It is important to note that the railroad owners did not start in business by corrupting the government. They had to
* See Frank H. Spearman, The Strategy of Great Railroads, New York: Scribner’s, 1904, pp. 273-276.
turn to the practice of bribing legislators only in self-protection. The first and best builders of railroads were free enterprisers who took great risks on their own, with private capital and no government help. It was only when they demonstrated to the country that the new industry held a promise of tremendous wealth that the speculators and the legislators rushed into the game to milk the new giant for all it was worth. It was only when the legislatures began the blackmail of threatening to pass disastrous and impossible regulations that the railroad owners had to turn to bribery.
It is significant that the best of the railroad builders, those who started out with private funds, did not bribe legislatures to throttle competitors nor to obtain any kind of special legal advantage or privilege. They made their fortunes by their own personal ability—and if they resorted to bribery at all, like Commodore Vanderbilt, it was only to buy the removal of some artificial restriction, such as a permission to consolidate. They did not pay to get something from the legislature, but only to get the legislature out of their way. But the builders who started out with government help, such as the Big Four of the Central Pacific, were the ones who used the government for special advantages and owed their fortunes to legislation more than to personal ability. This is the inevitable result of any kind or degree of mixed economy. It is only with the help of government regulations that a man of lesser ability can destroy his better competitors—and he is the only type of man who runs to government for economic help.
It is not a matter of accidental personalities, of “dishonest businessmen” or “dishonest legislators.” The dishonesty is inherent in and created by the system. So long as a government holds the power of economic control, it will necessarily create a special “elite,” an “aristocracy of pull,” it will attract the corrupt type of politician into the legislature, it will work to the advantage of the dishonest businessman, and will penalize and, eventually, destroy the honest and the able.
The examples quoted are only a few of the more obvious ones; there is a great number of others, all demonstrating the same point. These were taken from the history of a single industry. One can well imagine what one would discover if one went through the history of other American industries in similar detail.
It is time to clarify in the public mind the pernicious confusion which was created by Marxism and which most people have unthinkingly accepted: the notion that economic
controls are the proper function of government, that government is a tool of economic class interests, and that the issue is only which particular class or pressure group shall be served by the government. Most people believe that free enterprise is a controlled economy allegedly serving the interests of the industrialists—as opposed to the welfare state, which is a controlled economy allegedly serving the interests of the workers. The idea or possibility of an uncontrolled economy has been entirely forgotten and is now being deliberately ignored. Most people would see no difference between businessmen such as J. J. Hill of the Great Northern and businessmen such as the Big Four of the Central Pacific. Most people would simply dismiss the difference by saying that businessmen are crooks who will always corrupt the government and that the solution is to let the government be corrupted by labor unions.
The” issue is not between pro-business controls and pro-labor controls, but between controls and freedom. It is not the Big Four against the welfare state, but the Big Four and the welfare state on one side—against J. J. Hill and every honest worker on the other. Government control of the economy, no matter in whose behalf, has been the source of all the evils in our industrial history—and the solution is laissez-faire capitalism, i.e., the abolition of any and all forms of government intervention in production and trade, the separation of State and Economics, in the same way and for the same reasons as the separation of Church and State.
8. THE EFFECTS OF THE
INDUSTRIAL REVOLUTION ON WOMEN AND CHILDREN
BY ROBERT HESSEN
CHILD LABOR AND THE INDUSTRIAL REVOLUTION
The least understood and most widely misrepresented aspect of the history of capitalism is child labor.
One cannot evaluate the phenomenon of child labor m England during the Industrial Revolution of the late eighteenth and early nineteenth century, unless one realizes that the introduction of the factory system offered a livelihood, a means of survival, to tens of thousands of children who would not have lived to be youths in the pre-capitalistic eras.
The factory system led to a rise in the general standard of living, to rapidly falling urban death rates and decreasing infant mortality—and produced an unprecedented population explosion.
In 1750, England’s population was six million; it was nine million in 1800 and twelve million in 1820, a rate of increase without precedent in any era. The age distribution of the population shifted enormously; the proportion of children and youths increased sharply. “The proportion of those born in London dying before five years of age” fell from 74.5 percent in 1730-49 to 31.8 percent in 1810-29.1 Children who hitherto would have died in infancy now had a chance for survival.
Both the rising population and the rising life expectancy
The Objectivist Newsletter, April and November 1962.
1 Mabel C. Buer, Health, Wealth and Population In the Early Days of the Industrial Revolution, 1760-1815, London: George Routledge & Sons, 1926, p. 30.
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give the lie to the claims of socialist and fascist critics of capitalism that the conditions of the laboring classes were progressively deteriorating during the Industrial Revolution.
One is both morally unjust and ignorant of history if one blames capitalism for the condition of children during the Industrial Revolution, since, in fact, capitalism brought an enormous improvement over their condition in the preceding age. The source of that injustice was ill-informed, emotional novelists and poets, like Dickens and Mrs. Browning; fanciful medievalists, like Southey; political tract writers posturing as economic historians, like Engels and Marx. All of them painted a vague, rosy picture of a lost “golden age” of the working classes, which, allegedly, was destroyed by the Industrial Revolution. Historians have not supported their assertions. Investigation and common sense have deglamorized the pre-factory system of domestic industry. In that system, the worker made a costly initial investment, or paid heavy rentals, for a loom or frame, and bore most of the speculative risks involved. His diet was drab and meager, and even subsistence often depended on whether work could be found for his wife and children. There was nothing romantic or enviable about a family living and working together in a badly lighted, improperly ventilated, and poorly constructed cottage.
How did children thrive before the Industrial Revolution? In 1697, John Locke wrote a report for the Board of Trade on the problem of poverty and poor-relief. Locke estimated that a laboring man and his wife in good health could support no more than two children, and he recommended that all children over three years of age should be taught to earn their living at working schools for spinning and knitting, where they would be given food. “What they can have at home, from their parents,” wrote Locke, “is seldom more than bread and water, and that very scantily too.”
Professor Ludwig von Mises reminds us:
The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them. Low as these wage rates were, they were nonetheless much more than these paupers could earn in any other field open to them. It is a distortion of facts to say that the factories carried off the housewives from the nurseries and the kitchen and the children from their play. These women had nothing to cook
with and to feed their children. These children were destitute and starving. Their only refuge was the factory. It saved them, in the strict sense of the term, from death by starvation.2
Factory children went to work at the insistence of their parents. The children’s hours of labor were very long, but the work was often quite easy—usually just attending a spinning or weaving machine and retying threads when they broke. It was not on behalf of such children that the agitation for factory legislation began. The first child labor law in England (1788) regulated the hours and conditions of labor of the miserable children who worked as chimney sweeps—a dirty, dangerous job which long antedated the Industrial Revolution, and which was not connected with factories. The first Act which applied to factory children was passed to protect those who had been sent into virtual slavery by the parish authorities, a government body: they were deserted or orphaned pauper children who were legally under the custody of the poor-law officials in the parish, and who were bound by these officials into long terms of unpaid apprenticeship in return for a bare subsistence.