In order to stop inflation, and to promote domestic economic growth, the following three-fold program, I believe, is imperative: 1) Controls on the money supply through continuing fiscal and monetary measures. 2) A massive educational and action program designed to enlist government, labor, and management collaboration to increase productivity at both the micro- and macro-economic levels. 3) Development of “noninflationary flexible reward mechanisms” for sharing the productivity gains and profit gains with all factors of production/distribution. Well designed and communicated profit sharing programs can play a unique role in helping the United States in its present battle against inflation both as an “organizational” incentive capable of motivating everyone in the company to increase productivity and reduce costs: and as a “flexible reward mechanism” to give all factors of production/distribution the opportunity to earn “more” on a non-inflationary, as-earned, basis directly related to the enterprise’s ability-to-pay.
To the labor of man alone he (Smith) ascribes the power of producing values. This is an error. A more exact analysis demonstrates…that all the values are derived from the operation of labor, or rather from the industry of man, combined with the operation of those agents which nature and capital furnish him. Dr. Smith did not, therefore, obtain a thorough knowledge of the most important phenomenon in production; this has led him into erroneous conclusions, such, for instance, as attributing a gigantic influence to the division of labor, or rather to the separation of employments. This influence, however, is by no means inappreciable or even inconsiderable; but the greatest wonders of this description are not so much owing to any peculiar property in human labor, as to the use we make of the powers of nature. His ignorance of this principle precluded him from establishing the true theory of machinery in relation to the production of wealth (italics supplied). [Say’s critique of Smith and labor theory of value in J.B. Say, A Treatise on Political Economy (1830) 6 th American edition, pp. xl-xli. Cited in Robert Ashford and Rodney Shakespeare, Binary Economics: The New Paradigm (University Press of America, 1999), pp.100-101.]
Consider in what way the industrial system developed upon capitalist lines. Why were a few rich men put with such ease into possession of the new methods? Why was it normal and natural in their eyes and in that of contemporary society that those who produced the new wealth with the new machinery should be proletarian and dispossessed? Simply because the England upon which the new discoveries had come was already an England in which perhaps half of the whole population was proletarian, and a medium for exploitation ready to hand. When any one of the new industries was launched it had to be capitalized; that is, accumulated wealth from some source or other had to be found which would support labor in the process of production until that process should be complete. Someone must find the corn and the meat and the housing and the clothing by which should be supported, between the extraction of the raw material and the moment when the consumption of the finished article could begin, the human agents which dealt with that raw material and turned it into the finished product. Had property been well distributed, protected by cooperative guilds, fenced round and supported by custom and by the autonomy of great artisan corporations, those accumulations of wealth, necessary for the launching of each new method of production and for each new perfection of it, would have been discovered in the mass of small owners. Their corporations, their little parcels of wealth combined would have furnished the capitalization required for the new processes, and men already owners would, as one invention succeeded another, have increased the total wealth of the community without disturbing the balance of distribution. There is no conceivable link in reason or in experience which binds the capitalization of a new process with the idea of a few employing owners and a mass of employed nonowners working at a wage. Such great discoveries coming in a society like that of the thirteenth century would have blest and enriched mankind. Coming upon the diseased moral conditions of the eighteenth century in this country, they proved a curse. [ The Servile State . Section 4, “How the Distributive State Failed.” Indianapolis, Indiana: Liberty Fund Classics, 1977, pp. 100-101.]
The Open Market Committee, as presently established, is plainly not in the public interest. This committee must be operated by purely public servants, representatives of the people as a whole and not any single interest group. The Open Market Committee should be abolished, and its powers transferred to the Federal Reserve Board — the present public members of the committee, with reasonably short terms of office. Also, the Federal Advisory Committee should be enlarged and reorganized. Members should be chosen for the broadest possible representation of the public interest, their main qualification: ability. It may seem strange, but Congress has never developed a set of goals for guiding Federal Reserve policy. In founding the System, Congress spoke about the country’s need for “an elastic currency.” Since then, Congress has passed the Full Employment Act, declaring its general intention to promote “maximum employment, production, and purchasing power.” But it has never directly counseled the Federal Reserve. The Federal Reserve has filled this vacuum itself. The ends its policies are intended to achieve are those chosen by the Federal Reserve — all certainly admirable, but not necessarily those which the Federal Reserve should take on itself to pursue. For example, there have been times when the Federal Reserve has restricted the money supply and raised interest rates to gain an end, which had much better been left to another Government agency or the Congress to attain. The country could have had lower interest rates without sacrificing anything else. [ A Primer on Money, supra , p. 4.]
According to that hypothesis, two factors are at work, variation and selection. Next to nothing is known of the causes of the former process; nothing whatever of the time required for the production of a certain amount of deviation from the existing type. And, as respects selection, which operates by extinguishing all but a small minority of variations, we have not the slightest means of estimating the rapidity with which it does its work. All that we are justified in saying is that the rate at which it takes place may vary almost indefinitely. If the famous paint-root of Florida, which kills white pigs but not black ones, were abundant and certain in its action, black pigs might be substituted for white in the course of two or three years. If, on the other hand, it was rare and uncertain in action, the white pigs might linger on for centuries.
How is it that the new-born infant is enabled to perform this first instalment of the sentence of lifelong labour which no man may escape? Whatever else a child may be, in respect of this particular question, it is a complicated piece of mechanism, built up out of materials supplied by its mother; and in the course of such building-up, provided with a set of motors--the muscles. Each of these muscles contains a stock of substance capable of yielding energy under certain conditions, one of which is a change of state in the nerve-fibres connected with it The powder in a loaded gun is such another stock of substance capable of yielding energy in consequence of a change of state in the mechanism of the lock, which intervenes between the finger of the man who pulls the trigger and the cartridge. If that change is brought about, the potential energy of the powder passes suddenly into actual energy, and does the work of propelling the bullet The powder, therefore, may be appropriately called work-stuff not only because it is stuff which is easily made to yield work in the physical sense, but because a good deal of work in the economical sense has contributed to its production. Labour was necessary to collect, transport, and purify the raw sulphur and saltpetre; to cut wood and convert it into powdered charcoal; to mix these ingredients in the right proportions; to give the mixture the proper grain, and so on. The powder once formed part of the stock, or capital, of a powder-maker: and it is not only certain natural bodies which are collected and stored in the gunpowder, but the labour bestowed on the operations mentioned may be figuratively said to be incorporated in it.
[I]t is a political axiom that power follows property. But it is now a historical fact that the means of production are fast becoming the monopolistic property of Big Business and Big Government. Therefore, if you believe in democracy, make arrangements to distribute property as widely as possible. Or take the right to vote. In principle, it is a great privilege. In practice, as recent history has repeatedly shown, the right to vote, by itself, is no guarantee of liberty. Therefore, if you want to avoid dictatorship by referendum, break up modern society’s merely functional collectives into self-governing, voluntarily co-operating groups, capable of functioning outside the bureaucratic systems of Big Business and Big Government.” [ Brave New World Revisited. On www.goodreads.com.]
[T]he organized labor movement as it is constituted today is as much a concomitant of a capitalist economy as is capital. Organized labor is predicated upon the basic premise of collective bargaining between employers and employees. This premise can obtain only for an employer-employee type of society. If the labor movement is to maintain its own identity and security, it must of necessity protect that kind of society. Radicals, on the other hand, want to advance from the jungle of laissez-faire capitalism to a world worthy of the name of human civilization. They hope for a future where the means of economic production will be owned by all of the people instead of just a comparative handful. They feel that this minority control of production facilities is injurious to the large masses of people not only because of economic monopolies but because the political power inherent in this form of centralized economy does not augur for an ever expanding democratic way of life. [ Reveille for Radicals , 1945.]
The owners of labor, on the other hand, are being taught, by the most powerful and well-publicized examples, that the highest rewards are not for production, but for the employment of organized power to take over a share of what others produce. [ Two-Factor Theory: The Economics of Reality , Random House, 1967, p. 46.]
Under the old social philosophy which had governed the Middle Ages, temporal, and therefore all economic, activities were referred to an eternal standard. The production of wealth, it distribution and exchange were regulated with a view to securing the Christian life of Christian men. In two points especially was this felt: First in securing the independence of the family, which can only be done by the wide distribution of property, in others words the prevention of the growth of a proletariat; secondly, in the close connection between wealth and public function. Under the old philosophy which had governed the high Middle Ages things had been everywhere towards a condition of Society in which property was well distributed throughout the community, and thus the family rendered independent. [ The Crisis of Civilization, Being the Matter of a Course of Lectures Delivered at Fordham University, 1937 . Rockford, Illinois: Tan Books and Publishers, Inc., 1991, p. 107.]
The smaller man approaching our modern banking system, which controls all issue of credit and therefore pretty well all our industrial and commercial activities, is not what the controllers of that credit call “interesting.” He borrows with difficulty and upon high terms, and must pledge security out of all proportion to that which his richer rival has to put down. The very large units of production and exchange have access to credit on a large scale, sometimes without any cover at all, merely upon the prospect of their success, and always upon terms far easier than are open to their smaller rivals. It is perhaps on this line of easier credit that large capital today does most harm to small capital, drives it out and ruins it. [ The Crisis of Civilization, Being the Matter of a Course of Lectures Delivered at Fordham University, 1937 . Rockford, Illinois: Tan Books and Publishers, Inc., 1991, p. 132.]
The one thing needful for economic production is the green plant, as the sole producer of vital capital from natural inorganic bodies. Men might exist without labour (in the ordinary sense) and without land; without plants they must inevitably perish.
Equality of economic opportunity, in the context of private property, means equality of opportunity for the millions of capital-less households of today to buy, pay for, and employ in their lives the non-human factor of production, capital.
To control the production of wealth is to control human life itself. To refuse man the opportunity for the production of wealth is to refuse him the opportunity for life; and, in general, the way in which the production of wealth is by law permitted is the only way in which the citizens can legally exist. [ The Servile State . Section 1, “Definitions” Indianapolis, Indiana: Liberty Fund Classics, 1977, p. 46.]
Those who try to combat the production of shoddy pictures are enemies of the best art today. Those woodland lakes in a thousand sitting-rooms with gold-tinted wallpaper belong to the profoundest inspirations of art. It always feels tragic to see people labouring to saw off the branch they are sitting on.
The production of too many useful things results in too many useless people.
Technology plows through history at an accelerating rate, shifting the burden of production off labor onto the nonhuman factor because man uses his highest ingenuity to avoid servile labor.
The essence of all government among good men is this, that it is mainly occupied in the production and recognition of human worth, and in the detection and extinction of human unworthiness.
It is one of the greatest economic errors to put any limitation upon production…. We have not the power to produce more than there is a potential to consume. [Testimony, U.S. Commission on Industrial Relations, 1915.]
We know that the only alternative to private competition is government monopoly of enterprise. We know that when government monopolizes production, distribution, and employment, it is no longer the servant of men — it is their master. And, therefore, we know that economic liberty and political liberty are inseparable parts of the same ball of wax — that we must keep them both, or we shall lose them both.
Work is a means; it is not an end. And for any tasks that can be performed or eliminated by a capital instrument, human labor is not the best means…. Furthermore, we have science, engineering and management — the three disciplines — that really plan and control the production of goods and services, trying to eliminate labor. Who the hell is government to come along and try to create labor? The people who are producing wealth are trying to eliminate toil, while the politicians are trying to create it. This to me is absence of logic, absence of plan, absence of system, absence of thought.
We must resist the creation of monopolies and encourage the growth of small independent business units. When large aggregations of capital are necessary for low-cost production we must seek the widest possible distribution of ownership accompanied by adequate safeguards for the small investor and stockholder. [ Liberalism Fights On , New York: Macmillan, 1936, p. 158.]
These experiments seem almost childishly simple, and one wonders how it was that no one ever thought of them before. Simple as they are, however, they are worthy of the most careful study, for every piece of experimental work since done, in regard to this subject, has been shaped upon the model furnished by the Italian philosopher. As the results of his experiments were the same, however varied the nature of the materials he used, it is not wonderful that there arose in Redi's mind a presumption that, in all such cases of the seeming production of life from dead matter, the real explanation was the introduction of living germs from without into that dead matter. And thus the hypothesis that living matter always arises by the agency of pre-existing living matter, took definite shape; and had, henceforward, a right to be considered and a claim to be refuted, in each particular case, before the production of living matter in any other way could be admitted by careful reasoners. It will be necessary for me to refer to this hypothesis so frequently, that, to save circumlocution, I shall call it the hypothesis of _Biogenesis_; and I shall term the contrary doctrine--that living matter may be produced by not living matter--the hypothesis of _Abiogenesis_.
We expect in letters to discover somewhat of a person's real character. It is childish indeed to expect that we are to find the whole heart of the author unveiled.... Still as letters from one friend to another make the nearest approaches to conversation, we may expect to see more of a character displayed in these than in other productions which are studied for public view.
No Keynesian has ever proposed a measure designed to make the individual more productive; for that would require institutional means for enabling him to acquire ownership of the nonhuman factor of production: capital.
~Agriculture.~--Agriculture is the foundation of manufactures, since the productions of nature are the materials of art.--_Gibbon._
Technology plows through history at an accelerating rate, shifting the burden of production off labor into the nonhuman factor because man uses his highest ingenuity to avoid servile labor.
Although there may be in a community individuals who from want of capital cannot apply their labor as efficiently as they would, yet so long as there is a sufficiency of capital in the community at large, the real limitation is not the want of capital, but the want of its proper distribution. If bad government rob the laborer of his capital, if unjust laws take from the producer the wealth with which he would assist production, and hand it over to those who are mere pensioners upon industry, the real limitation to the effectiveness of labor is in misgovernment, and not in want of capital. And so of ignorance, or custom, or other conditions which prevent the use of capital. It is they, not the want of capital, that really constitute the limitation. [ Progress and Poverty , New York: Robert Schalkenbach Foundation, 1979, p. 84.]
Software production is assumed to be a line function, but it is run
It is a shallow criticism that would define poetry as confined to literary productions in rhyme and metre. The written poem is only poetry _talking_, and the statue, the picture, and the musical composition are poetry _acting_. Milton and Goethe, at their desks, were not more truly poets than Phidias with his chisel, Raphael at his easel, or deaf Beethoven bending over his piano, inventing and producing strains which he himself could never hope to hear.--_Ruskin._
Talk not so much … of the great old masters, who but painted and chisell’d. Study not only their productions. There is a still higher school for him who would kindle his fire with coal from the altar of the loftiest and purest art. It is the school of all grand actions and grand virtues, of heroism, of the death of patriots and martyrs — of all the mighty deeds written in the pages of history — deeds of daring, and enthusiasm, devotion, and fortitude.
Wherever the Industrial system has reached its second generation it is threatened by two mortal perils. The first is the demand by an organized proletariat for sustenance without relation to the product of its labor; a demand which threatens the very existence of PROFIT (on the necessary presumption of which Capitalism reposes). The second, and immediately graver danger is that of a revolt for the confiscation of the means of production. [ Survivals and New Arrivals: The Old and New Enemies of the Catholic Church . Rockford, Illinois: Tan Books and Publishers, Inc., 1992, p. 52.]
When we find set forth as an "absolute" truth the statement that the essential factors in economic production are land, capital and labour--when this is offered as an axiom whence all sorts of other important truths may be deduced--it is needful to remember that the assertion is true only with a qualification. Undoubtedly "vital capital" is essential; for, as we have seen, no human work can be done unless it exists, not even that internal work of the body which is necessary to passive life. But, with respect to labour (that is, human labour) I hope to have left no doubt on the reader's mind that, m regard to production, the importance of human labour may be so small as to be almost a vanishing quantity.
The one important distinction between the two factors of production is that in a free society, ownership of the human factor, labor, cannot be concentrated while ownership of the non-human factor, capital, can be.
Although it is capitalist theory that the consumer need not own the tools of production in order to profit from capitalism, still it is desirable that the ownership of production should be as widespread as possible. There is a reading of the situation that calls every family that owns a house or an insurance policy a capitalist but that is, really, verbal trickery. Approximately ninety percent of the capital of this country is owned by five or less percent of the American people…. Kelso is a serious man, and his idea is engaging….The objective [of enabling everyone to become shareowners] is surely right…. [ National Review, February 24, 1970.]
This so solid-seeming world is, after all, but an air-image, our Me the only reality; and Nature, with its thousand-fold production and destruction, but the reflex of our own inward force, the "Phantasy of our Dream," or, what the earth-spirit in "Faust" names it, "the living visible garment of God."
In the light of today’s “new things,” we have reread the relationship between individual or private property and the universal destination of material wealth . Man fulfills himself by using his intelligence and freedom. In so doing a person utilizes the things of this world as objects and instruments and makes them his own. The foundation of the right to private initiative and ownership is to be found in this activity. By means of his work a person commits himself, not only for his own sake but also for others and with others . Man works in order to provide for the needs of his family, his community, his nation, and ultimately all humanity. Moreover, a person collaborates in the work of his fellow employees, as well as in the work of suppliers and in the customers’ use of goods, in a progressively expanding chain of solidarity. Ownership of the means of production, whether in industry or agriculture, is just and legitimate if it serves useful work. It becomes illegitimate, however, when it is not utilized or when it serves to impede the work of others, in an effort to gain a profit which is not the result of the overall expansion of work and the wealth of society, but rather is the result of curbing them or of illicit exploitation, speculation or the breaking of solidarity among working people. Ownership of this kind has no justification, and represents an abuse in the sight of God and man. [ Centesimus Annus, §43. 1991.]