Appendix A. The Technological Society [From Spring 1971]

THE TECHNOLOGlCAL SOCIETY

by

Anatole Beck

1. Introduction. The purpose of this article is to set forth for examination a certain mode of economic activity, and to raise the question of whether it would be possible or desirable to build a society around that mode of activity in the same way that societies have been built in the past around agricultural, commercial, or industrial enterprises. On a deeper level, it will assert that such a society will be built in the near future, and will raise the question of who will build it and when and how, whether it will grow haphazardly or by design, and how it will relate to its participants and its`customers'.

2. Hierarchies of economic systems. Discussions of the problems of development in underdeveloped nations center around the observation that the trade relations between industrial and agricultural societies is, for the most part, very advantageous to the industrial society, to its people, and especially to its owners. England raises very little of its own food but produces a lot of machinery. Cuba manufactures very little machinery but raises a lot of sugar cane. In a classical Lockean manner, England trades machinery to Cuba for sugar. In this manner, an English worker obtains more sugar for an hour's work than does his Cuban counterpart, and the owners of England are far richer than the owners of Cuba. As a result of this imbalance, agricultural nations, as a whole, are eager to become industrialized, a process which is called `development' in honor of its importance to these nations.

It is not the case, however, that his distinction between agricultural and industrial nations is a complete account of this economic status hierarchy. The hierarchy has more steps, and does not apply only to nations. Within a large nation, like the United States, it applies to the economic relations between states and regions; in Europe, it applies to whole groups of nations. To the extent that a nation, state, city, or region has similar economic activities and shares a single standard of living, we shall refer to it as a community, and consider its economic relations with other communities.

At the bottom of the status ladder, in some sense, is the process of resource-gathering. Principally, this refers to the extraction of mineral deposits, but also includes such activities as lumbering, hunting, fishing, and trapping. Typically, those who inhabit mining or lumbering areas, or even oil-producing areas, see themselves and their communities as `exploited' in the sense of ordinary parlance, not the technical Marxian sense. This sense of being exploited even is seen in places like Kuwait, where the income per person from oil extraction is quite large, and is even stronger in Bolivia, Chile, Iran, and Thailand.

Hardly much better off are those communities which produce agricultural raw materials. Although it is true that there are some rich farmers and planters in the world, the fact remains that it takes a lot of rice or milk to pay for an automobile, to say nothing of a jetliner, and those who inhabit agricultural communities mostly feel like second-class participants in the life of the twentieth century. This observation, of course, applies with lesser force to farming communities which live on subsidies provided out of the profits of industrial nations, but to some extent, it applies even there. This is why agricultural societies think of a change to the industrial mode of production as `development'.

Better off, as a group, than either of these, we have light manufacturing and trading communities. Examples are the production of cloth, of simple artifacts, of furniture, tools, and clothing. As an example, the towns of the middle ages lived much better than the surrounding countryside, trading such products for agricultural products and raw materials. England became a great power selling cloth, and an examination of the trading with the Indians (blankets and axes for animal pelts) shows that each of the trading partners was getting something which he could provide for himself only at much greater expenditure of effort.

Next up the ladder are. the middle manufacturers (automobiles, refrigerators, tractors), finished materials (steel, brass, aluminum), and commercial services (shipping, merchandising). Higher yet are the heavy manufactures (whole factories, hydro-electric stations, ships), precision equipment (machine tools, jet engines, medical machinery), legal and banking services, corporate organization, and computers .

In this hierarchy, those communities which specialize in activities high on this status ladder are better off than those lower down. Although it is true that much benefit accrues to the agricultural community which buys modern farm equipment, it is not nearly so much as the benefit to those that sell it. The tradesman who takes a bank loan may reap a profit from it; on the whole, the bank profits more. Note how many thousands of bushels of wheat it takes to pay for a new combine. Both the farmer and the farm equipment manufacturer know that the manufacturer is in a `better' business.

3. The technological product. One activity which has been with us for a long time is the devising of new ways to do things. This activity encompasses not only invention, in the narrow sense, but also design, the breeding of domesticated plants and animals, the scheduling of productive operations, etc. In some cases, these are better ways of doing the things we have done, and in some cases, they are things we have never been able to do before at all. These ways and ideas constitute the technological product, and they take concrete form as patents, processes, designs, computer programs, seed corn, educational systems, new (medical) operations, etc. Those products are often of immense value to those who use them, and the costs of using them are generally small compared to the benefits. New product are pennecillin, the assembly line, irradiated ergosterol (Vitamin D), miracle rice, jet airplanes, automated banking, artificial kidney machines, transistors, etc. Despite the generally low cost to the consumer of this product, it is an immensely profitable form of economic activity. Successful designs and inventions all taken together enrich the human race collectively by an astronomically large multiple of the development costs (even when the total cost of unsuccessful efforts is reckoned in) and in many cases, an attractively large share remains with the developer, especially if it is a large corporation with marketing and legal resources rather than the basement inventor next door. The technological product has a rate of return which shames all other economic activities into insignificance.

Let us consider here the question of hydrogen fusion reactors. As the demand for electric power escalates, and the concern for the pollution of the environment mounts, more and more attention is being paid to the possibility of extracting power by 'taming the H-bomb', i.e., by the fusion of hydrogen into helium. Some Russian scientists have been making advances in this area, and we have reasonable hopes of seeing this problem solved within this decade. Let us imagine that the nation which masters the process were to license it to others at a figure of one percent of the gross power output forever. Certainly, it is a modest fee, and a huge bargain to the consumer. For the licensing country, it represents an enormous return on its investment, no matter how large.

To some extent, the attractiveness of technological enterprise is recognized by the business community. The shares of highly technological companies like IBM, Xerox, and Polaroid command prices out of all proportion to their assets or present earnings, or even to the projected earnings of the patents they now hold. A large part of the price represents a belief that these innovative companies will, through their laboratories and research efforts, continue to produce new and profitable ideas. In this sense, IBM's factories and their hardware production is less valuable than the newness of design, the increased effectiveness of that hardware due to new ways of doing the same job and new software. It is the improved computer system that will be invented next year, probably in an IBM research facility, that is in the mind of the investor who buys IBM stock, and the manufacturing effort is valuable because it will be the principal mechanism for selling the technological breakthroughs .

Another significant examples is miracle rice, which can triple the output of a rice paddy. What resources of human effort, what additional use of scarce land resources, would have been needed to triple the world output of rice in the absence of a new strain of the basic plant? The company which provides the seed for this miracle will reap a good profit, but it will be only a microscopic portion of the additional benefit to the human race as a whole.

4. The technological society. Despite the fact that we have always produced this technological product to some degree, there has never been a society which has this product as one of its main economics efforts. The nearest thing to it is present-day American society, at least in some areas. In fact, a substantial portion of our current export consists of the technological product, and it is one of the best earners in our balance of payments. Sometimes the product is embodied in actual manufactured goods, such as jet liners or Polaroid cameras. Sometimes it is sold raw, as in computer software, management consultation, agricultural expertise, or patent licenses. What applies between nations also applies between states or regions. When Wisconsin residents buy banking programs or Polaroid cameras with the proceeds of selling milk, they are exchanging the output of a relatively unprofitable economy for the output of a very profitable one, much to the benefit of certain people living in New York or Massachusetts, which are relatively technological states.

However, America is not a self-consciously and explicitly technological nation. Nor are many communities, with the exception of a few (Boston, Huntsville, Houston) self-consciously technological. Our image of ourselves is as an industrial society and our concept of national interest flows from this image. During the past century, we have become increasingly a nation which has traded machines in the world market for agricultural and mineral raw materials, and our national consciousness was to move in that direction. For a long time, we did that sort of thing better than the others. But that period is coming to an end. The European nations, the Soviet Union, and Japan all produce top quality industrial goods, in most cases more cheaply than the United States. The exception is in industrial goods which incorporate a significant portion of the technological product.

I suggest that we give added force to those features and elements which are moving us in the direction of becoming a technological society. At the present time, it is the thing that we can do significantly better than the Europeans and the Japanese, and still somewhat better than the Russians. The costs of the transition will have to be borne by the profits of our inductrial efforts. But as an investment, it seems an excellent one, and one which will keep us competitive, and more than competitive, with industrial societies rising.

5. Technology and industry. One interesting fact is the widespread alienation from technology of many of our brightest and most able young people everywhere in the world. In part this arises from a confusion of technology with industry, and in part from the use of technology in the manufacturing of artifacts of death and destruction. It is true that without the inventions of the last few centuries, there would be no industry, and thus no industrial wastes. There would be no automobiles, and thus no automotive pollution. There would be no insecticides, and thus no DDT poisoning. And those who would have preferred the life of the sixteenth century, with all its misery, quite reasonably take a neo-Luddite approach to industry and technology. Those, however, who value the advantages of twentieth-century life while hating the pollution of all sorts with which we live, pollution not only of the environment but even of the quality of the inner life, need to find a better way of doing things. There is little doubt of the urgency of finding a better way of doing things. And finding such a way is the business of technology.

One hundred years ago, there was essentially no way of running an industrial society without vast amounts of pollution in comparison with the total output of the industry. Today, we have the means of eliminating much of the pollution if we are willing to pay the costs. These costs are substantial but by no means overwhelming. The possibility of reducing pollution by some ninety percent at a cost of some five percent of our industrial product is not one which was open to the nineteenth century. Furthermore, anti-pollution technology is very small at present. It has has been pursued directly, and occurs now as a fortuitous by-product of other work. Thus, the use of electrostatic precipitators to clean smokestack emissions, centrifuges to clean water, advanced machines to burn fuel better and wash the sulphur products from the wastes, all these are due to the advances in technology in the past century. Furthermore, such inventions as the fluorescent light and the transistor have made it possible for us to reduce our power requirements in certain areas. A radio once required a lot of electricity; today it runs on almost none.

We could expect that a self-conscious attempt to develop pollution control machinery by a technological society would yield fruit at an even greater rate. And there can hardly be any doubt about the willingness of industrial societies to obtain these new methods of controlling pollution, and to pay for them in automobiles, cloth, and other manufactured goods. The curbing of the wastes of industry is part of the business of the technological society.

In the matter of arms, things are more difficult, But even here, it is grossly unfair to place the blame for today's horror weapons on the technologists. True, without their work, there would be no such weapons. However, the implied picture of the world as some sort of Eden which is corrupted by knowledge of the atom, of chemistry, and of biology will not hold water. The mad schemes served by the wielders of these weapons are not properly laid to the technologists, even the technologists of war. The best hope in this area lies not in the protections of ignorance, but in the elimination of war. This last may be impossible, but to the extent that it might be possible, it requires increasing the supply of food and fiber while curbing population. And both of these are major technological efforts which are now beginning to bear fruit. The answers to the problems of both pollution and war are to be found, if at all, by going forward, not backward, and the finding of such answers is the business of technology.

6. Technological resources. As tillable land is an agricultural resource, as a factory with a source of power is an industrial resource, so a community of creative thinkers is a technological resource. To reap the benefit of the underlying natural resource, creative intelligence, it is necessary to support and maintain such a community and to foster, develop and sell their product. Such communities exist, in a very minor degree, in some of the better universities, in the laboratories of some of the more forward-looking technological companies (IBM, Bell, Xerox, Polaroid, Lear), and in some of the new scientific and management consultant firms. But it is a small effort at best, compared with what it might be. A prime resource would consist of a collection of all of these, together with the legal and commercial operations needed to make them operational, and working in harmony rather than at cross purposes.

The largest single piece of this which one can find today is a large university (or more accurately, multiversity) equipped with a staff of creative thinkers and providing an atmosphere which is encouraging to their creativity and innovation. In some senses, it would be easier to add the other parts to it than to attempt to add such a facility to, say, an industrial laboratory. An example of such a community is the Boston area. Attracted by the universities and colleges of that area, hundreds of technological companies have located there, principally along Route 128, which girdles the city. Scientists and engineers took as part of their compensation the opportunity to live in this rewarding scientific, professional, and cultural milieu. It happens that at the present writing, Route 128 has been severely damaged by cuts in the space program, but we can expect that it will survive, though damaged, and recover. And Boston will remain an outstanding example of a technological community.

At the center of the technological community stands the university. For the university at its best, the university seen according to its own mythos, is a place which caters to and fosters the creative individual. It gives explicit rewards for creativity and brilliance. It creates an atmosphere conducive to innovation. It offers a chance to be in contact with what is new and exciting in other fields: new ideas, new art forms, new clothing, new ways of being. Its mechanisms are innovation, experimentation, and change. And all of these things are the life blood of the technological society. For the genuinely creative individual is also a consumer of creativity. He seeks just such a community, one where he can be in contact with the latest in philosophy, science, law, literature, music. And the Boston area has all of these.

There are other potential sites for the technological society. Each of the great cities has this potential, although the very bigness acts against the effect, diluting the interaction among the innovators. But smaller cities with major universities: Berkeley, Madison, Ann Arbor, Baltimore, these have the potential of being such sites. It is ironic that at just this point of time, when there is the possibility of turning these communities into technological societies, with all that might mean in terms of a profitable economy, all of the universities (California, Wisconsin, Michigan, and Hopkins) face crises which threaten to destroy or seriously impair the research potential which is the prime technological resource of its community. And in a broader sense, the entire nation is considering the reduction of its technological capacity. For, in fact, we do have a rather large technological capacity for an industrial nation, perhaps more than we need if we are not serious about the economic potential of this new form. But if we are serious about developing this potential, in which we currently lead the world, then we have only begun to develop the kinds of resources we will require.

It is important to realize that a technological society requires not only the best of engineering and product development, not only the finest of scientific research, but also the best and most active in the arts and language, philosophy, and law. Why this is so is not clear, but we have seen that several attempts to build and sustain first-class engineering communities have only been partially successful. Both MIT and CalTech have developed into first-class universities, albeit with an engineering slant. MIT, for example, has the leading department in abstract linguistics, and a strong group in mathematical logic. We might take a guess at why this is true, but note that the engineering schools which are not attached to well-rounded universities are distinctly of the second rank. One possible cause is that the academic seeks his roots, not his `clients' or his peers. A professor of electrical engineering choosing a new position is more attracted by a strong department of physics than of civil engineering. A physics professor, in turn, more by a strong department of mathematics than of engineering. Many mathematicians are more concerned over the state of logic at a prospective university than of physics and chemistry, and many logicians are more interested in how philosophy is doing than differential equations. The philosophers look more to history than to logic, and so it goes in endless progression.

In addition, all look to the arts, to language, to the social sciences for all are interested in areas beyond their specialities (e.g. this piece is written by a professor of mathematics). Within very general bounds, it is possible to slant or weight a community in one direction or another, just as it is possible to breed dogs as different as the chihuahua and the great dane, but just as a dog is still a dog, there are limits to how far one can slant a community in any one direction. It is only those universities which are `whole' which are great, and the same will no doubt be true of the technological societies. To make a metaphor, it is the whole apple tree which bears the fruit, not the branches alone.

7. The technological society and the university. Not only. does the university stand at the center of the technological society, providing it with the newest ideas and organizing it into a balanced whole, not only can it balance the various needs and claims of diverse groups (as for example the needs for electric power and for a livable environment), but it also manufactures the prime `material' of the technological society, namely, informed creativity. It is in most cases the university, today, which creates the technologist by adding to his natural talents the history of human effort and accomplishment. It is fruitful to the university and to the society that these not be separated. The university gets from the society sustenance, not only intellectual but also financial; the society draws spirit and renewal from the university. The sense of newness and innovation which are the heart-throb of the genuine technological community are to be found today at the university, which would act to the community in the role of a pace-maker. Without that input, any technological society would be flawed, perhaps fatally.

Because it has this central location in the technological scheme of things, it is best that the university should act as organizer of the technological society. To leave that organization to industry would result in too much of a business or profit orientation. The university would then become merely a cog in the business machine, an unsatisfactory role. It would then be unable to act as balancing agent, representing the interests of the whole community rather than merely a portion. But to achieve this central location, the university (and in the case of state universities, the state) must take on the burdens of entrepreneurship, must grow and develop itself to meet the needs set forth here and create the society around itself. It is in a very real sense urgent that it set upon this task at once, and not leave the shape of the development to the operation of market forces. Otherwise, the university becomes merely the supplier of raw materials to the technological society, a natural resource rather than a participant. Such an outcome is genuinely unsatisfactory not only to the university but to the entire community, since the potential fighting by industry for control of the university's resources could be as destructive, in its own way, as the fighting among European nations for control of the mineral resources of the world has been.

The university is bound up with the technological society in another way. The fact, perhaps unpalatable, is that we are today producing a surplus of educated people if we are going to continue as an industrial society and not a technological one. So far our main flirtation with the technological society has been in the field of military technology and space efforts. We can expect that both of these will be shrinking, especially the latter. We have proven our capacity to become a technological society, and for the past ten years, have pursued a course of action appropriate to becoming one. If we now reverse our direction, we find ourselves with an enormous surplus of trained manpower. Both B.A.'s and Ph.D.'s are `a drug on the market', for in fact, the German and Japanese experience show that elementary education is sufficient for participation in industrial society; a high school education is surely sufficient. For a community to be a consumer of someone else's technology requires that it have some B.A.'s, but not more than five to ten percent, and perhaps an occasional Ph.D., but nothing like our current output.

This situation is an important cause, perhaps the major cause, of the malaise which has beset our campuses. The student knows that his course of study probably leads nowhere, in terms of providing him with a career. And this knowledge is reflected in his attitude toward his school, and toward education in general. He is constantly asking himself: 'What am I doing here?' And the lack of a satisfactory answer makes it impossible for him to relate himself to the institution in a meaningful way. In the end, it may well make the continued operation of the institution itself impossible. Thus, the university has an added reason for wanting to see the development of the technological society now.

8. The role of government. As with all the other participants in the technological society, government must decide its attitude toward the change to technological economics. By its efforts, it can foster the change, hinder it, or merely allow us to drift in that direction. For ten years, government has acted in such a way as to foster the change. Our technological capacity has increased enormously, all over the world, but especially in the United States, particularly in certain places. Today, the governments of the United States and many individual states are acting in such a way as to hinder the continuation of this development. The reasons are not hard to find. One of the major problems of government is finding employment for the present labor force, and that means maintaining them in agricultural and industrial endeavors. Thus, government is very unwilling to divert resources from industrial development and support of agriculture to the creation of technological resources. Some governments, like those of California, Wisconsin, and Michigan, are actually lessening their technological potential, as is the United States government. However, this is the falsest of false economies. For at the same time, industry is using its development money to eliminate jobs. Thus, the investment in industrial society does not produce the desired effect of creating jobs. At the same time, it hampers the movement to an economically more productive mode, i.e., the technological. Thus, it provides neither wealth nor jobs. In the long run, the United States can remain an industrial nation only if it is willing to share the living standards of Germany and Japan. Surely, in the face of this choice, it is more reasonable to elect a concerted and directed move into technological society as quickly as the laws of economics and the capacity for education will allow.

In addition, government must act to prevent technology from becoming a private interest. The resource to be tapped, intelligence, is every person's natural heritage. By acting before property relations become defined in this field, government can assure that a substantial portion of the proceeds of this resource are returned to the people, all the people, for their common benefit. At the same time, only government can reasonably commit the resources to bring out this intelligence through the funding of schools and universities at a high level and the support of creativity in all disciplines. Industry cannot be expected to do it, nor should they have to do it. If they do, they will expect the lion's share of the proceeds, and that would not be a healthy situation.

In the last analysis, the decision of whether to become a technological community must rest with the community itself, which means with its government. It is hard to believe that any government which has the capacity to `go technological' and understands the stakes would fail to do so. The danger is that they would not understand the stakes.

9. Conclusions. We stand today, potentially, at one of the great economic revolutions, rivaling in its potential importance the agricultural and industrial revolutions. We have the potentiality of harnessing human intelligence to the solution of human needs to a degree which exceeds past performance in this area by large multiples. The society with the capacity to make this jump can expect huge rewards for the product of this effort, and a rate of economic return on investment not comparable with any other mode of economic activity. We in the United States, and more specifically, we in California, Wisconsin, Michigan, Maryland, and Massachusetts, must consider whether we are willing to make the effort to reap the reward. We must also decide whether we will let this change take place under its own power, rewarding those who stumble into its path, or whether we will, by taking an active part in its development, make ourselves its medium and principal beneficiaries. It is a choice we must make now. Those who preempt this field will master it for a long time to come. If we choose to be the medium for bringing this benefit to mankind, it will be to our own great advantage as well. But it requires vision, and courage, and a willingness to invest in the future.

Appendix B. The Iron Law of Wages.

The Iron Law of Wages derives from the late Georgian economist David Ricardo. It declared, simplistically, that in circumstances of labor surplus (a condition essentially permanent in his time), the level of wages would naturally decline until reaching the point below which they would not sustain life. This is not, as one of my economist friends alleges, merely a result of the elementary laws of supply and demand, though in the legal context of Ricardo's time it is exactly that. In today's world, with unions being legal and social legislation being widespread, it becomes a corollary of a much more complex system, one requiring just a tiny input of the Theory of Games for its comprehension.

We begin with a circumstance so simple that it hardly merits being called a game, and yet the theory of bargaining games is founded on it. Consider two parties, A and B , who are in a situation where they can obtain a benefit if they agree on how to divide the winnings. An example would be a corporation with a natural monopoly (as the Phone Company used to be) and an inventor with a patent which would save them e.g. ten million dollars a year. If they can come to an agreement on how the money will be divided, they can share the benefit. I call this game Tweedledum and Tweedledee, abbreviated T&T, for the obvious reason, though the positions of the players (the Company and the inventor) are hardly equal. Game theory seeks to construct believable canonical outcomes for games like this one and more complicated ones, so as to eliminate the necessity of nasty push and shove (such as strikes). However, in the matter of this basic game, this foundation block of the whole structure, there is essentially nothing to say. However, we will say what we can.

The typical outcome of such a situation is that the Company would offer the inventor a conventional percentage, like 5 % or 10 % , which it would apply in all such situations. That is because the Company can afford to be quite indifferent to the possible forfeiture of ten million dollars, while the inventor probably cannot match their aplomb concerning the loss of even one million, or even half a million. The attempts to quantify this theory of threat and indifference so as to make it amenable to analysis have been unfruitful. It remains more a matter of sociology (the fixed practice of the Company) and psychology (the needs of the inventor) than rational game theory. Indeed, the attitude of the Company is to reduce the simple game T&T to the only simpler one: Take It or Leave It (ToL). This is the game in which there is one player, who is offered a prize on this basis. Unlike T&T, this one has a solution: Take it! In T&T, each player would like to be able to put the other in the position of playing ToL, and the attempt to enforce this by both of the players comes to look like a game of Chicken, in which the drivers of two automobiles on a collision course each try to force the other off the road as the alternative to a head-on collision.

Failing the power of either player to create ToL out of T&T, it is agreed that there must be some division of the spoils, as mentioned in Chapter 30 on Progress. We see this most often in the field of labor contracts, of which more below.

The next game, just a shade more complex than T&T, is Big Brother, and that is the game which is an abstraction of the circumstance described by Ricardo. This game (abbreviated BB) has three players, called Big Brother (BB), First Brother (1B), and Second Brother (2B). No player can win alone, but BB can obtain a prize (say $ 100) if he can make an alliance with either 1B or 2B (or both). 1B and 2B together make nothing, and the grand alliance of all three also makes $ 100. The Ricardian analysis is that any agreement of BB with, say, 1B can be undercut by a change of partners to 2B with an increase in BB's share of the take. Thus, Ricardo tells us that in this situation, BB can have as much of the $ 100 as he is willing to manoeuvre for. However, BB cannot let 1B die, as he would then lose his leverage, so he cannot pay less than the cost of keeping 1B (or 2B) alive. Of course, in the real world, BB must hire not one of two workers, but perhaps 100 out of 1,000,000. The analysis is the same.

Returning to the simple form of the game, there is an alternative analysis. If 1B and 2B form a coalition, then this ``union'' can play T&T with BB. Presumably it is in a better position to get a reasonable share of the $ 100. To do that, of course, 1B and 2B must be in agreement on how to share their part of what the union secures, and that may involve another game of T&T within the larger game. There are examples of all of this.

One such example is if we complicate the game by specifying that BB makes only $ 90 with 2B. This complication may make it harder for 1B and 2B to come to terms, thus putting them more at the mercy of BB's strategy. (An example of this was found in the higher pay of high school teachers in the United States in the 1950s, which made it difficult for them to join in a union with elementary school teachers until the terms had been worked out between them.)

In the 19th Century, after the time of Ricardo, workers joined in unions specifically to defeat the effect of this Iron Law of Wages. The first reaction of the employers was to recruit the power of the State to enjoin this form of combination, which was described as ``criminal syndicalism''. Many were imprisoned for this offense until juries began to be unwilling to convict, and in the early 20th Century, unions became legal, and even protected, in all the industrialized countries. Then the game became more subtle. If BB had an agreement with 100 workers, he could again play the game if he could be sure of finding an additional 100 workers who would work for less. In that case, he was back in the old business. To prevent that, the union had to rely on an ephemeral concept called worker solidarity and on practices punishing strikebreaking, to one degree or another.

In addition, BB would have to find some way of preventing his new 100 workers from forming a new union, or he would have lost his gains. In the third quarter of the 20th Century, he would have found it difficult to do this, especially since there was not a great pool of desperate labor to be exploited.

The last quarter of this century, however, has brought in a new reality. The unions were more or less exclusively in the industrial nations, and consisted almost exclusively of white men, with a few exceptions. Furthermore, technological advance had begun to decrease the demand for labor, especially unskilled or semi-skilled labor. Demands for wages which kept pace with the cost of living could be disarmed by the threat of hiring Blacks or women, and where necessary the threat, whether explicit or tacit, could be carried out. The employers could even present themselves as philanthropists, bringing work to those excluded by the racist, sexist unions. If necessary, they might even escape over the national borders to less developed countries, again wearing the disguise of concern for the downtrodden. To those being offered jobs, even at lower wages, this looked like a blessing. Indeed, the unwillingness of the unions to see the needs of the excluded people was a gross failure of intelligence on their part. To be fair, many unions did address these needs, but it was hard for union leaders with that inclination to secure the consent of their members. In spite of that, the concern, on the whole, of unions with the fate of the downtrodden, both domestic and foreign, was greater than that of the supposedly philanthropic employers.

To the extent that employers have been able to reach across national borders, they have been able to reinstate the Iron Law of Wages. In some cases, they have had to secure the cooperation of the ruling classes in the countries where they were operating. In the industrialized countries, they managed to institute conservative governments which neutralized the supposedly excessive power of the unions. (To a distressingly large degree, this had the support of workers, even members of the unions. Without that support, the effort would have failed.) In the less developed countries, they either secured the support of leaders by appearing as saviors of their poor workers, or if necessary they bought them off with payments to their Swiss bank accounts in return for suppressing union activity in the factories of their supposed benefactors.

The flight across national borders is described as a natural law (See Chapter 20 on Greed) or philanthropy. Indeed, my friend the red baron, who is very much concerned over the welfare of the Chinese and the Indians, sees this as a positive development. He describes my concern to defeat the Ricardian disaster as a colonialist attempt to preserve the privileges of the white men in the industrial countries at the expense of the wretched of the earth, who are being liberated by the likes of Union Carbide and Rio Tinto Zinc. (See Chapter 43 on Cratchit.) Indeed, he has a point. The worst wages and the most dangerous conditions of work are preferable to death by starvation, and Dickens gives even Cratchit the good grace to be grateful to Scrooge for the bodily survival of his family and even for their Christmas feast.

But I have no difficulty in seeing the Ricardian holocaust for what it is: wage slavery. It was outlawed in developed countries for most of this century, but the acolytes of the Chicago School have brought it back. They have even managed to secure the support for it of most of the people who will be most damaged by it. I think those people will eventually turn against it, but by convulsion rather than rational planning, and when they do so, there is no telling what rude beast they will set loose to try to save themselves.

The red baron and others who are concerned for the plight of the wretched of the earth seem indifferent to the disparity in the degree to which their slim portion of liberation is being supported by the citizens of the advanced countries. The working classes are being deprived of all the gains of this century's activism, while the rich are not only not paying anything, but they are profiting enormously from the fact that they are no longer paying wages such as they paid only a decade or two ago. This is a circumstance which could be remedied by taxing their incomes at a greater rate and adding the increased taxes to the support of social programs designed to alleviate the distress of the displaced workers, or to educate and elevate the economic chances of their children, but that might lead to these same people moving their operations totally into the Third World so as to be beyond the reach of corrective legislation. In the end, that would require that the products themselves be barred or taxed at the borders. Such an expedient would of course be attacked as protectionism, which it surely would be. Whether this attack succeeded would depend in large part on how successful its proponents had been in establishing Free Trade as a form of Holy Writ. Like Criminal Syndicalism, that could be overturned by an aroused public, but not before a long period of social unrest. In the end, the solution would more likely run to a fascist rather than a socialist configuration and harm the poor of the Third World more than any program I have suggested here. (See Appendix C, The wretched of the Earth, below.)

Much depends on what boundary conditions can be imposed on the public debate by the owners of industry. When the red baron can be recruited against the interests of organized labor, we must accept that the rich are still calling the tune. And as the economic stranglehold tightens, we can expect that the working classes of the old industrial world will become less inclined, rather than more, to share with the poor, just as the less poor among them are unwilling to share with the more desperate.

The Iron Law of Wages is, amazingly, being peddled as an economic manumission for the world's poorest people. It is not that. It is an offer to return all of the world to the status of Victorian misery, except for a few at the very top of the economic pyramid. How socialists can support it is beyond me.

Appendix C. The wretched of the earth

My disagreement with the red baron has left me wondering about the effects of mercantilism directed not to corporate profit but to the preservation of employment in the industrialized world. I have no doubt that it will eventually come, whether under socialist or fascist auspices. The workers of these countries have the votes to elect a government which would close the borders to the products of cheap labor taken from desperate people in the Third World. Whether this would result in free trade among those with more reasonable labor standards is not at all clear. What is clear is that if it should happen under fascist auspices, there would be little quarter (or none) granted to the wretched of the earth by those regimes.

It is also possible that socialist governments would likewise ignore the plight of the world's poor, if the economies of the presently prosperous countries should become undermined sufficiently before the current policies were overturned. The date of reversal is at present being put off by the refusal of the social democratic forces in the world to attend to the needs of their own working classes, and by their policy of hiding from them the option of protectionism. The cheap products from the Third World require a prosperous working class for their market. The rich are indifferent to the price advantage of shirts sewn in Pakistan. That price speaks to working-class or middle-class consumers, who might well decide that civil peace in their own back yards is more valuable than cheap products. And they might so vote if it came to that. But it is entirely possible that either a fascist or a socialist regime would turn its back entirely on the world's poor.

However, I would like to pursue here the question of what the relatively rich workers of the North would owe to the starving masses of the South if they were inclined to treat them as though they had a veto on the impending era of mercantilism and protectionism. In this, I am motivated by the considerations I set forth in Chapters 16 and 31, on Sharing and on Progress. At present, the threat created by predatory capitalism buying labor in the South is to replace a large part of the labor of the North. I am urged to consider that those who get these poorly-paying jobs deserve a chance at a better life, and that a humane person would not wish to interfere with that. I observe, in the mode of Chapter 31, that it would be better for the workers of the industrial world to pay the miserable wages of the South out of their own pockets than to give up the jobs on which their own lives depend. I do not recommend that all the cost of such a program of relief should be borne by the working people, but only note that even such an extreme solution would be better for the workers of both the North and the South than what is currently in train. Indeed, I would advocate that the costs of the program I submit here for consideration should be borne by all the inhabitants of the rich countries, and most by the richest. It should not be a per capita tax on employment but a progressive tax on income. In that format, it would be a substantial nuisance but not a crushing burden, which the deterioration of the economies of those countries is threatening to become. Let me say at once that the red baron has not responded to my communication with him on this point. No doubt he finds my proposal highly visionary and impractical. Of course the impracticality arises because there is very little room in it for wealthy predators to enrich themselves further, so that it forfeits the support of any entrenched interest, except that of the People. It is well-known that that is insufficient to establish any large-scale and expensive undertaking. But to hear such an opinion in the mouth of a socialist (if I should find it there) is most discouraging. So without further ado, I will here set forth the details of my substitute for the exportation of jobs from the industrialized world to the impoverished.

But at this point a subtlety appears. If we are to be motivated by considerations of human need, then it is not in Mexico, India and China that our bounty should be expended. These nations are in the second and third quartiles of prosperity. If those in the first quartile should be motivated by human fellow feeling, it is clear that it is to the bottom quartile that attention should be paid first, and that quartile could well consume any payout so motivated. If we are urged to ignore the needs of the ``rich'' workers of America and Britain on behalf of the needs of the poorer ones of the middle half of the human race, then exactly that argument should persuade us that our concern should instead go past those to the hungrier yet, to those in the likes of Haiti, Mozambique, and Bengladesh. The advocates of Mexico and India do not agree with this analysis, but they are pleading for specific causes, and are not swayed by the same arguments they urge upon others.

To add some detail to this argument, let me introduce a new definition to the words ``third world''. This term comes to us as detritus from the Cold War, when the first two worlds were those of industrial capitalism and international communism. But I take the first world today to be the nations constituting the richest quarter of the world's population, and the third world the poorest quarter. The middle half, while double the size of either of the others, is more nearly uniform it prosperity, lacking the statistical ``tail effect'' of the extremes. And it is first to the extremes that we turn our attention.

The present export of near-subsistence jobs in the apparel and sporting goods industries to the workers of the second world results in swollen profits to the employers. If joint tariffs in the first world were to temper those profits, it would likely be unattractive to those employers to move the supplying of their domestic market to these countries, but would still offer some opportunity to indigenous entrepreneurs. That apparently would not satisfy the desires of the red baron and those who share his opinion, but it would certainly be sufficient for me and those I might convince.

So now I will address the needs of the third world. How many jobs should the first world support in the third? If we were to consider these as compensation for jobs not exported, then the number should not exceed the total number of jobs in the first world, even without considering that there are certain ones which are incapable of exportation, like personal services. Still, the cost is small, and we could imagine a model in which the blanket is spread as wide as possible, motivated in part by the fact that the cost of adding a worker in the South to the cost of each worker in the North would be far less than the depradation occasioned by exporting the work of the northern workers.

Thus, the nations excluding the products of near-slave labor could well agree that each would support a number equal to its own labor force, and the price of inclusion in the world trading bloc might be the fulfillment of such an obligation. I estimate that the total would come to about six humdred million jobs. Then there is the question of what the southern workers would do and what they would be paid. The lessons of The Iron Law of Wages being pressed by those who support the exportation of jobs is that the way to find those most in need is to pay the least and to hire those who would work for such a pittance. This is indeed what the predatory capitalists are doing at this very moment, to the extent that they can. The poorest wages in the world today range from about six hundred to nine hundred dollars pre year for long hours in terrible conditions of work and unsafe workplaces. Let us consider what would be the consequence of such a policy. In the first place, it would tend to minimize the cost, and to make the breadth of the blanket affordable. In addition, it would create an impetus for those above the very minimum to raise their labor standards to bring them to the level of the trading nations. Finally, it would preserve the market on which the global economy most depends: a prosperous working class in the first world. The cost would be enormous, but not devastating. For all the nations of the first world together, it would come to 400 - 500 billion dollars a year. As much as

that comes to, it is less than is now being lost in unemployment, including those supported and unsupported by these nations' economic safety nets.

In considering who might be hired in the third world, we would expect, like the present economic predators, to employ those most in need. These are the unmarried, childless daughters of poor families. Indeed, such people are so uniformly destitute throughout the poorer countries that we might well find that there is a demand for those jobs on any terms from such women even in the second world. We need to be attentive to that possibility. These women are in need not only of employment today but also of some degree of security in age, security which they can obtain in today's world only by having many children. The provision of employment which guaranteed life-long support would ameliorate the motivation which drives so many of these women into unsatisfactory marriages and unadaptive fecundity. Those who left such employment for the rewards of marriage and family would presumably not be doing that out of desperation. And it might be that this distinction would result in a good portion of the support finding its way into second-world countries.

Of course, the support of the poorest does not meet the conditions of Chapter 31 unless it buys off the threat to that prosperity. To do so, it must not produce goods or services which are in competition with the economies of the richest quartile. As it happens, there are important functions going unprovided in all of these very poor countries. As an example, I cite the spreading of literacy, the clearing of land mines, the inoculation of the population against infectious diseases and the nursing of the sick and dying. These functions have the benefit of not only preserving the jobs of the prosperous here on Earth, but also of gaining merit in Heaven.

I must mention that there are countries which have slaves or nearly slave conditions for their workers whom we would find it enormously difficult to exclude from international trade. Typically, these extract rare minerals or oil from the ground. It is probably unrealistic to expect that the industrial countries would actually bear the burden of doing totally without these resources in the interests of Sharing and Progress. To require it would be to invite evasion. More reasonable would be a uniform tariff imposed by all the industrial countries which would hold the imports to an unnaturally low level, but not so low that it would be a major check on the economies. I recognize that this is a form of compromise with evil, but so long as we keep the folly of national sovereignty as a shield behind which evils like slavery and near-slavery can continue, we must find realistic ways of dealing with the infection which that spreads to the economies of the whole world. I am sad that I do not know of a better way of dealing with this reality, but I certainly do not consider that free trade with such countries is one.

The present policy of free trade as a way of spreading some cash to the workers of the near-median countries by enriching the richest of the rich should not be permitted to masquerade as a humanitarian enterprise. Those who are genuinely moved by empathy should accept that the policy outlined in this appendix serves better the people of both the industrialized countries and the wretched of the earth.