In the beginning there was man, alone in the universe, surrounded by thousands of mutations and genetic cousins, in an untamed and unforgiving wilderness. The Homo Sapiens Sapiens may not have the sharpest teeth, fastest legs or farthest reaching eyes, but their ancestors had chosen significantly larger brains than most of their competitors and for the moment, this prevented their extinction. It also created an enormous problem, a problem that still remains to be solved for the species a whole. With larger brains came larger caloric needs and the fundamental question that would dominate the entire race forever afterwards: How do we feed ourselves?

The question was not a simple one to answer. In places like Africa which had been home to intelligent primates for millions of years, the animal kingdom had become accustomed to the hunting habits of the human predators and evolved to escape domestication and slaughter. In Australia and the Americas, the less adapted large mammals were all killed within a few generations of meeting the first human settlers, leaving those continents almost bare of large, indigenous wildlife. Eurasia was more biologically diverse, but it would be millennia before humans were able to use them to their advantage. Thus, human beings developed their first economic system, an exchange of protein hunted from mainly small fauna for the nutrients and carbohydrates of the gathered edible flora. This also built our first social order: men hunted and women gathered. Our brains provided us with the linguistic and communicatory skills needed to make this relationship work, and that was our species first great socioeconomic revolution.

This exchange forced a small number of people to work together, for it was obvious that more could be caught and gathered if those skilled in hunting were not forced to gather and those skilled in gathering were not forced to hunt. Since there were only two sub-groups of people exchanging two goods which each required roughly equal labour in proportion to their caloric value (Many hours required in hunting game produced huge dividends which each catch; a few minutes of gathering produced small dividends with each scavenging.) the two economic agents, men and women, were roughly equal. The group would also regulate its numbers in proportion to the surrounding stock of food, keeping a relatively stable, egalitarian paradise.

Given time, trouble inevitably befell these tiny collectives. Where environmental conditions were favourable, groups reproduced too quickly, provoking conflict with other clans as their range was forced to expand with their population. Where conditions were unfavourable, starvation and migration caused unprecedented social distress. Whatever the case, decisions needed to be made and they needed to be made quickly, much faster than the traditional consensus system or respect for the mumbling, slightly deranged elders would allow. These factions required leaders, and society began to stratify as a result.

These leaders were not all men as other philosophers of the "state of nature" will have you believe. For Locke or Rousseau, it might be acceptable to think that society began as an outcropping of the family (which it may have) and being that the family of their time was unequivocally led by the father, it would be natural to believe that all early societies were patriarchal. This wasn't the case. What mankind needed was decisive leadership, and one's genitalia is hardly a determinant of such a quality. In some societies a matriarchy blossomed; in others, a patriarchy. In some there were matrilineal social strata; there was patrilineal stratification in others. No matter the specifics, equality was slowly being eradicated from the face of the earth.

It might seem distasteful to modern readers, but the truth abides by no sense of political correctness. Inequality was useful to these early societies. If the leader had enough wealth accrued that he or she could spend all their time planning battle strategies and making treaties, their clan would surely defeat their rival whose leader was forced also to hunt and gather in addition to leading. The nobles who spend their time in leisure inevitably create more art, laws, religious ceremonies and useful inventions than the nobility which needs to concern itself with scrounging for edible roots or chasing limping boars. Humans needed inequality, but they didn't like it.

Men and women, who had for so long been used to seeing each other as equals, lashed out against their oppressors. They longed for the restful life of the ruling classes and frequently killed to assure themselves a place in this increasingly stratifying society. But economy craves stability, and those tribes and clans with the most stable leadership came to conquer and subdue those without it.

Thus, these leaders resorted to any method to make their social hierarchies more rigid. They created bizarre dogmas and religious rituals meant to justify their dominance. They used war and human sacrifice to rid society of their challengers and social outcasts. They gave rewards and punishments to those who did not deserve such treatment, but to whom would best serve the interest of their continued leadership. And so society became more conservative and inequality, useful though it was, began to infuse a more sinister image into the minds of our ancestors.

Although cultural practices became more rigid and experimentation began to wane, accidents continued to occur and those odd cosmic coincidences would lay the foundation for what produced modern civilization. Religious ceremonies led large numbers of people to congregate during certain seasons of the year and this produced predictable inter-tribal trading patterns. Where ecological possible, this led to the development of villages and semi-permanent dwellings. As nomadic peoples began to settle down, they chose specific areas to use as latrines and landfills and those dumping grounds became the natural laboratories for the seeds of deposited wastes to become the domestic, cultivated agricultural goods we know today.

Eurasia had a larger diversity of useful, natural plants and large, submissive animals to domesticate and so these accidents were more numerous in that part of the world, and it is from there that agriculture first spread. Paranoid of change as the leadership of these early Eurasian tribes were, the results of cultivation and domestication spoke for themselves. Those tribes with abundant foodstuffs would dramatically increase their population in only a short period of time, pushing the local nomadic tribes farther away and conquering the nearby settled villages. Less talented in war and castrated by civilization though they may be, nothing could possibly quell the sheer numbers of these farmers. Mathematics was on the side of agriculture, and it spread slowly but surely across all the hospitable terrains of Eurasia and North Africa. The second great socioeconomic revolution was transpiring.

The dangers inherent in building an agriculturally based civilization began to rear their ugly head relatively soon afterwards. Early farmers were weak and undisciplined. Their digestive systems were unused to the substances they were forced to consume and their health deteriorated for because of this. In addition, subtle changes in climate and environmental conditions could reduce their entire tribe to starvation in a matter of months. It was clear that more diverse tribes needed to consolidate, to protect each other and to spread the potential risk of famine amongst as many people and geographical areas as possible. Larger states could invest the capital necessary to create irrigation canals and transportation networks as well as stockpiles and granaries to prevent starvation in the long term. This created the first real concept of property, both controlled by the state and private individuals (for there often was little difference between the crown as a legal entity and the king as a man), and property gave rise covetousness, covetousness to conflict.

The storage of agricultural goods gave land a theoretical value that could be computed as rent, because it was clear that the more land a person held, the larger amount of tangible foodstuffs they'd be able to create, store and sell in the future. This created self-perpetuating wealth, and so long as one person held it, the avarice of others would encourage them to steal it. Society needed warriors to protect the property of their leadership and to defend the property of their tribe from foreign belligerents. With few exceptions, these soldiers were men, and inequality across class and gender solidified into the institutions of the state.

Labour became divided by sex. Men were considered stronger and so were tasked with the back-breaking work of cultivating their farms with little more than rudimentary tools and defending the homeland using savage technology that still haunts the collective nightmares of civilization. The noble classes needed to offer something to these warriors, and so they gifted their militaries with wealth and power, exalting once pitiless farmers to the bureaucracy or even the nobility itself. Because of this duty, men received better diets and education, making the womenfolk seem feeble and irrational by comparison. Such was not the natural order, but the conscious distribution of wealth from one subsection of society to another.

It was impossible to pay for this expansion of the elite without removing wealth from someone, and women paid the price. The massive expansion of the population required full time domestic attention, and women were subjugated to that task due to the simple mathematics of opportunity cost calculations. A male farmer or soldier could generate more income than the female in this system, and so individual families had little choice but to relegate women to an inferior role in a society (a choice that would have terrifying consequences for the future when one considers all that is lost by completing ignoring the human capital of exactly half of the species). Matriarchies would still exist in the nomadic societies, but the settled states were decidedly, and almost universally patriarchal, a system which naturally lent itself to the total control of one man: the father of the state.

Total autocracy was thousands of years in the future, but the paternalistic foundations of the state allowed for the sort of vertical power imbalance that radically intensified social inequality. At the top lied the king, usually also a spiritual leader who controlled the most wealth and power, greater in his one person usually than that of all the commoners in aggregate. Below him were the religious figures necessary to legitimize his rule and the military muscle required on occasion to convince the less religiously susceptible patriots and repel foreign invaders. There was an undeniably symbiotic relationship between these two, and the patriarch rewarded his underlings handsomely for their service, though they arguably destroyed more productive capacity than they created.

Why is this? For instead of granting the lower orders agency and allowing their creativity and ingenuity to thrive, they feasted off of the raw labour potential of their captive populations, caring little for the economic consequences. The regime may have been stable, but it could never progress. The only people with any incentive to grow their wealth (the nobility), got that wealth from robbing their subjects. Thus the economy of the state was controlled by the amount of tribes its nobles conquered and the favourability of the local environment, but it had no internal impetus of progression.

Alas, there was a middle class of sorts, an intermediary between the rulers and the ruled that cannot be forgotten, for they will eventually become the most important cast members in this play that is humanity: the merchants. There is perhaps no class of people more universally reviled than these early hommes d'affaires and certainly none so unjustifiably so. In many ways, these enterprising individuals are what made civilization possible, for they connected disparate groups and allowed them to trade on their comparative advantages, making both parties wealthier from the exchange. However, they were ruled by their own self-interest more than the needs of the state, and so these early statesmen and their propagandists characterized the merchants as the most despicable, unruly class.

We see in the works of Aristotle, for instance, a fairly nuanced exploration of the idea of exchange value and use value, and how currency can be used to equate the two exchange values of two items. However, we are then to understand that this exchange is unnatural, that we must do away with exchange values altogether, that since "nature makes nothing in vain," we should only be preoccupied with the uses nature intended. A shoe is made to be worn, Aristotle tells us, not to be sold to a shoeless costumer, and shame on those who fail to see it. Commercialism is a sin against nature, and the farther we specialize and exchange, the farther we are from our natural selves.

This is undoubtedly true, only Aristotle and his contemporaries saw the unnatural world as being evil, whereas thinkers such as myself see it in a more progressive light. Aristotle, however, convinced himself also that the state was a natural creation, for he believed it was impossible to live outside the polis. Why else would Socrates choose the hemlock to banishment from Athens? The state made mankind, not the other way around. In the same vein, destiny ruled the management of the household (from which we get the word "economics": a combination "oikos" being "household" and "nomos" being "rules"). Nature determined that master would rule over slave, husband over wife and father over son, for one was simply inherently superior to the other.

Political economy existed to maintain these three relationships (master-slave, husband-wife, parent-child), and this creates a logical paradox in the minds of the ancients. Accumulation is needed to maintain to relationships and seek the "good life," but accumulation can only happen with exchange. Thus, the state supports something unnatural, this tumour that is commercial activity. "There can be no community without exchange," we are told. "No exchange without equality, and no equality without ability to measure it." And so the state, who should by every right drive these greedy, merchant scum off the face of the earth, mint the coins they use to exchange and defend the property they wish to trade. Even if this is all in pursuit of enlightenment, pragmatism forces the evil that is commercialism into this world. It might be distrusted, but it is never disbanded.

There are, of course, just concerns with the dealings of merchants. They forced early philosophers to question their ideals of justice and equality, for it wasn't always easy to determine the just price. Was it fair, in the religious sense, to exploit a starving city and charge dearly for grain that would be sold cheaply elsewhere? Was it just to charge interest on loans and allow a person to beget wealth simply for the privilege of having owned wealth before? Was it possible even to own property at all, when the earth was truly only granted to humans for a very short time and its true owner, by all that was righteous and holy, was God himself? Such questions dogged the minds of philosophers as empires of whips and silver rose and fell with the winds of time.

Arguments against property became particularly popular during the decline of the Western Roman Empire and the subsequent rise of Christianity. In a move that was ostensibly to repair the Roman economy, Constantine began to mint a new, almost entirely pure gold currency to replace the horribly debased coinage of old and the bizarre, extremely complex (but surprisingly effective) in-kind, non-currency taxation of Diocletian. Constantine required the denizens of the empire to pay their taxes in gold, a commodity to which only a tiny portion of the population had access. Thus, commoners would pay local elites in labour in exchange for their employers settling of their taxes. This, coupled with land within the empire increasing being granted to Germanic tribes for siding with the Romans during various war efforts, led to a steady fracturing of the West into tiny duchies and micro-states where the inhabitants were tied to their local land-lord rather than the Roman state at large, creating what we would recognize today as feudalism.

Feudalism was entirely antithetical to property because these "rules of the household" were not really determined by nature, but by mutual obligation. A lord couldn't say he owned his serfs like a master could say of his slave. Instead, they worked his land in exchange for his protection and providing them with the necessaries of life. Furthermore, the nobles were granted their title through their obligation to defend their king, and the king was granted his control through his duty to promote the state and, much more importantly the church. And, naturally, the church was built on the authority of God. Thus, everyone's status in life was ultimately determined by their relationship with God. They had no inherent right to property, and the instant they failed to maintain their duties to the divine, everything that was theirs would be no longer. Saint Augustine was essentially saying just that even before the Roman Empire fell, and it remained a common refrain for much of the European Middle Ages.

Yet, even with Saint Augustine there are more practical matters to be discussed. Yes, it is true that nothing in life truly matters, that humans must all be ruled by the laws of the "heavenly city" and ignore the reality around us, but certain economic factors control our ability to do so. This is balance between "otium" and "negotium," (something that would be discussed by the marginalists fifteen hundred years later) or between leisure and business. Leisure was necessary for contemplating the works of God, but it could only be bought with some degree of accumulation, if not by yourself than by others who supply you. After all, one cannot simply resign themselves to the "heavenly city" as nihilist would, for that would be destructive and suicidal and the sin of such would bar one's entry for all eternity. So, even if there is no true property, for God owns and distributes all things in the universe, there is still some room for economic prosperity, but, again, not accumulation for accumulation's sake, but for the sake of leading a moral life on earth and finding fulfilment in paradise.

The trouble with Saint Augustine was that he left no place for free will in his equation, and that simply didn't sit well with later Christian theologians. How could it be just for God to punish sinners as terribly as the bible says he does if the sinner had no agency and had no intention of committing such terrible social ills? It seemed rather sadistic for this loving, father-like God of the New Testament. Thus, free will was assumed to exist and that pronouncement opened the floodgates for a variety of economic rules to suddenly be lifted.

If man had free will, then it was of his own volition that he acquired property, was it not? It was of his own volition and labour that he improved the earth and formed inventions for his own enjoyment. Property wasn't distributed through God, but by man and so it is must be natural. Lest this idea get out of hand, of course, Thomas Aquinas suggested a synthesis with the ideas of ancient Greek economic and political thought with Christian morality.

Yes, property was now accepted, but man as an ethical beast, must treat with morality and justice. Thus, property would be defended only to a certain point. Yes, it was wrong was to steal, but it was also wrong for one to starve to death. Thus, theft to avoid starvation would be morally acceptable.

Charity was an obligation, and inequality should never become so great as to be the cause of another's misery. Buyers and sellers also were morally required not to exploit one another, but to find a mutually satisfactory price determined not but the scarcity of supply or the abundance of demand, but on a price that would allow both parties to benefit to the maximum. Usury, of course, was still strictly banned, for it was selling something for nothing in Aquinas' eyes and thus purely exploiting the debtor.

Times were changing, however, and the scholastic economic school which Aquinas founded allowed for capital investments to be paid with interest. Investors were baring risk, after all and should be duly compensated. Perhaps because so many moneylenders were Jews at the time (because of the social stigma attached to the trade) Aquinas never bothered to see the risk that bankers undertook in extending lines of credit, but the attitude shift was still extremely important. As Machiavelli would illustrate some time later, fortune was controlled by God, but it could be managed by men. The incorporation of risk into the economic paradigm was a clear indication that mankind was accepting its role as the subject of the universe, rather than simply the object of their environment and their set of angry deities.

Although the Arab dhows used to connect a variety of prosperous trade ports across the Indian Oceans were specifically designed to the be risk averse (small, agile craft that carried minute amount of the most proportionally valuable cargo), the more primitive European naval industry gave rise to much commercial shipping strategies. Given that the fall of the Mongol Empire was now making land travel over the "Silk Road" increasingly expensive and dangerous, European demand for oriental goods drove huge investment into maritime shipping to obtain them. Thus, whereas the Arabs merchants could survive on small endowments and "networks of trust" to fund their trading voyages, Europeans required royal patronage or, sin of all sins, usury. The crown being somewhat of a spendthrift in the early modern period, this natural gave way to usury.

The rise of the Mongol Empire had killed millions upon millions of people, and the diseases that the Mongol soldiers spread (most notably the Black Death), killed hundreds of millions more, and the two events stacked together had a way of rapidly forcing the miracle of natural selection on a society that had been more or less stagnating for nearly a thousand years. Eurasia was left with only its most genetically superior citizens, and this tree, now fully pruned, was ripe to blossom.

The sixteenth century saw a massive increase in global aggregate demand, and the only sustained population boom that had been recorded in written history. The rapid economic expansion brought with a fervour to increase production by searching for new lands to cultivate and new resources to plunder. The sudden bounce-back of the population necessitated finding new dumping grounds to throw away the excess proletarians. Both of these motives, made the discovery and subsequent colonialization of the Americas almost inevitable. There is, after all, no problem man cannot solve when he sees some profit in it.

The building of overseas colonies was an expensive affair, and being that the European governments of the time always transferred financial liabilities to third parties whenever possible, an enormous amount of commerce and military power became under control of East India Companies and various other corporate entities. With this slow seizure of power, these nationalist merchants began directing government policy, and so we see the first instances of mercantilism popping up in official documents of the time.

Europe of the early modern period, from the fifteenth to the eighteenth century, was not a particularly cohesive, amenable place. The division between Catholics and Protestants, between colonisers and colonised, and between merchants and privateers created an era of nearly perpetual warfare, culminating in the Thirty Years War, the most brutal conflict that the continent had ever seen, nearly simultaneously with the English Civil Wars, which helped to thrust Britain onto the world stage. In an era before the invention of large standing armies, the overtly hawkish foreign policy of the major European powers at this time demanded that kings keep a massive stockpile of gold and silver specie on hand to raise an army to defend the nation whenever it might be required.

Constant war brings a need for a strong, central government with an enormous supply of cash. This was the ultimate goal of the mercantilists, and every tenet of their economic school exudes this preoccupation with the economy as an apparatus of the state to ultimately lead to larger national coffers and greater imperial dominance. This willingness to put the interest of the state and the accumulation of specie above all other concerns is certainly evident in the writings of two of the most famous mercantilists: Thomas Mun and Philipp Wilhelm von Hornick.

Mun advocated for the state to regulate all foreign trade to the purpose of maintaining enormous trade imbalances that saw raw goods flood into England and only processed goods leave it. He calls for a substantial state investment in the economy to promote local industry by saying, "Lastly, in all things we must endeavour to make the most we can of our own, whether it be Natural or Artificial." Although Mun would not have been aware of the communists who would nearly take the world by storm centuries later, his rhetoric is eerily similar to that used by Stalin in his push to industrialize Russia: emphasizing a strong state that empowers and modernizes the domestic economy at all costs.

Von Hornick was much more concerned with the accumulation of specie than Mun, and he advised his government to ensure that "gold and silver once in the country are under no circumstances to be taken out for any purpose" and that "[Foreign commodities] should be obtained not for gold or silver, but in exchange for other domestic wares." This, too, would necessitate a large and interventionist state trade policy to maintain. Merchants, after all, are liable to take whatever money they can without any concern for state security whatsoever. That would tend to explain why "Many mercantilists feared the consequences of too much freedom [and so] relied on the state to plan and control economic life."

Although the mercantilists' preoccupation with metal specie was understandable given the historical context, it comes off as rather amateurish today. Currency, after all, is not finite and so the paranoia of the mercantilists that if one nation gains in reserves all the others must lose is somewhat ludicrous. The introduction of fiat money to replace specie which was already occurring in the East easily puts a stop to that.

As more modern economists pointed out, increasing the money supply only deflates the value of each individual unit of currency anyway, something true with both commodity and fiat money. The colonies were valuable much more for their expansion of the European nations' productive power, not for their ability to inflate the money supply. Mexican silver certainly enriched the coffers of the Spanish crown, but that had much more to do with trading the silver as a commodity to the Mughals and Ming Chinese. Increased silver currency made their military might no more or less effective, and within a few hundred years they were regulated to the mere chess pieces of larger European players.

The works of Mun show a much more enlightened path, however, and one that would come to dictate much of human history. It is clear that the oppression of those who own natural resources by those who own the means of manufacturing those resources is a constant truth of our collective past.

When prices for raw materials were high, the manufacturers could pass on the costs to the consumers. When prices were low, the manufactures could save the costs to the detriment of the primary producers. Thus, no matter what economic conditions prevailed in the market, thus who imported raw materials and exported finished goods always prospered to a greater extent than those who did the opposite. The stories of resource peripheries becoming manufacturing cores has very little to do with primary industries rising their people from poverty, and more about the market slowly evolving and changing the definition of "primary" and "secondary" good.

Imagine there are two nations: Country A and Country B. Country A grows wheat and manufactures guns. Country B has large natural reserves of iron and bakes bread. In times of famine, Country B will economically prosper at the cost of Country A. In times of war, Country A will dominate Country B. Both nations have primary and secondary goods, but who is the core and who is centre is determined by which is more favoured.

The evolution of Europe into a metropole and much of the rest of the world into a colony was driven by market conditions and conscious policy in the regards of economic nationalist. On a micro scale, the case of England is particularly interesting where as early as the Tudors, kings were worried about the trade imbalance between the export of English wool and import of finished cloth from the Low Countries. The state made comparatively large investments and invested in semi-protectionist measures to create a domestic wool manufacturing industry to some degree of success. Many other European nations made similar investments continuing into the present day. On a macro scale, the colonization of the Americas created a much cheaper and abundant source of raw materials than could be had in Europe, leading to investment in primary industries in the colonies rather than the metropole.

The recent depopulation caused by the Black Death permanently increased wages, increasing the value of labour-saving technologies. That didn't stimulate manufacturing overnight, however, and European powers also made a habit of undermining oriental secondary industries by flooding the market with cheap products or, as was the case in the Indian calico sector where the English simply burned their equipment and broke the workers' fingers, literally destroying it. This made manufacturing the obvious choice of investment in Europe and primary industries the clear successor in almost everywhere else.

So, although the "division of labour" as Adam Smith called it was not an entirely natural phenomenon, it was clearly changing the face of the earth by his time, in the third great shift of human productive capacity: the Industrial Revolution. Now, if we are to believe the likes of Josef Schumpeter (and we have no reason not to), Smith never really had an original idea in all his life, and his Theory of Moral Sentiments was more or less stolen from David Hume, and his Wealth of Nations was almost certainly a melange of the morals of Bernard Mandeville, the economics of a variety of French physiocrats and a synthesis of the espoused rights of Rousseau and Voltaire. Even so, he was a fairly brilliant thief and for the sake of brevity, it would make more sense to comment on the works of one famed man than on his dozens of forgotten forebears.

Whereas the mercantilists viewed a world in which the wealth of the state could only be increased through the careful watch of the crown, Smith understood human nature to be a tool which, left to its own devices, would create the best outcome for all. It was not through the hoarding of gold coins or the colonial enterprises of the past that humanity would enrich itself, it was through the division of labour.

Through specialization and invention, the workforce would gradually become more efficient, and society would become wealthier. This process of labour specialization would naturally begin with civilization itself and as the market and population expanded, so too would the division of labour as "The separation of different trades and employments from one another seems to have taken place in consequence of this advantage." Thus, this great advance towards wealth had been undertaken without the conscious effort of any being, and this left government with an extremely reduced role in the economy.

Before publishing his Wealth of Nations, Smith theorized about the "invisible hand" in Theory of Moral Sentiments in which he claimed that the self-interested pursuits in wealth accumulation of the nouveaux riche would benefit society overall, to the point where humanity will be just as ameliorated as if "the earth [had] been divided into equal portions among all its inhabitants." In Wealth of Nations, Smith refines this theory to describe a form of implicit regulation whereby the balance between supply and demand keeps all commodities at their natural price and awards profits to the most meritorious recipients.

With this market system in place, the role of government becomes restricted to its purely regalian functions. Smith limited the proper place of government to only three instances: defence, law and order and public education (or other unprofitable but strategically vital services). The "free market" was deemed the superior regulator of the economy for as Smith noted in his Moral Sentiments, "The man of system...is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it." Unlike the state, the invisible hand was calculating and dispassionate, supposedly working towards the good of all.

For the mercantilists, money, not real goods was commonly equated to wealth. This narrow definition required government intervention so that the wealth derived by individuals fit the specific parameters mercantilists had created for enriching the state. However, just as the CEOs of the present use corporate buyback strategies to artificially inflate shareholder price and their own bonus pay, any economic policy that is concerned only with nominal and not real assets can have negative long-term impacts. Smith countered the mercantilists' fiscally irresponsible policies with a definition of wealth that is focussed on real values, primarily labour. He wrote, "The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes", making it clear that a nation's wealth is measured in its raw production, not in its relative stock of metal specie.

This is certainly an excellent way to defeat Smith's main enemies, the mercantilists still lurking in the pricy council office and the backrooms of Parliament, but there are major concerns with his assessment of value. For Smith, something's value was determined the amount of labour that could be commanded by it. For instance, if it took me three hours to catch a beaver in the wild, I'd be willing to pay up to three hours' worth of real value to buy a beaver from someone else. This seems perfectly fine, until we take into the account the distribution of the three constituent pieces of the capitalist economy: rent, profit and wages.

Say I catch three beavers in nine hours, giving each an absolute labour cost of three hours. Then the manager of the estate on which I was hunting asks for one of the beavers as rent. Then I keep the other as wages for myself and sell the other for a profit. Now, Smith would say the value of each beaver is nine hours, because in this distribution model a person would have to forego nine hours of labour to get the same results.

This might not seem like a problem, but consider the fact that if a person was able to catch their own beaver in the wild for three hours of labour, there's a significant difference in value here. More importantly, that difference in value is not caused by the product itself or the environmental conditions (it's still a beaver pelt and still in a wooded area), but in the distribution model. Thus, Smith wasn't really measuring the value of goods, but the added value of the men who created and sold them.

This is an error that David Ricardo attempted to rectify, and the theory of value he derived is the one I will (more or less) use in my own economic system. For Ricardo, the value of a commodity was inherent in the labour used to produce it, not in the labour it could command. Ricardo writes in his Principles of Political Economy and Taxation, "The value of a commodity...depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour." Thus, this theory of value would be independent from the distribution model, and although price could fluctuate with the method of distribution, real value would not. (The Chronimist theory of value essentially equalizes that of Ricardo and of Smith. Because capital is nationalized and rent is made impractical through easy access to loanable funds and laws against private investment, the distribution model no longer affects the command theory of value's price. It is determined strictly by labour costs. Yes, profits are involved as well, but those don't affect the chronimistic value as I will explain in the first chapter.)

There were problems associated with Ricardo's theorems, however. Although Ricardo did allow capital to find its way into the theory of real value (because capital determines how labour is used and there is labour embodied in the capital itself), there were huge differences between living and nonliving capital.

Human labour directly embodied its value into a commodity. If it takes an hour to find the clay and mold a pot, the pot is worth an hour's labour, for example. However, nonliving capital distributes an average rate of labour to its commodities over time. If a machine worth ten thousand hours of labour could produce ten thousand pots over its lifetime, each pot would also be worth an hour. However, if wages went up or down (say it now takes two hours to refine this pottery), the true value of labour intensive commodities would fluctuate. Nonliving capital intensive commodities would still have the same value, and thus the same paradox exists as with Smith. Two of the same products will have different values, only this time because of production methods instead of distribution models. (My economic system strives to fix that problem, and I'll address it in further detail in the following chapters. Essentially, it separates the good produced using labour intensive methods from the good using automated methods into two separates product types. The variable value of labour will make the labour-intensive product cost more, which is what happens in the real world. Ricardo didn't understand the novelty of having products made by hand, and strived to produce a system that equalized the cost of hand-made and machine made products. They aren't the same product, however, which is why we pay ten times the amount for a hand-painted vase as we do for a manufactured one.)

During the end of the eighteenth century and the beginning of the nineteenth century – the era in which Ricardo was writing – Europe underwent its first real prolonged population boom. Although the exact causes of such will debated among historians for some time, there is little argument that colonialism's spread of different agricultural goods such as potatoes, coffee, sugar, corn, peppers and others to the climates where they would produce the maximum quantity significantly assisted this sustained population growth.

These sudden pressures to the agricultural sector and the subsequent lowering of wages, but raising of food prices pushed millions into poverty and made it painfully obvious that the current socioeconomic regime could not be sustained for long. Many debates arose in economic circles over the future of the Western World, and I'll comment on some of the more important ones. The first was between the aforementioned David Ricardo and Richard Malthus concerning which class would (and morally should) trump the other: the land-owning aristocrats or the factory-managing capitalists.

For Ricardo, the writing was on the wall for capitalism the instant populations began to increase. Seeing labour, as he did, as a commodity to itself, the value of labour (wages) would be equal to labour needed to sustain and reproduce it. This gave rise to the concept of subsistence wages. So long as the population increased, there would be greater demand for food, increasing the price of agricultural produce and thus the rent of the aristocrats, and decreasing the profits of capitalists as higher food prices forced higher wages. Eventually, the scarcity of cultivatable land would make rent so high that the aristocracy took complete control of the state and capitalism itself collapsed from lack of profits. This is the phenomenon I will refer to in later chapters as the "Ricardian scarcity principle." Although it was tempered by the fact that larger populations drove down wages by competition, and lower wages would theoretically decrease the workers' ability to reproduce, wages simply couldn't go below bare subsistence levels because it would provide no incentive to work. Thus, as sustenance became more expensive, wages must rise and profits, being inversely related, must fall.

Thomas Malthus didn't ever bring any real evidence to dispute this picture, but whereas Ricardo had suggested that the state intervene on behalf of the capitalists, Malthus suggested progressing this coup d'état of the aristocracy even further. A rebel of his radical liberal upbringing, Malthus believed that it was impossible to improve the human condition on earth. Simply put, he understood that every innovation man had ever come across expanded his ability to reproduce. Thus, the new benefits were shared among a larger number of people, bringing humanity as an aggregate back to the same level of happiness it had experienced before. However, when population began to boom on its own, as was happening in his time, humanity truly suffered, for we would be required to cull our numbers with war and disease or by methods even more nefarious than those. Thus, it made sense to follow Ricardo's logic where it led and do nothing to rectify it.

There was a fixed amount of land suitable for cultivation. The rent of any spot of land was marginally determined by the difficulty of production on the least profitable piece of currently cultivated space (because rent would be charged at rate where all owners could make a profit). As population increased, less profitable lands would be cultivated, causing the rent to continue to increase and providing those with the best farmlands higher and higher rents. This rent would be money that wouldn't end up in the capitalist's hand, so it couldn't go to wages which would only encourage his workers to fornicate more and expand the population. The higher the rent of the aristocrat then, the less money left over to promote population and the evils which attended it. Again, capitalism was bound to fall, but the government should fully intend towards its demise.

Both of these thinkers forget two essential elements, however. First, new technology can improve the profitability of existing lands without increasing rents; and second, larger populations expand the aggregate demand for more than just food. They also can purchase consumer goods which expand the markets into which capitalists can invest. So, yes, they must pay higher wages, but capitalists also can sell more products.

Of course, during the time of Malthus and Ricardo, there was no such thing as a consumer economy nor had there been any substantial changes to agricultural practices for thousands of years, so they can be forgiven that oversight. The important element is that they both discuss the stationary state: a zero profit scenario which plays a crucial role in the chronimist story. A central goal of my system will be to create this stationary state without surrendering absolute power to either the owners of labour, rent or wages, of whom both Malthus and Ricardo played unapologetic favourites.

Later economic scholars like John Stuart Mill would argue that this stationary state was not such a terrible idea, and would return to the ideas of Aristotle once again, saying that all this accumulation (i.e. capitalism) perhaps was not a means to its own end, but a vehicle of progression between the feudalism of the past and the socialism of the future. Once there was no more profit, and no more need for profit, humanity would live in a paradise of virtue and individual liberty where all needs were met by economic processes so efficient they had no cost at all. This is extremely similar to the main goal of my economic system, although it has a much less humanitarian method of achieving it.

There was not, however, total unanimity that the stationary state would ever come to pass. As Jean Baptiste Say pointed out, it was ludicrous to think that profits would ever naturally fall. One man's spending was another's income, after all, and everything that was gained by one would ultimately be shared by the others. It mattered not how much income inequality there existed in the economy, wealth would naturally trickle down to everyone in the distribution process. New production would forge its own markets, and supply would always create demand.

Thus, it was impossible to have a "glut" or any kind of business cycle. Profit would always exist because even if profits were lowered, they would given to someone else, who would spend it creating more profits. Keynes thoroughly disproved this notion, so I wouldn't bother critiquing it now, only to say that some theorists still fundamentally spout this two-dimensional, invalid's view of economics to this day and it is much to their detriment and ours.

Although economic liberalism espoused values of liberty and equality of opportunity, and most of their models for the supply and demand of labour required the free agency of workers, a surprising number of colonies and former colonies continued using slavery continuously into the nineteenth century, and then used slavery under various pseudonyms and euphemisms into the twentieth. For large government projects, slavery was undoubtedly cheaper than wage labour, no matter what the classical economists said. If given free agency, the worker might choose to work in domestic industries and raise the price of labour. That's why colonial governments were infamous for building infrastructure such as railroads with "pressed" labourers who often used their work as a form of taxation. In order to suit the will of the state, it was better to redirect workers than to allow the market to allocate resources in a manner that might be inconsistent with government policy.

In the early days of the plantation economy, small plantations worked with a similar mentality. Slavery was economically necessary to force the indigenous populations out of self-sustaining farms into export oriented plantations and mining operations. However, once the self-sufficient economy had been thoroughly destroyed and efficient machinery had been brought to the colonies, wages were so low that it made no sense not to release the slaves.

The American South was one of the last outposts of slavery because it represented the antithesis of this historical pattern: slow to industrialize and with a comparatively small black population relative to the whites, keeping potential wages high. The end of slavery and the beginning of the wage-labour economy had very little to do with the liberal values of the Enlightenment and much more to do with the economic conditions of the colonies. With this done, though, and the swift death granted to mercantilism, economic theories which had once been little more than abstractions started to have real consequences all of over the world.

For most, that consequence was extreme poverty. Slave owners and feudal lords at least had some interest in keeping their workers fed, but that was not an obligation which the capitalists seemed to share. Although wages were theoretically supposed to sustain populations in the long-run, short-term fluctuations intended to decrease the workers' ability to reproduce caused the starvation and urban squalor for which the Industrial Revolution is so well known.

In response, another series of economic debates began to rage, but this time on the absolute opposite of the political spectrum. This new battle was for the soul of the left, a clash between the dreamers of utopian socialism and the revolutionaries of scientific socialism.

The twin concepts of liberty and rationalism were the underpinnings of the classical political economy, for it justified the remarkable social stratification that was undertaken during the emergence of capitalism. Workers were not forced by the whip to enter factories of disgustingly poor conditions, nor where the bourgeoisie enslaving populations to their will. The success of one man and the failure of another was determined by their actual value to society and the workings of the natural markets. Thus, in many ways reminiscent of Aristotle, some people were simply born to be oppressed, others to be the oppressors. Some humans were innately more intelligent, studious or hard-working than others, and each class deserved their lot in life. Any shift to this structure would be unjust, equating social spending with tyranny and public education to state brainwashing.

Robert Owen declared this outlook to be nothing more than a load of hogwash used to legitimize an unjustifiable system of inequality. Although his work is far more secular in tone than that of Saint Augustine's, it builds on a similar concept: that man has no free will. Only, it is not God directing the decisions of mankind; it is their environment. A person raised in wealth will perpetuate wealth, for his status grants him the education and ambitions necessary to do so. A person raised in poverty can never hope to escape it for they lack the skills needed to climb the social ladder. The classes acted, spoke, studied and thought differently, making it impossible to ever reconcile a system of perfect meritocracy to one of inherited social hierarchy.

The way to rectify this was to provide workers with the necessities of upward social momentum. Modelling after the phalanstères of Charles Fourier (although minus the monthly orgies and total communal property), Robert Owen established an efficient factory village in New Lanark where labourers were given higher than equilibrium wages to encourage better work ethic, their families were housed in a centrally planned affordable housing model and their children were given basic education and trade skills. Managers also developed a colour-coding model to inform workers whether or not they were above or below average efficiency, making the betterment of one's self a personal goal, instead of a life's necessity.

In this context, with everything owned by Owen, himself, the system worked quite affably. When he tried to establish new communities in America where all property was communally owned and the workers were forced to rely on each other, the experiment failed miserably. One only needs to pick up any text by Ayn Rand to discover why. (The woman could be stark raving mad at times, but she lived through the most violent and totalitarian socialism has to offer first-hard, and can explain better than anyone else why it inevitably fails.)

The important element to keep from the utopian socialists, however, is not their end goal of total, non-hierarchical communism, but their interim goals of public education, affordable housing and some degree medical care. Chronimism comes to the same conclusion in that in order to build perfect equality of opportunity, all people need to have equal starting positions or as close to equal as possible. I will develop this concept further in later chapters.

Scientific socialism never denied that mankind had free will, and that made Karl Marx's story of worker exploitation and commodity fetishism all the more tragic. For Marx, capitalism wasn't hypocritical or willfully ignorant in proclaiming the virtues of liberty, equality and freedom of property. Those ideals, in the perfect capitalist system, were real and embedded in liberal economics. They also made the exploitation of labour (and the consequent fall of capitalism) all the more inescapable.

Marx assumes that the free market will operate in accordance with the Ricardian theory of value, and thus the "the value of labour-power is determined, as in the case of every other commodity, by the labour-time necessary for the production." Therefore, wages would fluctuate to the point where they equalled the amount needed to feed the working population and allow them to reproduce. Thus, if it took five hours of labour to keep one's stomach full enough to labour for the day and tend to their family in the evening, a day's wages would be the equivalent of five hours of labour-production. This sort of subsistence wage system might seem like the same deal granted by the lords in their fiefdoms, except for one crucial difference. It was now possible to produce more labour than was received in one's wages. This created the spectre of Marx's "surplus value".

Consider the example already articulated above, where the day's real wages for menial labour find equilibrium at five hours. All the natural laws of supply and demand and theories of value have dictated it be so, and since those laws apply to everyone equally, this wage economics agrees wholeheartedly with liberal philosophy. However, the average worker is easily capable of providing much more than five hours of work in any given day. Thus, there became a quantifiable difference between the value workers earned in wages and the value their labour produced, a surplus which the capitalists were able to absorb in profit.

This profit is what becomes the primary agent of class exploitation. At first, the effects seem relatively innocent and almost entirely unavoidable. The law of this new liberal society is intended to defend property rights and because the bourgeoisie have more property to protect, justice naturally tilts in their favour. But Marx, in keeping with the classical political economy, believed profits to be a fleeting thing, a temporary anomaly that would eventually cease to exist, and not sometime in the distant future, but just over the horizon.

For Marx saw an unyielding paradox in the capitalist system: that wealth was generated by labour, but all the technical innovations of the new system seemed to be moving towards a world of machines. This drive to industrialize, far from making society richer, would slowly seek to starve it, as machines ate away at the surplus value of the bourgeoisie and unemployed countless hordes of proletarians. Smaller, less profitable, industrializing firms would be swallowed up in a wave of consolidations, further amalgamating the wealth of society into the hands of a few lucky individuals and allowing inequality to spiral out of control. These few, most elite members of the upper classes would exert such tremendous influence onto the system of government that the entire state would become focussed to their every need, furthering inequality even more.

Society would find itself trapped by interests of this tiny oligarchy. For if they failed to grow their profits, the economy would collapse into unending depression and bring about a new Dark Age, but if the state continued to divert more resources to enriching the bourgeoisie, the entirety of humanity would starve itself to death. The only solution, therefore, was violent and brutal class warfare. As Marx put it, "What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable."

Despite the fact that surplus value would inevitability lead to violent revolution or global starvation, neither of which being particularly pleasant for the proletariat, these profits were not ill-gotten gains according to the values of liberal democracy. Marx makes this extremely clear when he says, "in order that a man may be able to sell commodities other than labour-power, he must...have the means of production," i.e. be a member of the bourgeoisie. The workers' labour would be useless, after all, had the capitalist not created some overarching formula of raw materials, infrastructure and marketing to utilize it. Because the common worker had no idea how his labour contributed to the overall product, it was impossible to say that the value he created through his labour properly belonged to him. So, instead of Locke's formula for "the work of [one's] hand" being one's property, the work of one's mind became their property. The capitalist system had alienated the workers from the commodities they were producing and so profits were technically not being stolen from them. Instead, they were robbed of their humanity, as workers became objectified, little more than cogs in an increasingly complicated machine.

This alienation allowed capitalists and workers to meet as equals in sphere of liberal democracy. They both had rights to property – to own their capital and labour power – that were enforced by the state. The law protected the capital of bourgeoisie and outlawed the practice of slavery and serfdom, for example. The worker was paid the exact price for which their labour power, as a commodity, was worth: the amount of labour needed to produce it. The proletarian would add his labour power to the pool of resources at the disposal of the capitalist, and he would have no ownership over the creation which his labour helped produce. After all, a resource cannot own the finished product. The worker has no right to the product as the strip of leather has no right to the shoe. The cobbler owns the shoe for it his mind that made it, even if he chooses to direct others' hand in its making. Every law of economics and liberalism gave the worker only the right to bare subsistence and the capitalist the right to the absolute profit. Such was the nature of liberty.

Marginalists like Marshall would attempt to solve this philosophical quandary inherent in capitalism by slightly adjusting the theory of value, and I devote an entire chapter near the end of this volume to attempting to find my own solution within chronimism as well as disprove the synthesis put forward by Marshall. In the following chapter, I'll voice my prime objections with Marx that don't relate to his theory of surplus value. Those are his concepts that the objectification of the worker and the larger process of commodity fetishism is a negative force in humanity to be avoided. I argue much the opposite, and chronimism can't truly be understood or implemented without a thorough repudiation of Marx's belief on the matter. For now, just know that the ideas of Marx, his contemporaries, his critics and my responses to all three will form a significant part of the development of chronimistic theory.

Much of the issues Marx highlighted still exist to this day, and his prophecies on how they would resolve themselves, if not accurate in their totality, are beginning to manifest in a rather striking fashion. Income and wealth inequality, while dipping significantly during the past century, is nearing the levels Marx experienced during his writing. Each sizeable market correction after the 1970's has caused a consolidation into ever larger firms and that trend has made each consecutive global recession larger in terms of number of jobs and amount of wealth suddenly lost, culminating in the Great Recession of 2008.

While anecdotal evidence in my native Alberta has proven that shocks to oil prices have led to that industry becoming ever more concentrated, we know for a quantifiable fact that the 2008 credit crisis did the same thing to the largest U.S. banks. The five largest banks in America control such immense and diverse swathes of the American economy that if any one of them were to fail, the entire U.S. economy and the global economy which depends on it would collapse. It might not be happening for the reasons Marx suggested (i.e. substituting labour with machinery), but what is clear is that in recent decades wealth has become increasingly concentrated, and that concentration has been dubious at best and will prove to be disastrous at worst.

Because the utopian socialists described the ideal society without really explaining how to achieve it and Marx described the ways the current society would fall without really articulating what the ideal should be, it was only natural to synthesize these streams of thought into one. The workers of the world would unite and forge a new paradise of collective ownership over the earth and love of mankind. Although this served to recruit a number of revolutionaries to this new "communist" cause, it failed to reconcile the irreconcilable notions of the utopian and the scientific socialists.

Since Marx believed that class was defined simply by one's relationship to the means of production, the problems of the proletariat could be solved by merely collectivizing those means of production. The minds of the workers would direct the hands of the works, and with nothing more than the killing of all the bourgeoisie (or their surrender to the ranks of the working class) the alienation of labour would be solved.

Men would still toil, for such was necessary, but now they'd be getting exactly what they were worth. And men, naturally loving one another, would do all that they could to ensure that all needs were met by providing the maximum of their skills. It was ultimately the same rationale as supported capitalism: one would work harder for greater reward. Only, in this case, the reward was not for one's self, but for all of humanity. Hence, "From each according to his ability, to each according to his needs."

The inherent problem this creates with utopian socialism is that it needs a pre-existing social state to bring itself into being. A central planner like Fourier or factory owner like Owen had to create the perfect community through years of hard work and delicate orchestration. Fourier spent unnatural amounts of time selecting the "perfect" individuals to create his phalanstère in pursuit of maximizing social harmony and productivity. It took Owen a great deal of social experimentation to develop the best incentives and programs to provide for his utopian factory project in New Lanark. The utopia could not possibly be made by a single bloody revolution. It needed intricate planning and natural evolution. It needed all of humanity to slowly find itself in these perfectly attuned communities, not just suddenly swept into the new world.

Thus, workers began pursuing the euphoria and paradise of the utopia with the violent tools of the scientists without really understanding the underlying dynamics of their two opposing socialisms. Perhaps that would explain why workers were willing to back socialist leaders who became cruel and inhumane dictators once the revolution had occurred. The words of Marx really didn't offer anything but assurances that revolution was inevitable. After that, the next world probably wouldn't offer all it had cracked up to be. The works of other communists spoke about the future very differently, and for many, it was a message too enticing to ignore.

Had this new socialist message arrived during the time of Louis XVI and his generation of often hilariously ineffective leadership, perhaps the world would have become swathed in communist revolution. Unfortunately for the burgeoning socialists, the income inequality necessary to create the urge to revolt could only be a consequence of starvation or the rapid march of industrialization. Starvation was impossible to predict, and it served as the primary motivating factor for the greatest atrocities of the French Revolution, but it also resolved itself naturally. In order for the communist revolution to become a reality, it would need to attach itself to the more overt trend of industrialization.

Indeed the industrial revolution was forcing those who experienced it into abhorrently despicable poverty, but it was also providing more effective state tools to repress their starving populations. A few angry mobs had been enough to completely alter the shape of the French nation back in the late eighteenth century when the power of the crown was divided amongst a myriad special interests, deeply indebted and without any real force to defend itself (not counting its 8,000 generals, off course). That was not the case during the revolts of 1848 that spread all across the industrial centres of Europe. The military expansion of the Napoleonic era mixed with the industrial revolution of the intervening years had led to the creation of a consolidated state with nearly endless resources at its disposals. Disorganized bands of disgruntled workers erecting barricades of furniture were no match for modern armies and artillery fire.

Thus, the hopes of communism would be relegated to the arena of the starving peasants: the complete opposite of Marx's thesis. The Leninist and Maoist schools' attempt to merge Marx with the rural reality of Russia and China began to become totally divorced from the Marxist doctrine to the point where one can truly wonder if the world ever truly experienced communism at all. Communism, after all, was supposed to be the natural by-product of industrial capitalism, but with the exception of some close calls in Germany during and immediately after the First World War, the Western World totally evaded the heed of revolution. For the time being, Marx and his contemporaries had lost.

The working class of the industrialized world was forced to accept its inability to seize power and chose to exact its vengeance through its influence on the markets. They formed labour unions that stretched industrial sectors, nations and even continents. The workers of the world were finally uniting, realizing that they had nothing to lose but their chains. With their sheer force of numbers, the labour movement would exact the change it needed. It might seem strange then that the labour movement refused, for the most part, to add women to their numbers. Well, in that case, workers were just as susceptible as the capitalists were to greed.

The story of women re-entering the labour market in any significant way starts in China with the production of silk. The delicate, round-the-clock attention that the silk worms required necessitated bringing the work into the home, and women, being so domestically encaged in this agrarian society, played an enormous role in this silk economy. Thousands of households working together in an intricate supply and demand system produced a remarkable amount of this precious product, enough to export and create an insatiable demand all across Afro-Eurasia.

Silks were always too precious to meet demand, so the Indians began developing calicoes to serve the middling textile market. Importing techniques and technology from China, the Indians established their own much larger and more complex "put-out" system, whereby middlemen would purchase cotton threads and sell it housewives who would spin the thread into calicoes and sell their product back on a profit. There was minimal overhead and maximum results. Everyone was happy.

Everyone, that is, except for the impoverished Europeans who were still acquiring Chinese and Indian textiles at enormous mark-ups. This demanded that the Europeans do much the same as the Indians and create another, even lower-tier textile market. Using the same "put-out" system, women were put to work in this thriving cottage industries, weaving low quality textiles at the fastest rate their technology could allow them.

These women, whose output began to rival their husbands' meagre salaries, fed the paranoia of the menfolk who were seeing their share of the economy decrease with the influx of population and movement towards urbanization. They began to label these independent, working women "spinsters" and make obscene insinuations about their fertility and sociability. The term is still considered derogatory to this day.

Women's appetite for work was not to be whetted by slurs and male suspicions, however, and early factory owners began to favour women and children as workers because they could get away with paying them less. After all, if they didn't have to support a family, the subsistence value of their wages would be significantly lower since they only need to be paid enough to "produce" their labour, instead of "reproducing" it. This served to drastically reduce the wages of all workers in turn and caused remarkable social upheaval in a world that many saw as already changing much too fast.

Women working was perfectly logical. It could be accepted that the big, strong men were naturally suited to work the fields and fight the bloody wars, but one's sex didn't determine their ability to operate a machine or a pull a lever when instructed to do so. In time, men might be replaced altogether. Maybe Christine de Pizan and her "City of Ladies" had been right all along. Maybe husbands would one day be treated just as they were treating their wives now. Obviously, it had to be stopped. These men might be socialists, but seeing women go to work instead of them, that was simply too revolutionary.

And so, instead of bargaining for higher wages or better working conditions, can you guess which issue for which they went on strike, burned down factories and made public protests against first? Sometimes publicly, though more often through nefarious backroom dealing, the labour movement would use its numbers to force factory owners to send their female employees packing and hire back their better paid male counterparts. Equality, it seemed, was still an old boys' club.

To justify this illegitimate seizure of economic power, the labour movement was an instrumental part of manufacturing the narrative that women were naturally more nurturing than men and that children should stay at home with them until they had reached the age where they could go out and create their own families. The whole concept of childhood was entirely invented, and domestication and motherhood with it.

Whereas women and children had always been encouraged to work wherever they could, especially in a rural setting, the more urbanized, industrial societies encouraged weakness and dependency. The sentimentality was not entirely new, of course, but much of how we view the "patriarchy" and "traditional" attitudes towards women were not products of the Dark Ages as they seem to be, but creations of far more enlightened times.

Even if the ideas were not new, the degree to which they were enforced was. Women were still required to work to support their impoverished families, but to do so became social suicide. Daughters were liabilities instead of assets, and great dowries were paid to be rid of them (whereas marriages in most other societies required the opposite transfer of wealth: from the family of the groom to that of the bride). Wealthy women in ancient Rome were able to participate in gladiatorial matches and influenced the highest matters of state. High class women in Victorian England had to be careful which books they read, lest they "strain their mind too much".

Such blatant favouritism of one sex over another showed the worst side of socialism, but a very similar favouritism was about to display the equally worst of capitalism. Only, this playing of favourites had nothing to do with the at least somewhat quantifiable, biological differences between the sexes. Capitalism would be altered by the almost completely arbitrary distinctions between nations, distinctions which the proponents of free trade told the world to disregard and which the economic nationalists could never ignore. This brought about the third and final economic debate of the nineteenth century on which I will comment: between the economically supra- and ultranationalists.

The concept of free trade is a rather thorny one, and even today it bogs down much of the discussion over the risks and benefits of globalization. David Ricardo's logic of comparative advantage is sound. If every individual specializes in the production of the good in which they have the lowest relative opportunity cost and trades their excess supply with other individuals, consumption amongst individuals will rise with each person separately and as an aggregate.

Total free trade is more efficient and makes everyone better off in absolute terms. Two people each performing mediocrely at two separate tasks are far less productive than each specialized in his own individual task. That concept returns to Smith and his division of labour, the metric by which one measures the advance of civilization: the more divided the labour force, the more commodities could be produced and more people could be civilized.

And yet, even if trade and its resulting specializations made all of mankind wealthier in aggregate, there always seemed to be those particular members of society who wound up with the raw end of the deal. I don't mean this in the totally objective sense, as a fair deal would simply be the median of the parties' opportunity costs, and so technically all compacts made between players where they benefited equally from their comparative advantages would be considered perfectly fair. The trouble rises from the fact that not all comparative advantages come equal. That is the essence of the work of Friedrich List and the return of economic nationalists.

The American experience is extremely useful to illustrate some of List's main points, and considering he was exiled to the United States for a large portion of his adult life, it is one which informed many of his further works. The British, swamped with debts from the Seven Years' War and perpetual power shifts on the continent decided to cut its losses with the Thirteen Colonies. American independence was a private shame for the empire, but the costs of maintaining control over the colonies was becoming cumbersome, and the serendipitous publication of Smith's Wealth of Nations in 1776 confirmed as much. Military intervention was costly and ultimately would prove useless, because simple economics had doomed the Americans from the very beginning, or such was the British hope.

The relative immensity of the American colonies made land infinitely cheaper than in Britain, and thus the opportunity cost of agriculture was lower in North America than in Europe. Although in objective terms it might require the same investment to establish a factory or invent a new form of spinning cotton, that investment also had the potential to increase agricultural production more in the United States than in Britain. Thus, the United States would remain unindustrialized for all eternity because when the economy was in boom, capital would flee to the easy profits of the agricultural sector, and when the economy was in recession, there would be little capital left to invest in manufacturing. Contrarily, Britain could trade its manufactured goods for American primary ones and always guarantee a profit because they were adding value to the product.

This was the inherent flaw in the free-traders' logic. Each individual trade could be entirely fair, but over time, a trade imbalance between primary and secondary producers will create a core/periphery relationship.

The obvious proof of that was hidden in the laissez-faire capitalists' own theory of value. Because an industrialized society always adds a measurable amount of labour (or its equivalent through machines) to a product, its material addition is constant and will be compensated. The price of the finished product will only fluctuate with the cost of the materials or with changes to technology and labour. The value added will always be included in the final cost, no matter what it is. Thus, the workers always get their wages and the capitalists always get their profits.

This isn't so for the primary industry under the capitalist system. The cost of raw materials doesn't just reflect the cost of labour used to mine or farm them. It also imputes other phenomena like the climate which drastically affects crop yields or geographical changes which can unearth or bury important natural resources. This places a variable cost on primary goods which is paid back as rent. Although the farm workers still are paid constant wages like those in industrialized society, rent fluctuates with the produce of the land.

Capitalist profits can be volatile as well, leading to downturns in industrialized societies, but such fluctuations are caused by market corrections, and the society is generally made better for these downturns. It throws another log until the Darwinian fire, enriching the capitalist coals which lie beneath. Downturns in primary industry-centred societies lead only to the survival of the luckiest. The land-owner is paid rent by the product of his land, but because so much of that depends on geography and topography, he has no real control over those products. Punishing the poor capitalist and elevating the superior ones makes society more shrewd and productive. Doing the same with aristocrats and rentiers only needlessly increases social disparity.

The Americans, though they might love to promote the free market with all the cunning stealth of an inebriated vegan missionary with a megaphone in my world of the present, realized their predicament after their nation's founding and began to rectify it with some, dare I say, central planning. For, contrary to their more modern objective of liberalizing the world of trade, early American administrators did everything possible to keep foreign merchants out. High tariffs were introduced to discourage imports. Embargoes were frequently declared on European nations after the slightest of infractions against American honour. The state invested heavily in infrastructure and encouraged millions of immigrants to flock to its growing industrial centres in the North-east.

This policy reached its crux under the cynical hands of Abraham Lincoln who used the American Civil War to both destroy the agrarian economy of the South and jump-start the manufacturing industries of the North with massive war-time expenditure. Keeping European nations out of the Civil War wasn't just a diplomatic coup against the Confederacy, but it forced both sides to develop their industrial capacity for the war effort, something the revolutionaries had failed to do by siding with France.

Far from any humanitarian concern for the welfare of the slaves, Lincoln deliberately pursued an agenda of military-industrial expansion using the ethics of slavery as a pretense for war, not an end in itself. The South was a blight that forcibly chained the United States to another century, but that wasn't because of its workforce; it was due to its primary-resource based economy. The only way the South, both nearly sub-tropical and under-populated, would ever be able to rise from the chains of agrarianism was if its entire economy was burned to a cinder, and central economic planners from the North built it back up from scratch.

Lincoln gave free reign to General Sherman to do the former and provided the trappings of power necessary to allow General Grant to accomplish the latter. The Reconstruction saw the South become the fuel of the North's economic engine. Coupled with huge state investment in telegraph cables and railroads, the industry that the conquerors had built and the conquerors fed was ready to worm its way across the stretch of the North American continent.

Other states followed the American example, shunning free trade and being no worse for the wear. Japan used high-tariffs and extreme government investment and corporate monopolization first to industrialize in the late nineteenth century and did the same once again to rebuild after the destruction of World War II. This was based almost entirely from the Prussian model, which had undergone its own transformation earlier using similar techniques, and gone to handily defeat the French in the Franco-Prussian war and unite all of Germany into the greatest power on the continent. Again, all of that was done running contrary to the advice of free trade advocates. China, on the other hand, which had been forced by the European powers and an officially ambivalent America to pursue an "open door policy" and forcibly trade with its imperial bullies was left embittered, divided, unmodernised and destitute.

The great nations of the West had discovered the cheaper, more effective method of colonialism: one whereby a nation can be undercut and subverted through the use of economics without ever requiring a single soldier stepping foot on foreign soil. The simplest, most attractive form of imperialism was to devastate the local economy through uninterrupted access to the global market, where competition would wipe away all independent industries and force the local population to adhere to the teat of empire for its very survival.

Britain once was forced to occupy more than a quarter of the Earth's surface to maintain control. Now, even in the absence of that vast and expensive military power, its vassals pay tribute through massive imports of raw materials that make that tiny, resource-poor nation one of the richest in the world. The old colonies are forced to accept the same socio-economic structure that existed during occupation for without it, the nation would surely starve.

The Western strategy of using economic nationalism to foster industry at home and free trade to destroy manufacturing abroad had certain, clearly-defined limits, however. It was economically irrational for some nations, like the United States for instance, to industrialize, and their emergence as manufacturing powers saw a massive increase in industrial capacity that could not possibly be consumed. As such, near the end of the nineteenth century, Europe saw a major economic depression that lasted nearly a generation. This was caused not by shortage, as all other economic disasters in history had been, but by excess capacity. Rapid industrialization and inventions such as electricity made the West too economically productive, and the consumer base wasn't able to expand fast enough to maintain the growth, causing widespread economic collapse.

The Europeans and Americans solved this problem by greatly expanding their empires. The invention of cheap and easily produced quinine made wholescale colonization of Africa possible and the most notable European powers divvied the continent amongst themselves during the Berlin Conference of 1885. The Americans made a very noble effort to criticize their fatherlands' imperialist ambitions, before promptly carving up the Spanish empire for itself, occupying Cuba, Panama, the Philippines and several other island nations whilst becoming one of the world's pre-eminent naval powers. All of this was done in an effort to reach more consumers, new masses to sell western produce and maintain the West's unsustainable growth.

Being there was only a finite amount of land and peoples to conquer, both the Europeans and Americans were unable to pursue this strategy indefinitely. After every nation had been subdued in some form or another and all the world was connected by trade (international trade as a percentage of world GDP was as crucial to the global economy in 1914 as it was in the globalized world of the 1990's), the West's ability to expand was effectively curtailed. Europe responded by destroying its excess capacity with the two largest wars ever witnessed by man and the horrors of starvation and genocide. The Americans took a very different approach, and that approach is the basis of the modern failure of capitalism today.

The problem facing the Americans was excess capacity, and the only solutions in the public discourse at the time seemed to be the current imperialist approach whereby the nation must conquer all others perpetually or some form of socialist revolution. Although socialism became an incredibly dangerous pathogen in Europe during the end of the First World War that toppled the Russian Empire (with tacit German assistance) and nearly overtook the German throne as well, it never had any real sway in the homogenously liberal America. Imperialism was also a most despised concept given the country's own founding myth and its supposed crusade against empire and for freedom. There were only so many pretenses for invasion the American leadership could justify and the isolationist population of the United States was decisively against intervention in European wars.

Thus, instead of finding methods, often through violence, of expanding production, the Americans chose to limit production instead. However, they did so while at the same dramatically increasing profits and stratifying wealth, which, although less destructive than two world wars, planted the seeds of future economic collapse into American society. The robber barons of the early nineteenth century may have spared the United States from the horrors of war and genocide, but it made future social strife inevitable.

The United States was uniquely suited for industrial consolidation given the prominence of the railroad industry. Being such a large nation, rail-roads were of greater importance and higher value to the economy than anywhere else in the world, encouraging massive investments that only a very small number of individuals could afford. The federal and state governments, then rather miserably corrupt, played into this by creating favourable contracts with crony capitalists that limited the number of the players and made competition economically unviable. Jay Gould and Cornelius Vanderbilt formed a virtual lock on the transcontinental shipping industry and used their control over the network to force other corporations into consolidating with their empires, making both men amongst the richest in the world.

Similar tactics were also used in other capital-heavy industries such as steel, telecommunications and, most crucially, oil. Cartels and outright monopolies emerged as players bid up the market entry price, bought out competitors and used tactics ranging from bribery to thuggery to quell competition and ensure political cooperation. By 1913, John D. Rockefeller's wealth alone counted for two percent of American GDP, and his fellow robber barons had also amassed fortunes worth hundreds of billions of dollars in today's currency. This was done as they strategically used their control of the industries in question to lower production, increase scarcity and thus raise enormous, unprecedented profits.

Thorstein Veblen was among the first to note this disconnect between profits and production. Veblen saw that the purpose of capital investment was to produce profit, not increase production. Although those two were often linked, the best method of accruing profit in the modern economy was by promoting scarcity, not by producing more than one's competition.

The economy might be very diverse, but the industrial world produced a long and elaborate supply chain, and each individual part was vital to the entire economic engine. A toothbrush needs plastic which needs oil which needs to travel by rail which needs steel etc., etc. To produce anything, one must produce everything. That could only give rise to two forces: monopolization or conglomeration, either robber barons highjack one area of the chain and squeeze the entire economy for profit or they vertically amalgamate to protect supply lines. The Gilded Age in America saw both.

Because the industrial world favoured monopolists who promote scarcity and conglomerates which foster cooperation instead of competition, Veblen assumed correctly that the picture of American capitalism would not be of tiny shops competing for customers as Adam Smith believed, but of behemoth corporations using their reach to annihilate competitors and monopolize access to resources. The more capital to which these companies had access, the more competitors it could buy up and resources it could control, and the more scarcity it could promote. Given that scarcity increased profit, and profit encourages more investment, scarcity would invite more capital. As such, investment and capitalism was working to singlehandedly destroy the real economy, not build it up. The robber barons were brilliant at reproducing profits; they were imbeciles at producing goods.

Of course, Veblen is more well-known for his treatises on the "conspicuous consumption" that grew during this time, lending the Gilded Age its name. It was there that Americans were able to reform their economy while the Europeans failed. Instead of focussing on foodstuffs and consumer merchandise that was really needed, the concentration of wealth promoted by the robber barons inspired an economy built on conspicuous consumption, mindless artifacts that displayed the trappings of wealth and power. The American economy has never really been able to escape from that trap, and it has produced a world where every inhabitant has a smart-phone but where one in ten do not have access to clean water. To avoid the horrors of overproduction, American capitalism created many new terrors of its own.

The massive expansion of capital caused by soaring profits in the Gilded Age gave American financiers the cash needed to fuel both sides of the First World War. Were it not for that conflict and the debt it drummed up for American banks, it is doubtful I would have any reason to mention the United States in this book at all. Before the war, it was a trivial regional power uncomfortable asserting itself on the world-stage. Afterwards, it was the greatest neo-colonial empire on the planet and the banker of Europe's greatest nations. The free flow of wealth across the Atlantic and the huge profits domestically allowed the Americans to make enormous loans and investments all over the world stimulating the boom of the Roaring Twenties, allowing debt to be overextended, industrial capacity to be overbuilt and creating the conditions for the largest economic depression in human history.

The Great Depression is the clearest example of capitalism's failure to adjust to short-term shocks in technology and environment. Take the invention of the tractor, for example. Low-interest loans allowed millions of farmers to make the capital investment in tractors. In an unconnected market, the increased demand for capital would increase capital's rent, meaning fewer farmers would be able to afford tractors at higher prices. This ensures that only those who can pay back the loans receive loans in the first place.

Because America's capital markets were global, however, interest rates stayed unsustainably low and too many tractors were purchased. The capital investment dramatically increased agricultural production, which lowered the price of that produce. However, the farmers were paying back their loans with profits from their agricultural sales, meaning each new tractor sold made it more difficult for the existing tractors to be paid. This encouraged farmers to develop unsustainable farming practices to increase production which exacerbated the problem. Eventually, the farmers were forced from their lands as the banks repossessed their properties which had now become worthless due to environmental damage. Millions were left without jobs or livelihood, depressing the economy and the banks were saddled with uncollectible debt, destroying capital wealth. It was a financial apocalypse brought on by the creation and extension of too much wealth not backed up by enough real economic product.

Opinions on how to resolve this economic crisis were diverse and often devastating when enacted. Economists were finally able to produce reasonably stable economic theorems to explain reality, but they still failed to grasp the psychology behind the numbers. With such raw, unfeeling calculus, the initial response to the Great Depression made perfect sense, but needlessly increased human suffering and capital destruction to a scale that had never been witnessed before.

Classical economics made it quite clear that voluntary unemployment was not possible. If there weren't enough jobs available, workers would compete against one another until wages were lowered, allowing businesses to afford more workers and thus ending the surplus of job seekers. Ergo, the unemployed were simply lazy, arrogant or some particularly loathsome combination of the two. This line of thinking led the American government to dramatically cut assistance and programming spending to balance its budget, essentially hoping that if it made the workforce more desperate, people would be put back to work.

This logic is, of course, complete bogus. Rather than returning to equilibrium, the economy fell into an easily avoidable death-spiral. Lower wages definitely do make workers more affordable, but they also make goods more unaffordable for workers, and if people are buying less then the employers who depend on consumer spending for their livelihood will not be able to afford a larger workforce no matter their wage. Classical economic wage theory might hold up when the consumption habits of the working classes had a negligible impact on the economy, but in the growing consumerist spirit of the twentieth century, workers couldn't be so easily neglected. Ford understood this, and gave his employees generous pay packages and a day off to shop. Western government failed to get the message and focussed on the wrong end of the economic process.

Depression-era governments also radically misunderstood how investments in the economy where made. Rather than attempting to limit interest rates to encourage businesses to borrow money and expand operations, western leaders adopted policies such as protectionist trade regimes that dramatically increased interest rates in the hopes it would encourage savers to put their money in the banks. According to the Say's law, each policy would be equally valid as saving is ultimately the source of investment, but such an elementary view of economics took no account of human emotions. With the banking structure almost in complete ruin, no rational citizen was going to invest their money, even if extremely high interest rates made it in their interest to do so. High interest rates then made it impossible for new businesses to form and so the percentage of the population that actually had access to enough cash to consider investing continued to decline as well.

It was the obsession with saving that also led to such incredible wealth concentration on the eve of the Depression. Governments saw no reason to curve the tremendous inequality of the 1920's because inequality increased savings and thus allowed more capital to be invested. In reality, inequality only made it more difficult for the populace to continue to increase their consumption level, creating a natural ceiling to economic growth. Increased wealth concentration continued to inflate the stock market and increase the value of luxury items, whereas the consumption of non-Veblen goods slowly began falling.

It is not the goal of government to ensure that the maximum amount of capital is invested, but that the maximum amount of goods are produced. These two are related, but not one in the same. As Keynes points out, higher capital investment leads to less capital efficiency. The marginal utility of capital falls with each additional unit of capital added; so higher savings and large capital pools might increase investment, but that investment will add less and less to overall production. Keynes' General Theory showed quite clearly that moderate changes in interest levels did not affect employment, wages or prices for this very reason.

Yes, in the long-run, high savings would probably stabilize the economy, but as Keynes so famously declared, "in the long-run, we'll all be dead." Economic down-turns don't require purely monetary solutions. They necessitated counter-cyclical fiscal stimuli: a brief burst of government investment meant to stabilize aggregate demand. The formula still rested on Say's law, but in the opposite way. Consumers willing to pay more would lead to industries springing up to serve them, rather than excess capital leading to consumers willing to buy the surplus supply. So long as the government created more growth than it spent, and reigned in the fiscal resources during the economic recovery, this option would be open forever and the economy would never collapse again.

Unfortunately for the world economy, Keynesian economics wasn't just used to dig Western Civilization out of the Great Depression. It also became the weapon of choice for all combatants in World War II. Tanks, airplanes, guns and even atomic bombs were indeed deadly in their own right, but nothing was as terrifying and destructive as the power of the state: countless millions of souls united in purpose and undying in determination. The French Revolutionaries had discovered it long ago after the first levée en masse in their wars with Austria, and the awesome power of the state had grown many thousands of times since then. Where once one country could bow another to its will, today, it could choose to annihilate the other without a second thought.

The power of the massive, mobilized state proved too enticing for the civilized world to avoid. Although cutting their military resources, the communists maintained an enormous and suffocating state apparatus, exercising near totalitarian control over its subjects. The capitalists allowed free business to flourish and grow, but the might of what Eisenhower coined the "military-industrial complex" never really diminished. The state remained in total war, but against new enemies, enemies that men like William Beveridge identified as "want, idleness, disease, ignorance and squalor."

Although taxation in the post-war period was much larger than it had been in the inter-war period, this expansion of the state was not really financed through the traditional levies and tributes the populace had come to expect. In large part, in fact, this growth was made possible by incredible amounts of sovereign debt, and here too Keynes showed his cleverness and his ultimate downfall.

On the surface, John Maynard Keynes seems like a genius, the man who invented the concept of free money. Once a loan is made after all, its term are fixed and the loan's amount is frozen in time. The value of the money loaned may change in the real world, but the exact number of borrowed funds is a historical fact. As such, all one has to do is ensure that inflation is higher than the interest rate, and one can borrow money indefinitely. They'll simply pay back a loan with money worth less than it was at its original borrowing.

For a normal individual, this isn't possible as the nominal inflation rate typically adds inflation. For a government, however, whose inherent stability allows it to borrow at the lowest rates possible, this posed no problem. Add this to the fact that government spending is one of the principle causes of inflation, and it meant astronomical government spending was in fact more sustainable than typical fiscal conservatism. It was a dream come true for liberals the world over, and every Western country used this sudden flooding of funds to build their own version of the welfare state with greater access to health care, universal education, enormous pensions and a generous social safety net.

This logic, of course, only works if money is an intangible thing, nothing more than numbers on a page to be endlessly tossed around by accountants and book clerks like hockey players battling over a tiny rubber disk: very entertaining, but ultimately pointless. Mankind is not so delusional as to fill millions of office towers, train billions of employees and pour uncountable litres of blood, sweat and tears into the pursuit of some imaginary thing. Money is real. It must be backed up by something, and eventually every house of cards will collapse onto the table on which it is based.

A government can only borrow money for free as long as the economy continues to grow and the economy can only continue to grow with a continual expansion of resources. Of course, the most important of those resources is capital, whose limit is never fixed, but the other is land, whose limit most certainly is. In a world ruled by the internal combustion engine, the main natural resource that either inspired or hindered growth was petroleum. So long as oil was cheap, the economy would endlessly expand. The instant costs rose, the economy began to contract.

Even without the OPEC embargo of 1973, it seems doubtful that oil prices would have remained low forever, putting a natural end stamp on Keynesian economic policies. Non-renewables are naturally scarce, and even if the government borrowed money endlessly to energize the economy, scarcity would increase resource prices, making the borrowed money essential worthless. This is was the horror of stagflation in the 1970's, where high inflation was no longer a boon to government that reduced its real debt burden, but a rope that slowly strangled business until it keeled over and died from lack of oxygen.

That being said, the broad strokes of Keynesian thinking should still be admired and accepted. The idea of spending in times of recession to avoid spiraling depression is a novel idea and fiscal policy can indeed resolve economic crises, or at least reduce their impact. The problem came in world leaders overzealously applying his logic.

The economic slowdown of the 1970's left the welfare state open to ideological attack. After thirty years of reducing inequality and expanding access to education, employment insurance, pensions and healthcare, the nations of the West abruptly turned against their post-war consensus. Friedman, Stigler, Becker and Laffer paved the way for this dismantling through a relentless, well-argued and concerted exposé of public sector incompetence and private sector efficiency. At the heart of this "Chicago School" was not really the goal of changing the economic thinking of the West, but a complete transformation of Western society from one that apologized for and was ashamed by its capitalist tendencies to one that fully embraced, celebrated and energetically exported all its worst excesses, mindless spectacles and planet-destroying consumption, conveniently repackaged as moral virtues.

Milton Friedman is mentioned first for his outsized role in this cultural shift. His penchant for empty witticisms and snappy sound-bites seem are ample evidence that his crusade against the modern state was not academic, but cultural. His short, easily condensed ideas fueled his legions of inept followers and clever, folksy wisdom like his classic "If the government were put in charge of the Saharan Desert, within five years we'd have a shortage of sand" speak volumes more than his ample treatises and opuses worth of calculations ever could. That, of course, was exactly the point, being that his main academic achievements, namely the concept of "monetarism" are slowly being discredited by more serious members of the academy.

Friedman's attack against the Philip's Curve, though somewhat preposterous, could not have come at a better time. What better evidence was there, after all, that inflation was not related to employment, than an economic crisis where massive inflation was leading to more unemployment, not less of it. Friedman's response to this realization, however, was completely disproportional.

His "monetarist" approach was to essentially castrate the state. Fiscal policy of any kind was too harmful because of its inflationary effects, and any sort of ambitious monetary policy was doomed to fail for the same reason. Instead, the state should retreat and allow the market in all its perfection to correct itself over the long-run. Government should produce the best possible climate for business: low, stable inflation; low taxes; law and order; and nothing more. Thus, we have the first pillar of this new school of thought: Small and confined fiscal and monetary policy.

George Stigler focussed on the other side of the equation: liberating business from the watchful eye of government regulation. Stigler proved that industrial sectors with more government regulation had fewer competitors and were more profitable. Larger corporations had better access to law-makers and more legal resources to comb through lengthy regulations in order to find loop-holes. Thus, they could create a feedback loop where one aspect of their largesse supported the other. Large corporations would push for more government regulation, and because they were the only company large enough to efficiently manage the new regulatory regime, they would successfully eliminate their competition. This would afford them more resources which would allow them to push for more regulation.

Although I certainly agree with the logic of Stigler's "regulatory capture," and see the evidence quite clearly in examples such as the American telecom industry where artificial monopolies and massive regulations are meant to produce artificial monopolies and high prices in internet service, the idea of over-regulation was taken far out of context and justified enormous reduction in government oversight to many industries that desperately needed them. The most famous example of this, of course, is in the American banking sector where a handful of banks managed to control amongst all investments in the entire economy and these major institutions routinely broke laws and gambled away endowments the size of mid-range countries without any pushback from government whatsoever. This is what I will call the second pillar of this neo-classical thinking: de-regulation.

As I stated previously, it wasn't just enough to radically transform the Western economy; the culture had to significantly adjust as well to accept these new ideologies. Gary Becker aided that shift by asking society to apply economic thinking to its sociological activity.

Becker overturned the view of "a common good" and instead focussed on a collection of "individual goods" that motivated each actor in society. Government was not interested in "the people"; it cared about and protected the interests of "its own people": those most crucial to its maintenance of power. Individuals didn't hold the door open or vote in a general election or tip the waitress because they were being "nice". They did so to garner social capital, to avoid public humiliation. People, in Becker's view were perfectly rational actors who made all social decisions by weighing the cost and benefit of each action.

Although I have much to thank Becker for in the development of my own theory of chronimism (as well as his contributions to sociology in general), again, his ideas were taken too far and used to justify actions that far exceeded his original goals. Neo-liberal governments chose to cut back on social services because individuals would be better able to provide help through donations. They valued "choice in schools/healthcare" more than public education and health funding and economies of scale. They provided more ballot initiatives and recall legislation to give the populace more say in the day-to-day functioning of government. All of this led to a worse delivery of services as efficiencies were lost, services were stratified along economic lines and the people allowed their inherent stupidity to leach into public policy.

Becker can be entirely correct, but if people do not have perfect information, their perfect rationality will still lead them astray. The more recent work of Kahneman and his associates shows that humans also just are not rational to begin with, but are easily manipulated and deceived. Still, neo-liberal governments structured much of their rationale on the infallibility of individual choice. This created the third pillar: highlighting the individual over the collective.

Arthur Laffer, author of the famous Laffer Curve, provided the financial justification for all of this. His Tax Revolt demonstrated that when the tax burden was too high, it provided disincentive to work and produce wealth. If taxes were reduced, more wealth would be created, and although the government would be capturing a smaller portion of that pie, the pie itself would be much larger, guaranteeing the public coffers a significantly expanded slice. At the same time, the extra profits would "trickle down" to the rest of the economy as the wealthy spent their newfound cash and created jobs to service their luxurious lifestyles and profitable corporations.

Laffer fits the common theme here in that there was nothing particularly wrong with his logic, but it was just used completely incorrectly. Rather than lowering the tax burden for everyone, politicians had most incentive to lower taxes for their ultra-rich donors, leaving lower-income brackets to pick up the tab. Governments also didn't stop slashing taxes once they had reached the height of the Laffer Curve, but kept reducing taxation until no amount of increased economic activity could make up the deficit.

Rich people didn't create jobs with their newfound wealth either. The wealthy only paid taxes on their profits, and they only hired people who would be profitable to their business. Fewer taxes meant they paid less to the treasury, but that didn't affect whether or not a person could make their company money. At best, low tax regimes encouraged investment in an era of increasingly mobile capital, but a simple treaty would have solved the problem, whereas racing towards the taxation bottom only further dismantled the state. This was the fourth pillar of neo-liberalism: "trickle-down economics".

These four neo-liberal ideas, smaller, less ambitious fiscal and monetary policy; de-regulation; individual infallibility; and trickle-down economics, took the Western world by storm with the election of Thatcher and Reagan and their numerous imitators. The next thirty years saw a massive increase in productivity and economic activity, but this was more in spite of these neo-classical reforms, not because of them. While free trade and unregulated investment banks did drive growth at the top, real economic expansion, as always, started with the consumers.

First, the sexual revolution led women into the workforce and within a decade the number of working hours put into the economy had been effectively doubled. Next, families as a whole began working longer hours (and as a result, engagement with civil society dropped dramatically). Finally, after this was still not enough to maintain the middle-class standard of living, families as a whole started relying more and more on credit, and the economy of the West rested on higher and higher liquidity ratios.

The free trade push of the Reagan years also happened at a terrible time for the world economy. During the 1980's and 90's, market reorganization and mechanization led to remarkable corporate consolidation in almost every industry at the same time that the first products of the Third World baby boom of the late twentieth century were reaching the age of majority. Thus, the West gifted its citizens a world of far fewer employers and infinitely more potential employees.

Free trade, not as it exists in the imagination of David Ricardo but as it was negotiated in the real world, merely exacerbated all the negative trends in the global economy of the post-modern era. It contributed greatly to the swallowing of smaller, local competitors to trans-regional giants. After all, tiny "mom-and-pop" operations could not possibly navigate the increasingly complex regulations established by free trade regimes (of which the EU is a prime example). This led to less impetus to compete for new employees, create new products or lower prices.

Simultaneously, the greatest spike in human population ever experienced sparked huge demand for more goods and a massive oversupply of labour in an increasingly automated world. As such, the cost of living became crushingly expensive at the same time that real wages declined and government services began to evaporate. The corporate world had never been so profitable, and the middle class had never been so suffocated.

Yet, even having said all of this, free trade was still the correct business move. With higher prices and lower wages, profits flourished, and those profits could have made everyone better off. Unfortunately, the grittier side of human nature came to forefront.

It would be irrational after all for the corporate behemoths of our age to pay the enormous taxes they owed when they could donate only a tiny fraction of their liabilities to the main political parties and have the tax code rewritten to suit their favour, regulations invented to increase their profitability and squeeze out competitors and government agencies defunded so that the public would be unable to police their behaviour. The rest of their spoils could be parked away for safe-keeping on some distant tax haven the average citizen wouldn't be able to point out on a map.

But even then, the free market should have allowed for the commoners to better themselves. The corporate tycoons couldn't simply enjoy the fruits of their ill-gotten gains, could they? If they stopped reinvesting their profits into their various enterprises, creating more jobs and better products in the process, someone else would inevitably steal away their clientele and erect an industrial goliath to rival their own, right?

It's certainly a great idea, but, as is so common with much of economics, the physics of reality makes it impossible. The great problem of our age is geography. Anyone wanting to compete with the global corporate establishment needs to be able to tap into the cheapest labour, most abundant raw materials, most skilled managers and engineers and wealthiest consumers and, for the moment, all of these are grouped on different continents.

The costs involved in creating a corporate structure that spans the globe and effectively deals with thousands of national and local governments, millions of international, federal and sub-state regulations and billions of customers limits the number of players considerably. And, unfortunately for us, basic human psychology dictates that the fewer the number of agents, the easier it is for them to cooperate. This is made all the more inevitable when one considers that most corporate boards are operated by the same group of individuals who control multiple companies (often in the same industry) and elect to give each other raises and fantastical bonuses.

Capitalism works extremely well when every agent has access to perfect information and can freely buy from, work for and compete with all other agents. It's why the tiny villages of Adam Smith sound so wonderful and free, and why even Ayn Rand's perfect remodelling of society in Atlas Shrugged had a maximum of only a hand-full of enterprising individuals. Once the market expands to the point where some people can afford access to information and education but others cannot, where some are able to seek better employment but others cannot and where some can create new businesses but others cannot, the meritocratic system becomes nothing more than a meaningless lie meant to propagandize the poor into submission. As the market expands in size, the cost of entry also increases, making initial advantages like one's station of birth infinitely more important. Thus, we see in these decades also the extreme rise of inequality and the return of the non-working rich.

This concentration of wealth ultimately proved unsustainable to the world economy. Larger profits drove up the cost of living for ordinary people as wealth was invested in real estate (leading to a property bubble) and luxuries, which both drove up the cost of basic assets, but also provided social pressure to consume more and at a higher price. Whereas the enormously wealthy few could afford this extravagance, the average family could not, and debt became an almost universal method of making up the difference. In countries like the Netherlands where property prices are exorbitantly high and thus home-owners expect tremendous debt or high rental rates, wealth redistribution maintained the state of affairs. In countries like the United States, the market economy simply failed.

The repeal of the Glass-Steagall act and other banking regulations during the era of Bill Clinton allowed banks to grow larger, trade in more areas than previously allowed, maintain smaller reserve ratios and combine investments and savings functions. The trend towards consolidation also allowed for banks to give out loans to riskier and riskier clients as the more behemoth a corporation was, the more efficiently it could absorb risk.

This was for two reasons: First, larger, more diverse portfolios can cover a wider range of possibilities so that successful gambles tend to balance out failed ones (hence why larger investments grow at a faster rate). Second, the largest Wall Street banks guessed (correctly) that they had become too big to fail and that should their behaviour prove too risky, the American taxpayer would be the ultimate guarantor of their investments.

Investment banks repackaged acidic loans (and bribed and coerced ratings agencies to turn a blind-eye) while enticing top officials at regulatory agencies with lucrative private sector jobs to keep the government at least complacent and perhaps even complicit in their machinations. Liquidity ratios became so incredibly low that for many of the top American banks, a simple three percent decline in their portfolio value would leave the corporation insolvent. This is what happened to Lehman Brothers on September 15, 2008, setting up a chain of events that saw hundreds of millions of people lose their life-savings, millions lose their jobs and homes and governments across the Western world pour trillions of dollars of taxpayers' money into their rapidly collapsing banking structure.

At the time this book is being written, the recovery is still far from complete. The stock market has regained all its losses, and is currently soaring at all time highs. In terms of GDP, many western countries, including my native Canada, are growing at an unexpectedly high clip. The jobs, however, have not returned. Work has become more precarious, wages have decreased in value and the top earners have a more unequal share of wealth than ever before. At the same time, the people are responding by retreating to nativism, violence, nationalism and authoritarianism in all areas of the world. Traditional political paradigms are being uplifted, strong majorities are being made more precarious and international organizations are falling apart or under increasing assault. Wars are waging on three continents, and international tensions continue to rise.

In all societies, during all eras and in every context, any technological or demographic upheavals that substantially reduced labour costs and increased unemployment resulted in chaos. Creative societies which could harness the idle, chaotic masses into productive purposes thrived. Those who ignored or combated their restive populations did not. We have all the rapid change, angry mobs and approaching chaos; what we're seriously lacking is a little creativity.

Creativity is what Caesar showed when he responded to dramatic socio-economic turmoil in the late Roman Republic with the dream of empire. The spread of the Republic overseas had returned hundreds of thousands of slaves to Italian servitude, reducing labour costs and allowing the largest estates to buy up their smaller competitors. Millions lost their jobs as paid labourers and thousands more were forced off their farms by wealthier patricians, all coalescing into angry mobs and rolling riots.

Such a pool of poor, angry, unemployed men proved far too tempting for a fair number of clever politicians, who recruited these plebeian hordes and tossed them at each other until the empire country was consumed in civil war and the Republic was ripped asunder. The new Roman Empire survived for four hundred more years by keeping those hordes of poor, angry, unemployed men fighting against foreign enemies, and it collapsed just as soon as it could no longer afford to do so.

Creativity is what the feudal lords of Europe demonstrated when they responded to the collapse of the Roman Empire by building a successor state in Christendom. Whenever the mob of poor, angry, unemployed men grew too great, they could go to work building another cathedral for several hundred years. Decentralized power kept the lords to fight amongst themselves getting rid of their excess populations, and poor sanitation allowed sweeping plagues to toss out whomever was left. And if all of that wasn't enough, the Pope called a crusade and pushed the raging peasants unto the doorstep of his Islamic rivals.

Creativity is what the emerging Western superpowers used when they built trans-oceanic empires instead of letting their people wallow in misery and squalor on the continent. The discovery of American crops led to giant, sustained population growth at the same time contact with India and China brought new industrial technologies that destroyed cottage industries overnight. Millions were forced into the cities in search of ever-less valuable factory jobs.

Roving bands of Luddites pillaged the English countryside. Revolution bled France white, and fifty years later nearly toppled every major government in Europe. Wars of ever increasing magnitude threatened to end civilization itself. In response, the European powers quietly redistributed the world between themselves and sent off their poor, angry, unemployed men to settle new colonies and commit new atrocities against the natives.

Then, we got to the twentieth century and the "creativity" suddenly stopped. There were no more empires left to forge, no new churches left to build, and no forgotten lands to colonize. The world needed a new distraction for its mobs of poor, angry, unemployed men, and it just couldn't find any. Meanwhile the problems got worse.

New farming technology led to a dramatic overproduction of agricultural produce and the price of food took a sudden tumble. The old subsistence farmer and free-holders were forced from their land again as crop prices could no longer sustain their investments into new technology. Another population wave hit the cities building ever bigger and madder mobs of poor, angry, unemployed men.

The nations of Europe tried as they might to stuff those men into ever more uniforms. Germany raised a navy to challenge the strength of Britain. France built an army to retain its lost province of Alsace-Lorraine. Russia bankrupted and starved its people trying to feed enough troops to control them. America upgraded its military in hopes of becoming a new imperial power. More and more poor, angry, unemployed men were handed guns and given flags, until it became inevitable they'd have to die killing each other or die starving from stagnation. Instead of creating stability, the new distraction of the working classes gave rise to the two bloodiest wars in human history, nearly bringing an end to humanity itself.

This is the lesson that our leaders, whomever they may turn out to be, need to find some way to learn. Those mobs of poor, angry, unemployed men and women will always be there; the true test of a civilization is whether it can put them to work on something productive.

The world is at a momentous time in its history. The flow of twenty million illegal immigrants in the last two decades into America, and millions of refugees into Europe will lower wages just as mechanization and the growth of the tech industry gentrify more neighbourhoods and eliminate more jobs. Climate change will dry up more farmland and flood more coastal areas, leading to even more urban migration from once-rich but now infertile rural areas. The discovery of more green technologies will destabilize petro-states like Venezuela, Saudi Arabia and Russia, leading to larger conflicts, more refugees and more energy turmoil.

All of this will mean more people will flocks to our cities, competing for fewer jobs which pay less to buy food that will cost dramatically more. The end result, all over the world, will be the creation of many, many millions of poor, angry, unemployed men and women. If we aren't able to occupy their time doing something productive, they will fill their days with something destructive.

America has already been hit a wave of opioid abuse in one end of the country and race-war in the other. Europe is currently engulfed in terror attacks. Much of the Middle East, and large swaths of Africa are captured in civil warfare. China's leaders are threatened by growing democracy movements and are resorting to increasingly repressive control tactics. Russia is forced to invade a new neighbour every few years or chance civil insurrection. Brazil can no longer afford to occupy its people with government spending, and its debt crisis threatens to send the country into a mini-Great Depression. Large crowds of poor, angry, unemployed men and women are the root of all these problems, but they can also be the solution, if we let them.

At this point, I doubt that the will remains to "fix" capitalism, and even if it did, the infighting between the opposing opinions on what exactly the "fix" should be would prove worse than the problem they were attempting to solve. No, instead we need a new project. Something that will really get the collective imagination going. Something big. Something like chronimism.

We have greater access to technology, innovation, manpower and energy than at any other point in human history. There's no excuse for us to be sitting around covered in gasoline waiting for a spark to come along and immolate us. We can do better than force poor people out of nice houses, push angry people into wars against each other and throw working people into unemployment. We're the greatest species in the known universe. It's about time we made an effort to prove it.