American Culture and the Decline of the Digital Spirit: Part I

To paraphrase Rodney Dangerfield, when it comes to explaining a nation’s techno-economic performance, culture gets no respect. It can’t be easily quantified, so economists tend to ignore it. It concerns the nation, rather than the enterprise, so business scholars largely ignore it as well. But despite this, culture plays a critical role in a nation’s techno-economic success. And today, U.S. culture has decidedly become a collective headwind against digitalization—both against the success of digital firms and against the broader digital transformation of the economy.

It’s hard to say exactly when the culture turned from supportive to oppositional, but perhaps 2011, the year Steve Jobs died, is as good a turning point as any. Since then, the U.S. elite narrative, long one of digital enthusiasm and interest, has shifted largely toward digital skepticism and critique.

As history shows, culture matters. A critical, rather than supportive, culture produces a business class that doubts itself and a society that hesitates rather than seeks faster progress. This should be obvious. If elites—including the intellectual and political classes—are not wholeheartedly behind technological progress and transformation, whether industrial or digital, progress will inevitably be more halting and less successful. In a world where America faces intense international competition in the digital space, this is a cultural posture we can ill afford.

This is a two-part blog. This first installment examines the role culture played in industrial development through the experience of England. It relies predominantly on Martin Wiener’s 2004 book, English Culture and the Decline of the Industrial Spirit, 1850-1980, which anyone interested in industrial development should read.

Wiener’s heavily documented thesis is that although “England was the world’s first great industrial nation… the English have never been comfortable with industrialization,” that discomfort ultimately contributed to industrial weakness and decline.

I argue in the second blog that the same dynamic is now playing out in the United States with respect to digitalization.

Wiener argues that notwithstanding the first 40 or 50 years of English industrialization, Britain never quite seemed culturally “at home” with industry. Over time, these anti-industrial views contributed to the decline of British industry and the “modern fading of national economic dynamism.”

England’s state of mind, like that of much of the United States today, was profoundly conservative in the sense of preserving the past while remaining skeptical of, or openly hostile to, the present and future.

Ralf Dahrendorf, the German-born director of the London School of Economics and Political Science from 1974 to 1984, concluded that “an effective economic strategy for Britain will have to begin in the cultural sphere.” The same is true for the United States today.

Wiener argues that “for a long time, the English have not felt comfortable with ‘progress.’” He states:

The English nation even became ill at ease enough with its prodigal prodigy to deny its legitimacy by adopting a conception of Englishness that virtually excluded industrialization… In the later years of Victoria’s reign, they came to form a complex, entrenched culture syndrome, pervading ‘educated opinion’. The idealization of material growth and technological innovation that had been emerging received a check, and was more and more pushed back by the contrary ideals of stability, tranquility, closeness to the past and ‘nonmaterialism’.

He goes on to note that the English genius “was not economic or technical, but social and spiritual; it did not lie in inventing, producing or selling, but in preserving, harmonizing and normalizing.” According to Wiener, Britain’s greatest task—and achievement—lay in “taming and ‘civilizing’ the dangerous engines or progress it had unwittingly unleashed.”

England did this while other nations, including the United States, Germany, and Japan, got on with the task of unleashing. Indeed, Wiener points out that “even those nostalgic for the rural past in America rarely disdained manufacturing and progress.”

As one English scholar wrote in 1976, “In West Germany neither making money nor making three-dimensional artifacts are culturally dubious activities.” Today, by contrast, America’s elites are nostalgic. They increasingly romanticize an analog past.

So why did England invent the machine but then become ambivalent at best—and hostile at worst—toward industrialization? Wiener writes that “modernization has never been a simple and easy process. Wherever and whenever it has occurred, severe psychological and ideologic strains have resulted.” English elites resisted those strains, much as American elites do today.

Part of this resistance took the form of the aristocratic landed elite absorbing the new industrial bourgeoisie. Indeed, a mark of success for a wealthy factory owner was often to retire and buy or build a large estate in the country. Wiener explains that “the consolidation of a ‘gentrified’ bourgeois culture” meant that economists, journalists, civil servants, and even political leaders increasingly held sentiments and ideals that restrained rather than stimulated economic growth.

As early as the 1820s, John Stuart Mill set the tone, describing industrialists as “the very classes of persons you would pick out as the most remarkable for a narrow and bigoted understanding and a stunted and contracted disposition as respects all things wider than their businesses and families.”

Even at the relative height of England’s industrial revolution—symbolized by the construction of the Crystal Palace in Hyde Park for the Great Exhibition of 1851—the reaction was mixed at best. Much like today’s digital skeptics:

• Social critic John Ruskin dismissed industrialization as nothing but “noise, emptiness, and idiocy.”
• Rudyard Kipling famously refused to install a telephone in his country estate.
• According to George Bernard Shaw, Charles Dickens thought the industrial system was “horrible.”
• Historian Arnold Toynbee called English industrialization “a period as disastrous and as terrible as any through which a nation ever passed.”

And, of course, this hostility toward industrialization extended naturally into contempt for America. British philosopher Herbert Spencer, who laid the groundwork for Social Darwinism, wrote that “the American is less happy,” and that existing and future generations of Americans “are and will be essentially sacrificed.”

Wiener quotes a widely read left-wing intellectual writing in 1926 that “the English dislike America for the American worship of size, speed, mechanism, and money.” As Wiener observes, America was seen as offering the least resistance to the dehumanizing tendencies of modernity; it had “sold its soul” to industrialization. It also created a mass middle class in the process.

In the minds of the British, America became—to borrow Tolkien’s imagery—Mordor, while England was “the Shire.”

Even England’s leading economists, not unlike some today in the United States (e.g., Nobel laureate Daron Acemoglu), were ambivalent toward industrial growth. Alfred Marshall hoped for a society in which social order would surpass the present through “the subordination of material possessions to human well-being.” John Maynard Keynes was “not a great friend of the profit motive.”

As Wiener explains, these economists, along with Treasury and other government officials, similarly attached “a low priority to the increase of production and the pursuit of material gain.” One UK Treasury official warned in 1960 that economic advance was disruptive, and that economic change itself was “evil.” It is therefore no surprise that the anti-growth guru of the 1960s, E. F. Schumacher, was an English economist. (Schumacher’s “small is beautiful” doctrine would later inspire the title of my 2018 book, Big Is Beautiful: Debunking the Myth of Small Business.)

These views were also reflected in British politicians and leadership:

• Conservative Prime Minister Stanley Baldwin saw himself as a representative of “those far-off days before acceleration was regarded as a manifestation of civilization.”
• Lord Halifax sought to shift agriculture away from efficiency and toward a vision in which more English workers could return to the farm and leave the urban factory behind.
• Liberal leader Sir Edward Grey wrote, “I took things as I found them and for 30 years spoke of progress as an enlargement of the Victorian industrial age—as if anything could be good that led to telephones and cinematographs and large cities and the Daily Mail.”

As Wiener concludes, after World War I, government and politics in England became permeated by a mentality that regarded industry as a necessary evil and innovation and competition as risky and faintly disreputable.

Sounding strikingly like today’s “family-first” national conservatives in the United States, the UK Conservative Party’s official 1949 platform declared:

Conservatism proclaims the inability of purely materialist philosophies to read the riddle of life, and the necessity of subordinating scientific invention and economic progress to the needs of the human spirit.

The socialists of the time were no better, lamenting that “the world is growing ever blacker, uglier, noisier, and more meaningless,” and insisting there was still time to “turn back.” Even England’s unions were ambivalent about industrial growth, decrying their organized American brothers and sisters and criticizing them as “too materialist in their aims.”

There were, of course, a few dissenters who resisted the elite narrative. As Wiener notes, “Rarely were these canons challenged, and then only by self-possessed ‘rugged individualists’ who had a strong sense of swimming against the tide.”

Other nations did not suffer from this pathology. America certainly did not. Nor did the Asian Tigers after the 1950s. Germany did not either.

As Wiener reminds us, ideas have consequences. How could they possibly not? English politics reflected widespread ambivalence toward industrial society and, in practice, dampened rather than stimulated industrial development. He writes that these cultural values ultimately “discouraged commitment to a wholehearted pursuit of economic growth.”

It should therefore come as no surprise that the UK today is largely an industrial wasteland, with per-capita income roughly 30 percent lower than that of the United States and, according to the World Happiness Report, no happier for it—or than Americans, for that matter.

Culture matters.