Thursday, October 2, 2008

19th Century Innovation in David Ames Wells's Recent Economic Changes

David Ames Wells, a 19th century engineer and economist, was chairman of the national revenue commission under President Abraham Lincoln and special commissioner of the revenue under President Andrew Johnson. Wells became an advocate of reduced tariffs and hard money. He opposed free silver. He opposed income taxes. In 1871 he argued in Local Taxation that New York State was losing business to other states because of excessive taxation. His view of the late 19th century deflation was that depression was due to "overproduction". In his book Recent Economic Changes, published in 1889, he argues that unemployment is due to improvement in technology. This was true short term but not long because labor rotated into services. On page 64 he mentions that "fifty years ago the railroad and the locomotive were practically unknown". "The ocean steam marine dates from 1838." "Electricity had then hardly got beyond the stage of an elegant amusement." He adds:

"The following is a further partial list of the inventions, discoveries and applications whose initial point of 'being' is not only more recent than the half-century, but whose fuller or larger development in a majority of instances is also referable to a much more recent date:

The mechanical reapers, mowing and seeding machines
The steam plow and other labor-saving agricultural devices
The Bessemer process and steel rail (1857)
The submarine and trans-oceanic telegraph cables
Photography and all its adjuncts
The steam hammer, repeating and breech loading fire arms and rifled and steel cannon
gun-cotton and dynamite
the industrial use of India-rubber
The steam excavator
The sewing machine
The practical use of the electric light
The application of dynamic electricity as a motor for industry
The steam fire-engine
The telephone, microphone, spectroscope and the process of spectral analysis
The polariscope
The compound steam-engine
The centrifugal process of refining sugar
The rotary printing press
Hydraulic lifts, cranes and elevators
The regenerative furnace
Iron and steel ships
Pressed glass
Wire rope
Petroleum and its derivatives, and analine dyes
The industrial use of metal nickel
Cotton-seed oil
Artificial butter
Stearine candles
Natural Gas
Cheap postage
The postage stamp

How have we doing in the past hundred years? Keep in mind that television and radio were conceptualized by Nikola Tesla, a 19th century inventor who decided not to focus on them. Had he, they could have both been operational by 1910.

How does the 20th century, the century of "Progressivism" compare to the 19th, the century of laissez-faire in terms of real progress? Of course, the twentieth century invented the atom bomb, nuclear power, nuclear submarines, the analog and digital computer, the Internet, "buy and hold" strategy of mutual fund investment and Warren Buffett's stock investment strategy tips (yes, we have made major progress under Progressivism). But overall, it would seem that the age of Progressivism has been one of slow progress.

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