Sunday, March 6, 2016

Wealth Created by Brains not Labor by Guy Morrison Walker 1922

Wealth Created by Brains not Labor by Guy Morrison Walker 1922

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THE world has not been without great minds in the past, but Solon and Lycurgus, A though great law-givers were unable to invent the steam engine. Socrates, Plato, and Confucius, were great in the realm of ethics and metaphysics but they were unable to conceive electricity. Archimedes, Aristotle and Caesar, founded mechanics, logics and military engineering, but they were unable to invent the telegraph, the telephone or armor plate. Galileo, first conceived of our solar system, but he never dreamed of the mechanical devices of these times with which we measure the distance and light of the stars and determine the metals that constitute their physical makeup.

Social philosophers have ignored the most extraordinary thing that makes for human inequality, and that is, the diversity of ability and quality in the human mind. Hundreds of thousands of ordinary brains put to work on the identical problem can not solve it unless the problem be one within the comprehension of any single one of those thousands of ordinary minds. And, if it is within the understanding and comprehension of any one of those thousands of ordinary
minds, any one of them is just as good for the solving of that problem as the united efforts of the hundreds of thousands. But if the problem be beyond the understanding and comprehension of the ordinary mind it must wait for its solving for the rare appearance of one of those great minds of unique quality, who is able to solve it and who it sometimes seems is born for the purpose of solving it. One who when sent solves it for the benefit of the whole race. Those extraordinary brains constitute such a rare treasure for the world that when they appear the world should subsidize them and reduce their struggle for existence to a minimum so that these extraordinary brains can devote their whole energy to the intellectual effort of solving the heretofore unsolved problems of the race.

With all the great minds that the world has had from the beginning of time, it labored along with only man-power and animal-power, until Watt discovered the expansive force of steam, and substituted steampower for man-power. With all the great minds of the past, the world had to go along without steam locomotion until the extraordinary brain of Stephenson began the annihilation of space that is now well nigh accomplished. With all the great minds of the past, the human race was only able to invent a written record for itself about 5,000 years ago, and so we know nothing of the history of the race for the hundreds of thousands of years thru which it struggled up until then.

For nearly 5,000 years, the only way its greatest and best minds were able to make such a record was to chisel a few inscriptions in clay or on the face of stone, or to laboriously transcribe them by hand on skins and barks. With the reproduction of books possible only by long-hand transcription, it was impossible for knowledge to become diffused or for education to become general. Not until Gutenberg and Faust adapted the Chinese art of printing to European alphabets was it possible for the carefully copied ideas of the world's best minds to become generally distributed.

With all the great minds that the world has produced the race struggled along in physical darkness while fear and superstition peopled the night with demons and ghosts, until a Rockefeller made artificial light possible to the poorest being on earth, by the economical production and cheap and general distribution of petroleum, which in its turn is now being superseded in all civilized communities by electric lights, which are being constantly improved until it is now almost a scientific fact that they rival the light of day.

With all the great minds of the past, the world never realized the necessity or possibility of a pure water supply or the epidemic infections due to water contamination that decimated cities and killed millions, until modern bacteriology was discovered. And this knowledge has not yet become the possession of two-thirds of the population of the earth, for the millions of people in Africa and in India and in China are still without pure water and suffer terribly from epidemics that are now no longer known in Europe and America. Contagion and infection are so little understood that the populations of Egypt, India, China and the Philippines, absolutely refuse to recognize the attempts of modern administrators to enforce quarantine.

When you consider the attitude of the best educated men toward labor from the beginning of the race until the middle of the 18th Century, it is not surprising that statesmen and historians regard wealth as purely material.

Through all this long period the labor of the race plodded clumsily along, undirected by its men of extraordinary ability, for it was considered beneath the dignity of intellectuals to interest themselves in such material things as production or the creation of wealth.

Until this time intellectual effort was therefore confined to the writing of religious works, theological speculations, histories, annals, and the production of poems. Until comparatively recent times it was considered a gross prostitution of mental abilities for a man of education and brains to write a novel, or to record events of other than political or moral significance.

The primitive attitude of the intellectual and educated men toward labor and production is nowhere better exemplified than in the exaltation of formal literature by Chinese scholars and statesmen down to the overthrow of the Manchu Dynasty in 1911.

Europe has but slightly broken away from its prejudice against the participation in industrial production or trade of its educated men, and only the knowledge of the extraordinary rewards that have followed the exercise of intellectual effort in this direction in our country, has induced some to defy the prejudice against it that still exists throughout Europe.

Not until comparatively recent times has intellectual effort been directed toward industry, production, and the creation of what we recognize as wealth. It is barely 200 years since the first engine was devised as a toy, but it 00was not until 1780 that Watt devised the first real operative steam engine, began the revolution in labor saving modern industry and inaugurated a new era of production and wealth creation.

As we look back over the record of human accomplishment from the beginning of human records up until 1780, we are not so much astonished at what the Race accomplished, as we are appalled by the prodigal waste of human energy and the reckless spending of human life in doing it.

The “Pyramids” are a wonderful monument of human labor but it is appalling to think of the expenditure of human energy and the waste of human lives expended in their creation. Every stone in those Pyramids was cut by human hands from the quarries, moved from their place to the site of the Pyramids by human labor, and raised to the place where they now rest by human energy.

The “Great Wall of China,” remains one of the wonders of the world, but when you think that every a one of its bricks was made by human hands, transferred to its place by human labor, and that not one single labor-saving device such as we now know, was used in the erection of this monumental wonder, you cannot help but be oppressed by the thought of the millions who were driven to its erection.

BUY: The Myth of the Robber Barons: A New Look at the Rise of Big Business in America by Burton W. Folsom

The same thing is true of the “Canals of China,” the canals and so-called “wells” or “tanks" of India, the enormous structures raised as temples to appease the angry gods, and this includes the wonderful cathedrals of Europe.

This country of ours is the only one on the face of the earth unmarked and unmarred by any gigantic structure raised by undirected, unrewarded, human labor.

In 1782, when the Independence of our country was recognized, two years after the invention of the steam engine by Watt, the entire wealth of the world was not over 100 billion dollars. This represented the entire unconsumed surplus created by the undirected labor of the race, from its beginning up to that time, and the values of the used lands of the earth based on their then use by the peoples of the earth.

I do not intend to enter into a discussion of the increase in the standards of living, or the relative values of human life, now and 140 years ago. But I wish to call your attention to the fact that at that time there was practically no house on earth with glass windows; that ventilation, sewerage, and pure water supply were unknown; that education was within the reach of but few and was still entirely classical and religious in its character. That the largest ship in the world at that time (1782) was the then newly built English Battleship, the “Victory,” the flagship of the famous Lord Nelson, which measured 186 feet in length. The largest ship that sailed in trade between Europe and the American Colonies before our Revolution was 120 feet long, 34 feet beam, with a tonnage of about 600.

The founders of our United States realized as had no other political thinkers in the world before, the value of men's brains in production. From the first, we have recognized to a degree unequalled by any other nation or people, the property rights of men in their inventions, devices, and ideas, while by our almost immediate and universal use of such inventions, devices, and ideas we have made it worth while for our intellectuals, our men of brains and of genius, to devote themselves to that character of human effort, namely, intellectual, that has enabled labor in this country by seeking and accepting the aid, direction and leadership of our best brains, to reach a unit of per capita production that has never been dreamed of by the peoples of any other country in the world.

I have called attention to the fact that the values of lands on the earth depend on their accessibility. This was well known and recognized by the men who undertook the development of this country.

The first ship not driven by human hands or the winds was Rumsey’s steamboat that made a successful trial on the Potomac in 1782. The first successful steamboats of the world plowed our Western rivers, and within forty years, long before the first steamship crossed the Atlantic, were going far into our West, up the Missouri, the Arkansas and the Red rivers, making them more accessible and nearer in point of time to our Atlantic coast than was Europe.

The first power loom was not invented until 1785 and was not commercially successful until 1835. Until that time all our clothes were homespun and home woven.

The first sewing machine was invented in 1830.

Railways, which first supplemented and finally superseded the canals and rivers, were not invented until 1826. By making the remotest acres of our country accessible and their products easily marketable, our railways have done more to increase the wealth of our people than any other single instrument.

The electric telegraph was not invented until 1835.

The first power press was not invented until 1814, and it was not until 1845 that Hoe first invented the fast press which has made possible the modern diffusion of knowledge and news by our daily press.

I remember in my boyhood in the Orient, seeing the native blacksmiths laboriously making nails, hammering each one by hand, and I was astonished to find that being wrought, they could not be driven into hard wood, but that they always had to have a hole drilled in the wood before the nail could be used. The first nail-making machine was invented by Reed in our United States in 1786, but it was not until forty years later that his device really came into general use, and that cut-iron-nails superseded the old hand-made wrought-iron-nail.

Adam Smith, the first political economist of England, uses the manufacture of pins as an illustration of the benefits of specialized labor. Within fifty years after he wrote his “Wealth of Nations” the first pin-making machine was invented by Wright here in our United States (in 1824) and the specialized labor, so much admired by Adam Smith, went into the discard along with the political philosophies founded on his illustration.

The first rolled iron beam for building construction was not made until 1855, and the first elevator, a slow moving hydraulic one, was not invented until 1865.

The first electric light did not glow until 1866, and then only in a laboratory. It was almost ten years later before it began to get into commercial use.

The first steel ship was not built until 1870. This invention opened new possibilities in world commerce, by enormously increasing the unit of freight in foreign commerce, and reducing the cost of world transportation.

The telephone was not invented until 1876. While submarines, wireless telegraphy, automobiles, gasoline motors, aeroplanes, X-ray, and wireless telephony, are practically all the inventions or developments of the past twenty years.

While the value of lands depends upon their accessibility, their accessibility depends upon the railroad, or steamship transportation facilities available for the transportation of their products.

The rewards of labor are dependent upon the market for the products of labor, and from the beginning of time until the invention of railroads and steamships, it took labor a day’s work to transport a ton of its product only one mile away. But with the brains of the Race devoted to relieving labor from this enormous handicap in transporting its products to where they can be consumed; our brains have devised methods of transportation that enable us now to transport the products of labor a ton-mile for one-three-hundredths of a day's work, and this has left to labor 299/300ths of what it used to spend in carrying to market the products of its labor. The saving to labor by the invention of transportation facilities alone has enabled the ordinary laboring man to double his per capita production.

It is plain to be seen from the record, which is there for anyone to read who will, that it has not been human labor in the physical sense that has relieved itself of the original limitations imposed upon it by nature, but it has been the thought and devices of extraordinary individuals, who have devoted themselves to the task of saving their fellows from the burdens imposed upon them by nature.

It has not been "labor” that has produced the wealth of the past 150 years but BRAINS. It is not labor in the physical sense that is producing the wealth today but BRAINS, and it never can be anything but human intellect devoting itself to accelerating production and directing the less endowed members of the race in their labor that will produce the still greater wealth of the future.

The literature of the past has had much to say about the conflict between Capital and Labor, but it is only lately that the peoples of the world have begun to realize that this element of brains is more important in the creation of wealth than is either labor or capital.

Political economists have not yet discovered the value of brains in production and wealth creation, but today we have the astonishing spectacle of capital, which knows it has no brains, and labor which realizes its inability to direct itself, eagerly competing for the use of brains, and offering the possessors of this scarce article almost anything they demand to accept the management of capital or the direction of labor.

Capital would generally be idle and waste away if it were not for the brains of some thinker who finds a better way to use it than it is being used. And labor would often be idle if it were not for this same thinker who devises, invents and creates, undreamed-of opportunities for labor. By holding before capital the greater profits and rewards in a new venture, the thinker secures the support of capital, which labor would not be able to secure for itself.

Social economists claim that there is only one source of wealth-Labor. Political economists insist that in addition to Labor-Land and Capital-must be classified as additional sources of wealth. But they both deny the economic value of that which is the greatest of all in the production of wealth-BRAINS. The ability to see the relation between cause and effect, the ability to see why labor expended in one way produces little, while labor expended in another way produces much. Why one crop is a failure on a piece of land while another crop produces prodigally. A farmer once was asked how much land a man needed in order to make a good living? And he replied, "If a fellow’s got brains enough all he needs is enough land to stand on."

If labor complains that it does not get what it is worth, it should reflect upon the fact that there is nothing cheaper than capital. If safety can be assured to capital, the use of it can be purchased for two or three per cent. The great fortunes are made not by the possessors of capital but by men of brains, men who purchase the use of the capital for a small per cent. and use it with their brains to build up great industries. Rockefeller was a great borrower. It is brains that make the difference between two and three per cent, and the profits that are made in modern business. The attack, therefore, upon the creation of wealth is primarily an attack upon brains, and it is just as well that we should recognize frankly the fact that the great mass of mediocrity is attempting to make it a crime for a man to have any sense.

There are still those in this world who believe it a sin to have anything. They may be found stalking naked with their bodies smeared with ashes and their hair uncut in greasy wringlets everywhere throughout India, and some of their unwashed and unkempt disciples may be found in all parts of the world. The idea was prevalent, even among people of our race, in the Middle Ages, and there were many who took the vows of poverty, but thanks to an enlightened conscience and a saner economic philosophy, our race at last has come to realize that man with his heart and his mind and his soul was not to spend his life like brute creatures in satisfying only the necessities for existence, but that it was his duty to do, to make, and to have, more than the individual needs for himself.

Do you think there would be any happiness in a world where you were barely able to find enough to keep alive and where you were constantly engaged in a struggle to satisfy the pangs of hunger? Only by producing more than he needs, does the individual create a surplus, and only by having more than his immediate necessities require can the individual secure the leisure that is necessary for contemplation and thought, for study, discovery and invention.

Many have toiled in useless and purposeless tasks without creating wealth, and there is no greater economic crime than to spend useless toil on work that need never have been done. The greatest conservators in the world, and on the whole, the poorest compensated and paid, are the Thinkers, those who study and scheme to devise ways and means of saving their fellowmen from useless work.

The idea seems to prevail that when the leader or inventor or the resourceful manager of property by some device, or invention, or method, is able to increase the output of his product, or to reduce the amount of labor necessary to produce the same output, that he should divide this increased production among those whom he has directed in its production, but if the individuals working under his direction do no more work than they did before, it is hard to see what part they have in the increased production, or why they should be given any share of the increase. Not unless there is something done by or delivered by the worker himself that contributes to or helps make the increase of production, or to decrease the amount of time necessary for the same production, can the worker or laborer maintain any claim to a share in the increased product. You might as well propose to pay the machine instead of the inventor of it.

One of the first principles of economics is that consumption is limited but that production is unlimited. Let a demand for anything be created and the supply to satisfy that demand will increase at a steadily decreasing cost. The demand of labor for higher wages has exactly the opposite effect from what labor desires. Labor seems to think that the high wage that it receives is conducive to prosperity, but the truth is, that as costs rise consumption falls, factories cannot sell their products, employment becomes limited and wages either fall in order to decrease the cost of production and stimulate consumption, or else the factories close down entirely and wages cease altogether.

I remember once dropping into the office of Mr. Dodd, the famous solicitor of the Standard Oil Company. I found him sitting at his desk, tipped back in his office chair, his feet up on his desk, while he gazed out of his window over the Bay. He seemed to be thinking, so I started to back out of the door, when he, glancing over his shoulder, motioned to me to come in. I walked slowly across the room from the door to his desk, then Mr. Dodd spoke, saying: “I was sitting once, just as you found me now, when Mr. Rockefeller opened the door as you did. Glancing in and finding me in this attitude, he stepped noiselessly across the room to the back of my desk, placing his elbows on the desk he leaned over toward me, and said in a hoarse whisper, ‘Dodd, is this what I pay you for?’ Without changing my position, I looked up at Mr. Rockefeller and replied: ‘Did you think you paid me for working?’ Every time I attempt to leave for a vacation, the evening of the first day finds at least a score of telegrams from you, saying, ‘Dodd, what about this? Dodd, what about that? Dodd, come back quick.’ If I do the thinking for the rest of you, I am doing all that can be expected of me.”

A New York paper some time ago pretended to show how the one-hundred-time millionaire was made. It started its description with declaring that there was a small nail mill with only $75,330 cash capital put in but it made money and made so many nails and sold so many nails and turned its capital over so many times in a year, that somebody came along in a few years and paid them one million, two hundred thousand dollars for the little wire nail factory that had had only $75,000 invested to begin with, and the Editor declared that this constituted watering the stock. Now there were a number of other nail mills, which the Editor did not mention, that had more than a hundred thousand dollars invested in them and which never made a dollar, and which were abandoned and rusted away or were dismantled and were mostly or entirely lost.

The two mills had exactly the same opportunity, they had bought the same kind of machinery, they used the same material and they had the same market, but there was no buyer for one, while a million two hundred thousand dollars was paid for the other. This was not because of any water, you could have pumped as much into one as into the other. It was because one mill had $75,000 plus brains and industry, and in the other instance it was one hundred thousand dollars minus brains and industry.

The essence of Socialism and of the Labor dogma is to deny the unequal gift of brains or ability to individuals, and to demand the assassination of the individual with unusual gifts, if and when he appears, as a danger or a menace to the mediocre ability and brains of the common mass. This has been and is a feature of the Soviet government in Russia, which has frankly declared war on all so-called “intellectuals” and has hunted out and exterminated all the educated men and women that it could find. But it is easy to see where this will lead for the mass, which has always profited by and benefited by the inventions of the brains and ability of these extraordinarily gifted individuals.

Denying the rights of individuals to possess extraordinary gifts, Socialism refuses to inventors any rights in their devices that would give them any reward over others. If they should succeed in their propaganda, inventors, or those with the ability to invent, knowing that the mediocre mass would appropriate their discoveries and that they would get nothing more out of them than would the veriest lout who never had a thought, would refuse to exercise their extraordinary gifts. They would stop trying to think and would cease to invent, and the world would be the loser. The essential weakness of Socialism is that in destroying the incentive for improvement and progress, it destroys the possibility of improving the conditions of the ignorant and mediocre and that in its efforts to cheat extraordinary ability out of a fair compensation, it robs itself of all benefit that it would derive from the exercise of the gifts of its most intelligent individuals.

Remember, it is always the individual who is the pioneer and who blazes the way for the multitude. All progress has been through these individuals, who have had the vision to look through the time-killing methods of their day and the courage to break with conventionality and precedent, and to use their newly discovered ways and methods. Only by the preservation and encouragement of individual initiative is the germ of progress kept alive or induced to flourish. Kill individual initiative and all progress will cease and civilization die.

To teach men that the ignorant are as good judges as the educated or that the ordinary and mediocre are as efficient and useful as the extraordinary, is cruel because it is so utterly false.

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