology, this societal tool can be used justly or unjustly. It can be used by those who control it to suppress the natural creativity of the many, or it can be used to achieve economic liberation and prosperity for all affected by the money economy. [“A New Look at Prices and Money: The Kelsonian Binary Model for Achieving Rapid Growth Without Inflation,” Journal of Socio-Economics , vol. 30, p. 495, 2001.]
[M]any of the deficiencies of our economic system could be alleviated if ways were found to broaden the ownership of the means of production.…This has happened in some companies [through ESOPs]. Successful approaches of this sort would pay dividends in terms of employee commitment and morale. And they would not deprive anyone of his present holdings since they are based on future growth. [ The Second American Revolution , 1976.]
Taxation has its limitations as a method of achieving better economic distribution since for this purpose it is essentially remedial. We must also take a positive approach by finding new ways to spread ownership of future capital growth more broadly in our society. [ The Second American Revolution , 1976.]
War and revolution had stunted the economic growth of the country and retarded every attempt at social or political reform; its future was mortgaged by the assumption of an enormous burden of debt in 1869 and 1870. A renewal of war with Guatemala in 1871, and a revolution three years later in the interests of the ex-president Medina, brought about the intervention of the neighbouring states and the provisional appointment to the presidency of Marco Aurelio Soto, a nominee of Guatemala. This appointment proved successful and was confirmed by popular vote in 1877 and 1880, when a new constitution was issued and the seat of government fixed at Tegucigalpa. Fresh outbreaks of civil war occurred frequently between 1883 and 1903; the republic was bankrupt and progress again at a standstill. In 1903 Manuel Bonilla, an able, popular and experienced general, gained the presidency and seemed likely to repeat the success of Soto in maintaining order. As his term of office drew to a close, and his re-election appeared certain, the supporters of rival candidates and some of his own dissatisfied adherents intrigued to secure the co-operation of Nicaragua for his overthrow. Bonilla welcomed the opportunity of consolidating his own position which a successful war would offer; José Santos Zelaya, the president of Nicaragua, was equally ambitious; and several alleged violations of territory had embittered popular feeling on both sides. The United States and Mexican governments endeavoured to secure a peaceful settlement without intervention, but failed. At the outbreak of hostilities in February 1907 the Hondurian forces were commanded by Bonilla in person and by General Sotero Barahona his minister of war. One of their chief subordinates was Lee Christmas, an adventurer from Memphis, Tennessee, who had previously been a locomotive-driver. Honduras received active support from his ally, Salvador, and was favoured by public opinion throughout Central America. But from the outset the Nicaraguans proved victorious, largely owing to their remarkable mobility. Their superior naval force enabled them to capture Puerto Cortes and La Ceiba, and to threaten other cities on the Caribbean coast; on land they were aided by a body of Hondurian rebels, who also established a provisional government. Zelaya captured Tegucigalpa after severe fighting, and besieged Bonilla in Amapala. Lee Christmas was killed. The surrender of Amapala on the 11th of April practically ended the war. Bonilla took refuge on board the United States cruiser "Chicago." A noteworthy feature of the war was the attitude of the American naval officers, who landed marines, arranged the surrender of Amapala, and prevented Nicaragua prolonging hostilities. Honduras was now evacuated by the Nicaraguans and her provisional government was recognized by Zelaya. Miguel R. Davila was president in 1908 and 1909. Entry: HONDURAS
He refused to Smith's system the title of the industrial, which he thought more appropriate to the mercantile system, and designated the former as "the exchange-value system." He denied the parallelism asserted by Smith between the economic conduct proper to an individual and to a nation, and held that the immediate private interest of the separate members of the community would not lead to the highest good of the whole. That the nation was an existence, standing between the individual and humanity, and formed into a unity by its language, manners, historical development, culture and constitution. That this unity must be the first condition of the security, wellbeing, progress and civilization of the individual; and private economic interests, like all others, must be subordinated to the maintenance, completion and strengthening of the nationality. The nation having a continuous life, its true wealth must consist--and this is List's fundamental doctrine--not in the quantity of exchange-values which it possesses, but in the full and many-sided development of its productive powers. Its economic education should be more important than the immediate production of values, and it might be right that one generation should sacrifice its gain and enjoyment to secure the strength and skill of the future. In the sound and normal condition of a nation which has attained economic maturity, the three productive powers of agriculture, manufactures and commerce should be alike developed. But the two latter factors are superior in importance, as exercising a more effective and fruitful influence on the whole culture of the nation, as well as on its independence. Navigation, railways, all higher technical arts, connect themselves specially with these factors; whilst in a purely agricultural state there is a tendency to stagnation. But for the growth of the higher forms of industry all countries are not adapted--only those of the temperate zones, whilst the torrid regions have a natural monopoly in the production of certain raw materials; and thus between these two groups of countries a division of labour and confederation of powers spontaneously takes place. Entry: LIST
The Civil War wrought a havoc from which a full recovery was hardly reached before 1890. The economic evolution of the state since Reconstruction has been in the main that common to all the old slave states developing from the plantation system of ante-bellum days, somewhat diversified and complicated by the special features of a young and border community. The farms of Arkansas increased in number 357.8%, in area 73.7% and in total true (as distinguished from tax) valuation about 53.8% between 1860 and 1900; the decade of most extraordinary growth being that of 1870-1880. Thus Arkansas has shared that fall in the average size of farms common to all sections of the Union (save the north central) since 1850, but especially marked since the Civil War in the "Cotton States," owing to the subdivision of large holdings with the introduction of the tenant system. The rapidity of the movement has not been exceptional in Arkansas, but the size of its average farm, less in 1850 than that of the other cotton states, was in 1900, 93.1 acres (108.8 for white farmers alone, 49.0 for blacks alone), which was even less than that of the North Atlantic states (96.5 acres, the smallest sectional unit of the Union). The percentage of farms worked by owners fell from 69.1% in 1880 to 54.6% in 1900; the difference of the balances or 14.5% indicates the increase of tenant holdings, two-thirds of these being for shares. Entry: ARKANSAS
The good and evil of it may be weighed. Monasticism working through St Augustine helped the world to realize the mood of love as the real or eternal life. Of the natural life of the world and its responsibilities, through which that mood would have borne its completest fruit, it took but little heed, except in so far as, by creating a class possessed of leisure, it created able scholars, lawyers and administrators, and disciplined the will of strong men. It had no power to stay the social evils of the day. Unlike the friars, at their best the monks were a class apart, not a class mixed up with the people. So were their charities. The belief in poverty as a fixed condition--irretrievable and ever to be alleviated without any regard to science or observation, subjected charity to a perpetual stagnation. Charity requires belief in growth, in the sharing of life, in the utility and nobility of what is done here and now for the hereafter of this present world. Monasticism had no thought of this. It was based on a belief in the evil of matter; and from that root could spring no social charity. Economic difficulties also fostered monasticism. Gold was appreciated in value, and necessaries were expensive, and the cost of maintaining a family was great. It was an economy to force a son or a brother into the church. The population was decreasing; and in spite of church feeling Marjorian (A.D. 461) had to forbid women from taking the veil before forty, and to require the remarriage of widows, subject to a large forfeit of property (Hodgkin, _Italy and her Invaders_, ii. 420). Monasticism was inconsistent with the social good. As to the family--like the moderns who depreciate thrift and are careless of the life of the family, the monks, believing that marriage was a lower form of morality, if not indeed, as would at times appear, hardly moral at all, could feel but little enthusiasm for what is socially a chief source of health to the community and a well-spring of spontaneous charitable feeling. By the sacerdotal-monastic movement the moralizing force of Christianity was denaturalized. Among the secular clergy the falsity of the position as between men and women revealed itself in relations which being unhallowed and unrecognized became also degrading. But worse than all, it pushed charity from its pivot. For this no monasteries or institutions, no domination of religious belief, could atone. The church that with so fine an intensity of purpose had fostered chastity and marriage was betraying its trust. It was out of touch with the primal unit of social life, the child-school of dawning habits and the loving economy of the home. It produced no treatise on economy in the older Greek sense of the word. The home and its associations no longer retained their pre-eminence. In the extreme advocacy of the celibate state, the honourable development of the married life and its duties were depreciated and sometimes, one would think, quite forgotten. Entry: 3
Many of these industries have a history going back far into colonial times, some even dating from the first half of the 17th century. Textile products were really varied and of considerable importance before 1700. The policy of the British government towards such industries in the colonial period was in general repressive. The non-importation sentiment preceding the War of Independence fostered home manufactures considerably, and the Embargo and Non-Intercourse Acts before the war of 1812, as well as that war itself (despite the subsequent glut of British goods) had a much greater effect; for they mark the introduction of the factory system, which by 1830 was firmly established in the textile industry and was rapidly transforming other industries. Improvements were introduced much more slowly than in England, the cost of cotton machinery as late as 1826 being 50-60% greater in America. The first successful power loom in America was set up at Waltham in 1814. Carding, roving and spinning machines were constructed at Bridgewater in 1786. The first cotton mill had been established in Beverly in 1788, and the first real woollen factory at Byfield in 1794. Woolcard machinery destined to revolutionize the industry was devised by Amos Whittemore (1759-1828) in 1797; spinning jennies were in operation under water-power before 1815. Carpet-weaving was begun at Worcester in 1804. "Not a yard of fancy wool fabric had ever been woven by the power-loom in any country till done by William Crompton at the Middlesex Mills, Lowell, in 1840" (Samuel Lawrence).[6] The introduction of the remarkably complete machinery of the shoe industry was practically complete by 1865, this being the last of the great industries to come under the full dominance of machinery. At Pittsfield and at Dalton is centred the manufacture of fine writing papers, including that of paper used by the national government for bonds and paper money. Four-fifths of all loft-dried paper produced in the country from 1860-1897 was made within 15 m. of Springfield; Holyoke and South Hadley being the greatest producers. Vulcanized rubber is a Massachusetts invention. Most of the imitation jewelry of the United States is produced at Attleboro and North Attleboro, and in Providence, Rhode Island. In 1905 Boston produced 16.4% of all the manufactures of the state, and Lynn, the second city, which had been fifth in 1900, 4.9%. Some industries which have since become dead or of relatively slight magnitude were once of much greater significance, economically or socially: such as the rum-distilling connected with the colonial slave trade, and various interests concerned with shipbuilding and navigation. The packing of pork and beef formerly centred in Boston; but, while the volume of this business has not diminished, it has been greatly exceeded in the west. For many years Massachusetts controlled a vast lumber trade, drawing upon the forests of Maine, but the growth of the west changed the old channels of trade, and Boston carpenters came to make use of western timber. It was between 1840 and 1850 that the cotton manufactures of Massachusetts began to assume large proportions; and about the same time the manufacture of boots and shoes centred there. Medford ships began to be famous shortly after the beginning of the 19th century, and by 1845 that town employed one quarter of all the shipwrights in the state. Entry: MASSACHUSETTS
In Germany the growth of militarism and nationalism have gone on side by side under constitutional government, and certainly in harmony with predominant public opinion. Neither of these communities is willing to sink its individual conception of progress in those of the world at large; each is jealous of the intrusion of alien elements which cannot be reconciled with its own political and social system. And a similar recrudescence of patriotic feeling has been observable in other countries, such as Norway and Hungary: the growth of national sentiment is shown, not only in the attempts to revive and popularize the use of a national language, but still more decidedly in the determination to have a real control over the economic life of the country. It is here that the new patriotism comes into direct conflict with the political principles of free trade as advocated by Bastiat and Cobden; for them the important point was that countries, by becoming dependent on one another, would be prevented from engaging in hostilities. The new nations are determined that they will not allow other countries to have such control over their economic condition, as to be able to exercise a powerful influence on their political life. Each is determined to be the master in his own house, and each has rejected free trade because of the cosmopolitanism which it involves. Entry: FREE
Fourier seems to have been of an extremely retiring and sensitive disposition. He mixed little in society, and appeared, indeed, as if he were the denizen of some other planet. Of the true nature of social arrangements, and of the manner in which they naturally grow and become organized, he must be pronounced extremely ignorant. The faults of existing institutions presented themselves to him in an altogether distorted manner, and he never appears to have recognized that the evils of actual society are immeasurably less serious than the consequences of his arbitrary scheme. Out of the chaos of human passion he supposed harmony was to be evolved by the adoption of a few theoretically disputable principles, which themselves impose restraints even more irksome than those due to actual social facts. With regard to the economic aspects of his proposed new method, it is of course to be granted that co-operation is more effective than individual effort, but he has nowhere faced the question as to the probable consequences of organizing society on the abolition of those great institutions which have grown with its growth. His temperament was too ardent, his imagination too strong, and his acquaintance with the realities of life too slight to enable him justly to estimate the merits of his fantastic views. That this description of him is not expressed in over-strong language must be clear to any one who not only considers what is true in his works,--and the portion of truth is by no means a peculiar discovery of Fourier's,--but who takes into account the whole body of his speculations, the cosmological and historical as well as the economical and social. No words can adequately describe the fantastic nonsense which he pours forth, partly in the form of general speculation on the universe, partly in the form of prophetic utterances with regard to the future changes in humanity and its material environment. From these extraordinary writings it is no extreme conclusion that there was much of insanity in Fourier's mental constitution. Entry: FOURIER
The explanation of this decay of interest does not lie upon the surface. It is frequently supposed that the influence of the "old Political Economy" has been gradually undermined by the attacks of the historical school. But great as the achievements of this school have been, it has not developed any scientific machinery which can take the place of theory in economic investigation. If our view is correct that, broadly speaking, the two ways of regarding economic questions are complementary rather than mutually exclusive, there does not seem to be any reason why the growth of the historical school should have been destructive of the "old Political Economy" if it had been well founded. The use of the historical method has, in fact, raised more reputations than it has destroyed, because by keeping carefully in view the conditions in which economic works have been written, it has shown that many theories hastily condemned as unsound by _a priori_ critics had much to be said for them at the time when they were propounded. This observation is true not only of old-world writers like the Mercantilists, but also of Ricardian economics. No one is concerned to prove that the Ricardian economics applies to the manorial system, and it is generally supposed at any rate that the world has been approximating more and more nearly during the last century to the conditions assumed in most of the reasoning of that school. On the principles we have explained, therefore, the Ricardian economics should supply just that body of general theory which is required in the investigation of modern economic problems, and the reputation of at any rate the leading writers should be as great as ever. It would be of immense advantage from a scientific point of view if this could be taken for granted, if for a time the work of the classical economists could be considered final so far as it goes, and for the purposes of investigation regarded as the theoretical counterpart of the modern industrial system. This assumption, however, has been made quite impossible, not by the historical school, but by the criticism and analysis of economists in the direct line of the Ricardian succession. Entry: ECONOMICS</b>
Hungary was apparently better situated. Despite the campaign of obstruction that overthrew the Bánffy and led to the formation of the Széll cabinet in 1899, the hegemony of the Liberal party which, under various names, had been the mainstay of dualism since 1867, appeared to be unshaken. But clear signs of the decay of the dualist and of the growth of an extreme nationalist Magyar spirit were already visible. The Army bills of 1889, which involved an increase of the peace footing of the joint Austro-Hungarian army, had been carried with difficulty, despite the efforts of Koloman Tisza and of Count Julius Andrássy the Elder. Demands tending towards the Magyarization of the joint army had been advanced and had found such an echo in Magyar public opinion that Count Andrássy was obliged solemnly to warn the country of the dangers of nationalist Chauvinism and to remind it of its obligations under the Compact of 1867. The struggle over the civil marriage and divorce laws that filled the greater part of the nineties served and was perhaps intended by the Liberal leaders to serve as a diversion in favour of the Liberal-dualist standpoint; nevertheless, Nationalist feeling found strong expression during the negotiations of Bánffy and Széll with various Austrian premiers for the renewal of the economic _Ausgleich_, or "Customs and Trade Alliance." At the end of 1902 the Hungarian premier, Széll, concluded with the Austrian premier, Körber, a new customs and trade alliance [v.03 p.0023] comprising a joint Austro-Hungarian tariff as a basis for the negotiation of new commercial treaties with Germany, Italy and other states. This arrangement, which for the sake of brevity will henceforth be referred to as the Széll-Körber Compact, was destined to play an important part in the history of the next few years, though it was never fully ratified by either parliament and was ultimately discarded. Its conclusion was prematurely greeted as the end of a period of economic strife between the two halves of the monarchy and as a pledge of a decade of peaceful development. Events were soon to demonstrate the baselessness of these hopes. Entry: J