Phantom Industry - Part 1 Of 3
What is the Phantom Industry? Look around you. You are standing in the middle of it - the ultimate economic phenomenon of our epoch, a sociopolitical entity that employs and benefits, in one way or another, as much as 80% of the American workforce and has branches and outposts throughout the world.
It has a brief yet stormy history.
1. In the Beginning
The U. S. Constitution was ratified before the Industrial Era came into existence. To all intents, the Republic's overall political structure was implemented in the days of agricultural quasi-feudalism, which goes to show that the economy, though a powerful factor in a country's makeup, does not have to dictate how "we the people" should live and be governed, at least not all the time.
Influenced by Karl Marx, most historians felt compelled to classify Capitalism as an epoch unto itself, confusing politics with reality, economy with history, and the joy of scientific inquiry with the paycheck. Originating as it did in the Age of Industry, Capitalism was merely an economic system requiring many hands to be productively employed by relatively few companies. Once hired, most employees were required to perform simple, mindless, repetitive tasks. Under Capitalism, large firms rather than individual producers took it upon themselves to satisfy the needs of the so-called consumer, delivering anything and everything, from the basic staples to luxuries. The end of that ponderous historical interval came in sight once the first assembly line was set in motion by Henry Ford in the early years of the Twentieth Century.
Some analysts of the time gleefully anticipated new possibilities and prospects. Others, less tediously optimistic, pointed out that automated production of goods might leave many folks without a job. To offset everyone's fears, the optimists argued that mechanized labor was going to create a lot of spare time for everyone, which could then be used to improve the average citizen's spiritual standards, enable him to take long gratifying vacations in exotic regions, allow him to appreciate art, motivate him to vote, and Santa Claus would eventually show up to pick up the tab.
In the end, neither view proved valid. Reality hardly ever lives up to people's, much less economists', expectations. Even though scientific fortunetelling differs from the traditional model in that a lot more people pretend to take it seriously, the basic methods and the end result are similar. The lingo-ridden vagueness of prediction is resorted to lest the fortuneteller should be exposed as a fraud. Some forecasts come true periodically (albeit hardly ever two in a row from the same source), keeping the layman from dismissing the entire field as intrinsically fraudulent.
World War One created a great, if mostly artificial, demand for many more hands in the workplace. Military supplies had to be produced in large quantities. Even before it was over, though, drastic political changes occurred everywhere, most notably in the Russian Empire. The most radical group of people ever to convene on that country's territory seized, and went on to maintain, power against tremendous odds, making a wild, monstrously misguided attempt to humanize the Age of Industry, already a thing of the past then, by introducing (supposedly) some basic Christian values to it. Selfish as radicals tend to be, they had no desire to share their power with anyone, least of all God, whom they gleefully excluded from the equation (accompanied by the standing ovation from the agnostically inclined global intelligencia). Their mistake (indeed, everyone's mistake today, almost a century later) was to expect Christian ethics to work without the influence of the Ultimate Judge of Such Matters, much as if one were to expect a high-speed train, finely designed and assiduously assembled, to function without electricity.
Even so, the Socialist Revolution in Russia forced certain folks elsewhere to examine their own conduct. Unless they wanted more revolutions, they had better mend their ways and start treating the workforce as if it were composed in some degree of sentient human beings with, maybe, some basic rights.
It was already too late, though. It was no use. Whether oppressed and exploited, or appeased and unionized, most of the workforce had to be laid off. Machines were faster, cheaper, more precise and, since they had no immortal souls requiring fulfillment and entertainment, less cumbersome. The downfall, known in the U.S. as the Great Depression, came on top of many panicky decisions and annoying results. Resurrected by World War One, the Age of Industry was still grotesquely alive but could not go on unless products were purchased, consumed, produced, and purchased again: hard to accomplish with half the consumers out of work and newspapers suggesting with irritating consistency that Socialism might be a healthy alternative after all. (The onslaught of ideological nuances so befuddled the period's thinkers, it never occurred to any of them that Socialism, and even Communism, however Utopian, were Capitalism's siblings rather than antipodes, since they, too, were thoroughly industrial in principle, required employment of many, discouraged individual thinking, and were just as eager to sacrifice fuzzy numbers at the altar of the Gross National Product. It does not make much difference in the long run whether a few dozen corporations are running the show, or just one, and how many of them are state-owned or state-sponsored. As for the peculiar treatment by the Soviets of their own population, why, one shouldn't expect folks who have openly renounced God to behave charitably. One can govern with promises, handouts, and guns, or promises, no handouts, and a lot of guns. It is strictly a matter of preference and has little to do with the economy.
2. Once the Dust Had Settled
The period immediately following World War I was anything but rosy. The machines started to take over. France, in her own salacious way, alleviated some of her economic problems by bleeding Germany (World War One reparations, etc.), but Germany and England were hit very hard indeed. Unemployment rates skyrocketed everywhere. As always, governments around the globe proposed constructive measures and took none. The debates went on until the famous market crash put and end to them.
Some politicians and businessmen spent the following couple of years trying to pick up the pieces of a shattered era, the one Henry Ford had sent packing, to no avail. There was no way for the average consumer to obtain an income other than by hiring himself out to someone who could use a pair of hands and, in some special cases, a brain. It was an impasse of the worst kind. Only a portion of the workforce could be employed, but the entire country had to have an income to be able to purchase the results of employment.
Franklin Delano Roosevelt, Teddy's distant relative and, some years later, Stalin's good friend and drinking buddy, decided that the situation was, well, unacceptable. A man of wit and considerable political courage, he deviated from his predecessors' laissez-faire approach by actively seeking, and eventually finding solutions. Redistribution of wealth was out of the question. It generally is. Folks will not part voluntarily with anything that might conceivably benefit others. Roosevelt looked at the tax revenue and decided to make good use of that.
He could not simply give away money: governments, if they wish to be taken seriously, must never indulge in direct charity. Instead, he explained that the country was in dire need of railroads, highways, bridges and such (which was true), and that his administration was quite eager to compensate those willing to construct same.
This new approach soon became an integral part of the economic picture. Those who produced the basic staples were taxed; the resulting funds were transferred to those who produced improvements. Simply put, it was a well-organized attempt to find a meaningful occupation for everyone.
The New Deal (as the new approach was dubbed) was, in fact, a noble idea. Little by little, the outdated conventions of the Industrial Age would fall away, 20% or so of the workforce would effortlessly provide the food, clothes, and shelter for everyone, whether employed or not, allowing the rest of the country to work on various improvements and innovations. Sooner or later, anyone would be able to take as much time as they wished to find their niche in any of the numerous available fields. Those still uncertain about their true vocation would be given enough public assistance to be able to afford passable living conditions. The Republic was going to show the world a healthy alternative to humanity's unrealized and seemingly unattainable dream (i.e. Communism, Star Trek style). A superior alternative, too, since there was seemingly no need for gory social experiments, radical leaders, or incongruous ideologies.
World War Two interrupted this line of thought.
The capture of Czechoslovakia by German troops was ignored. The division of Eastern Europe between Hitler and Stalin, who reckoned they had their own economic experiments to conduct, was also ignored, although there was less flippancy this time around. German planes rained bombs on London. The English started paying attention. France was soon occupied, but since the cafes stayed open, the Metro continued to be functional, and the Opera performed more regularly than it does today, most French folks figured it was no big deal. Then came Hitler's invasion of Stalin's territories. Some people looked up from their desserts. The Japanese attack on Pearl Harbor was, in fact, covered by the press. As it progressed, the new World War confused and frightened nearly everyone in the civilized parts of the world. The Age of Industry had to be resuscitated once again. Millions of hands were once again needed at plants and factories everywhere. The New Deal was put on hold indefinitely.
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