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Chapter 85 of 117 · The Freeman 1983 by Foundation for Economic Education

From Caves to Computers; B. B. Greaves

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Mrs. Greaves is a member of the Foundation's senior staff. This article is based on a recent talk she gave in Dallas, Texas. Computers, however, are only one of the many impressive devices we enjoy today, for which we are in debted to our innovative ancestors. To appreciate the extent of our debt and the many contributions their originality, experiments and exer tions have made to everyday phe nomena, we should think back to the time before modern tools existed. In the Beginning Imagine, if you can, Planet Earth as it appeared before there were people-nothing but rocks, moun tains, deserts, plains, jungles, riv ers, lakes, oceans. The large land masses and bodies of water have shifted over the ages, to be sure. Earthquakes, volcanic eruptions, erosion, alluvial deposits, and the like, have caused many changes. However, Planet Earth's natural re sources are still essentially the same, 587 588 THE FREEMAN October physically and chemically, as they always were. And if it hadn't been for the appearance on earth of peo ple, there would still be only rocks, mountains, deserts, plains, jungles, rivers, lakes and oceans.

As we look around today, we are impressed by what people have wrought. We see many remarkable things-magnificent highways, vast acres under cultivation, huge facto ries, gigantic skyscrapers, mighty ocean freighters, airplanes over head, trucks and automobiles, heavy earth movers, countless homes and apartments, shopping centers, elec tronic computers, radios, TVs, mov ies, man-made textiles, "miracle drugs," and so on. All these have been brought into existence by the efforts of people. Yet they were not created in the physical sense. People cannot createsomething out of nothing. They cannot even imagine how something may be created out of nothing. Thus, we must ask, how did all these re markable things come about? Freedom to Experiment, Freedom to Improve In the beginning, men, like ani mals, had to struggle to survive. They had only their own hands and wits to help them in trying to satisfy their most pressing wants, aims and goals.

They could do little but forage for food, shelter and for things to wear, then carry or drag what they found to wherever they wanted to use it. Long hours had to be spent almost every day in acquiring the barest es sentials. Yet step by step, men brought about improvements. The changes that made all these im provements possible depended on four factors-the freedom of men to pursue personal values and goals, their ability to conceive of new ideas, the opportunity to acquire property and to use that property as they chose, and their willingness to ex periment in the attempt to imple ment their new ideas. Whenever men have enjoyed such freedom and op portunity, they have been able to improve their situation. Over the centuries, as men were free to try, free to experiment, they transformed Planet Earth into our world of modern machines, struc tures and appliances. Each step along the way was taken by an individual, choosing and acting according to his or her own best judgment. The ac tion of a single individual may seem insignificant, but the accumulated actions of countless individuals over the ages have led from the cave to the modern computer. The process was long and slow. It was uneven.

Men encountered many obstacles and setbacks due to natural catastro phes and the violent interventions (war, pillage, theft, and the like) of other people. However, they did make progress in time, thanks to the con tributions of unknown ideamen and experimenters.

1983 FROM CAVES TO COMPUTERS 589 People recognized rather early that it was to their advantage to cooper ate with other people on some proj ects. Two or more persons could push or drag heavier loads than could one man alone. Two or more men could forage or hunt over a wider territory than could one man alone. Two or more men could protect more women and children in a larger shelter· or refuge area than could one man alone. Cooperative pushing, drag ging, foraging, hunting, and pro tecting meant that there would be more food to share, more and better shelter per person, and more safety and security for everyone in the community. Cooperation helped ev eryone concerned. Specializationand Trade As time went by, more and more persons came to appreciate the ben efits of cooperation. Cooperation en abled them to specialize and to ex change their output with others. It was no longer necessary that each person be a "jack of all trades." Each could spend more time on what he preferred to do and what he could do well. Out of cooperation there devel oped specialization and trade. Com munities, towns and eventually cit ies evolved as centers for commu nication and trade.

To cooperate, specialize and trade successfully, however, men had to communicate. This called for some kind of language. We know little about the origin of language, except that it must have been a product of prolonged and continuing coopera tion. Words may have originated as simple sounds, expressions of pain or joy combined with gestures and signals, or perhaps in imitation of the calls and cries of animals. In any event, as a result of countless con tacts among individuals who wanted to express ideas, words were devel oped in time for many familiar ob jects-man, woman, child, baby, danger, fire, home, hearth, and the like. Eventually, words were adopted also. for abstract concepts until we now have terms to express fine shades of emotion, complex scien tific theories and· even profound philosophical concepts. Yet no one set out to develop a fullfledged lan guage. It developed simply out of countless attempts on the part of many individuals, on many occa sions, to convey ideas and transmit messages to other persons. More over, men have developed not just one single language over the ages, but hundreds, each with its own unique vocabulary and its own dis tinct grammatical structure.

A Mediumof Exchange Money was also developed as a re sult of countless actions on the part of many private individuals who took advantage of freedom and opportu590 THE FREEMAN October nity to pursue their various per sonal goals. Specialization and ex change, which came with cooperation and communication, made it possi ble to produce more goods and serv ices. However, they also made most trades more complicated. Buyers and sellers of specific items were not al ways easy to locate so it was seldom easy to match them with one an other. What one wouldbe seller was offering might not be what any available wouldbe buyer wanted at the time. And wouldbe buyers might not then be ready to offer in ex change, for the items they wanted, the precise combination or quan tities of goods and services anyone else in their community was seek ing. Faced with this dilemma, some one must have asked himself one day: "Why not accept in trade something other people might want? Even though I might have no use for it now, I could use it later to trade for things I will be wanting then."

This reasoning led buyers and sellers step by step to intermediate exchange. Rather than waiting for trading partners with precisely what they wanted, they traded their goods and services for more generally ac cepted commodities. They expected a supplier of what they really wanted would be more willing to take this generally accepted commodity than the good or service originally offered in trade. Thus, different commodi ties-cows, wampum, shells, tobacco, and so on-gained general acceptance as "media of exchange" or "moneys." In time, as a result of countless separate trades among in dividuals, the choice gradually nar rowed until by the end of the 19th century gold had become recognized almost worldwide as the most gen erally accepted "medium of ex change" or "money." People, not governments, were re sponsible for money; governments only took advantage of the money which evolved over centuries from the ideas and voluntary transac tions of private persons. The paper and credit money we use today is not market money, but rather a perver sion of matket money, dependent on the force and coercion of govern ments which hampered individual actions and choices. But that is an other long story.

Few nowadays give thought to how such common everyday phenomena as cooperation, communication and money developed from the ideas and the voluntary choices and actions of private persons. Yet they did. All arose out of persistent and repeated efforts on the part of unknown num bers of our ancestors who conceived of new ideas and used what freedom and opportunity they had to experi ment. It is only thanks to them that we can cooperate, communicate and trade with ease today. Without widespread cooperation, languages for far-reaching communication and 1983 FROM CAVES TO COMPUTERS 591 a widely accepted money, it would be absolutely impossible for our complex market economy to func tion today. Productivity Men cannot create anything in the physical sense. However, if there are no insurmountable obstacles in their path, they can move· already exist ing things around. They can alter natural resources in various ways.

They can transport, reshape, adapt, and combine them with one another. By moving specific quantities of nat ural resources around, at crucial times and under controlled condi tions, men can form new shapes and new structures. As a matter of fact, when men have been free to experi ment, their ingenuity and inven tiveness leads to a kind of "creativ ity." This "creativity" is productivity, which stems simply from the ideas men have about how to move natu ral resources around, when to com bine them with other resources and under what specific conditions. Whenever a person with a new idea transforms a natural resource in some way to develop a new tool or production method, he sparks an "industrial revolution" of sorts. Oc casionally an individual who intro duces a significant innovation-a Gutenberg, a Ford or an Edison will be recognized and remembered. However, most of the innovators who have contributed to our remarkably productive economy, with its "mi raculous" tools and products, have been unknown, unheralded and un recorded. For instance, we know nothing about the specific individu als who introduced the wheel, the axe or the arrow, thus sparking the first "industrial revolutions." But we do know that they had some purpose in mind. They used mind and reason to try, to experiment and to improve their situations. We know also that all who came after, all who chose voluntarily to use the wheel, the axe or the arrow, did so because they ex pected it to help them accomplish their own goals.

Some ideas for new tools were sparked by observation, others by thought or action. "Lucky accidents" undoubtedly played a role. But it takes mind and reason to turn a "lucky accident" into a good idea. Some new tools were intended to make it easier, or quicker, to accom plish specific tasks, others to im prove or increase output. Men learned in time that they could ac complish more, more easily and more quickly, with tools than they could with only hands, muscles and elbow grease. Thus, they chose voluntarily to adopt these "productivity-in creasing" tools. With every "indus trial revolution" that succeeded, the struggle for survival became a little easier. The development and improve ment of tools has been a continual 592 THE FREEMAN October process from the cave to the present day computer. Whenever men were free to try, their urge to improve conditions induced them to move re sources around. They couldn't create a fire or heat. However, they discov ered how to build a fire that produced heat by rearranging natural re sources. They learned to twirl two sticks together to make sparks from which they could light a fire. Later they discovered how to put phospho rus on a small stick, strike that stick against a rock.to produce a flame that could set dry leaves, twigs or wood shavings on fire. They were not cre ating anything. They were just rear ranging natural resources in line with their ideas in the hope of achieving a purpose.

Rearranging Resources This process of rearranging re sources, revising, adapting and com bining them with others, is produc tion. The many things we have today-our tools, machines, equip ment, appliances, commodities and conveniences-were all produced by shifting natural resources from place to place, in certain quantities, at crucial times and under prescribed conditions. The "creativity" of hu man beings, their productive ge nius, stems simply from the ideas they have about how to move natu ral resources around, when to com bine them with other resources and under what conditions. The computer, as well as the many other so phisticated tools, commodities, ap pliances and conveniences we enjoy today, were all developed and produced in this way-by individu als who were free to act, conceive of ideas, and dare to experiment by moving natural resources from place to place under controlled conditions.

Let's consider a specific exam ple-steel. Iron is dug from the ground and shipped to a foundry. There it is combined with carbon and other minerals at extremely high temperatures. The steel that results is then compressed, stamped, cut and shaped into many products-rails, trains, ships, automobiles, toasters, computers, and countless other fa miliar and unfamiliar products-all this without benefit of miracles, simply by rearranging natural re sources. Millions of small "industrial rev olutions" have occurred since the days of the caveman, each sparked by some individual's idea and ac tion. The "Industrial Revolution" from the mid-18th to the mid-19th century was the outcome ofa cluster of newly-developed tools and meth ods of prOduction-the steam en gine, the factory system, the spin ning jenny, large-scale agriculture, assembly-line production and new trade channels. John Locke, David Hume and Adam Smith, among oth ers, had argued in their writings, published over several decades, that 1983 FROM CAVES TO COMPUTERS 593 the" powers of the British monarch should be limited and the lives, property and freedom of British cit izens should be better protected. As such ideas gained acceptance the British Parliament repealed many controls and regulations on produc tion. Then persons with new ideas no longer encountered such serious obstacles from government. They were no longer prevented by the old Mercantilist government rules and regulations from embarking on new projects. Individual ingenuity was challenged and new ideas and in ventions proliferated.

Respondingto Opportunities The effects of the relatively greater freedom enjoyed by British citizens to act and experiment were felt in almost every field of endeavor transportation, shipping, commerce, communication, mining, iron and steel, farming, construction, tex tiles, clothing, medicine, and so on. Production expanded and the coun try's population increased. Individ uals were better able to acquire property, save and invest their prop erty to further increase production. People moved from localities where their families had been attached to the land for generations, to places where opportunities looked bright er. Many migrated to the United States, South Africa and Australia. New trade channels were opened, new sources of raw materials and new markets for factory products were developed. The groundwork was being laid for today's industrial pro duction and the "Computer Age."

Great things are accomplished step by step. A magnificent church is constructed stone upon stone. The tallest skyscraper is built floor upon floor. New factories are constructed brick upon brick. New highways are extended mile by mile. New trading patterns are developed bit by bit. Similarly, the vast accumulations of wealth, the stocks of goods, the many tools, machines, pieces of sophisti cated equipment, appliances and modern conveniences, were all de veloped over the ages, without the benefit of miracles, as entrepreneurs explored and experimented to dis cover new resources and new ways to revise and combine them. The progress of men from the cave to the computer has been step by step, as a result of individual choices and ac tions. The famed economist, Ludwig von Mises, often described the automo bile of today as "the automobile of 1900, with hundreds of minor im provements." Thus the modern com puter is the calculator and/or the typewriter of decades ago "with hundreds of minor improvements."

Each improvement came about as some individual had an idea, had the freedom to act and dared to experi ment with property he could call his own. I John JeffersonDavis Computers and Capitalism IT is an increasingly obvious fact of contemporary American life that the computer is having a pervasive in fluence on the way we work and live. What is not so obvious is that the computer is beginning to challenge some of the most widely held as sumptions about the nature of our economic system. Specifically, the invention of the microprocessor has helped to make obsolete some of the most common objections which the free market system has faced during the last several generations. "Capitalism leads to excessive market concentration." This criti cism is at least as old as Marx him self. Capitalism, it is said, inevita bly leads to monopolistic con centrations in each industry which ruthlessly suppress the competition Dr. Davis is Associate Professor of Theology at Gor don-Conwell Theological Seminary, South Hamilton, Massachusetts, and author of the forthcoming book, Your Wealth in God's World.

The Freeman 1983

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