This is the end and the conclusion of The causes of wealth, de Jean Fourastié, translated by Theodor Caplow.
The seven preceding chapters have clearly shown, I hope, the force of the causal relationships that bind the level of living of any people to the productivity of their labor, and therefore to the scientific quality of their methods of production.
We may now write that the productivity of labor is the independent variable of contemporary economic development. Not only is it one of the factors leading to improvement in the level of living, but it is the preponderant and dominant factor because it determines or conditions the others: rents, profits, interest rates, the value and income of capital, geographical distribution, labor force, wages and the ladder of wages, social action and social structure.
In this complex machinery of causes and effects, of actions and reactions, there appears a mainspring. This mainspring is important not only because it moves the rest, but also because it is possible for men to act upon it.
Consumption is a result of production. There can be no increase in the level of living without an increase of production.
It is illusory to pursue a short-term improvement in the purchasing power of wages in relation to all goods and services consumed. Substantial improvement in the ratio of wages to prices can only be obtained for certain products, those, for example, that show a significant reduction of the profit rate or a significant increase in the productivity of labor in a given period. This is the consequence of the law of value.
However, with increasing output, the pattern of consumption changes, and the improvement of the level of living demands not only an increase of production but a change in the nature of the goods produced, or, in other words, a change in the structure of production.
The structure of production in turn is a result of the distribution of the labor force among different occupations. There is therefore a nearly perfect functional relation between the three following phenomena:
1) the pattern of mass consumption
2) the structure of production, or national income
3) the distribution of the labor force.
If one wishes to modify the first of these structures, and this is necessary to improve the level of living, it is the third that must be manipulated. It alone is directly dependent, in the middle run, on ordinary human initiative.
Economic phenomena are essentially labor force phenomena. Monetary and budgetary facts, like credit, are only a screen between consumption and production. In order to estimate their effects on the distribution of the labor force and the volume of production in each occupation. The financial conceptionof the economic system imposed itself upon the classical economists because it was useful and valid in the traditional epoch, and by the force of tradition, continues to be hel dtoday in most countries-for example, in its Keynesian form. This traditional viewpoint reveals itself to be incomplete andless and less useful, because it leads us to think in terms ofwealth and capital, of income, of profit, and of interest, when we ought to be thinking in terms of labor.
The productivity of labor is a joint effect of the natural conditions in which the worker finds himself and of the methods which he uses. These two sets of factors are ceaselessly changed and improved, changeable and subject to improvement, by technical progress under the influence of scientific progress. Natural environments not permitting human survival in 1700, like the Canadian plateau or Central Siberia, now contribute greatly to the world's life. The motor of the contemporary economic system is most surely the development of scientific knowledge.
Economic development being thus dominated by the development of technology, and this in turn by the development of science, the areas of economic studies and of the so-called exact sciences, that formerly appeared to be so distant, are now seen to be united; it is impossible to think of an economic system without reference to technology and thus to the whole of experimental science.
Economic history is only a branch of history. It is not possible to make any synthesis unless we study demographic, social and political facts, as well as economic facts. In our time especially, political facts are dominant and tend to orient the world's future.
There has been no question here of attempting such a synthesis. Our object can only be to provide certain source materials for those who may eventually try. Nevertheless, we must raise an objection in advance against certain critical commentators who are likely to propose an erroneous interpretation of the merely economic farts here described. This interpretation would be to attribute to the political regime the credit for economic progress realized during the past century. In reality, it must be said that technical progress has led to economic progress, not so much by means of the political and juridical regime, but in spite of it. By defending property, our law defends its necessary attributes, interest, rent, and profit. The entrepreneur seeks profit. To obtain it, he may seek technical progress, and thus stimulate economic progress. But it is only in this accessory fashion - outside of the initiative and even the awareness of the entrepreneur, and consequently as slightly and slowly as possible - that the search for profit leads to social progress. Larger and larger gaps are thus created between the real and the possible. Here we have studied only the real, but it requires only a little reflection on many of the pages of this book to appreciate what might have been obtained with modern technology if only the political, juridical, and social conditions in France had been less unfavorable to progress.
The improvement of scientific knowledge permits the raising of the level of living of the people. It is still necessary that man, when aware of the causalities imposed upon him by the real world, applies them to the daily realities of the production of consumable goods and services. In other words, it is still necessary that scientific progress be transformed into technical progress. Observation of the modern world shows that there is a considerable lag between scientific progress and technical progress, since scientific knowledge is usually placed at the disposition of the whole of humanity as soon as it is discovered, while technology has progressed at very different rhythms from India and China on the one hand to the Western world on the other, and from the pagan, Hindu, and Moslem civilizations to the Christian countries. The causes that have led a fraction of humanity to secure a lead over the rest, first in science and then in technology, that could not have been predicted by an observer of the previous history of these advanced nations, are still unknown. The study of this question is one of the essential tasks of our generation. It is the study of the sources of human progress.
The confusion of ideas in these matters is so great that the very notion of human progress, in the middle of the twentieth century, is still questioned by almost all Western philosophers. Economic and social sciences do not give any place to the concept of progress. The very word, they say in the schools, has no scientific sense. The intellectual leaders of our time, Huxley, Mauriac, Duhamel, Sartre - repeat for the length of printed columns that humanity has arrived at the threshold of the Apocalypse or else turns without rest in an infernal circle. They find it only too easy to illustrate their theses by some of the frightful adventures into which humanity has recently been thrown.
No one seems to care at all about long-term trends. No one seems to notice the passage of the popular masses from a vegetal life to one that is not so limited. Not a word is said about the disappearance of famines in the Western world. No one is congratulated on the development of intellectual culture, the opportunity of an increasing number of men to enjoy higher education, or the extraordinary increase in the means of aesthetic appreciation.
No one seems to suspect the existence of factors favorable to individuality in the new tertiary civilization. A man who, two centuries ago, would not even have learned to read, if he had survived to maturity, profits by his windows, the central heating of his apartment, and the 300,000 copies of the newspaper for which he writes, to announce that humanity has arrived at the last stage of barbarism.
We may summarize the effect of technical progress on the material life of man by saying that technical progress liberates men from servile labor, increases the length of their life, enlarges their autonomy with respect to physiological needs and the external environment, permits them to pass from a vegetal phase to a mobile phase, allows the average man to have advanced education, and opens to him the path of intellectual civilization.
Doubtless it may be said that if this inventory of the economist is largely favorable, that of the moralist or sociologist is not so at all. It is true that contemporary civilization runs great risks and shows some alarming symptoms. My duty is to draw attention to the fact that factors favorable to the development of a high intellectual civilization of individualistic character are numerous in contemporary economic development and that there is no reason to assume that the unfavorable factors will carry the day.
The maladjustments of the present day arise, in my opinion, from the natural errors provoked in the human spirit by the confusions of the transitional period between traditional civilization and the civilization of the future. Nothing is easier for us who live so short a time-and nothing is more dangerous than to take as the direction of history what is only the direction of some few years of history.
Certainly it must be remembered that the area of human knowledge is not delimited by the scientific method alone, and that scientific and technical progress do not necessarily imply human progress, by which I mean the progress of the total man. It is as dangerous to appreciate technical progress while denouncing the moral stagnation of humanity, as to expect technical progress to solve all human problems.
More exactly, I believe that the essential evil of our century arises from the difficulty we have in distinguishing those elements in our heritage that belong to the scientific field and must be constantly modified, from those that belong to the moral and religious domain and that probably ought to be conserved, or modified only with great prudence.