The Hotel Pierre Address
This lecture was given on January 13th, 1933 in the Hotel Pierre in New York City.
- Technocracy, Series A, No. 19, July 1940
- The Technocrat, No. 131, Oct 1947
- Information Brief #17, March/April 1948
- The Northwest Technocrat, No. 175, April 1954
- Technocracy Digest, special edition (date unknown, mid 50's most likely)
- Technocracy Digest, Feb. 1970, No. 215
- The Northwest Technocrat, April 1973
- The Northwest Technocrat, 1st qtr 1995, No. 338
- Undoubtedly in other places...
No Platinum Handcuffs
Technocracy, speaking tonight from Regional Division 7340, salutes the radio audience of America.
At the outset, Technocracy desires it to be understood that all of this publicity has broken upon it like nothing else that has happened to any similar organization in the history of man. Months ago we were unknown, working quietly as a non-profit research organization which in the year 1932 had expended less than $1,200 for administrative purposes and had received not more than $300 exclusive of the subscriptions of its members. To date it has written fewer than 14,000 words but, judging from the response on this Continent and abroad, those 14,000 words have done their work well--too well perhaps, since most of the clamor in the press, pulpit and elsewhere has not, of necessity, the slightest genuine connection with the work, data and principles of Technocracy. Let it be said also that most of the many attacks against us originate in the camps of the liberals, economists, social philosophers and others of the tribe of axiologists* who are all interested in the preservation of `values' that have no functional relationship to the problems of a modern industrial society. These attacks, however beneficial to newspaper and publishing interests, have added nothing to a proper understanding of our work.
Technocracy is a dual thing. On the one hand it is an organization of scientists, engineers, technologists and workers in other technical fields; on the other, it is a body of thought. This body of thought may be concisely described as a technological approach to, and an analysis of, all social phenomena. Technocracy is not premised on any philosophical preconceptions, convictions or beliefs. Technocracy is based primarily on a study of the rates of growth of all energy-consuming devices on this Continent as a function of time. Technocracy is concerned with the natural resources available for conversion into use-forms and their quantities; with the quantity of energy and materials consumed in the proper operation of the physical equipment on this area; with the number of people required in this total operation and the hours of work within a given time. These are some of the principal questions with which Technocracy has always been, and is now, concerned.
Tonight we would like to take this gathering and the radio audience of this Continent backs a few pages in the history of this country and in the biologic progression of man.
Ever since man was driven from the jungle by his more agile but less enterprising relative, the ape, he has been conducting a long and arduous struggle, fighting his way toward ever more effective sources of energy. In this struggle the problem of population has come to play an increasingly important part. For example: in the 200,000 years prior to 1800 the biologic progression had so far advanced that the total world population of the human species in the latter year was approximately 850,000,000. In the subsequent 132 years this population grew until it is now approximately 1,800,000,000--a greater increase than in the previous 200,000 years.
The point to be especially noted is that most of this population increase is due to the introduction of technological procedures into social life. By way of contrast, consider China. According to the Nanking estimates of 1932, China has a population of 470,000,000 today an estimated growth of only 71,000,000 in the past two centuries. France--according to the estimates of Reid, Baker, and others--would require over four hundred years to double its present population of approximately 40,000,000. Both of these countries are admittedly backward in their rates of growth on the technological level; that is to say, neither of them has taken full advantage of the incentive to population increase afforded by the introduction of technological procedures into their social life.
Compare these examples with the United States. In 1830, slightly over a century ago, this country had a little more than 12,000,000 people. Today the figure is approximately 122,000,000--an increase of 10 times in a century. Now set these figures against the background of the energy consumption during the same period: In 1830 we were consuming as a nation less than 75 trillion British Thermal Units of total extraneous physical energy (derived principally from windmills and domestic animals with some coal and water power.) In 1929 we consumed slightly less than 27,000 trillion British Thermal Units of extraneous physical energy--an increase in the century of 353 times. What is the drift of such facts--which can be supported and strengthened from many sources?
Technocracy points out that in all social systems prior to the last 200 years man was the chief engine of energy conversion. Efficient from the mechanical point of view, this engine was severely limited in output, rating at approximately one tenth horsepower per eight-hour day. All the work and wealth of human society from the dawn of recorded history to the beginning of the 18th century depended exclusively upon this engine. Thus we have Adam Smith, in the opening sentence of his famous book, (published in the same year as America's Declaration of Independence and, ironically, within a short distance of the town where James Watt was developing his steam engine) defining wealth in terms of human labor which in turn created all values. This was a correct description of the conditions of which Adam Smith wrote, but it has since become increasingly evident that man, as a creator of physical wealth, is receding more and more into the background, yielding, and not unwillingly, to the rapid growth of technology and of power procedures. Technocracy emphasizes that in all the older social systems there was no means of altering the rate of doing work: You could increase the total number of human beings only up to the physical limits of the area in which they lived, that limit reached, migration was the only alternative to the reduction of population by mass famine.
On this Continent, a century ago, the log cabins of our forefathers required for their operation and maintenance only the simplest of water-wheels, and windmills. There was no integration, no coordination or synchronization. The individual ego could be exercised to the full, and each local area could be manipulated according to the whims of the individual operator. At this point we come to the basic question--the operation of a physical apparatus.
The law of impact states that when two oxcarts collide at three miles per hour there is no great danger of any serious results, and at this rate in an oxcart civilization you could do without good roads and stringent driving regulations. The driver could fall asleep, and even when awake required only moderate intelligence to prevent the mild order of disaster which might result from inattention; but increase the speed of the vehicle and the sequence of operations instantly changes. With a modern automobile you require not only roads but good roads. You cannot drive at sixty miles an hour on blind earth; the faster your rate of motion the smoother must be the path you traverse. Speeds of that order require a given curvature of road to prevent disaster, the maximum curvature possible for a road designed to carry traffic at any given speed can be determined in advance--and this determination will have no regard of the personal idiosyncrasies and capacities of the operator.
We have been experiencing a change in the magnitude of social operations due to the accelerating rate of doing work on this Continent. For precisely the same reasons we must consider, quantitatively, without personal allowances, the proper conditions under which this work may be accomplished smoothly.
It has often been said that if we could take the Chinese and somehow raise them bodily to the standard of living that prevails on the American Continent, not only China and the Orient would be benefited thereby, but prosperity would return to the United States and the Occident. Such reasoning is characteristic of the present confusion in social thinking which is still based upon the classical economics of human labor and `value.' When, however, one realizes that prior to 1830 we, on this Continent and everywhere else in the world, consumed not over 2,000 kilogram-calories of extraneous energy per capita per day, and that in 1929 we, on this Continent alone, consumed a maximum of 154,000 kilogram-calories of extraneous energy per capita per day when we realize this, the problem of China takes on a new and unsuspected aspect. In brief, in order to raise the standard of living of China to the present level of the North American Continent it would be necessary to expend two and one-half times the total energy consumed by the entire globe in 1929--a little puzzle which we may reasonably doubt even the capacity of the Chinese to solve.
Now, in 1933, after three years of the most unprecedented conditions that this country has ever known, when the oscillations of production have gone to greater extremes than have ever been witnessed in any preceding depression, we find ourselves with more unemployed than we had total population a century ago. Each succeeding declination in the production curves of pig-iron or of almost any other major industrial commodity swings lower, calling more forcibly to our attention the problems peculiar to a society increasingly dependent upon the correct operation of its physical equipment. It is these problems which Technocracy now poses, stating in particular that the continued substitution of physical energy for man-hours results, not in technological unemployment, but in a reduction of total employment and of total purchasing power.
Granting this inexorable replacement of human labor by physical energy, Technocracy makes the further statement that such a condition brings the social mechanism of this Continent into sharp conflict with the interference control vested in the Price System of production. The Price System, which we have defined as `any exchange or energy flow control founded upon a commodity valuation,' originated under those social conditions where human labor was the prime factor in the performance of work and the creation of wealth. The `values' upon which this system rests and by which alone it may continue to function might be described as the condensation of human perspiration. Once you eliminate that sheer human toil becomes functionally insignificant--you have struck at the very heart of the Price System fundamental postulate is the continuance of man-hours as an appreciable factor in the total energy consumed by society. You cannot continue to eliminate man-hour an expect the Price System to remain stable: It will go out of balance in proportion to the rate of social change and social change is here quantitatively defined as proportional to the rate of substitution of extraneous physical for man-hours in the operation and maintenance industrial social mechanism.
By way of illustration: Our first blast furnace in Massachusetts turned out approximately 3 tons of pig-iron a week. (My authority here is a published advertisement of the New York Trust Company.) A modern furnace, operating with less than half of the earlier total of men per furnace, will do over 1,000 tons per day are speaking, remember, of changes of rate, not total employees in the iron and steel industries.
The number of people required to shovel sand, coal or by individual labor may be realized when you watch a power shovel with a 100-foot beam and a 95-foot moving 15 or 18 cubic yards of material a vertical distance equivalent to a six story building. Just how laborers would be required to move one load of that shovel an equal distance?
We are not here attempting to say--as many of critics charge us with saying--that America is on the verge of chaos or an evil doom. We have merely maintained that if present trends continue--and we see no chance of them abating--you may expect a greater unemployment in this country within eighteen month at the present rate of these trends, and assuming continuance, it is conservative to envisage a total unemployment in the United States within this period of 20,000,000.
We make this statement knowing full well that moratoriums, inflation, and all other possible palliative are going to be attempted with all the astuteness and dexterity that political chicanery can bring to bear in dealing with the problems of this Continent. We know also that the debt merchants will exercise their legerdemain to the full in order to save the face of the present situation. Inflation, which is now one of the prime concerns of Congress, would be of real interest only to those who possess above a certain number of debt claims, because they alone can go into debt fast enough to take advantage of inflation. The man who works for wages or a salary cannot go into debt and thus cannot take advantage of inflation, the privilege of debt being in other hands.
So it has come about that Technocracy, in the full blaze of world publicity, will experience attempted exploitation by those with whom it has, and can have, nothing in common. The politicians and debt merchants of the day will be moved to employ Technocracy as one of the cornerstones of a new political state; they may even go so far that, under the color of Technocracy, an institutional fascism will be introduced as one of the dictatorial prerequisites of the incoming president. This and many other efforts will be made to utilize the work which Technocracy so quietly initiated, but we, ourselves, will consistently maintain the position from which we started--that you cannot continue to do certain things on this Continent; that people and times have changed, and that any decisive moves toward readjustment must be the responsibility of those who control the policies of this country.
We have accomplished very little, but it has become clear that, if present conditions continue, we shall be forced to consider problems more grave than any with which this country has so far concerned itself. Yet America has just lately had a national election, and not a single outstanding figure in politics or finance has come forward with any proposal that has one iota of usefulness in dealing with these conditions and these problems.
To an outside observer America would appear to be a nation that is rapidly sinking to greater social instability and whose leaders lack intelligence to offer us more than soporifics and palliatives. The past three years have brought forth nothing genuinely relevant to the situation and, if this barrenness persists for another ten years, we are due for one of the gravest social readjustments that this country has ever experienced.
James Watt produced his steam engine at about the time the Constitution of this country was drawn up. There is a profound significance in this fact. It meant that the epoch of social change, as above defined, opened with the commencement of the United States as an independent political unit. It meant that all the political instruments and economic theories carried over from an older time would become obsolescent on an area exceptionally favored by nature for the richest development of power--an area to be subsequently exploited to the full in that direction.
A similar irony of events brings me to speak tonight in a hotel that yesterday was sold on the block under the hammer of the auctioneer. Symbol enough of the financial obsolescence brought about by the very technological procedures misapplied to its design and construction! As the Irishman said, `Sure and it was no good before it was built.' Throughout the United States today we have an identical situation.
Bear well in mind that under a Price System monetary wealth is equivalent to the creation of debt; physical wealth, on the other hand, is the conversion of available energy into use-forms and services. Under a Price System the process of being wealthy is the collection of debt claims (such claims being represented by the amount of `money' you possess); physical wealth, on the other hand, is a degradation of converted energy into total uselessness, or, complete consumption. You are not physically wealthy in the possession of debt claims against an automobile company (that is, through being able to buy its product); you are wealthy, in the physical sense, only when you are wearing a car out through use.
Let us put this question of debt in another form. The population of this country during the past century has increased as the square of time, production as the cube, total debt as to the fourth power, and available energy as to the eighth power. You are putting your goods `in hock' faster than you make them. Note now this peculiarity about debt: The more use we make of it the more we have. This is in complete violation of the basic laws of physics which state that the more we use of physical things the less we have of them.
Today, with over 200 billion dollars of total debt in this country, we find ourselves owing four times per capita as much as we did in 1895 and sixteen times as much total according to one of our economists. Do not forget that in 1893, 1907, and 1920 we had write-downs of this total debt, but its rate of growth is inclusive of all the write-downs, and the debt continues to mount thus continually throwing the system out of balance.
How then is it proposed to handle a Continental setup wherein the production of physical wealth has passed from the direction of one process to that of another?
The Price System goes back to remote history. We have had variations of it for thousands of years. Russia today operates under a Price System, even if it has eliminated private enterprise and commercial initiative. Its mechanics of exchange and its evaluation procedure are on the same basis as those of the United States--it has internal bonds, corporation charters, corporation stock; it pays wages and salaries and buys and sells on a commodity valuation basis. These things cannot exist without the Price System--from which Russian communism believed it had escaped. Furthermore, Russia had to call upon the outside world for technical assistance in the introduction and use of new machinery--the foundation of the new social mechanism she wished to set up. Unfortunately, a great part of this machinery was sold to Russia by businessmen who were anxious to unload stocks of this equipment already obsolete. Tractors that were made to sell to the back lot farmer of 140 acres should never have been sold to the gigantic farms of this new state. But Russia is learning her lesson and doubtless by now is rectifying these errors.
If you plot the growth of population on any given area subject to a high-energy consumption, then you must also plot the growth of all energy-consuming devices on that area--for this reason: The only distinction man possesses functionally, the one thing which differentiates him functionally from all other species, is his capacity to design and construct organic extensions, that is to say, energy consuming devices independent of himself and capable of operating at high capacity with a minimum of human labor and attention. Under the compulsion of this technological development our modern world has reached a point where a laissez-faire economy can no longer be maintained. It is essential that we know the rate of growth each and every energy consuming device upon any given continental area if we are to operate successfully the physical equipment of that area at an energy consumption of 150,000 kilogram-calories per capita per day. The more energy we consume per capita, the greater the need for a change in the methods of control--exactly as in the change from an oxcart to an express train. The social mechanism of today has advanced to an order of magnitude far beyond the log cabin stage of our ancestors; the methods of control must be adjusted thereto.
Technocracy points out that these problems, if not solved, will lead to a situation of increasing gravity, possibly terminating in a secondary crisis. Attempts to balance our budget, to reduce expenditures on a downward curve, will simply mean less employment than before with a resulting decrease in purchasing power, and we will be compelled finally to such devices as debt moratoriums, debt holidays, inflation, and a free-for-all race as to who can create debt the fastest.
How long this can go on we do not know. We did not create the situation; we are not responsible for it. Machinery and power procedures are not guilty of the present situation on this Continent; neither are the engineer, the technologist, and the scientist. What we do know is that the past three years have been more conducive to social thinking than any similar period in our history, for it would seem that only under such conditions do we achieve some lucid intervals in our way of social thought.
We cannot push our industrial situation much beyond the point it has now reached. We have today a `technological backlog' overhanging this country which makes our material backlog resemble a backyard woodpile. Yet, thanks to the prevailing interference control of the Price System and its corollary, debt creation, we can use only a small portion of that technological backlog. A new system will have to be put into effect in order that the things which science and technology have developed may come into full social usage. Such usage is not possible where you are looking for the earliest possible means of creating debt faster against others than they can create it against you, and it is just this procedure which is necessitated by the Price System under which we operate our society. If you cannot maintain a preferential position in creating debt claims then you do not stay in business; you go out of it. This is not the fault of the individual debt merchant or businessman; he is no more rapacious than any other individual or group in this country, hut under the setup he is compelled to play the game that way. Granted a different setup, the rules of the game would be different. Technocracy is pointing out that social change will necessitate a new set of rules.
Social change, in the sense of change in the rate of energy conversion, was not inaugurated until the advent of the scientist, the engineer, and the technologist. The meal which we have had here tonight and the microphone before which I am now speaking are symbolic of two entirely different processes--the meal of a process which has not appreciably changed in seven thousand years, and the microphone of one introduced by modern technology. Food is still served with man as a transport animal with antiquated combustion methods still used to cook it; yet here before us is a delicate instrument through which the technologist puts me into direct communication with the people of this Continent. There is no reason why the meal could have not been served without human aid--no technical reason that is; financially, yes: It would not be sufficiently profitable to serve it so, and the capital investment would be too high.
Given a continuance of the present rates of growth of energy consumption, we can see no hope of social advance under the Price System and its democratic political sponsorship. These things contain nothing suitable for dealing with the problems in hand. They have no methodology except that of debt creation and this is not sufficient for a high-energy civilization. Therefore, Technocracy insists that unless a procedure is developed whereby we can accurately measure and know the rate of growth of all energy-consuming devices on this Continent as a function of time, and unless all production and distribution sequences are operated on what is known as the balanced-load (which means a minimum of deviation), then we shall rapidly approach the end of social stability and the beginning of chaos on this Continent.
I wish to note here a very interesting thing which has come out of the work and activities of Technocracy--one of the strangest social and political realignments in history. For the first time we are witnessing an alignment on the basis of functional capacity, so that now we discover the liberal (that last resort of the incompetent and stupid), the debt merchant, and the communist, fighting together in defense of a system of advantage. We can but wish them well, hoping that the company of each is pleasing to the others, and we reiterate that, unless the physical factors of society on this Continent are brought under control, and that very soon, these strangely assorted companion-at-arms will have little or no solace save the mud of the last ditch wherein they now struggle so valiantly.
Technocracy has little more to say except that it proposes to carry on, hoping that in the near future it may be able to bring out its first definite reports on how this Continent has functioned in the past century. It may be that social conditions are moving faster than we think that they are even more serious than we have claimed. We do not know. Suffice it to say that if swiftly moving conditions do prevent our work from becoming known, they cannot prevent the work from continuing. That we have enemies and encounter hostility is clear enough, but we prefer to be known by the enemies we have made, for in their character and motives they exhibit an unparalleled functional incapacity.
Thus it comes about that Technocracy is not greatly concerned with replying to its critics. It does not have to. Conditions are determining the rate at which we are moving: Technocracy can afford to work and wait: no other organization on this Continent can. If we are correct, then we have carved out for ourselves one of the biggest tasks in history (and we will die in harness). If we are wrong, then we have been merely human. We can leave it at that, in the full knowledge that conditions in the next few years will decide who is correct.
Technocracy has no theory of the assumption of power; it is not concerned with going any particular place. It merely observes the present direction of social forces, striving to obtain a clear and unified picture of what is happening on this Continent. What is to come is for the future to tell. We wish everybody a happy landing, and close with the affirmation that Technocracy will stand its ground. For the rest, we will leave it to tomorrow.
Footnote: From the Greek, meaning a student of the theory of values. Axiology, the theory of values, their unique forms and inter-relationships, as the True, the Beautiful, the Good, contrasted with the scientist, whose proper concern is with quantities, their precise measurement, correlation and control in the interests of knowledge and the service of man.