- The Great Machine
- – Analysis of how the arbitrary assignation of value works in our modern society
There’s an argument going on LibCon about markets and how they affect societies. There seems to me, and has for a while, to be a major blind-spot in the discourse over this topic. I believe that there is really only one country capable of producing people who see beyond this blind-spot, and that is Britain. The reason I think this is that as we were the first industrial nation, so we are the first post-industrial one.
The flaw I see in all of the analyses offered today is that they take no account of this completely inevitable phenomenon. Every economy that people point to as doing all the ‘right things’ (as defined from an industrial viewpoint) are the economies that are only just now rising out of agrarian pre-industrial status. Yes, that’s even true of China and India. It’s disguised by the fact that they have Information-Age first world economies to bootstrap them, which those of us who developed it the long way did not. It’s still what’s happening. People forget the timescales, partly because of the effect of Moore’s Law; China’s industrial revolution is equivalent to ours in 1830 and India’s to ours in about 1880.
We know and have known for a long time that Western-model market capitalism only works in a state of constant expansion. To succeed one needs two things to be true: a constant source of new markets for your sophisticated goods and a constant supply of new client states with cheaper labour where you can manufacture those goods and import the profits back to your home economy. Thus far, this model has served the West very, very well but the warning bells are sounding. We started running out of economies to conquer and got a 20-year lease of life from an unexpected source; CERN and the rest of international geekdom. The PC and then Internet revolutions created multi-billion dollar industries (and thereby, markets) not by geographical expansion but by actually coming up with something really new. They created a new market. Seen any more of those, lately?
When you get out of medieval, muscle-powered agrarianism and into an industrial-capitalist model, particularly if you do so in a thoroughly post-Enlightenment world where someone else (mainly, us!) has already made all the mistakes so you can learn from them, then yes, you see a vast change in basic standard of living. I lived through this in Ghana; in 1981 we were a typical African failing state, by 1998 we were about the strongest economy in the region, as the failure to redistribute Nigeria’s oil wealth caused the implosion of an inadequately integrated socio-political system. 
Ghana saw a ‘communist military dictator’ establish a constitution, run two cycles of clean elections, refuse calls to modify the 2-term limit on Presidential ambition, and retire. We saw our GDP broadened from 80% relying on only three products, to the top 60% coming from 10 sectors and the remainder rapidly being developed. Via the Akosombo Dam engineering project we supply most of the Bight of Benin states with their electrical infrastructure; to the point that Rawlings effectively blackmailed West Africa into stopping the Liberian war with the threat of turning the lights off. Education is still way behind, but the University at Legon are working on that. The people in my village are still muscle-powered farmers, but the ones my age have radios and listen to the BBC: they travel to the industrialising southern cities to earn a cash stake and then come home and invest in joinery businesses and water engineering projects. All I’m describing is exactly what Britain was doing between 1750 and 1850, but contextualised by much of the world having done it first.
Britain is post-industrial. My analysis suggests that the last five years (culminating in the ridiculous behaviour of the Bush regime, inflating an empty boom to try and pay for his personal war) have seen the tilt point in the US which Britain saw after WWI: they are about to start the slide we’ve been on ever since, which saw off our primary industry and then saw our manufacturing industry fold under competition from cheaper, less-developed countries (and the European Union, but that’s just shortsightedness on the part of our political masters, not underlying economics).
That’s why the Yanks are suddenly protectionist again; free trade agreements massively benefit anyone who’s on the up-curve of industrialisation (labour surplus => cheap labour => cheap manufacturing with relatively low capital infrastructure investment compared to a fully-mechanised, fully-automated build) over anyone who is at the height of it (where they have to pay a decent wage, their workers have dreadful expectations like pensions and health-care and education, where they have anti-discrimmination laws, and all the other things that make manufacturing more expensive). The Yanks were free-traders for as long as they were behind the curve relative to Europe. The Cold War exerted an unusual influence; it kept them technically free-trade past the point where they went into the industrial plateau, for purely ideological reasons. Then their internal manufacturing started to lose in the market-place, and hey look; protectionists again.
The only answer if a late-industrial nation wants to compete in the ‘making things’ game is to up the tech level (see Japan on the subject). The only way a late-industrial nation can compete with a developing one is by automating; that removes what little is left of our traditional ‘labouring’ class, and means really everyone in your country needs a technical education A-level or above, which costs money and, again, raises the expectations of the commons. It’s not about whether markets work or don’t to help people; it’s about industrialisation and post-industrialism. You cannot answer post-industrial problems with industrial-era solutions. This is also why the traditional political discourse of ‘power to the working class’ just no longer works; in the UK the ‘working class’ under the traditional definition are less than 20% of the population, and every single currently industrialising economy will, at length, undergo the same change.
The elephant in the room is this: since market capitalism only works under the twin conditions of new markets for goods opening up, and new sources of cheap labour opening up, when we run out of planet and everyone, Africa too, has slid into post-industrialism, what happens next?
 This is a fairly loose analysis, but it’s broadly to do with the extent to which industry and communications infrastructure have been distributed into the hinterland. Obviously, the single largest problem those two units have always faced is that they’re just too big. And, in the case of China, too much of the country being above three thousand feet above sea level.
 “If I hadn’t seen such riches, I could live with being poor” and out there they express this sentiment with AKs.