Theory of Affluence

I don’t agree with quite a lot of this article, but its interesting nonetheless.

For thousands of years, most people on earth lived in abject poverty, first as hunters and gatherers, then as peasants or laborers. But with the Industrial Revolution, some societies traded this ancient poverty for amazing affluence.

Historians and economists have long struggled to understand how this transition occurred and why it took place only in some countries. A scholar who has spent the last 20 years scanning medieval English archives has now emerged with startling answers for both questions.

Gregory Clark, an economic historian at the University of California, Davis, believes that the Industrial Revolution “” the surge in economic growth that occurred first in England around 1800 “” occurred because of a change in the nature of the human population. The change was one in which people gradually developed the strange new behaviors required to make a modern economy work. The middle-class values of nonviolence, literacy, long working hours and a willingness to save emerged only recently in human history, Dr. Clark argues. Theory of Affluence

Only an economist would call it “abject poverty“. Capitalism and it’s insidious spreading disease around the world hasn’t always been so great.

Clark does admit that primitive hunter/gatherers ate better then the affluent of society.

I also don’t perceive the “change in the natureof humans. We’re influenced by our environmental and social conditions, but humans appear to be pretty much the same as ever imo.

This “theory” seems rather strange to me. The industrial revolution was also characterized by cheaper and cheaper energy, which gave rise to an abundant agriculture explosion, which gave rise to huge populations, which created higher and higher productivity of the classes.

For example, a single barrel of oil represents 8,000 man hours of labor. And for a long time, oil could be easily pumped from the ground. This enabled men to exploit both the oil resources and the energy benefit it created. Inventions followed on the internal combustion engine and created a huge abundance of everything – agriculture, cities and population.

Even steam energy created a huge work advantage and the fuel necessary (primarily coal) was readily available and could be exploited by steam itself.

Of course, all this industrialization resulted in the over exploitation of all the natural resources throughout the world. Now, with oil energy in serious decline, the civilization that this all built is in peril.

The danger that I see with a theory of this type is “affluence”. This always comes at the expense of something else. Yet affluence is thought (always) as being good and benign, a dangerous concept.

If the Industrial Revolution was caused by changes in people’s behavior,



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15 thoughts on “Theory of Affluence

  • August 7, 2007 at 11:53 am
    You hit the nail right on the head John and I couldn’t agree with you more. It is the work of so many people that oil does for us that lets us live such ‘rich’ lives.

    The only other thing I would add is modern fiat currency banking that creates currency from debt and effectively moves future earnings into the present. And the bankers collect exponential interest. A house of cards that always ends in collapse as interest payments demand ever greater percentages of the money supply.

  • August 7, 2007 at 12:15 pm
    Was just reading an interesting book called Brain Waves Through Time, in it the author mentions that the brains of modern humans reached their current large size, before written language, before agriculture, before steel tools, and before large cities.

    We had the same hardware back then, happily, we are the same folks.

    The author describes that a primary feature of our brain’s design is shortcutting, or arriving at the quickest solution possible by skipping the thinking part when under stress. (it also shuts down any other non critical system like immune system, etc.)

    Pretty much everything any one of us ‘thinks’ is suspect.

    We respond to our environment and our current environment triggers our brains with hardwired cues that yell ‘fire’ every where we look.

    For example, our brains are designed to live and operate in groups of about 60 people maximum. If there were nothing else about ‘civilization’ that went against our brains design, group size alone pushes our brains into a higher level of physiological arousal and shuts down cause and effect thinking(unless the brain owner knows to override this automatic reaction.)

    The Industrial age did put a middle man in between people and their own basic needs(food/water) over which they had no control… feeling of ongoing powerlessness = shutdown of hope and effort in our genetic line. Not sure that changes our essential nature just a snapshot of our current moods.

    Is poverty defined as a lack of things, whether you want them or not? whether you need them or not?

  • August 7, 2007 at 1:10 pm
    In the Middle Ages, serfs worked an average of three months of the year for the lord of the manor, and, in return, received their shelter, a garden plot, protection, law enforcement, communal defense, et cetera. Tax freedom day in Georgia (the date by which you have earned what you will owe during the year in taxes, fees, licenses, permits, etc) is in late May.
    Add to that what you need to earn for shelter (either rent or mortgage) and your adjusted ‘freedom day’, when we gain equality with the 15th century peasant, comes sometime around Labor Day (early September). Puts a new meaning on that holiday, no?

    In addition, counting all church holidays, feast days, and similar, the medieval serf had 80 vacation days a year. Modern day Americans take, on average, a mere 4 days of vacation time per year (according to Harris Interactive).
    “The idea of somebody going away for two weeks is really becoming a thing of the past,” said Mike Pina, a spokesman for AAA, which has nearly 50 million members in North America. “Itâ’s kind of sad, really, that people canâ’t seem to leave their jobs anymore.”
    Many even have to work on ‘public holidays’. Stores, restaurants, and cinemas are open even on Christmas day.

    Our modern world has made slaves of us all.

  • August 7, 2007 at 1:59 pm
    45 years ago my father paid 3 times his yearly blue collar wage to buy his home at 4% interest and raise a family on 1 income. 20 minutes of wages bought a barrel of oil.

    Ask yourself how many years you must work to buy your home now, not counting income tax deductions, or how many hours you must work to buy a barrel of oil. Then consider the fact that your country is also the worlds largest debtor as opposed to once being the worlds largest creditor and ask yourself if we are wealthier or better off now that anytime before.

    Decreasing energy availability, rotting infrastructure, endless government entitlements, and exponentially increasing private and public debt egual…

  • August 7, 2007 at 2:39 pm
    kali, it’s not just oil whose back we’re living off of. We’re also living off the backs of the Chinese and all of the other people in the 3rd world who are making things cheaply for us because they aren’t yet in a position (whether of desire, economically, or whatever other reason) to have the same “standard of living” as we do.

    I find it incredibly silly and ignorant for anyone in the West (but particularly in North America) to think that they’ve earned their standard of living and thereby feel entitled to it. The hidden and unpaid (so far) costs are tremendous.

  • August 8, 2007 at 4:25 am
    My grandfather may have dropped out of school at the age of 12 to work on the farm, but by comparison, his work days were leisurely. Even in the 60’s, a family with two parents, both working at minimum-wage jobs, could live in a nice middle class neighborhood, have a car that ran even if it was old, and perhaps even have some luxuries, like a fur-trimmed coat or gold watch. Today, those people are living with their parents because no one can “afford” otherwise.

    The opposite of affluence is not poverty. Its self sufficiency.

  • August 9, 2007 at 12:50 am
    dokijo, you’ve hit the nail on the head with the observation that the whole organization of modern society, with its overcrowding is designed to make us insane.

    It isn’t just overcrowding, either. Another aspect of modern society is that all our landscapes and living and working spaces are sterile and confining. There is nothing to engage the senses and the mind, so we are in a constant state of sensory deprivation.

    The worker in a cubicle or a blank-walled office located in a concrete bunker of a building experiences a whole range of negative emotions and mental reactions. Obviously, one feels trapped–at the mercy of whoever is running this facility. With nothing to engage it, the mind will lapse into fantasy–which will tend towards paranoid fantasy. Since you are in this setting with excessively large numbers of other people, you will tend towards collective fantasy, collective paranoia, and collective obsessive-compulsive behavior. You see the same types of behaviors among zoo animals, or caged hens in factory farms.

    You comment that the industrial age interposed a middleman between people and their basic needs.

    Here’s where we need to delve into fundamental economics. The enslavement of people within a class society occurs with expropriation from the land. That is, it occurs when the land is privately owned by a minority–as opposed to a situation in which land is held in common, or in which almost everyone is a freeholder in the land. Henry George devoted almost 600 pages to proving this in “Progress and Poverty,” his classic on fundamental economics. This is an unbelievably great book–written in the 1800s. No one has ever seriously tried to refute his argument; it’s bullet and bomb proof.

    Subsequently, Albert Jay Nock further developed this idea in “Our Enemy, the State.” Nock pointed out that the State simply could not exist without the private ownership of land (state land monopoly)–that the first order of business, if you are setting up a class state, is to create a dependent, exploited class, and this is ALWAYS accomplished (and historically always has been accomplished) through expropriation from the land.

    Gosh I wish people would read this stuff. You don’t have to drag yourself through the whole 600 pages–nobody can do that–but a person can easily grasp George’s arguments by hitting the high spots. Nock’s book is a slim volume.

    Nock is an interesting guy–a conservative who did not believe in a class society. They don’t make them like that any more. The modern conservative believes, above all else, in perpetuating a class society.

    Nock was really an anarchist. Old-style conservatives appear to have been anarchists, when they carried their views to their logical conclusions, as Nock did.

  • August 9, 2007 at 1:07 am
    I think another great read, which is apropos to this discussion, is Jerry Mander’s “In the Absence of the Sacred.” This is another dinosaur of a book. He points out that “primitive” hunter-gatherers devote only two or three hours a day to gaining their subsistence. The rest of the time, they just loaf and socialize.

    A MSquirrel points out, the largely self-sufficient farm economy of the 1800s was far more leisured than we are, in our industrial society.

    There’s also a book called “Time on the Cross” that points out that black plantation slaves in the South were actually better fed, better housed, and more leisured than white industrial workers in the North during the same period.

    I remember reading with interest that overseers were directed to let pregnant women lounge around in the shade. In case one of the slaves pretended to be sick to avoid work, overseers were directed to “let him ‘lay up’ for a day or two.”

    Most of us don’t get treated that well at our jobs here in the US.

    While such practices may not have been universal, you can see that they were probably general, since they would have been in the slaveholder’s interests. He didn’t want sick, malnourished slaves, and he would have wanted full-term, healthy babies.

    I’d say that we’re worse off than our preindustrial forbears–worse off, even, than slaves.

  • August 9, 2007 at 9:20 am
    Not to dismiss any of your other insightful comments Sharon, but the majority freehold analogy put forth by Harold George in Progress and Poverty is pretty much at odds with (and debunked by) the facts put forth in “The Tragedy of the Commons.”

    Garrett Hardin’s treatise on the matter is widely respected and often cited, but the problems were observable to ancient world thinkers such as Thucydides and Aristotle.
    Free access and unrestricted demand for a finite resource ultimately dooms the resource through over-exploitation. People are individually selfish, and act that way.
    Classic externalization of the problems and hidden costs to society or the environment, while privatizing profits and benefits.
    One could also look at this as a realization of diminishing/negative marginal returns on added growth/complexity, with both Malthus and Jevon in agreement. Too much discounting of the future in lieu of the present.

  • August 10, 2007 at 3:41 am
    fallout11, I’ve watched the video on the “tragedy of the commons.” The thing is, land was held in common throughout much of human history.

    The ancient agricultural setup in England was that no one actually owned the land, and the community assigned strips of land to each family every year.

    Native Americans in North America had no concept of private ownership of land. Tribes occupied certain land areas as a matter of custom.

    The concept of private ownership of land is actually fairly recent in large areas of the world–certainly in most of North America, where it was an unknown concept before Europeans showed up on the scene.

    The concept of the private ownership of land was unknown in Europe until the Middle Ages–and “commons” still existed in England until the famous Enclosures Acts of the 1700s. The commons seemed to have worked fine up until that time. They worked for Native Americans and for traditional cultures throughout the world. They still seem to be working for the Hopi and Navajo, and on other tribal lands.

    The “tragedy of the commons” literature and video appears to me to be a “setup” designed to prove that commons are a losing deal–despite the fact that it’s a concept that was universally successful in the past.

    I think there are significant differences in the way the “commons experiment” was designed and the way commons have historically worked in actual practice. I’m not qualified, nor have I looked at the details closely enough, to analyze the differences. Certainly one glaring difference is that commons were not formerly set up as tiny islands in the midst of a society that is both competitive and oriented towards maximum production of surplus for conversion into cash–as opposed to competitive and oriented towards subsistence and livelihood. Traditional societies didn’t even have a money economy, or not much of one.

    So–we have one “study” that is supposed to disprove the viability of a system that worked for thousands of years throughout the world, and is still working today?

    My view is that almost all studies of almost everything are intended and designed to prove what the folks funding them want them to prove. I believe this is notorious.

  • August 10, 2007 at 3:54 am

    I meant to say “as opposed to COOPERATIVE and oriented towards subsistence and livelihood.”

    I have a suspicion that this is the key difference, by the way. Production of large surpluses is a feature of profit-oriented societies. The need for the production of excessively large surpluses is related to private ownership of the land by elites who charge rents, by money economies that charge interest, by the capitalist model of eternal expansion, and by the State system, which also absorbs huge surpluses of production (which it transfers to elites).

    By these mechanisms, the agriculturist is forced to produce surpluses, and the mechanism itself tends to produce a competitive, rather than cooperative, community.

    Another important factor is philosophical, in that the human view of economic activity has shifted away from subsistence and livelihood towards “profits” and excess consumption. These are attitudes that are scorned in traditional societies.

  • August 12, 2007 at 6:10 pm
    In the “beating a dead horse” category, here’s a concept that people overlook because we’re completely immersed in a money and profit driven economy:

    Henry George pointed out that human existence is, and always has been, “hand to mouth.” The necessities of life CANNOT be stored for any very significant period of time. Food spoils; shelter and other other artifacts deteriorate, requiring continuous maintenance and replacement.

    Food storage possibilities are mostly limited to a few months under refrigeration (or in root cellars), while some grains can be stored longer periods of time, depending on conditions.

    This means that all the necessities of human life must continually be created anew by human effort. Storage over the long term is out of the question.

    Why do we overlook this fact?

    Because we live in a money economy; money CAN be stored indefinitely. Hence, such economies offer the illusion that humans can provide themselves with long-term security.

    Money economies create a bias in favor of the production of huge surpluses for conversion into money and, hence, a bias in favor of overuse of all natural resources for the production of surpluses.

    If you stop and think about it for a minute, you will realize that the Plains Indians–and the other Native American hunting tribes–never hunted anything to extinction. The agricultural tribes did not deplete the soil.

    One reason for this is obvious: The products of hunting and agriculture would not keep, so over-hunting and over-production of agricultural products was simply a waste of effort–and a waste of natural resources.

    But imagine if these same peoples had existed in a money economy. Suddenly you have an incentive for over-hunting and over-production: Surpluses can now be converted into cash; cash can now be converted into a claim on future production. Besides that, cash can now be converted into a claim on present labor and labor products.

    So you can see how a cash economy, by creating the illusion that value can be stored indefinitely, creates a bunch of problems: Overproduction and depletion of resources, the incentive to establish monopoly rights to surpluses through the private ownership of land, the possibility and incentive to lavish lifestyles based on the ability to draw on the labor of others.

    Yet the idea of stored value remains an illusion. The storage life of the actual necessities of life has not been extended by a single second. Surplus “stuff” has been created, but this surplus “stuff” cannot be stored. It must be sold to someone for money, which can be stored. What a money economy actually does is to create a continual future claim on the labor of other to produce these necessities.

    Once it was possible to sell beaver pelts and buffalo hides for money, the destruction of these resources was assured. The resulting cash could then be used as a claim on the labor of others to over-harvest timber for conversion into still more money for the conversion of still more resources into money.

    Flash forward a couple of hundred years, and many of the former resources have been completely depleted, and every remaining resource is being converted into money as expeditiously as possible.

    The hitch is, after you’ve converted everything into money, you have precisely bubkas. The money represents a claim on “stuff,” and once the “stuff” is gone, it becomes worthless. It also represents a claim on labor, but if the resources to which labor can be applied (to advantage) are gone, the claim on labor becomes worthless–or near-worthless. I suppose if you can’t pay a fisherman to catch fish for you, because there are no fish, you can still pay him to dust your mansion. Maybe. But only if he can use his paycheck to buy some fish.

  • August 12, 2007 at 7:14 pm

    With today’s technology, it’s possible to achieve 30 year food storage pretty easily (and it’s even affordable).  The rich and wealthy are probably making sure of this right now. It’s surprising how few people are making food preparations, you’d think with all the bad news coming down each and everyday, they’d realize that the game is up and they’d start setting some food aside.  However, this is not happening, only on a very limited scale.
    One of the primary reasons the North American Indians did not over hunt or deplete their resources like we do was because they were nomadic. They did in fact overuse their local resources and were forced to move on for this reason.
    Many indigenous tribes and cultures had this problem. They either died out (like on Easter Island) or were forced to move on (like the Anasazi).

    Civilization is about leverage and the ultimate (and necessary) leverage is about food production and population. Even money isn’t necessary, or all the other baubles and trinkets that civilization produces. Humanity has always pursued the quest for a renewable food supply, all else and all other human activity springs from this.

  • August 13, 2007 at 9:32 am
    Indeed, a quest for a literal “Garden of Eden”, a fully renewable food supply with no inputs required, universally understood to be an actualized paradise on earth, has always been the penultimate aspiration.

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