Joys of the Quaker Way: One More Branching—Quakers & Capitalism

November 22, 2014 § 4 Comments

One more branching—Quakers and capitalism

Prologue

So I have laid out the general outline of my joyful experience in unfolding of ministry as a Friend. This has followed a pattern:

Openings, the flaring of bright moments of insight that come as gifts of the Holy Spirit, which I experience as moments of joy that are sometimes quite sublime. Furthermore, some of these openings have led to . . .

Leadings, specific tasks laid upon me by G*d that, even when they have become a burden, and sometimes they have, still in their pursuit I have found fulfillment, a sustained joy in knowing what I am to do and joy in the doing of it. And then, blessing upon blessing, sometimes these leadings have given birth to . . .

Ministries, calls to service that are broader in scope, deeper in demand, and longer lasting than individual leadings—and even more fulfilling, more full of the joy of service to the community and to G*d.

There is one more layer to this onion—what I call my calling. But I have one more branch in my personal story to tell, another instance in which a leading and the study it required uncovered a new door into service, a new opening that led to a new leading and then to a new ministry.

The opening. I was rummaging through Pendle Hill’s library—i forget what I was looking for—when I “happened upon” the book of proceedings of the first Friends World Conference, held in London in 1920. This book was in amongst other books related to the other world gatherings. I knew nothing about this first gathering, or any of them, for that matter, so I sat down to read for a while. And here was a new discovery: the Eight Principles of a Just Social Order and accounts of the debates that it evoked at the Conference, plus hints about an even more intense debate at the 1918 London Yearly Meeting sessions.

London Yearly Meeting (now Britain Yearly Meeting) had convened a Committee on War and the Social Order in 1915 whose charge was to explore the causes of the Great War. It came back to London Yearly Meeting with its final report in 1918, with a thoroughly-thought out critique and the Eight Principles. The Committee blamed the industrial system—capitalism—in part for the war and the first draft of the Eight Principles, which had been watered down in the final draft after they had been sent to the quarterly meetings for consideration, were quite critical of the economic-industrial system of the time. Meanwhile, the Friends receiving the report were captains of industry in the very system being criticized. In a sense, these Friends were criticizing themselves.

The leading. I was hooked. I now wanted to learn everything I could about Quaker attitudes toward the capitalist system, given especially the tremendous wealth of British Friends through the centuries. Soon, I felt led to write a history of Quaker economics—a history of Quaker contributions to capitalist culture, Quaker economic attitudes, and an economic history of the movement. The resulting research and writing became the unfinished book published in installments as the first posts of this blog (available as pdf files from the link in the sidebar to the left labeled Quakers & Capitalism).

It felt so natural. I had already been studying biblical economics for years. Also I worked at the time as the marketing communications person for a high-end speakers bureau that represented many of the most important thought leaders in the business world and many of the world’s first-tier economists. it was my job to know what these people were thinking and writing and saying, and then present it to the business speakers market. So i was learning how the system worked from the inside, while I was simultaneously learning how Jesus had reformed the economic instructions of Torah.

And I discovered that the history itself, of Quakers and capitalism, was not only fascinating but also virtually unknown to Friends. As I like to put it, the industrial revolution would have taken place without Quakers—but it didn’t. Friends developed most of the foundational, indispensable industries, businesses, infrastructure, and financing of the British industrial revolution, and they became fabulously wealthy as a result. Yet almost no Friends I have ever met know much about it. Every time I give a presentation on this material, it blows my audience members’ minds.

The ministry. Then, following the pattern I was used to now, the leading to write this book led to a ministry of teaching about not only our economic history and our contributions to capitalist culture, but also a prophetic ministry of awakening to economic testimony.

We stand in a similar relation to the capitalist system as we do to the prison system—we helped create something that has become a monster. And not only are we nearly oblivious of this relationship; we are weirdly neurotic about it. Our amnesia in this area is very strange for a community so obsessed with its own history, and so proud of it. i feel that the collective consciousness of modern Quakerism is neurotic about money and economics.

My ministry is to explore why this is so and to call Friends to “stand still in the light” until the shadow we live under in this matter burns away, and we come up through the flaming sword into a new relation to money and our economic system, until we are open to G*d’s wish for us regarding the economic system we helped launch.

Meanwhile, however, the openings, the leading to write the book, the ministry of writing and teaching about Quakerism and capitalism—all this has been a ceaseless cascade of passion, discovery—and joy. I thank G*d for it.

Gift Exchange Economies—An Alternative?

August 28, 2014 § 5 Comments

Well, I’ve been ranting and railing against the capitalist economic system for several posts now, using strong words like “evil” (which I didn’t bother to define) and “dung”. I find it brings out the vitriolic in me; it tempts me to a righteous and poetic indignation. Not so good. Not very constructive, anyway.

So it’s time to own up once again to the fact that our economic system is not only evil—not only hierarchical and anti-democratic; competitive, if not actually violent; deceitful and manipulative; inherently anti-worker and effectively anti-consumer; carcinomic, rapacious, and unsustainable; oh, and anti-biblical . . .

It is also good, in that it has raised the standard of living for huge numbers of people, arguably in fact everyone on the planet—except for indigenous peoples. It is an extremely creative engine of technological advance, and many of these advances serve the greater human good. Not so much the good of whales and frogs.

But more to the point—what else is there?

When I first started talking and writing about these predicaments of capitalism and Quaker testimonies, the Soviet Union still held sway over millions of people, and inevitably, Friends would respond with: “So, what—would you have us all become communists? Look how well that’s working out.” As if there were only two economic systems in the world. Now, many Americans anyway, think there is only one.

But what about socialism? Some democratic quasi-socialist states, like Norway, are doing quite a bit better than we are by virtually every measure. Many countries have vital socialist parties and manage, mostly, not to fall into chaos or hell, as the true believers in capitalism fear would happen here.

Meanwhile, everyone seems to have forgotten that fascism is also an economic system, featuring private ownership of capital but state control of the economy. Also basically a failed experiment.

But the economic systems that I find most attractive are the gift-exchange economies that most indigenous peoples have. Had. Virtually all the traditional gift exchange economies on earth have been destroyed by the market economy.

In a gift exchange economy, one gathers power, not by amassing wealth, but by giving it away. Those gifts obligate the receiver to reciprocate in some way at some time. Because people are different, as are circumstances, places, luck, and a host of other factors, some people end up with more power than other people—they have wider networks of obligation owed to them than the complex of obligations they owe to others. They often become chiefs.

The classic case is Sitting Bull. Sitting Bull was the first and only man to be the traditional chief of all seven tribes of the Lakota people. He achieved this status by providing many gifts, but one especially—the (temporary) salvation of his people. Sitting Bull saw that the American military strategy was to cut off the annual, seasonal, north-south migration of the bison, kill them off, and starve the plains peoples into submission. Military power wasn’t doing so well, at least not until the invention of the carbine, a short-barreled repeating rifle that could be cocked with one hand and used in close quarters, and thus was suitable for use by cavalry. William Tecumseh Sherman, more famous for his reign of terror across the deep South during the Civil War, and named, ironically, after one of the greatest Indigenous warriors of all time, commanded the Indian Wars for a time; he called the Plains Indians the best light cavalry on the planet, with the possible exception of the Cossacks, another indigenous horse-people.

Anyway. Sitting Bull’s counter-strategy was to cut off the southern bison migration himself and keep what was left of the bison herds in the north. He talked all seven tribes, the Northern Cheyenne, and several other tribes, into cooperating to achieve this. This delayed the conquest of the Northern Plains for almost a generation. Among his own people, he was called He Feeds the People. The Lakota gifted him with this name in recognition of his great gift to them.

In gift exchange economies, you gain power by feeding people. Or by giving them hides, for clothing, shelter, containers, bedding, etc. Or by giving them rights to one of your fishing camps. Or by gifting them with horses, or basket rushes, or . . . You get the idea.

Now, you feed people and provide all these other necessaries, in many traditional indigenous life-ways, by being very good at living with the land, by really knowing it and understanding it, by possessing a sublime eco-intelligence, by possessing valuable skills, by possessing powers of organization and persuasion, by caring about future generations. By giving.

Gift exchange economies elevate social roles, instead of giving people jobs. Instead of working for a wage and then buying your life in parts and assembling it at home, like we do, in a gift exchange economy, you trade goods and services, tasks and labor, favors, songs and dances, names, reputations and loyalties. You sing at my daughter’s wedding; I give your whole family meat that lasts a week; or maybe, two winters later, I take you in when your own hunters can’t find a herd.

Gift exchange economies work for small groups who live in partnership with the land. Scaling one up to serve 300 million people would be a challenge. When everyone lives three or ten degrees of separation from basic production of basics—of food, building materials, energy sources, clothing materials, medicines, etc.—the chains of exchange would become extremely complicated; only computers could keep track. When everyone in the system has quite specialized skills and jobs, trading services would be impossible. When the only thing you could trade is things, you are still locked into the mass production-mass consumption economy to acquire the things you might trade in the first place. So—elegant idea, maybe, but totally impracticable.

The market economy has won. It’s like kudzu: it soaks up so much of the sunlight that no other economies stand a chance.

What to do? We are left with the project of radically reforming capitalism.

We could start with usury laws. These were deregulated under Ronald Reagan, so many of us remember a time when interest rates were regulated more or less equitably, though I doubt that many of us were really paying attention. I know I wasn’t. But you can draw a straight line from Reagan’s policies on interest rates to the Great Recession. And here, unlike with many of our modern problems, the Bible really has something to offer as a starting point.

So let’s start there. Next time.

Mendaciousness—Capitalism and the Testimony of Integrity

August 15, 2014 § 4 Comments

I said in the introductory post of this series on capitalism and Quaker testimonies that, in terms of both its accounting methods and its conduct of competition in what it likes to call the open market, capitalism has built lies into its very structure. It also encourages deceit by its practitioners. It lies about its overhead, about the true costs of the resources it consumes and the wastes it produces. And it lies to its end-users in its advertising.

Capital lies.

The material culture of capitalism requires raw materials, resources that come from our Mother Earth to make and do the things it sells to consumers. It assumes that half the balance sheet of the Earth—the planet’s assets—are available for the taking. As for the liabilities, especially the accounts payable—to these capitalism turns its gigantic blind eye.

This cavalier attitude toward the Earth’s bounty should be noxious to anyone or any culture that holds a biblical worldview because “the earth is the Lord’s and the fullness thereof” (Psalm 24:1; actually this is only one translation of this passage, and not, I suspect the most valuable one, both to us and to the writer of the Psalm—but that is another post). In this view, the Earth is not even a gift, but actually a loan. God has put it into our hands for right use and we will be held accountable for that use. But, when it comes to economics, our society is anything but biblical in its worldview, and the more conservative you are, and even the more conservative Christian you are, the less biblical your economic worldview is likely to be.

But back to capitalism and the Earth’s balance sheet. The “households” in our economic system factor the current cost of the resources it extracts from Mother Earth into the prices it charges for the goods and services it provides. Businesses pay the current value of these resources in the market. They factor in the cost of the rights to extraction; they factor in the cost of the resource as determined by competition for it in the market; they factor into the end-product price the cost of its transformation into capital goods. It’s worth noting, however, that the players in these markets try to distort the markets or manipulate them in order to get advantageous prices. This works especially well in the international market for raw materials, where the over-developed nations almost always hold resource-rich developing countries at a disadvantage.

However, the current value of a resource is not its real value. We do not really know its real value, because it is likely only to go up over time as the supply dwindles. More importantly, while a given resource (say, molybdenum, which is used in specialty steels, and which only a couple of countries currently produce)—while a given resource may be quite valuable to us today for our consumption, it might be desperately necessary some time in the future to our descendants for something we cannot today even imagine. Capitalism is oblivious to our descendants’ needs and it cares not a whit for the fact that they will curse us for our profligacy.

To account for this unknown potential value of Earth’s assets, we should be creating escrow trust accounts to help our descendants cope with the shortages we are creating. And we should be doing the same thing with the resources themselves; we should be holding some percentage of all that we extract as a trust against the demands of the future.

We do neither of these things. We lie about the true cost and value of our capital.

Waste lies.

We do the same thing with the true cost of our waste management. Capitalism does not figure into its pricing the real, final cost of disposing of its wastes safely, which ought to be part of its overhead, and never is. And when—or, to be realistic, if—the bill ever comes due for cleanup, capitalists inevitably try to squirm out of paying; it hurts profits and equity value.

This is especially important for wastes that do not biodegrade, but remain toxic and present in the body and bloodstream and organs of Mother Earth more or less permanently. And because Mother Earth is us—because our very bodies come from her—these wastes remain toxic and present in our bodies and bloodstreams and organs, as well.

The great killer disease of the industrial age was tuberculosis, the destruction of human lungs caused by the use of coal as a fuel. The great killer disease of the post-industrial age is cancer, the mutation of cells by toxic foreign substances. Thus some serious percentage of our healthcare costs should be included in the overhead cost of waste management.

Capitalism pretends that the only cost it must bear for managing its prodigious waste stream is the immediate one of getting it some distance away from its producer and providing for some minimal treatment before it gets poured back into Earth’s bloodstream or buried in her soil-flesh.

The superfund put aside for the treatment of “superfund” sites should be the model for the entire economic system. The goal should be zero toxic, non-recyclable waste returning to Mother Earth, zero toxic substances in our own bodies and those of our children—and a massive escrow account fed by some meaningful percentage of every economic transaction set aside to solve these so-far unsolvable problems in the future and to fund research and care for a public health increasingly threatened by capitalist dung.

The true cost of eliminating carbon dioxide, or uranium waste, or the 50,000 or so chemicals that we have never even tested for toxicity, would be staggering. So we just don’t think about it. Let the great-grandchildren deal with it.

In fact, if we really did account properly in our pricing for the destruction of natural capital and the remediation of capitalist waste, the system would collapse. Short-term greed is the main reason we don’t deal with these issues, but the reason we don’t even talk about it is the existential threat to the system itself that transitioning to an honest economic system represents.

Advertising—marketing lies.

Finally, capitalism depends on advertising for growth in an environment of intense competition for market share. This tempts economic households to psychologically manipulate their consumers through advertising. This manipulation distorts human relationships by turning consumers into objects. It tends to misrepresent the true character and value of its goods and services to make them seem more valuable than they really are. It tends to hide any negative aspects of its products and services. It resists attempts to keep it honest and transparent. The tobacco industry is the classic example. More recently, the lies and subterfuge about credit default swaps and mortgage derivatives brought the entire system to its knees—and taught the liars no real lessons at all.

But misrepresentation of products and services is just the more or less visible surface of its mendaciousness. More troubling really, is the ways that advertising invades and distorts our worldview, our understanding of the good life, and thus our very dreams. It tells us that consumption is good for us; that low prices that allow more of us to consume more, are good for us; that we actually need the things that in reality we simply desire. It tells us that the good life is defined by the things and experiences that we can buy in the marketplace.

The catch-all phrase (in America) for this constellation of lies is “the American dream”—owning your own house and as many good cars as your family thinks it needs, providing a good education for your children, securing freedom from fear of want, healthcare, and acquiring some things that provide, or at least represent, a comfortable life. Now, given the system, who could argue? These are all good things that anyone would want.

Only the earth cannot sustain seven billion American dreams. Nor is it true that you need all these things to be happy or fulfilled. And especially, it is not true that a mass production–mass consumption economy is the only way to have these things.

Is it? Are there any alternatives to this kind of system? These are my first queries for Friends. Here are some more:

How do we remain true to the testimony of integrity when our entire social, and material, and perceptual, and cognitive, and physical, and even emotional environments are totally saturated with lies—with salesmen seeing in me the pathway to their quota, with plastic bubble-wrap for individual pieces of processed cheese product, with images of half-clad women tugging on my pud with the promise of some fantasy fulfillment, with ideas like “the American dream”, with ads and billboards everywhere I look, with false desire trying to crash the gates of my amygdala? Why should our spiritual discernment and environment be polluted by this trash?

And now to the core: Would I be willing to pay the real cost of sustainable resource capital management and waste management with markedly greater prices for everything? And with my or your (probably) stagnant wages, how could you or I? Would I be willing to utterly change my lifestyle to accommodate a truly sustainable economy? For instance, would I accept the inevitable percentage of vermin that bulk food distribution inevitably entails—not just bring my own containers to the store—so that we could limit food packaging to the every minimal and the truly recyclable? How much am I willing to sacrifice, so that Mother Earth—and her creator-logos-the-christ—are not crucified on the cross of our economy instead?

Owner Autocracy—Economic Non-democracy

July 18, 2014 § 1 Comment

Capitalism is inherently vertical in organizational structure. It consolidates power in the hands of the few and the power radiates down in a pyramid through management structures. This dictatorship can be varying degrees of benevolent, but, ultimately, the only power inherently vested in the worker is the power not to work—the power to strike or quit. It took a long time for the power to strike to become a legal right, we are still not completely there, and, since Ronald Reagan sacked the entire air traffic control community as his first official act in office, it’s been losing ground again. Moreover, it stretches things to call the power to quit or strike a “power”, since it makes workers so vulnerable.

Owners and managers decide virtually everything that’s important about your job: who gets to work, when, how, where, with whom, and for whom. They design or determine the time, space, body movements, and actions of your labor, sometimes even your speech. They monitor and evaluate your performance and they hold the ultimate power over you, as well—they can fire you.

Whether ownership is private, corporate, or public/bureaucratic, the system is barely post-feudal in its vertical structure. Since the transformation of European political feudalism and the fall of the sovereign monarchies, we have come to define democracy as the sine qua non of social justice: people should have a say in the things that affect their lives. But we take the tyranny of capitalism for granted. Capitalism is undemocratic.

This power corrupts, of course. Given the complete absence of any inherent, structural limits or mitigating counter-forces in the system, we must rely on outside social-political forces for protection against the misuse of this power. For this, we have turned to government. Gradually, centuries after capitalism’s rise to power, we workers have been granted protections from abusive hours, unsafe working conditions, harassment and discrimination according to a very slowly growing list of vulnerabilities.

Capitalism hates this advance in human rights. Naturally, therefore, the handlers of this power do all they can to limit the regulatory power of government. Thus the corruptive influence of power that is built into capitalism’s DNA inevitably infects the political system, and our protection is routinely and systematically undermined. 

Conservatives, whose mouths are constantly shaping the words “liberty” and “freedom” and “individual rights”, define these terms over and against the government only—against the only countervailing advocate we have against capitalism’s tyranny. Capitalism gets a pass. In fact they often worship the power and freedom of the market with a kind of religious fervor. Only our weak, compromised, and late-comer protectors in the government are to be feared.

I might summarize the predicaments for Friends regarding the power structures of capitalism in the following queries:

  • Given that the quasi-feudal hierarchical structure of our economic life inevitably if not necessarily leads to quasi-feudal patterns of discrimination and oppression, what can we do to bring the testimonies of justice and equality to bear on behalf of capitalism’s victims?
  • As a community that has proven over more than three centuries that horizontal power structures do work, how can we do a better job of transforming the vertical power structures of our economic system?
  • As Friends, how can we better promote the concepts and practice of servant leadership, a phrase coined and a practice first championed in the modern era by our own Quaker Robert K. Greenleaf? (Read an article by Larry Spears, the Quaker champion of Greenleaf’s work and servant leadership in our time, published in Quaker Life, titled Servant-Leadership and Quakers.)
  • Does your yearly meeting have a coherent, Spirit-led testimony on labor and worker rights?
  • Most importantly, how can we leverage our education and our Spirit-led testimonial power to begin conceiving a true alternative to this abusive system?

Private Ownership—The Moral Structure of Value in Capitalism

July 14, 2014 § Leave a comment

Capitalism is predicated on the private ownership of capital and of property in general. Only the owners or stockholders are entitled to the profit, the surplus wealth, which the system generates. They usually benefit from other privileges, as well.

By separating the owners of capital from the rest of the participants in the economy for profit and other privileges, capitalism creates a system of value that has moral implications. It says that capital, or property, is more valuable to the system than the labor which transforms it into something of worth in the market, and that the people who own the property are more valuable to a particular business, and in the wider social-political economy, than either those who work for it or those who buy the end product.

The practical consequence of this investment of value in capital and profit is that workers, consumers, even other businesses and industries, are relatively devalued: their needs are of secondary concern to the owners of a particular business, especially when those needs are in conflict with the pursuit or protection of either capital or profit. Workers are always in this position, because they are a cost to be cut.

I might summarize the predicament for Friends, then, in these queries: How does the quasi-moral aspect of an otherwise secular social system influence the actual ethical choices of individuals, especially the people who make the decisions about a business’s behavior? How might the investment of value in capital, property, profit, and owners/managers distort the moral framework of society as a whole? How do we build into our economic system the moral freedom to value appropriately the interests of other stakeholders in the system besides the owners and shareholders? Does your yearly meeting have a coherent, explicit, and Spirit-led testimony on economics and economic justice?

Quaker Testimonies and the Predicaments of Capitalism

July 11, 2014 § 4 Comments

I believe we have to question whether participation in the capitalist economy brings Friends into conflict with our traditional stands on peace, simplicity, economic justice, earth stewardship, community, and the right sharing of world resources. I am led to believe that it does. This is a predicament.

I use the word ‘predicament’ deliberately to mean not only the dilemmas that capitalism presents to Friends but also to indicate that capitalism is predicated on assumptions that necessarily bring Friends into conflict with their traditional witness testimonies. I am not arguing that enlightened participation in a capitalist economy is impossible, or that capitalism does not have its good points. Only that it has structural evils that one cannot avoid, that dynamics of human behavior and interaction are built into the system that necessarily lead to conflict, violence, social and economic injustice, materialistic excess, and damage to Earth’s ecosystems. Oh, and it violates the gospel of Jesus.

I see five basic predicaments of capitalism that challenge Friends’ lives in the light of their own testimonies. These are quite inter-related and sometimes it hardly makes sense to separate them, except that it’s so hard to make sense of them if you don’t. The five predicaments are:

  1. Private ownership of capital: Individuals (or the stockholders of corporations) own the goods and services that generate income when sold in the market, and they own the means to produce these goods or provide these services. It puts into private hands things that properly belong to the community and to future generations: mineral resources, agricultural resources, water, the wealth of the oceans. As currently structured, the community is cut out of the deal.
  2. Capitalism violates the Quaker testimonies of community, equality, and right sharing of resources.
  1. Competition: Capitalism is inherently competitive and assumes an ‘open market’ relatively free of direct government or collective social control. It competes for everything—resources, labor, energy, markets, customers, attention, even our dreams. Competition inevitably leads to conflict; inevitably over time, though not in every instance, conflict leads to violence.
  2. Capitalism violates the Quaker testimonies of peace, economic justice, and right sharing of world resources.
  1. Owner autocracy: Capitalism concentrates economic sovereignty—the right to make decisions—in the hands of the owners of capital and, by delegation, their managers, in an overall system of vertical organization. Until recently, the social history of capitalist economies in the over-developed world has been evolving toward increasing democratic governance; those for whom free-market capitalism is a religion give capitalism the credit. However, capitalism itself remains feudal in its governance structures; it is inherently undemocratic.
  2. Capitalism violates the Quaker testimonies of community and equality.
  1. Growth: Capitalism determines the health of a business and of the system as a whole in terms of growth; at all levels, its command is to expand—or die. Furthermore, the primary locus of value, the goal of the whole system, is profit, that is, surplus wealth, which is also a kind of growth. Capitalism assumes that economic growth has no limits and it pursues this goal with no structural limitations. Tissue that grows without limits is called cancer, and this disease is killing Mother Earth.
  2. Capitalism violates the Quaker testimony of caring for the earth.
  1. Mendaciousness: In terms of both its accounting methods and its conduct of competition in an “open market”, capitalism lies to itself and to its participants in three ways: about the nature of capital, the nature of overhead, and in its advertising.
  2. It does not take economic responsibility for the real value of the resources it treats as capital, which it almost always consumes without replacing, and it does not build into its pricing either the known real value of these resources or their unknown potential value to future generations. Meanwhile, it is drawing down the resource capital of the entire planet at a now catastrophic pace.
  3. Furthermore, capitalism does not figure in its pricing the real, final cost of disposing of its wastes safely, which is part of its overhead. When—if—the bill ever comes due for cleanup, capitalists inevitably try to squirm out of paying; it hurts profits and equity value.
  4. Finally, capitalism depends on advertising for growth in an environment of competition for market share. This tempts it to psychologically manipulate its consumers through advertising. Advertising invades and distorts our worldview, our understanding of the good life, and thus our very dreams, with desires that drive human behavior independently of real human need or broader social welfare; and that’s even when it is telling the factual truth.
  5. Capitalism lies—it violates the Quaker testimony of integrity.

Capitalism’s meta-predicament lies in the very structure of the system itself as a whole, the way it structures our relations with each other socially and politically and our relations with our Mother Earth. Capitalism wrongly structures these relations and it cannot do otherwise.

But the meta-argument about the rightful role of an economic system in civilization will have to wait for another post, as will fuller discussions of each of these predicaments. And then there’s Jesus.

Quaker Testimonies and the Predicaments of Capitalism

November 13, 2011 § 7 Comments

Competition

A few days ago, an Oakland policeman shot a young man with a rubber bullet while he was videotaping a police line at the Occupy Oakland demonstration. The man videotaped his own shooting, so you can see that, far from provoking the attack, he was actually trying to confirm that his behavior was acceptable to the police who were dealing with him. This incident illustrates one of the ‘predicaments’ of capitalism, as I call them, when viewed in the light of the traditional Quaker testimonies.

I call them ‘predicaments’ because capitalism is predicated on them: they are aspects of capitalism that inhere in the way the system defines itself and in the ways it operates; they are part of its DNA. And they are ‘predicaments’ for Friends because they violate our traditional testimonies.

I have identified five such predicaments:

  1. Private ownership of capital: Individuals (or the stockholders of corporations) own and control the money and goods or services that generate income when sold in the market; they own the means to produce these goods or provide these services—property, patents, machinery, etc.; and by virtue of this ownership, they have more or less exclusive access to the business’s profits and perquisites.
  2. Owner autocracy: Capitalism concentrates economic sovereignty—the right to make decisions about the company’s actions—in the hands of the owners of capital and, by delegation, their managers, in an overall system of vertical organization.
  3. Growth: The health of a business and of the system as a whole is determined in terms of growth; furthermore, the primary locus of value, the goal of the system, is profit, that is, surplus wealth, which is also a kind of growth. Capitalism assumes that economic growth has no limits.
  4. Mendaciousness: Capitalism lies to itself and to its participants in two ways, in regard to both its accounting methods and its conduct of competition in an open market. First, it deceives itself about the nature of capital and of overhead: It does not account for or take economic responsibility for the real value of the natural resources it treats as capital, or the real, final cost of disposing of its wastes safely, which is part of its overhead. It systematically undervalues both. And it deceives its customers in its marketing and advertising: it’s dependence on advertising in an environment of competition for market share tempts it to psychologically manipulate its consumers and to withhold information from them and from regulators. Capitalism lacks integrity.
  5. Competition: Capitalism is inherently competitive and assumes an ‘open market’ relatively free of direct government or collective social control. It makes everyone and everything both a competitor and an object of competition.

The Oakland shooting illustrates the predicament of competition: Competition inevitably leads to conflict; it is, in fact, an organized form of conflict. And conflict inevitably leads to violence. I don’t mean ‘inevitably’ in the sense that every instance of conflict will lead to violence, or even that any instance of conflict will necessarily lead to violence. People can always avoid using violence to ‘resolve’ a conflict (of course, violence never does resolve a conflict). But capitalism generates so much conflict that some of it inevitably turns violent because that’s how humans are.  Capitalism is inherently violent. Thus it violates our peace testimony.

Capitalism competes for everything and it drags everyone into its competition: Companies compete with each other for resources, labor, energy, customers, research breakthroughs, our attention, even our dreams. Workers compete with each other for jobs and for advancement; they compete with their employers for their compensation and work conditions. Industries compete with each other. Nation states compete with each other. And the economic system itself competes with all the other stakeholders in the planet’s ecosystems for the resources it needs to survive and to grow.

Does competition have to lead to violence? Enlightened business owners and national leaders can rely on cooperation and mutual understanding to resolve competing claims. This is most possible when the system is working well and no parties are near the particular edge or shortage that they fear. For capitalist competition is predicated on shortages—there is no need for competition if there is already enough of what everyone wants. But the system has these edges—these divisive thresholds—that necessarily separate the participants when they are reached—when oil supplies are threatened, for instance, or when employees demand new rights that cut into profits. And the disparity between those at the top and those at the bottom—between economic classes at home or between the overdeveloped and the developing countries of the world, for instance—these disparities create a distance of experience and worldview that undermines understanding even when intentions are good.

Of course, competition is creative, too, as its apologists so often claim. In their competition, Amazon.com and Apple drive each other to keep innovating and we get the iPad2 and the Kindle Fire, competing visions of the tablet. In the competition with the Soviet Union that Sputnik ignited, we got a generation of incredibly creative and productive scientists and engineers.

But we also get the Luddites smashing the mechanized frames of their early adopters in the British textile industry, and the violence of the state and then of the mobs in response. We get Pinkertons gunning down workers in their picket lines in the early days of labor organization. We get the first and second Iraq wars.

Because one of the defining characteristics of the state is its (theoretical) monopoly of deadly force, the dominant powers in the system—corporations—turn to the state to protect their interests. This is what gave that man in Oakland that ugly, painful, temporarily disabling bruise on his leg. The police almost always defend private property and the interests of the owners of capital, rather than workers, consumers or the integrity of the natural world. That young man was lucky, in a sense; that could have been—and often has been—live ammunition.

But we must acknowledge that that rubber bullet shooting escalates the conflict: the viral video of unprovoked police assault and all the other incidences of police violence we can see now on YouTube give the flywheel of violence another kick. They feed more energy into the feedback loop of violence: Demonstrators tussle with police lines => Police fire tear gas canisters => Black robed anarchists torch stores => Policemen shoot peaceful demonstrators with rubber bullets => . . . What’s next? I could not help but think of Kent State.

What to do?

Commitment to nonviolence and training in nonviolence prevailed in the civil rights movement. It doesn’t stop the violence, but it cuts it in half because one side won’t use it. It interrupts the feedback spiral. It helps in the competition for “hearts and minds.” And it is the right way to go. And it does address the seeds of violence in individual people. But it does not address the causes of violence, the genetics of violence embedded in our economic system.

So we are left with the queries: How can we reform capitalism in ways that will value cooperation at least as much as competition? And what can we do to break the feedback loop that escalates its competition into conflict and this conflict into violence?

Quakers & Capitalism: A Brief Recap

September 9, 2011 § 5 Comments

It’s been a while since I published an essay in the Quakers and Capitalism series, in which I’ve been digesting a book in progress, a sketchy and rather schematic history of the influence that Friends and capitalism have had on each other. Because of the piecemeal nature of blog posting, I have found myself losing track of my progress and of the arc of the whole; I imagine my readers may have, too. Also, I had fallen behind in creating pdf files of these postings. Thus, before I go on, I’ve decided to offer a brief (well, medium-sized) recap of the project so far.

I have also finished and reorganized the pdf files for each ‘chapter’ in the book. The summary below has links to the respective files and they are also listed as links on the page labeled Quakers & Capitalism—The Book, accessible from the navigation column to the left of the posts. Reading those pdf files in order will give you the main thread of the book. Note that there are several appendices. I’m not satisfied with their style and formatting—I think they’re ugly, in fact, though properly Quaker plain, I suppose—but I did not want to delay while I experiment with style.

I have divided this history of Quakers and capitalism into three main periods: the 1650s, 1700 to 1900, and the 20th century. These are separated by major periods of transition, periods lasting roughly a generation in which external forces collide with forces within Quakerism to transform both capitalist culture and Quaker culture in a symbiotic relationship. During these periods of transition, Quaker fortunes and their relationship with the world around them completely change. Here’s the sketchy outline, with links to their respective essays:

  • Introduction — Introducing John Bellers as perhaps the second most well-known Quaker in history, a man of extraordinary talent and intelligence who had a tremendous impact on Western culture, yet is almost completely unknown among his own Quaker community. Why? Introducing the idea of cultural amnesia regarding economics among Friends, the almost utter lack of meaningful economic testimony (until very recently, at least), notwithstanding our almost indispensable role in creating and developing the capitalist system, and the need for a ministry of teaching and prophetic examination of Quaker economic history.
  • Quakers & Capitalism — Introduction

    • The 1650s — Early Friends (who were mostly yeoman farmers and small trades people) assail the world order with revolutionary fervor in the Lamb’s War, challenging some aspects of economic life, notably in the practices of plain speech and refusing hat honor, but somewhat indirectly, as their focus was essentially religious and aimed primarily at the church. Friends absorb the leaders and members of both the Diggers and the Levellers, more radical egalitarian social movements, but do not absorb their ideas.

    Quakers & Capitalism — The 1650s

      • First major transition (1661 – 1695) — Externally, the persecutions, and internally, the establishment of gospel order, completely transform Quaker culture and Quaker economics. After the Restoration, the state tries to stamp the movement out and seizes vast amounts of Quaker treasure over roughly thirty years. Friends respond to these external pressures by reorganizing—or perhaps organizing would be a better description—instituting structures and processes for internal discipline. Notwithstanding the intense economic assault, however, Friends emerge from this period as a class of wealthy merchants poised to create not quite single-handedly the first truly new platform for creating wealth since the invention of agriculture: industrial capitalism. This extraordinary feat—not just thriving in the face of economic oppression, but ending up in a position to change the world, after all—was a cultural miracle.

    First Transition: Persecution and Gospel Order

    • 1700 – 1900: The Double-culture Period
      • The 18th century — During the 18th century and on into the 19th century, Quakers make many of the indispensable technological innovations upon which industrial capitalism depends, including coke smelting, cast steel, and the railroad. They build many of the key industries, establish many of the most important companies, build its financial infrastructure, develop new modes of organization, and pioneer humane treatment of workers. At the same time that they are engaging the world of business, industry and commerce with incredible energy and invention, they are withdrawing from engagement with the world in virtually every other area of life. Friends maintain this double culture for two hundred years. In England, they become fabulously wealthy; in America, they do pretty well.
      • John Bellers and Quaker responses to Industrial capitalism — Already by 1700, the new industrial economy was creating a new class of the poor: industrial workers, people who had left the land or their village to work in the new urban factories. One extraordinary Friend, John Bellers, saw the problem and proposed a solution: Colledges of Industry. In several pamphlets over 25 years, he brought his ideas to Friends and to Parliament. Both declined to act on them. He made many other significant contributions to Western civilization, as well, only to be virtually forgotten by his own people for two hundred years.

    Quakers & Capitalism — The Double-culture Period

    Quakers & Capitalism — Quaker Contributions to Industrial Capitalism

      • Minor transition (1800 – 1828) — Two new ideologies, or domains of western thought, are born as fraternal twins around 1800— evangelical theology and the new ‘science’ of political economy. Thomas Malthus, in particular, was both an evangelical minister and one of the first progenitors of political economy; in his work, the two are fused into one approach to wealth and poverty. Evangelical political economy dominates economic policy in competition with classical economics; Malthus, the evangelical minister, and David Ricardo the investor, (and married to a Quaker, though a Jew converted to Unitarianism himself), embody this rivalry in the early 1800s, though they are personal friends. Joseph John Gurney and Thomas Chalmers make the most influential connection between evangelical Friends and evangelical political economy; these hugely influential figures also are friends.
      • The 19th century — Quakers fragment under the influence of evangelicalism and some evangelical Friends partially reengage with economic/social issues, notably becoming leaders in the philanthropical movement that is the signature response to capitalism’s collateral damage in the Victorian period.

    Quakers & Capitalism — Evangelicalism and Political Economy

      • Major transition (1895 – 1920) — A number of external forces combine with new trends in Quakerism to end the double-culture period and usher in the spirit of liberal engagement with the world that characterizes much of Quaker culture in the 20th century. Quakers had cut a deal with the powers that be: leave us alone and we’ll leave you alone. Now the deal was off.

    Second major transition: The Corporation, the Great War, Liberalism and the Social Order

    This last transition period is a complex one and deserves a little more treatment. For one thing, the fragmentation of Quaker culture in the 1800s means that the forces unleashed at the turn of the century affect different communities differently. You can’t really tell just one story, as I have been trying to do so far. And these forces are so many and so complex that it’s hard to treat them properly in a format like a blog. But here goes:

        • The rise of corporate capitalism — The laws governing the limited liability corporation are finally settled definitively in the 1890s in both America and Britain and the modern corporation is born—a business owned by shareholders rather than private families and so big as to require management. Over time, this innovation deconstructs the great Quaker fortunes in Great Britain.
        • The emergence of the social sciences, including the science of economics — New kinds of thinking are brought to bear on social problems. The Quaker Benjamin Seebohm Rowntree of the Rowntree chocolate dynasty plays a central role in proving scientifically that the poor are not poor because of poor character but because of structural inequities in capitalism itself. In England, the rise of New Liberalism gives birth to a new political party and inaugurates the welfare state, in which, for the first time, government tries to protect the citizenry from capitalism’s downside.
        • Classical economics takes the field — Classical economic theory eclipses evangelical political economy, which was already in decline. However, the spirit of evangelical political economy—the blame for poverty on character (sin), the reliance on private and faith-based solutions for social ills, and the dread of government intervention—lies dormant.
        • The rise of liberalism — The Richmond Conference in America in 1887 and the Manchester Conference in England in 1895 mark the beginning of ‘liberal’ Quakerism, in which ‘liberal’ ideas, especially the scientific study of the Bible, transform and galvanize British Friends and the Hicksite branch of American Quakerism. FGC and FUM (then Five Years Meeting) are born. Rufus Jones introduces a new historiography of Quakerism in which the faith is recast as “mystical” and Fox’s phrase “that of God in everyone” is understood anew as a kind of neo-Platonic divine spark; it becomes over time the central tenet of liberal Quakerism.
        • The Great War — For the first time in two hundred years, Friends are persecuted for their convictions of conscience. This helps to decisively pull Quakers, especially young adult Friends, back into engagement with the world. AFSC is born.
        • The rise of ‘social concerns’ — London Yearly Meeting explores the relationship between war and the social order and, in 1918, approves the Foundations of a True Social Order, a decisive departure from the hands-off attitude toward the social order maintained during the double-culture period and a fairly radical indictment of capitalism as one of the factors leading to the Great War. The document and the debate are carried forward into the first Friends World Conference in 1920 in London. Quaker culture enters the modern era.

    I’ve not yet written one of these transition essays, on the rise of liberalism. I have a lot of new notes from recent research that I need to digest first. And I’ve only just begun to research the economic history of Friends during the twentieth century. In a subsequent entry, I do want to outline the subjects and the people who I think figure prominently in 20th century Quakerism, and I invite any readers who know any of these subjects or people in some depth to contribute. It’s going to take me a while, a long while, to finish this project alone. I welcome collaboration.

Quakerism & Capitalism — Transition (1895-1920): The Limited Liability Corporation

June 30, 2011 § Leave a comment

When London Yearly Meeting approved the Foundations of a True Social Order after discussing the report of the Committee on War and the Social Order during the 1918 sessions, the sense of the meeting was that the social order—that is, capitalism—had played a key role in causing the war that was still crippling an entire generation. In the Foundations, one can see this relatively new awareness of capitalism as a system with potentially horrible social consequences reaching beyond a narrow focus on the war to include labor and industrial relations as well (the British Labour Party was constituted in the same year). In fact, British Friends declared that nothing less than the ‘personality’—the personhood of the human—was at risk in the ways that the system treated its participants.

Personhood was central to the discussion in part because full legal ‘personhood’ had been conferred decisively upon the limited liability corporation in Britain and America only twenty years before. In that short time, the new technology had completely transformed the capitalist system. It was also completely transforming British Quakerism.

It’s hard to exaggerate how momentous this innovation was. The modern corporation, wrote Peter Drucker, the preeminent business thinker of the 20th century, “was the first autonomous institution in hundreds of years, the first to create a power center that was within society yet independent of the central government of the national state.” * (The Company: A Short History of a Revolutionary Idea, John Micklethwaite and Adrian Wooldridge, Modern Library Edition, New York, 2003)

The idea was not new. The Limited Liability Act of 1855 (in Britain) had granted limited liability to companies incorporated under the Joint Stock Companies
Act of 1844, subject to some capital requirements. The earlier act had done away with the need to get a special charter from Parliament to form a company, requiring only simple registration. The system was further rationalized under the Joint Stock Companies act of 1856, requiring only seven people to sign a Memorandum of Association and to put “ltd” at the end of the company’s name. However, the final block was put in place when, in 1897, in Salomon v. Saloman & Co., Ltd., the House of Lords (which was then Britain’s Supreme Court) finally firmly established the separate legal identity of a company and conferred upon its directors—not just its shareholders—the ‘corporate veil’ of protection. The corporation had become the equivalent of a person before the law.

Limited liability meant that shareholders were only financially liable for the value of their own investment in the company and that, when someone sued the company, they were suing the company and not its owners or investors. It essentially made the company in some ways the equivalent of a person in terms of the law. This affected not just financial liability; it also simplified a host of other financial, legal and management problems: by wrapping responsibility up in the fiction of corporate ‘personhood’, a company’s business relations and transactions no longer had to be conducted with each of its individual shareholders as owners. All this made it possible to raise the capital necessary to form the kind of large companies that the mature industrial economy required and to run them with managerial efficiency.

The proceedings of LYM’s 1918 sessions reveal that some members of the Meeting were nervous about the very essence of this innovation: was it morally right to relieve the owners of a business from responsibility for its actions? This seemed inconsistent with moral principle. It also struck at the heart of the Protestant Spirit that had dominated Quaker business practice for two centuries (and which had only just been defined in Max Weber’s landmark book, The Protestant Ethic and the Spirit of Capitalism), in which one viewed one’s business as an expression of one’s religious calling. That only worked if you owned and ran the business yourself. It didn’t work if untold numbers of people owned the business through investment shares who then relegated the business’s operations to directors and managers, and whose legal responsibility for its actions were now severely limited.

But that debate about limited liability went nowhere. In the proceedings of the 1918 sessions, you see some Friends arguing forcefully for the moral contradictions involved, which even the supporters of the new technology had trouble refuting. But it was too late. The modern corporation had already completely taken over. It was obvious to everyone that it was now, not just a fait accompli, but also actually indispensable to the new social order.

This fact was literally demoralizing to those Friends who considered it. At just the moment when Friends had become aware for the first time of capitalism as a system with mixed moral consequences, they were forced to accept its amoral (was it actually immoral?) character. In retreat, London Yearly Meeting resolved to reform the system as best they could, responding with one of the signature acts of modern liberal Quakerism—they formed a committee. The Committee on Industry and the Social Order went on to do some of the most searching and challenging work in the history of Quaker social testimony. But Friends had effectively abandoned any direct challenge to capitalism itself on moral grounds.

Moreover, the limited liability corporation did more than challenge the moral identity of British Friends. It also destroyed their sizable fortunes. Many Quaker business owners held onto their family ownership for a long time, but eventually they virtually all went public. Cadbury, Rowntree, Lever Brothers, Barclay—one by one, Quaker owners became managers in firms that had been in their families for generations. Gradually over the course of the 20th century, the great Quaker fortunes of Great Britain dwindled in size and importance. For two centuries, Quakers had been the wealthiest, or one of the wealthiest, communities in the United Kingdom. Between the triumph of the limited liability corporation and later the influx of convinced Friends from the middle middle class, the social demographics of British Quakerism dramatically changed for the second time in its history: from yeoman farmers and small trades people in the 1650s, to industrialist tycoons during the 18th and 19th centuries, and then back again towards the middle classes during the 20th.

In America, things were quite different. The United States embraced the limited liability corporation earlier and with greater enthusiasm than the Brits, seeing the innovation as democratizing and recognizing early on how it served the already famous American entrepreneurial spirit. But corporate law was mostly a matter for the states to write, so the technology grew for a long time in a haphazard way as states variously began legalizing it and then began competing with each other for business. First New Jersey, and then, ultimately, Delaware, made corporation-friendly law a hallmark of state identity. As in Great Britain, these laws first emerged in the middle of the 19th century and finally coalesced into some sense of national policy toward the end of the century, but states have always retained the power of incorporation.

With the Sherman Act (1890) and subsequent anti-trust legislation, the federal government began finally to seriously regulate corporations for the first time and these efforts figured prominently in the rise of Progressivism in America. Then came the New Deal. But these developments hardly affected Quakerism in America, which had always been more economically diverse than in Great Britain. The rich Quakers of Philadelphia had not played the central role in creating capitalism that their British brethren had, they were not by and large industrialists, and they represented only a small portion of the American Quaker population, let alone of the American wealthy and power elite. Even as early as the War for Independence, Philadelphia Quakers had ceased to be very important to the nation’s economy. By the time of the second transition in Quaker economics at the end of the 19th century, the final codification and rationalization of corporate law had no real impact on Quaker culture in America.

Quakers & Capitalism — Transition: Seebohm Rowntree and the Awakening of ‘Liberal’ Economic Consciousness

June 15, 2011 § 4 Comments

The second major transition in Quaker economic culture caused a dramatic shift away from the double-culture period of the 1700s and 1800s, in which Friends had withdrawn from the world around them in virtually every sphere of human activity but one—industry, commerce and the practical arts and sciences. In these areas, they played a truly significant role. Beginning around 1895, however, external forces combined with trends within Quakerism to draw (or even force) Friends out of their shell and reawaken them to responsibility for the wider social order.

In historical moments like these, key individuals often serve as a bridge into the new culture and its ethos. These Friends respond to the changes going on around them with new sensibilities. They speak and act and live in ways that lead the rest of the Society in a new direction. In this second major transition period, a number of extraordinary individuals shine out in this regard: Rufus Jones and John Wilhelm Rowntree are perhaps the best known. Less well known but equally important, at least in his influence on Quaker economic history, is Benjamin Seebohm Rowntree.

The external forces to which he responded include the plight of the industrial poor, whose conditions remained awful, in spite of efforts throughout the 19th century to deal with the problem: the New Poor Laws of the 1830s in England, the rise of organized philanthropic giving, and attempts at reform by individual business owners, in which Friends often led the way. By 1895, these efforts at reducing poverty and helping the poor were no longer new, but something else was: the emergence of what we now call the social sciences: psychology, sociology, and the discipline of economics itself. In the field of sociology, especially, brilliant new thinkers published groundbreaking work during this period of intense social change.

Karl Marx is sometimes called the true father of sociology, though Auguste Comte and Emmanuel-Joseph Sieyes independently coined the term in the 1830s, and Herbert Spencer pushed the science along in the 1870s and 1880s, but it was Emile Durkheim who laid the foundation for the discipline as a science and set up the first sociology department in a university in 1895. Max Weber (1864-1920) began writing prolifically in the late 1880s about social policy and began work on his landmark book The Protestant Ethic and the Spirit of Capitalism in 1904. Weber was keenly interested in economics throughout his career. But it was a man named Charles Booth (1840-1916) who inspired Seebohm Rowntree.

Booth conducted the first scientific sociological statistical study in history, ultimately interviewing thousands of households of the poor in London, beginning in the East End. He published the first fruit of his research in 1889 and went on to publish a total of 17 volumes through 1903. He invented the concept of the ‘poverty line’ and proved that 35% of Londoners lived in abject poverty and that the vast majority of them worked. Here was scientific proof that the poor were poor, not because of their moral character, as had been assumed for centuries, but because they did not earn enough in their work. Poverty resulted, not from moral failure but from systemic failure. They may have had too many children; they may have spent some money on drink, gambling and other vices or diversions, but the real problem was that they didn’t have enough money in the first place.

However, Booth’s The Life and Labour of the People of London was inaccessible, too huge and too dense to reach any but the most interested intellectuals. Among the intelligentsia, it sparked intense debate. Were these problems confined to the capital, or were the provinces beset with similar conditions? Put another way, was capitalism the problem, or was it London? Seebohm Rowntree set out to answer this question by applying Booth’s new statistical, sociological methods to his own home town of York, where only two employers controlled most of the economy: the railroad and his own family’s chocolate business.

Rowntree surveyed 11,560 families, representing 46,754 of York’s population of 75,812, roughly 60% of the city. He defined two classes of poverty: “primary poverty,” affecting people who lacked the financial resources to provide for themselves even the basic essentials—10% of the total; and “secondary poverty,” in which earnings would suffice for basics, except for “other expenditures, either useful or wasteful”—18%. In other words, close to one third of York’s population was poor. More importantly, half of the people living in primary poverty had regular jobs!

Like Booth, Rowntree concluded that poverty resulted, not from bad character (though gambling, drink and other bad habits were often aggravating the problem), but from low wages. The traditional Quaker virtues that had helped to make Quakers so successful, like prudence and thrift, simplicity and moderation, and Puritan abandonment of the world’s pleasures, would help these people hardly at all. And philanthropy could hardly touch their condition, let alone change it. Poverty and its ills were inherent in the character of capitalism itself, not in the character of its workers. The poor were victims, not causes, of their suffering. And paternalistic attempts to solve the problem by morally elevating the poor were ill conceived and failed to address the causes of the problem.

Rowntree’s book had a tremendous impact. It was well organized, well written, it was short and accessible, and it struck a chord. It spoke to the liberal-scientific worldview that was emerging at the time and it resonated with other reformist forces at work in English and American society. Other well-received books and Parliamentary reports had sparked a lively debate about poverty and social reform in society and in the press. The suffragette movement was on the rise and so was labor and socialism and, in America, Progressivism. Reaction to the labor movement was becoming violent; the police riots against strikers in Chicago’s Haymarket Square had taken place in 1896. The troubles in Ireland, too, had people wondering where society was going. The book became a bestseller.

Someone recommended it to Winston Churchill, then a young Conservative Member of Parliament, who couldn’t get it out of his consciousness, calling it “a book which has fairly made my hair stand on end.” He wrote and spoke about it repeatedly and reviewed it for a military journal. It ignited both his moral conscience and his creative imagination and redirected his political career. Ultimately, he joined the Liberal government that formed in 1906.

In 1908, Churchill became President of the Board of Trade and Lloyd George became Chancellor. The two men joined forces to bring sweeping reforms to the political economy and Rowntree’s book, and Rowntree himself, figured prominently in their work. George, who had been an MP since 1890, had risen from humble beginnings himself and devoted his whole career to alleviating poverty. George and Rowntree became friends and George would brandish Poverty as he spoke to large crowds all over Great Britain campaigning for the New Liberalism that he, Churchill and others had inaugurated in 1906. Though their People’s Budget and the social legislation it funded provoked a short-lived constitutional crisis in the House of Lords, in 1911 Parliament passed the National Insurance Act, providing for state-funded insurance for unemployment, sickness and old age. The modern welfare state had been born and Poverty: A Study in Town Life had provided much of the prevailing argument for radical systemic change, with its clear exposition, demonstrable evidence and straightforward, scientific approach.

The book inspired more such studies in other regions of the country. It heavily influenced Churchill’s own 1909 publication, Liberalism and the Social Problem. Rowntree was named to a government committee to study land, land tax and housing issues. The committee applied Rowntree’s methodology to these problems in the years 1912-1914. Thus Rowntree became an expert on land reform and this remained an abiding concern throughout his life. He championed the creation of garden cities, in particular, in order to diversify the agricultural system and relieve some of the pressures threatening both the health of workers and the dwindling rural areas. Beginning in England in 1910 and soon spreading to the U.S., the garden city movement favored relatively low-density planned communities with lots of open space, including, usually, a green belt encircling the housing and areas with flexible zoning that could support local industry and commerce. He also came to believe that the labor movement was an essential part of economic reform.

But what did the Rowntrees do about the subject of Seebohm’s book, poverty in the city of York and Rowntree’s own family business? Poverty encouraged Seebohm’s father, Joseph Rowntree, to build new rental housing, what we would call today low- and moderate-income housing. Despite his efforts to provide acceptable accommodations at the lowest possible cost, however, these apartments remained beyond the means of the very poor, the people for whom he’d intended them. According to James Walvin (The Quakers: Money & Morals), the welfare services provided by the company represented 0.8% of gross selling price in 1908. Joseph Rowntree kept improving the company’s benefits, adding profit sharing, better sick pay, paid vacations, and convalescent facilities. But the basic problem remained: wages.

Rowntree laborers were paid by the piece. Joseph Rowntree set up a process for wage review every three months and he monitored wages. If someone fell below the ‘poverty line’ that his son’s book had so popularized that he often is credited with its invention, rather than Booth, the company moved the worker to different work or encouraged them to work harder. Those who couldn’t make it were dismissed or encouraged to find another job. Departments were evaluated according to the percentage of employees that were making more than the minimum wage. Meanwhile, although Seebohm Rowntree agreed with labor unions in principle, in practice, he resisted them in his own plants. Quaker paternalism was not dead yet.

Nevertheless, in both his book and his long and distinguished career in public service, Seebohm Rowntree helped lead Friends through the transition into the twentieth century and its liberal engagement with social problems. By ‘liberal’ I mean an optimistic faith in the ability of society (meaning, mostly, government, but also civil society) to change things by studying them, proposing solutions, developing programs, and creating institutions for implementing the programs. Rowntree came to believe in state regulation of aspects of the economy “to over-ride the immediate interests of the employer by imposing on him (sic) obligations which are to the advantage of the nation rather than his (sic) own.” This was a fundamental break from the double-culture compromise forged in the persecutions of the first transition period, that Friends would leave the state and the foundations of the social order alone, as long as they were left alone in turn. Under the leadership of Seebohm Rowntree and other young reform-minded Friends, Quaker religion once again became a public, and not just a private, affair.

Poverty: A Study of Town Life launched Rowntree on an exceedingly prolific writing career; Amazon lists 26 books. Poverty itself is available from Google Books for free as a download here. And here’s a link to a bibliography of Rowntree’s writings, to give you a sense of the range of his interests. Four main themes dominate his work: He returned again and again to the problem of unemployment and he wrote several books on housing. He wrote about the Christian and the Quaker responses to social problems. And he wrote several books trying to humanize business and industrial relations. He also applied for a patent in chocolate manufacturing.

This extraordinary man deserves our thankful remembrance for the following landmark achievements:

  • Groundbreaking work—understanding poverty. Poverty is the second attempt in history to use a sociological survey (and statistical analysis) to understand a social problem (poverty) and to shape a meaningful policy response.
  • Defining the “poverty line”. Rowntree is widely credited for inventing the idea of the “poverty line,” an income level below which a person or a family can no longer provide for the basics of food, clothing and shelter. I believe, however, that again we can thank Charles Booth for this innovation. However, Rowntree put it on the map and I believe he revised Booth’s calculations to make them reflect reality a little more accurately, though most economists today agree that it still needs to be redefined. The current formula for the poverty line (at least in America) comes originally from an American economist from the Roosevelt administration named Mollie Orshansky, who based her own work on Rowntree’s. The idea really caught on with the War on Poverty in the 1960s. Once a ‘scientific’ way to define poverty had been established, Rowntree (and before him Booth) came to a revolutionary and truly startling conclusion:
  • Groundbreaking conclusion—the poor are poor through no fault of their own. Rowntree’s research proved that poverty was not primarily the result of personal moral failing, but was rather a systemic, structural problem endemic in the capitalist system itself. It proved that the vast majority of the poor actually worked, worked hard, too hard; they just didn’t make enough money to survive—their wages were too low. It was not indolence, drink, gambling, sex (too many kids), and general wantonness that had cast them into poverty, as most people believed until then, though these factors often made things worse. The real problem for the poor was not at its root moral; it was structural—it was low wages. The poor wanted to work, they did, in fact work. It just wasn’t enough to lift them up out of poverty.
  • Groundbreaking paradigm—social science and technocratic solutions. This helped to usher in the modern social scientific approach to understanding and treating social problems. Poverty showed that scientific methods yielded results that you could not arrive at using moral philosophy, and it helped to pinpoint where and what the problems really were. This did not put an end to moralizing, as we well know. Conservatives, especially, have continued to cite moral failure as the cause of social ills up to the present day. Now, however, they must also downplay, discredit, bypass and obstruct scientific arguments that clearly point to structural evils in the system. Rowntree’s book ushered in an age of warring paradigms in social policy. One of them was rooted in 19th century evangelical theology and the political economics it had nurtured, focused on individuals, their choices and their ‘freedom’ from government intervention. The other paradigm was rooted in science and focused on communities, on systemic causes and solutions to social problems, and on the roles that only government was in a position to play in addressing these issues.
  • Groundbreaking policy—the birth of the welfare system. The book led directly to the modern welfare state in England and, by extension, everywhere else in Europe and North America.
  • The end of the ‘double culture’ period and the reengagement of Quakers. Seebohm Rowntree was part of the generation of modernist Friends that remade Quaker culture around the turn of the 20th century. They included his cousin John Wilhelm Rowntree, Rufus Jones and a number of others who had been energized by the Richmond Conference in 1887 and the Manchester Conference in 1895. They were the internal force for change within the Society of Friends that met the external forces that helped shape what I call the second great transition period in Quaker history, moving us from the double culture of religious and social withdrawal, on the one hand, combined paradoxically, on the other hand, with energetic engagement with the worlds of business, industry and commerce. They pulled us out of our isolation and insulation until both our feet were planted in the modern world.
  • Quakers discover capitalism as a system. Seebohm Rowntree’s landmark book and methods opened Quaker eyes to capitalism as a system. Until then, Quaker testimonial life had regarded the ‘social order’ as a matter for individual attention; that is, on the one hand, as a matter for the discipline of personal behavior, of “right walking” over the world, while on the other hand, individual Friends and Friends’ meetings had focused their efforts to address social ills like poverty on individuals. Recall Elizabeth Fry’s work in Newgate Prison raising up the educational and moral levels of inmates. With Poverty, Friends became aware for the first time of structural evil, of the way that systems caused suffering. This new awareness took a long time mature. It got major reinforcement, at least in the UK, during the Great War, when London Yearly Meeting convened a Committee on War and the Social Order and approved the Eight Principles of a Just Social Order in the 1918 sessions of London Yearly Meeting, which I’ve discussed in an earlier post. Nevertheless, it was not until the 1960s that systemic thinking really began to shape Quaker testimonies in any meaningful way: Right Sharing of World Resources addressed global trade policy; AFSC turned increasingly from service to the suffering toward advocacy on behalf of the oppressed; and the War in Vietnam vividly illuminated the power and role of the “military industrial complex” in our economic life. The war also brought Marxism back to life; Marx and Engels had understood that capitalism as a system oppressed the working class way back in the middle of the 19th century. But Quakers never really warmed to Marxism, even though Das Kapital mentioned their own John Bellers by name, and even though a small, very active group of socialist Friends did emerge in the same period in which Rowntree was doing his work late in the 1800s.

For all these monumental contributions to the cause of a more just and compassionate political economy, Benjamin Seebohm Rowntree is one of my heroes. He also is one of the unsung heroes in the history of Friends. And so I have become one of his modern champions.

Note: On Tuesday, December 21, American Public Media’s daily financial news radio magazine Marketplace featured a piece on Benjamin Seebohm Rowntree (1871-1954). It’s not a bad introduction to this extraordinary man. Here is the link.

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