The Carey Center for Democratic Capitalism
www.democratic-capitalism.com / careydcntr@aol.com

This is number 9 in a series of articles which summarize proposed reforms

9. Robert Owen: "Good" versus "Bad" Capitalism

Robert Owen (1771-1858) was born in Wales, left home at age ten, learned how to spin thread, and then became the manager of a factory. By age 28, Owen had become managing partner of a concern that bought New Lanark, a large spinning mill near Glasgow.
Owen’s years of experience interacting with workers on the factory floor gave him great respect for the potential of ordinary people:

If due care of your inanimate machines can produce beneficial results, what may not be expected if you devote equal attention to your vital machines, which are far more wonderfully constructed. Your time and money so applied would return you not five, ten, or fifteen percent, but often fifty and in many cases a hundred per cent.

          Owen had learned two principles necessary to release the enormous productivity and innovation of turned-on people: the worth and potential of each, and an environment of trust and cooperation. Owen took action to provide free education, training, clean housing, health care, job security, and encouraging sobriety. Young children learned to relate to each other with trust and cooperation. Over a twelve-year period, out of 3,000 students in Owen’s school, not a single criminal action occurred. Owen was criticized for these uncommon investments but he made greater profits than the “ bad” capitalism that tried to maximize profits by suppressing wages and benefits.
          A generation earlier, Adam Smith had written that material scarcity in the world could be eliminated. Owen spent his early life on the factory floor observing peoples’ response to opportunities. Smith was a philosopher seeking truth, Owen was a factory manager seeking a better product, who also provided experimental verification of Smith’s theories, the final convincing step in the Enlightenment truth-seeking process.
          Owen commented as follows on the potential for democratic capitalism:

The period is arrived, when the means are obvious by which without force or fraud of any kind, riches may be created in such abundance, that the wants and desires of every human being may be more than satisfied. In consequence, the dominion of wealth and the evils arising from the desire to acquire and accumulate riches, are on the point of terminating.

When Owen toured other mills he found, instead of his work culture of human development, one of brutal exploitation. Owen’s son, Robert Dale Owen, reported:

Greed of gain had impelled the mill-owners to greater extremes of inhumanity, utterly disgraceful to a civilized nation. Their mills were run fifteen hours a day with a single set of hands, and they did not scruple to employ children of both sexes from the age of eight. Overseers carried stout leather thongs, and we frequently saw even the youngest children severely beaten. In some large factories one-fifth of the children were either cripples of otherwise deformed by excessive toil or brutal abuse

          Owen petitioned Parliament to limit hours for workers under 18 to 10 ½, to prohibit children younger than 10 from factory work, and older children from working on the night shift. Owen also visited authorities in the Church of England thinking that they would be excited about supporting an economic system with inherent morality, and would be impressed with the results of his educational program.
          The universities, with the mission to investigate and illuminate, unify and elevate, might have recognized this coherent workable system and presented it for student consideration. The churches, concerned to feed the hungry, clothe the naked, and house the homeless might have blessed Owen’s discovery. Governments, dedicated to promoting the general welfare might have supported Owen’s capitalism as the best economic opportunity, the prerequisite to benefiting from other freedoms.
          It did not work out that way. Both Parliament and the Church rejected the proposals of this evangelist with his low-class Welsh accent. The other capitalism, however, was so vile that reformers, and later Victorian writers such as Dickens, became enraged and attacked the problem by passing laws, instead of examining and reforming the system.
          Most of society failed to recognize that democratic capitalism was the way to peace and plenty. This myopia continues to the present but with a difference: Now the work culture demonstrated by Owen is required in Information Age industries with substantially greater participation by the workers. Because the “good” capitalism produces greater profits now, as it did then for Owen, it is growing on its own economic and social logic. The “bad” capitalism, however, has been given a new life by ultra-capitalism that treats the wage earner as a disposable commodity and in which finance capitalism is dominant.
          When people finally realize that it was “bad” capitalism that caused such damage to so many in ’08-’09, then the “good “capitalism will prevail. The time it takes to move from the “bad” to the “good “ capitalism will be determined by how long it takes for universities, religions, school-teachers, political reformers, and the media to discover democratic capitalism.