Grizzly @ Adams

Senior Seminar. Despite Edward Bellamy’s bland prose, Looking Backward was a runaway bestseller. (In fact it was the third-best-selling book in 19th-century America. Uncle Tom’s Cabin, of course, was number one.) And despite its high kumbaya index it was taken quite seriously and prompted the birth of “Bellamy Clubs” devoted to promoting its brand of socialism.

While it can be argued that Bellamy fundamentally misunderstood capitalism, a few of the economic ideas in Looking Backward have taken root (in the form, for example, of consumer cooperatives like REI and warehouse stores like Costco). But most economists today would probably just laugh at Bellamy’s insistence on the necessity of central government economic planning:

In your day the production and distribution of commodities being without concert or organization, there was no means of knowing just what demand there was for any class of products, or what was the rate of supply. Therefore, any enterprise by a private capitalist was always a doubtful experiment. The projector having no general view of the field of industry and consumption, such as our government has, could never be sure either what the people wanted, or what arrangements other capitalists were making to supply them. (140)

Actually, a free-enterprise system “without concert or organization” does have a “means of knowing” about supply and demand. Marketing departments do a great job of figuring out “what the people want,” and advertising actually creates wants where none existed before. And the profit motive (as Marx was fully aware) provides a tremendous incentive for capitalists to diligently seek out and exploit weaknesses in the existing production and distribution of goods. (There are no comparable incentives for government planners.) Less efficient businesses get destroyed by more efficient ones, leading to the continuous improvement of the economic system overall.

Yes, argue the free-marketeers, this system is unstable and in many ways wasteful, but on balance the gains in efficiency far outweigh the losses of what is sometimes called capitalism’s “creative destruction” (which refers to the way old practices are continually destroyed as new ones are continually created — or, as Marx put it, the way “all that is solid melts into air”).

Part of what Bellamy seems not to understand is the general idea of spontaneous order, in which highly organized systems emerge on their own without any actual agent doing the organization — systems whose organization is in fact far beyond the planning capabilities of any agent. (Think of the evolution of ecosystems — who could possibly design one from scratch?) As the philosopher Friedrich Hayek pointed out, capitalism is such a system and thus works best when left to operate on its own. (Needless to say, Hayek is one of the key figures in modern conservativism.)

Here’s another passage I want to call to your attention but can’t think of any clever paragraph transition for:

Now nothing about your age is, at first sight, more astounding to a man of modern times than the fact that men engaged in the same industry, instead of fraternizing as comrades and co-laborers to a common end, should have regarded each other as rivals and enemies to be throttled and overthrown…. Your contemporaries, with their mutual throat-cutting, knew very well what they were at. The producers of the nineteenth century were not, like ours, working together for the maintenance of the community, but each solely for his own maintenance at the expense of the community. If, in working to this end, he at the same time increased the aggregate wealth, that was merely incidental. It was just as feasible and as common to increase one’s private hoard by practices injurious to the general welfare. One’s worst enemies were necessarily those of his own trade, for, under your plan of making private profit the motive of production, a scarcity of the article he produced was what each particular producer desired. It was for his interest that no more of it should be produced than he himself could produce. To secure this consummation as far as circumstances permitted, by killing off and discouraging those engaged in his line of industry, was his constant effort. When he had killed off all he could, his policy was to combine with those he could not kill, and convert their mutual warfare into a warfare upon the public at large by cornering the market, as I believe you used to call it, and putting up prices to the highest point people would stand before going without the goods. The day dream of the nineteenth century producer was to gain absolute control of the supply of some necessity of life, so that he might keep the public at the verge of starvation, and always command famine prices for what he supplied. (140-141)

The modern free-market economist would agree with Bellamy that, when private greed leads to greater “aggregate wealth,” such a result is “merely incidental.” But so what? The question is not whether capitalism’s contribution to the aggregate wealth is intentional or incidental, but whether it is greater than socialism’s contribution. On this point, at least, history has not been kind to Bellamy.

On the other hand, Bellamy’s criticism of monopolies was spot-on in the 1880s and still rings true today. We still have antitrust laws designed to prevent the creation of monopolies. And we still generally insist that certain “necessit[ies] of life,” such as drinking water, be produced and distributed in common rather than by private enterprise.

Of the many responses (both pro and con) to Looking Backard, perhaps the best, at least from a purely literary perspective, was News from Nowhere by British socialist William Morris.

Edward Bellamy had a cousin named Francis Bellamy, who was a Christian socialist and who wrote the Pledge of Allegiance in 1892. Now for your questions: Which economic system is most consistent with Christian values? Are things like economic efficiency and aggregate wealth creation relevant in answering such a question?