Must We Have the Profit Motive?

Innovation Without Capitalism

By Gwydion M. Williams

We are told that all of the wonderful things we’ve had since the 1980s would not exist without capitalism.

We are also told that before the 1980s, we suffered because we were straying from Capitalist Truths.

If you ignore what was then happening in the Soviet Union, at least as many wonderful technological things happened before the 1980s as have happened since.  And without all of the stress, inequality and malignancy brought to us by Thatcher and Reagan.

Ignoring the Soviet Union is justified, because it too was doing wonderful things as well as harsh and ruthless things before the 1970s.  They were first into space, after all.

The miserable decay under Brezhnev was caused by a wrong turning from the 1968 invasion of Czechoslovakia, or maybe Hungary 1956.  These at the time were correctly seen by many of us as a betrayal of socialism in favour of Power Politics.

East and West might have converged, and in the 1960s and 1970s the West was ready.  It was the Soviets who let down the ideals that the state had been founded on.  Yet there was also no return to pre-1914 capitalism, for all the Libertarian talk that this should be done.

State power and tax-and-spend remains a fact of life, though not always for progressive aims.  ‘Feed-the-Rich’ has been the reality behind New Right rhetoric.

The big Western advances from the 1940s to 1980s were often funded by the military, or spun off from academic research.  Safe and cheap passenger aircraft were spun off from programs the military paid for.  Likewise microchips.

Nor was this new.  James Watt developed his superior steam engine with an understanding of heat that noted academic Joseph Black had developed.  The existing Newcomen Engine wasted a lot of fuel by turning water into steam and then back into water.  Aware of the importance of Latent Heat – later understood as the energy involved in breaking the links between water-molecules so that they became a gas – Watt invented the Separate Condenser. This was a much better design, but also more intricate and likely to break down.[A]  It needed help from industrialist Matthew Boulton to make it a success: but Boulton was a member of the socially progressive Lunar Society.  This remarkable Midland group were at least as much interested in social improvement as personal profit.[B]  They were the Radical Left of their era.  They were everything that the Libertarians and New Right think themselves superior to.

In the 19th century, Heinrich Hertz was an academic who mastered the production and detection of radio waves.  He did this in the hope of proving what fellow-academic James Clerk Maxwell had implied with his famous equations: that light was actually just a type of electromagnetic radiation.[C]  This had seemed likely when Maxwell’s maths showed that if electromagnetic radiation existed, it would have the same speed as had been found by an astronomer studying irregularities in the eclipses of the moons of Jupiter.  The variations in what we saw on Earth if light had a finite, gigantic, but measurable speed.  But it was still open to question.

Hertz’s project was to create another sort of electromagnetic radiation: one the eyes could not see.  He demonstrated that this stuff behaved just like light, if you allowed for it being a very different wavelength.  An astonishing four meters for the waves he generated, while the wavelengths for light are less than a thousandth of a millimetre.

The notion that light was electromagnetic radiation needed to be proved.  It might have been wrong.  Einstein’s later concept of space-time says that any massless particle must move at the speed originally identified for light in a vacuum.  There might be several different types of radiation with the same speed.  Current physics says not, with even neutrinos turning out to have a very tiny mass.  But who knows what will turn up next?

Within known physics, gravitational waves ought to have the same speed.  Recent detections suggest yes, for the one case where we saw both together.  More measurements are now arriving, after an upgrade.

Back in the 19th century, Hertz confirmed Maxwell’s view.  But if he noticed the interesting fact that his ultra-long waves could go through walls, he did not see this as important:

“Hertz did not realize the practical importance of his radio wave experiments. He stated that,

“‘It’s of no use whatsoever[…] this is just an experiment that proves Maestro Maxwell was right—we just have these mysterious electromagnetic waves that we cannot see with the naked eye. But they are there.’

“Asked about the applications of his discoveries, Hertz replied,

“‘Nothing, I guess.’”[D]

Luckily he operated within the German academic system, which was happy to fund the pursuit of pure knowledge.  But people also know that abstract knowledge did sometimes have unexpected practical uses.  With the free exchange of ideas and discoveries, an Italian called Marconi was the first of many to develop these invisible rays for superior communications.

Marconi was very much interested in money, but not in capitalist abstractions.  He supported Mussolini’s fascism, joining the party in 1923, well before Mussolini was transformed from Prime Minister to Dictator. He remained in good favour, with Mussolini appointing him President of the Royal Academy of Italy, which also made Marconi a member of the Fascist Grand Council.  He died in 1937, aged 63.  Had he lived on into the era of Italian Christian Democracy, he would probably have continued to fit.

Hertz meantime had died young, but would have been in trouble had he lived into the Nazi era, since his father was a Jewish convert to Lutheranism.  His portrait was removed by them from its prominent position of honor in Hamburg’s City Hall.  His widow and daughters were among the small number of displaced Jews who found refuge in England: anti-immigrant feelings blocked most of them and many were later murdered.

Despite Hitler’s lethal and self-defeating anti-Jewish obsession, fascism was at home with most science and all new inventions.  They were slightly behind with radar, but developed the first jet fighter.  Also the first militarily useful cruise missiles (V1s) and the first long-range rockets (V2s).  These lethal weapons were the first fruit of a German space and missile project conceived independently of Nazism, but taken up by Hitler.

Post-war US tolerance of those tainted by Nazism was enough to let Wernher von Braun transfer his V2 skills to them.  It got the bulk of the funding when their All-American rockets kept blowing up when stretched to give them power enough to launch a satellite.  The Nazi connection won the Moon Race for the USA.

It also need not have been a race.  Kennedy saw the space program as wasteful, but did not want to be seen as a loser.  So in 1963 he proposed a joint venture.[E]  Had this happened, there might have been a Russian setting foot on the moon first, but then hugging his US colleague before they jointly planted the flag of the United Nations.  This would probably have happened in the early 1970s, without the risky dash for the USA to manage it by 1969.  Kennedy had set this target back in 1962, but in a joint venture a little slippage would have been OK.

Had history gone that way, it is also likely that the first moon rocks would have been brought back by a mostly-Soviet robotic mission. They actually managed this in September 1970, after a string of failures that had been intended to scoop the US landing with humans.[F]  And after failing to produce a rocket big enough to take humans to the moon and bring them back: but robotic probes can be much lighter.

The US moon landing is now hailed as a triumph of Democratic Capitalism.  But had it been capitalist, it would not have happened.   Likewise had it shown current Western distaste for those who worked pragmatically with dictators.  It would have been much slower without Von Braun and his team.  Commercial space launches only began in the 1980s, with Ronald Reagan requiring NASA to encourage them.

Had the Soviet Union decided it was time in the 1950s to move on from both Lenin and Stalin, everything might have been different.  China managed this with Mao, but now with some return to Maoist values while the West is spreading global chaos.  Khrushchev distorted everything by having Lenin remain sacrosanct but he denounced Stalin for carrying through Lenin’s program.  This froze politics until the final collapse.[G]

Soviet science remained excellent down to the end, though the increasing irrationality of the post-Stalin system offended scientists like Sakharov.  Technology too was at one time excellent, with the best tanks of World War Two.  Also the remarkable Katyusha rocket launcher, known to Germans as the Stalin Organ.  It was only in the 1960s and Brezhnevite corruption that the general quality of goods declined.  This included the once-brilliant space program.  The Soyuz spacecraft and its rocket from the 1960s remain in use and had a much better safety record than the Space Shuttle.  But a string of interstellar missions achieved little after the first landing on Venus.

Let’s imagine a different 1960s, with the Space Race turning into a joint venture for shared ideals.  Supposing Khrushchev is still deposed much as he was, but Soviet generals in 1968 might decide that invading Czechoslovakia is madness and remove Brezhnev.

Let’s also suppose that Bobby Kennedy does not get assassinated and instead gets elected President.  He initiates a policy as radically different as Roosevelt’s New Deal.  Except the USA pioneered that, whereas he perhaps would have done something like what Europe’s Christian Democrats had already done.  A ‘Mixed Economy’ in which welfare is improved, and which gave Western Europe much faster growth than the USA up until it was contaminated by New Right ideas in the 1980s.[H]

If all this happened, perhaps Mao relaxes.  China still becomes a global centre for cheap manufacturing, but prevents the massive inequality and cultural vulgarisation that actually happened.  And perhaps the weak industries of other poor countries are protected rather than being destroyed.

The USA carries on with its standard pattern of growth from the 1940s, but the benefits flow to the whole society, with the less-well-off continuing to gain slightly more.

We still get the Microcomputer Revolution and then the Internet Revolution.  Indeed, Mao’s Cultural Revolution system would have permitted a version of this, had their science and technology been advanced enough.  It favoured low-level initiatives, but not for private profit.

Would the same radical technology have been possible without the Profit Motive?  Several of the pioneers of the West’s IT Revolution were not motivated by money, and did not become rich.  The slew of radical ideas found at Xerox Parc did not make the Xerox Alto a commercial success.[I]  Nor did Steve Jobs’ first imitation with the Apple Lisa.  But having made a lot of money from the previous more conventional Apple computers, he was able to make the brilliant Apple Macintosh.

The Internet was invented as a military system that could survive a nuclear war.  The World Wide Web is something different: hypertext that runs on an internet system.  It was developed by Tim Berners-Lee while working at CERN, where the main task is subatomic physics, and no commercial outcome is expected.

New Right economics ignores most of what happens in the real economy.  Concentrates instead on maths that is largely pompous gibberish.

Copyright © Gwydion M. Williams




[D]  Ibid.





[I] and