Schism

Preview - R.F.H. Chapter 2 Ending Poverty part 2

Along with these obvious benefits, something else happened.  Slowly, people in the countries that were going through this industrial revolution had more money and more food.  Then, they began to live longer and fewer of their children died. 

It wasn’t always a smooth transition, even for those in the most industrialized countries.  With the invention of devices that helped make farming more efficient, many farm laborers lost their work and were forced to move to the cities in order to find factory jobs.  They joined others who had moved there voluntarily in order to find a better life, and there often wasn’t enough work for everyone.

In the winter of 1811, in Nottingham, England, the automatic looms lay in pieces.  Smashed by the skilled workers they had replaced, they were the first machines destroyed by a loose group of protestors known as the Luddites.  For several years the Luddites destroyed industrial machinery and the British Government even passed a law, commonly known as the “Frame Breaking Act”, which made destroying a commercial loom, or attempting to do so, a crime punishable by the death penalty.  The uprising eventually died, but the Luddites had made it clear that technological innovation was not always welcome, especially when it resulted in lost jobs and lower wages.

These weavers did not rise up because the expanding industrial capitalist system was actively trying to improve their lives.  They rose up because the factory owners had eliminated their jobs and replaced them with lower paid, unskilled workers.  The industrialists behind the sweeping changes were not working from idealistic motives.  They had not set out to change the way that foods were grown or things were manufactured because they wanted to raise everyone’s standard of living.  They were trying to make a profit for themselves.  And yet, people in the industrialized nations began to move out of poverty.  Capitalism, most especially entrepreneurial capitalism, was providing surplus goods, time and money that enabled people to climb out of the pit of poverty.

Most assuredly, many suffered as the industrialized societies passed through this time of technological and social change.  There were still people living with all of the symptoms of poverty, but for the first time in history, some of the root causes of this suffering, insufficient food and lack of a reliable wage, were being solved.  Capitalism had, by accident, turned into a major force against poverty.

SLOW CHANGE

If you traveled the countries of Western Europe, North America, Australia and New Zealand in 1900 you would have seen a vastly different world than the one that had existed one hundred years earlier.  Every country in these areas, with the exception of Portugal, had an average lifespan that lasted more than forty years.  Purchasing power per person had more than tripled in the United States.  Child mortality was half of what it had been in many countries.  Economic growth had produced wide-ranging benefits throughout these countries.

Unfortunately, it took longer for these changes to spread to the rest of the world.

If, in 1900, you toured South America, Africa, the Middle East and Asia, you would have found that things had changed very little.  Most countries had abolished slavery by that time, but little else had changed.  People were earning less money than in the more developed countries and the average lifespan was still less than forty.  And some of the darker aspects of colonialism had forced them to stay this way.

The mountain Cerro Rico, reddish-brown at its crest, stands over Potosi, Bolivia, the highest city in the world.  The native South Americans who had been forced to work in Cerro Rico’s silver mine had become harder to find and had been replaced by African slaves.  The need for replacement workers at the “rich mountain” was understandable, considering the millions of natives who had died in the mine.   Shafts were dug straight down into the ground and there was little ventilation, so many died of silicosis.  Cave-ins were common and instead of having elevators, ladders were used to carry out the ore that supplied the Spanish Empire. 

The export of raw materials fed wealth to the colonial powers, and even after countries gained their independence, as Bolivia did in 1825, conditions stayed the same as precious metals, agricultural products and fuels were shipped to the more industrialized nations.  Even today, when Bolivia has given the Cerro Rico mine to the miners themselves, their conditions have barely improved.  They still work until they die.

For many years, the economic systems that pulled western nations out of poverty had no positive impact on the rest of the world.  They took raw materials like the silver from Pelosi, Bolivia and kept the profits.  And this continued until something so valuable was discovered that the lives of the locals were improved with its profits.

BLACK GOLD

Though it was barely north of the equator, the temperature in the small nation of Brunei on the island of Borneo, rarely topped ninety degrees Fahrenheit in July 1928.  But that didn’t make things easier for the workers who were drilling in the middle of the peat swamp on the country’s coast.  There were no roads leading to the drilling site and they had to wait for the tide to go out in order to drive along the beach if they needed to leave.  But none of that mattered, because after they had drilled down nearly 1,000 feet, the oil began to flow.  By 1935, Brunei, which is almost completely surrounded by Malaysia, had the highest income per person in the world.

Soon after, oil rich countries in the Middle East began to grow more prosperous as oil was discovered there and demand for gasoline increased.  Finally, some of the poorer countries began to pull themselves out of poverty.

Oil had been discovered earlier in the United States, with particularly prosperous wells in Texas.  With its greater infrastructure, Texas also benefited economically from the discovery of oil.  And while the purchasing power of its citizens didn’t skyrocket as it did in Brunei in 1928, Texans were somewhat shielded from what happened a year later.

RECOVERING FROM A CRASH

Black Tuesday, October 29th, 1929 is the day most credited as the beginning of the Great Depression, which not only hit the United States, but much of the rest of the world as well.  But the slide of the stock market really began five days earlier, on the 24th and it continued through mid-November of that year.  What followed was like a perfectly executed recipe for creating mass poverty.

A severe drought hit the United States in 1930, causing widespread crop loss.  It forced two and a half million Americans to leave their homes, most of whom traveled west, where they often settled in migrant camps.  Protectionist tariff policies backfired and resulted in less international trade all around.  Banks failed by the thousands and with wages low and unemployment high, people bought less and saved what they could.  This decrease in demand led to even more jobs being lost.  By 1933, unemployment in the U.S. was nearly 25%.

Though many oil producing areas of Texas were protected from the worst effects of the Great Depression, the oil fueled capitalism could only shield a few there.  Drought and a crippled economy began to take their toll everywhere.

But these problems did not go unanswered.  Private charities stepped in and provided meals, shelter, clothing and other aid to the poor.  Their immediate help saved lives, and when the U.S. Government stepped in with the New Deal, poor Americans began to escape poverty permanently. 

The government’s response, which had previously been just to build a few poorhouses, was staggering in size.  The New Deal did everything from repealing Prohibition to building bridges to creating Social Security.  And while the money and programs started by the government during this time did much to improve economic situations and employment rates, it couldn’t quickly bring these levels back up to levels before the crash.  Capitalism, charities and government programs would need one more ally to really tackle poverty.

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(Author's note:  One more section to this preview...how everything came together.)