Several years ago, while pouring over the Journals of the Continental Congress, I came across the following note, dated January 24, 1783:
The Committee [Mr. James Madison, Mr. Hugh Williamson and Mr. Thomas Mifflin] instructed on the motion of Col. [Theodorick] Bland to report a list of books proper for the use of Congress, recommend that the Superintendt. of Finance and the Secy. of Congress be empowered to take order for procuring the books enumerated below: the same when procured to be under the care of the said Secy.
The note is interesting in its own right. For although Madison, Williamson, and Mifflin were probably not aware of it at the time, they were in fact putting together the first catalogue for the legendary Library of Congress, the books that legislators and representatives would need in order to properly conduct the affairs of the new republic.
Then follows the list itself, nine pages of closely set type, line upon line, many of the titles listed in their original languages, not only German, French, and Spanish, but also Greek and Latin, accurately reflecting the superior training not only of Madison, Williamson, and Mifflin, but of all the members of Congress.
This superior training displayed itself four years later, when the states sent delegates to the Convention in Philadelphia. Education would appear to have been one of the leading criteria for selecting the body. Five had earned their degrees at Harvard, six at Yale, with eleven including Madison from Princeton, four from Middle Temple (London), and five from William and Mary. Only two had attended King’s College (Columbia) and only three the University of Pennsylvania, including Mifflin and Williamson. Darmouth had its delegate (John Langdon), as did Oxford (Charles Cotesworth Pinckney), St Andrews (James Wilson), Glasgow (Richard Dobbs Spaight), and Edinburgh (James McClurg), while fully six of the delegates had acquired their learning through retained private tutors. This was a learned gathering indeed.
And while it is surely doubtful that all of these men had full command of all the books in the Library of Congress’s, their command of the classics was impeccable, not only of Aristotle, Plato, and Thucydides, but of Virgil and Plutarch as well.
This command of the classics, it so happens, would be terribly important in determining the final form of our Constitution. For it meant not only that the framers were predisposed to embrace and write republican values and institutions into their Constitution, but also that they were deeply weary of the dangers posed by an overly-ambitious popular democracy. This weariness is apparent in nearly every debate and on nearly every page of the record of the Constitutional Convention. But perhaps nowhere does its appearance strike us as more peculiar than in Alexander Hamilton’s famous remarks regarding the the “celebrated Pericles” found in Federalist No. 6, “Concerning Dangers from Dissensions Between the States”:
The celebrated Pericles, in compliance with the resentment of a prostitute, at the expense of much of the blood and treasure of his countrymen, attacked, vanquished, and destroyed the city of the Samnians. The same man, stimulated by private pique against the Megarensians, another nation of Greece, or to avoid a prosecution with which he was threatened as an accomplice of a supposed theft of the statuary Phidias, or to get rid of the accusations prepared to be brought against him for dissipating the funds of the state in the purchase of popularity, or from a combination of all these causes, was the primitive author of that famous and fatal war, distinguished in the Grecian annals by the name of the Peloponnesian war; which, after various vicissitudes, intermissions, and renewals, terminated in the ruin of the Athenian commonwealth.
Hamilton’s remarks are peculiar because, then as now, Pericles was regarded as the “father of democracy.” And, yet, at least among the framers of the Constitution, this sobriquet was not taken as a compliment, but, rather, as a warning. The question is why?
In order to answer this question, we need to transport ourselves back to the dawn beginnings of the Athenian republic itself, when no more than one in twenty men of voting age were actually qualified to cast a ballot. At this point political power was divided fairly evenly among Athens’ leading families. Should any of them have sought more power than the others, or should any of them have attempted to exclude the others, then the citizens always had recourse to the practice of ostracism.
This practice permitted citizens to scratch the name of any leader they thought had grown too powerful on a shard of pottery, called an ostracon. The names scratched on the ostracons would then be counted. The individual whose name appeared most often among the ostracons would then be ostracized, literally sent out of the city. In this way, even though Athens was still a virtual oligarchy, a government of the few over the many, none of its oligarchs could wield power without the tacit approval both of the other oligarchs and, implicitly, of its leading citizens.
Enter Pericles, born of wealthy, well-placed parents, a full Athenian. Had he wanted to, Pericles could have taken his place alongside Athens’ other powerful families and helped rule this young republic as one of its oligarchs. But Pericles wanted more. He wanted to assume complete and total power over Athens, but he knew he could not do so without risking ostracism; unless, that is, he could woo Athens’ citizens over to his side.
Pericles’ campaign for total control over Athens began with his shifting his allegiance from the aristocratic to the democratic party. Assured that he would not himself be ostracized by the people, Pericles then moved quickly to have his leading opponent, Cimon, a member of the aristocratic party, ostracized. With Cimon’s ostracism behind him, Pericles next moved to consolidate his power. He helped pass a law giving free theater tickets to Athens’ poor. He then used his increasing popularity to lower the property requirement for serving as a civil servant in Athens. But, it was for his next act that he would become most famous.
In 454 BCE, Pericles dramatically increased the wages paid to jury members in Athens’ supreme court, making it possible for citizens without any other means of support or special legal training to play a central role in the highest court of the land. From that point forward, it was difficult for many jury members to separate their legal obligations to the republic from the financial debt they owed to Pericles, a conflict of interest not lost on the young Plato, whose dialogue Gorgias would poke fun at the foolishness of such a decision.
In his Gorgias, Plato pits Gorgias against Plato’s mentor Socrates. Like Pericles, Gorgias is trained in the fine art of political rhetoric. Gorgias tells Socrates that he can “make an orator of anyone who wishes to learn from [him].” He then tells Socrates that an orator, properly trained, can convince anyone of anything. And, for this reason, says Gorgias, rhetoric is the finest of all arts. But, then the dialogue gets interesting:
SOCRATES: And consequently in all matters [the orator] will be able to get his way before a mass of people not by teaching but by convincing?
SOCRATES: You said just now that even on matters of health the orator will be more convincing than the doctor.
GORGIAS: Before a mass audience—yes, I did.
SOCRATES: A mass audience means an ignorant audience, doesn’t it? He won’t be more convincing than the doctor before experts, I presume.
SOCRATES: Now, if he is more convincing than the doctor then does he turn out to be more convincing than the expert?
SOCRATES: Not being a doctor, of course?
GORGIAS: Of course.
SOCRATES: And the non-doctor, presumably, is ignorant of what the doctor knows?
SOCRATES: So when the orator is more convincing than the doctor, what happens is that an ignorant person is more convincing than the expert before an equally ignorant audience. Is this what happens?
No one, but no one, mistook Plato’s dialogue for anything other than a direct swipe at Pericles and Periclian democracy. Pericles had created the perfect environment not for democracy, but for demagogy, leadership through deception. Nor was Socrates the only Athenian who faulted Pericles for his methods.
Thucydides, whom we usually think of as one of Pericles’ allies, held a similarly dim view of Pericles’ methods. Three stories, all from Thucydides’ History of the Peloponnesian War, illustrate why Thucydides, along with America’s Founders, were troubled by these methods.
In the first story, against the best advice of his wisest advisors, Pericles has elected to go to war to help suppress a rash of democratic uprisings in the Peloponnese. The war is not going well for Athens. Archidamus, the leader of the opposing Spartan army, is closing in on Athens, when Pericles is suddenly gripped by the fear that Archidamus might spare Pericles’ substantial personal land-holdings. Why?
Well, it so happens that Archidamus and Pericles are good friends. Their families have vacationed together. They have visited one another’s homes. So, it made sense that Archidamus might spare Pericles’ estates. But, of course, this could prove to be a political disaster. What would the Athenians think if all of Athens was laid waste, with the exception of Pericles’ private property?
Ever the master of political strategy, Pericles quickly hatches a plan, which Thucydides describes as follows:
He therefore came forward first and made a statement to the Athenians in the assembly, saying that, though Archidamus was his friend, this fact was certainly not going to be harmful to Athenian interests, and, in case the enemy should not lay waste his estates and houses, like those of other people, he proposed to give them up and make them public property, so that no one should have any suspicions against him on their account.
The plan was brilliant. Pericles had profited hand over fist from his political career. So, too, had Athens. As they plundered the coasts and cities of the Peloponnese, Pericles’ armies shipped their riches back to Athens, helping fund the most expansive and expensive public building project in Greek history. But the benefits from war did not end there. This was also the age of expansion in the arts and sciences, the age during which even the poor now could view the plays of Aeschylus, Sophocles, and Euripides free of charge. War, at least initially, was good for Athens, very good.
But, then Athens’ luck began to change. As Pericles plowed more and more of Athens’ resources into creating and maintaining his empire, this left fewer resources for Athens itself. Nor had Archidamus squandered his advantage. As his armies laid waste to the countryside and destroyed Athens’ ability to obtain fresh food and water, her citizens were struck by what Thucydides called “the plague.”
The plague was not one catastrophe. It was many catastrophes piled one upon another. It was the financial crisis brought on by Pericles’ expansionary policies, but his refusal to pay for these policies by taxing wealth. But it was also the lack of fresh water and a crumbling infrastructure. And it was the accumulation of sons and fathers, whose death brought untold hardship to all Athenian families. And, then, lastly, it was the plague itself. So that, while Pericles’ silver tongue had been sufficient to bring Athens’ citizens to support military expansion, many wonder whether it sufficient to convince them to stick with their mission to the bitter end. Athenians were now demanding an unconditional drawing down of forces. Would Pericles be able to charm them once more?
What is remarkable about Pericles’ speech—his “oration,” Socrates would have called it—is how skillfully he twists the real suffering, sorrow and justifiable fear of his supporters into a sign of their weakness and lack of resolve, but a sign of his heroism and courage.
I am the same man and do not alter, it is you who change, since in fact you took my advice while unhurt, and waited for misfortune to repent of it; and the apparent error of my policy lies in the infirmity of your resolution, since the suffering that it entails is being felt by every one among you, while its advantage is still remote and obscure to all, and a great and sudden reverse having befallen you, your mind is too much depressed to persevere in your resolves.
But there is more. Not only does Pericles fault his followers for their weakness. He then goes on to admit that his detractors had been right all along. Athens, Pericles confessed, was not a democracy, but a tyranny. His wars had made many enemies around the Peloponnese. So it would be foolish to draw down now.
You should remember also that what you are fighting against is not merely slavery as an exchange for independence, but also loss of empire and danger from the animosities incurred in its exercise. Besides,
to recede is no longer possible, if indeed any of you in the alarm of the moment has become enamoured of the honesty of such an unambitious part. For what you hold is, to speak somewhat plainly, a tyranny; to take it
perhaps was wrong, but to let it go is unsafe.
And, yet, as Thucydides recounts bitterly: “Not long afterwards, as is the habit of crowds, they again elected him general and committed all their affairs to his hands.”
When the framers of the Constitution read these accounts, they could not help but feel that the initial error—granting the vote to men ill-equipped to judge the merits of what Pericles was telling them—was more serious than the last. It was Gorgias’ fine art, rhetoric, at its finest. Could Pericles persuade his audience to do as he wished? Yes he could. Could he have persuaded an audience made up of experts? No. The broadening of the political franchise had not been a move toward greater democracy. It had instead been a cynical move to expand the power of one man, Pericles.
The very idea sent shivers up the spines of the Founders. So, should America too become a democracy? Will an illiterate dock worker or sailor or common laborer be able to see through the lies of one ambitious politician? And would not a Constitution built on a universal, all-male, franchise invite—no, reward—precisely those qualities and character traits—deceit, lying, graft, power, greed, envy, crime—that have wrecked many a republic? As our third illustration demonstrates, the framers knew from whence they spoke.
For, not long after Pericles’ death, Athens quite simply disintegrated under the weight of the political form Pericles had unleashed on them.
In times of peace and prosperity cities and individuals alike follow higher standards, because they are not forced into a situation where they have to do what they do not want to do. But war is a stern teacher. . . . So revolutions broke out in city after city, and in places where the revolutions occurred late the knowledge of what had happened previously in other places caused still new extravagances of revolutionary zeal, expressed by an elaboration in the methods of seizing power and by unheard-of atrocities in revenge.
Had not the framers just passed through a similar revolution? Were they not at similar risk? How were common laborers or dock workers to distinguish their war against the British occupiers from their war against the banks, the property owners, or “federalists” of any and every stripe? Daniel Shays, they knew, was not an exception. He was a patriot. A good man. But he was also an anti-federalist, a democrat, to whom common folk looked for leadership. The framers knew that there was scarcely a tenant farmer in all the northeast or central coast, scarcely a dock worker or common laborer, who wouldn’t at a moments notice take up arms against the men meeting in Philadelphia should the occasion arise.
These farmers, laborers, and sailors had fought and died for freedom and liberty. And, yet, guns silenced and red coats safely shipped back to England, what was the thanks they had received? No right to vote; inflation that reduced their wages to less value than the paper on which it was printed; and an unending string of shortages, foreclosures, and jailings . And for this they had fought and died?
No. Daniel Shays and his rebellion was not an exception, and the Convention delegates knew it. So, when they read Thucydides’ account, they were far from comforted. Popular rule based on lies and deceit, on public oratory and rhetoric, could only meet a bad end.
Here is how Thucydides had described that end:
To fit in with the change of events, words, too, had to change their usual meanings. What used to be described as a thoughtless act of aggression was now regarded as the courage one would expect to find in a party member; to think of the future and wait was merely another way of saying one was a coward; any idea of moderation was just an attempt to disguise one’s unmanly character; ability to understand a question from all sides meant that one was totally unfitted for action. . . . Anyone who held violent opinions could always be trusted, and anyone who objected to them became a suspect. . . . Love of power, operating through greed and through personal ambition, was the cause of all these evils. . . . The simple way of looking at things, which is so much the mark of a noble nature, was regarded as a ridiculous quality and soon ceased to exist. Society had become divided into two ideologically hostile camps, and each side viewed the other with suspicion.
Thus, it is entirely understandable why Thucydides’ words sent chills up the spines of the Convention delegates. What had they unleashed? Would they be able to avoid Athens’ fate? Could they steer clear of Pericles’ error?
Obviously there is much in Thucydides’ account that speaks to our own day. Many would argue that we too have lost that “simple way of looking at things,” that “what used to be described as a thoughtless act of aggression” is now regarded as courageous, and that the ability to look at an issue from many sides is now widely viewed as a sign of weakness, not strength.
As the delegates pondered their options, they believed that they had found a solution. Not Gorgias’ fine art, but Aristotle’s Politics; not oikonomia, but res publica; not the rule of the deceitful over the gullible, but the rule of citizens equally endowed to rule over one another together, in turn.
The Democratic Party is lost. From its left fringe to its bland center, the Democratic Party is lost. It does not lack a legislative agenda, not exactly. And, come 2012, it will also not lack a Party Platform, sort of. But the Democratic Party is lost.
This blog—and soon book—was written in order to encourage the Democratic Party to recover its identity. In the process, my hope is that it will also help our nation reclaim its classical heritage. Reclaiming this heritage is necessary because over the course of the last century our leaders and our people appear to have forgotten the most basic truths upon which their nation was founded. Not the least of these truths is that America, first and foremost, is a republic, not a democracy.
This may seem like an odd place to begin, but it is absolutely crucial. It is crucial because, unless (big “D”) democrats reclaim republicanvalues and institutions, the Democratic Party has absolutely no chance of recovering its own identity. Democracy, after all, means so much—rule by the demos, the people—that in the end it means very little. In theory, we are all (small “d”) democrats. But, in theory, that hardly distinguishes us.
Yet, whereas most of us who vote Democratic embrace and defend republican values and institutions, most of those who vote Republican do not. That is because the very term republic—res publica—turnstheir stomachs and sends them into convulsions. After all, both as understood in its original Latin and as understood by the framers of the Constitution, res publica means “public things” or “common wealth.” Res publica are the “things we hold in common.” Which is why nearly every Republican candidate since Reconstruction (with notable exceptions) has been fiercely opposed to holding anything in common—whether social security, health care, public utilities, public education, public transportation, public lands. You name it; if it has the name “public” anywhere near it, Republicans run for the exits or, as they like to put it, “we reach for our wallets.”
Therefore, at least ideally, the Democratic Party is the true (and only) republican party, the only party ready to embrace and defend republican institutions and values. And, yet, gradually, over the course of the last half century even the Democratic Party has steadily retreated from its vigorous defense of the Republic, so that today it is not uncommon for Democratic candidates in some parts of the United States to join their faux Republican allies in opposing the most basic public values and institutions. Why?
The reasons are certainly complex. But they are not incomprehensible. Some candidates fear the loss of precious corporate campaign finance contributions. Others fear a genuine rebellion among their FOX News loving constituents. And still others may in fact have lost their own passion for republican values and institutions. (Perhaps they really are closet Republicans.) But, at bottom, all of these reasons have a common root, their failure to distinguish and separate two of the most basic concepts in political and economic life.
This failure, it so happens, is not all that uncommon. So common is it, in fact, that two and a half millennia ago, the Greek philosopher Aristotle was said to begin nearly all of his lectures on politics by alerting his students to precisely this error:
It is an error to suppose, as some do, that the roles of a statesman (politikon), of a king (basilikon), of a household-manager (oikonomikon) and of a master of slaves (despotikon) are the same, on the ground that they differ not in kind but only in point of numbers of persons—that a master of slaves, for example, has to do with a few people, a household-manager with more, and a statesman or king with more still, as if there were no differences between a large household and a small state. They also reckon that when one person is in personal control over the rest he has the role of a king, whereas when he takes his turn at ruling and at being ruled according to the principles of the science concerned, he is a statesman. But these assertions are false.
We too may be similarly inclined to think only about the numbers and not also about the kind of government. A nation ruled by the many, the demos, is a democracy. A nation ruled by one is a monarchy. A private enterprise or oikonomia is also managed either by one or by a few (an oligos), but is smaller than a monarchy. A nation of free individuals ruled by a tyranos is a tyranny, while an individual who rules over unfree members of a private enterprise—i.e., slaves—is a master, a despot and his government is a despotism. The differences among these various forms of rule—democracy, monarchy, economy, despotism—are not differences in number alone, notes Aristotle, but also differences in kind.
Nevertheless, we often make the same error as Aristotle’s students. We too think that there are no essential differences between the CEO of a large company and the governor of a small state—“no differences between a large household [megalen oikian] and a small state [mikran polin].” And so we also may ask, “Why shouldn’t the manager of a large private enterprise,” say an oil company, “be perfectly suited to serve as the Governor for one of the United States?”
Because, points out Aristotle, the aptitudes businesspeople acquire managing individuals who report to them are not only different from the aptitudes statesmen need to work together with their equals. These two sets of aptitudes, Aristotle tells us, are diametrically opposed to one another. Which is why a businessperson is as likely to destroy a republic as a statesman is likely to destroy a private enterprise.
The point can be made even sharper. As most readers know, our English word economy is a transliteration of the Greek oikonomia (from the root oikos, meaning household, and the suffix –omia, meaning management). However, its nearest equivalent might actually be private enterprise, which captures both the private dimension of the household and the entrepreneurial dimension of management.
To grasp what the Greeks meant by this term, we need look no further than your own families. Few parents canvass their children before dinner to see whether they would prefer soda and cotton candy to vegetables, protein, and fruit. So, few parents let their pre-teen children decide when they will go to bed, when they will get up, whether or not they will clean their rooms and help out with common household tasks. The household, we are all fond of reminding our own children, is not a democracy—the many do not rule. Nor, however, is it a tyranny, where those less fit to rule govern those who are better qualified.
A household, properly speaking, is a despotism in which those better fit to rule govern those who are not (yet) fit to rule—least of all themselves. Similarly, neither is a private enterprise, an oikonomia, a democracy. It, too, is a despotism. A CEO or Board of Directors—or those to whom the CEO or Board of Directors delegate authority—hire employees whom they deem fit to perform highly specialized tasks. No one is hired thinking that all parts of the enterprise are equal or of equal rank and authority. If an employee fails to live up to the expectations of his or her employer, the employer is free to “let them go.” Which is why no one walks into a private enterprise thinking that he or she is walking into a democracy where equals work side-by-side with and make decisions democratically with others equally well-suited to make such decisions.
Management skills are important, both in a household and in a private enterprise. And, as we will see later on, private enterprise is essential to every republic. More importantly, democracy can pose a serious threat both to a private household and to a private enterprise. As Aristotle knew well, a private enterprise is neither a democracy, nor a republic. It is, in fact, a despotism. And those skilled at despotic governance should be kept as far away from the decision-making bodies of republican institutions as wolves from a flock of sheep.
Later on we will look carefully at the debates that took place at the Constitutional Convention in Philadelphia. These debates will make it clear beyond a shadow of doubt not only that the framers of the Constitution were intimately familiar with Aristotle’s arguments, but that they embraced them. We will also examine the steps the Founders took to ensure that our nation’s republican values and institutions would not fall easy prey to the private interests and personal avarice of its rulers or its people.
I think all of us can agree, they did a pretty good job. And, yet, over the past two and a quarter centuries Americans appear to have forgotten precisely what it means to be a republic. This is not only true of Republicans, who, since Reconstruction, have waged an ongoing battle against all things public, but also of Democrats, who, since 1976 have proven themselves increasingly reluctant to reaffirm and strengthen their own commitment to republican values and institutions. As a result, our nation is at serious risk of going the way of all great republics, which, having abandoned republican values and institutions, often in the name of democracy, quickly lost sight of their very reason for being.
Since the Republican Party shows no interest in defending the republic, but only in crushing every last remaining public institution and value, that leaves us with the Democratic Party. But, as I said, the Democratic Party is lost.
In chapter two, we will examine the events and ideas that first inspired the framers of our Constitution and so provided them with a foundation upon which “to form a more perfect Union.”
I’m just not so sure. Paul Krugman correctly challenges the GOP’s interest in or concern over reducing the deficit. The larger the government deficit, the better. (See T Franks’ Wrecking Crew.)
But does it follow that the GOP is only concerned with the dissolution of the welfare state?
So what’s it all about? The answer, of course, is that the GOP never cared about the deficit — not a bit. It has always been nothing but a club with which to beat down opposition to an ideological goal, namely the dissolution of the welfare state. They’re not interested, at all, in a genuine deficit-reduction deal if it does not serve that goal.
To be sure, there are some in this club who have this goal. But my fear is that the goal of “the base” is far more sinister: not welfare alone, but res publica as a whole. What is phony is therefore not only their mock concern over deficits, but their mock concern over republican values and institutions taken together: the Republic.
Remember: these folks idolize the anti-Federalists, opponents not only of the Federalists, but of the Constitution. And, here, they are on fairly solid ground. The anti-Federalists believed in democracy, not “common wealth.” The republicans, by contrast, feared that the anti-Federalists (and democrats) would sacrifice shared public interests to private self-interest.
Which is among the reasons why both the original anti-Federalists and their modern day followers have so much trouble wrapping their heads around the preamble to the Constitution:
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
Our modern day anti-republicans (the GOP) would like to interpret these words as though written by Ayn Rand, Milton Friedman, or Friedrich von Hayek.
In fact, they were written in response to Shays’ Rebellion, the inability of the Federal government to raise an army, mint a currency, pay its debts (domestic or foreign), and with southern landowners (hardly the friends of Union) fearful that their “property” might at any moment rebel. In other words, they forget what the early anti-Federalists could never forget: that this document, this Constitution, was written against them.
Yes. Government can secure the Blessings of Liberty (and not simply by keeping its hands off). Yes. Government can promote general Welfare (and not simply by letting all do as they please within the limits of the law). And, yes. Governments can insure domestic Tranquility (and not simply by opening and protecting markets).
This Constitution was activist, interventionist, and centralist; it meant to put down men like Shays. It was not the friend of men like Patrick Henry or Tom Paine, solid democrats both (and opponents of res publica).
So, when I hear the GOP inveighing against the Federal Government spending and against raising taxes, what comes to my mind is not a club eager to destroy the welfare state. What comes to my mind is that tradition in American politics that has never been happy with the US Constitution and would just as soon be done with all republican institutions and values.
I just finished reading Erik Larson’s In the Garden of Beasts, a book that follows the family of the Ambassador to Germany during the rise of the Nazis in the 1930s. And, as is always the case, I am reading the headlines through a lens carved by (among other things) my current reading list. In this case, the overall effect is chilling.
That is because most people—even intelligent, thoughtful, people—believe that political extremism comes from politically extreme ideas. On its face that can’t be true. Politically extreme ideas are a dime a dozen and are always circulating here, there, and everywhere.
No. Political extremism is the natural and even predictable response of people who are looking for rational, coherent, intelligible answers during economic and social hard times. And since most people under such circumstances don’t have the time or money to run out and get Ph.Ds in all of the fields they would need to master in order to understand what is happening to them, they do the best they can with what they have.
In the 1920s and 1930s what they had was well-funded anti-Communist, Anti-Semitic, anti-Socialist broadsheets vying for the attention of underemployed and unemployed workers and servicemen again much less well funded broadsheets printed by the Communist and Socialist parties. But there was another critical ingredient, and that was the understandable complicity of well meaning middle class and upper class folk who naturally believed that fascism was preferable to either communism or even socialism. In fact, in many ways, Germany was in an even more advantageous position than we are today (at least in the US), because at least the Germans had a large and well organized left wing political movement.
Where Larson’s Garden of Beasts comes into play is in the ways that political extremists take advantage of what “everyone” thinks “everyone knows.” In Germany (and in the US) in the 1920s and 1930s, what “everyone” thought that “everyone knew” was that Germany’s (and America’s) Jews exercised far more political, economic, and social power than their numbers would warrant and that they did so to benefit a worldwide cabal of Jews who were out to enslave the non-Jewish world. They also “knew” that Jews were behind both the world of finance and world Communism. But, until the financial crisis of 1929, when underemployed and unemployed workers and servicemen began to search for answers, what “everyone” thought that “everyone knew” could not be successfully leveraged by political extremists.
Which brings us back to the Greek crisis. Tucked into Rachel Donadio’s New York Times article are the portentous lines:
In recent months, the governments of Ireland and Portugal have been ousted over efforts to cut budgets and benefits. Students have rioted to protest tuition increases in Britain, and young people who feel shut out of their own futures have held nationwide sit-ins in Spain, where the governing Socialists are in trouble in the polls. Right-wing political parties are gaining strength, tapping, in part, the populist rejection of austerity plans.
I find these lines portentous because “everyone” knows that “everyone knows” that it is not the Left or the Socialists whose mismanagement of the economy brought us to this terrible turn. Just as in 1929, “everyone” knows that “everyone knows” it was unregulated investment finance and the unwillingness of political leaders to reign in capital. But, of course, that is not at all what Germans understood in 1929. And evidently it is not what Greeks, or Portuguese, or Spanish, or Irish, or French, or British, or Americans understand today. Rather than reign in capital and make wealth shoulder its fair share of the social contract, what “everyone” knows that “everyone knows” today is that capital needs to be unshackled from the burdens of increased taxes, overregulation, and, above all, “Obama-Care.” Furthermore, what “everyone” knows that “everyone knows” is that our economic woes are exacerbated by the _______________ (you fill in the blank) pouring across our borders, taking our jobs, and stealing our wealth.
Under the extreme circumstances toward which we and the entire industrialized world appear to be careening, under- and unemployed workers and servicepeople are likely to want an explanation for what is happening to them. And they are likely to take what they “know everyone knows” and fit that knowledge into what they are hearing and seeing on FOX, on CNN, on MSNBC, on PBS and run with it.
Level-headed, well-intentioned economists can rattle off the facts, place their special spins on these facts, and reassure us that there is really no cause for alarm. In the mean time, working families are losing their mortgages, health care costs are soaring, and our prison populations are literally exploding beyond their capacity.
Which extreme political movement would you put your money on today? Is this not already the garden of beasts?
For those of you who missed today’s lecture (June 10, 2011), the following summary will have to do.
Is Karl Marx still relevant?
I am guessing that for most readers, the answer to this question is almost too obvious to even bother asking. Beyond a minuscule gaggle of new and old Trots, of course Karl Marx is not relevant. The US won the Cold War. End of story. So, why are we even asking?
Nor does it help if we spruce up the question: Why is Karl Marx no longer relevant to practicing economists? Because, again, the answer seems all too obvious. Karl Marx is no longer relevant to practicing economists because they presume as a given what Marx, the archetypal critic of capitalism, called into question.
So, rather than asking why practicing economists no longer believe Marx is relevant, perhaps we should be asking why they take capitalism as a given. Here the answer may seem straightforward. But its not. For, as anyone who has taken an introductory course in economic theory knows, what we accept as given was hardly so when our field was trying to define itself in the eighteenth century. That is because eighteenth century political economists knew not only that what they were doing was quite novel. They also knew that the world they were doing it in differed qualitatively from every other world in the past. These original political economists, these “worldly philosophers” as Heilbroner calls them, knew therefore that nothing, but nothing, could be taken for granted. Which is why, one after another, these worldly philosophers wrote chapter after chapter showing why this novelty was, in fact, necessary, right, and natural.
Take Adam Smith, for example. Based upon not the least shred of evidence, Smith trotted out what appeared to be a fairly plausible explanation for the emergence of markets and market behavior. We have, so Smith argued, a “natural propensity to truck, barter, and exchange.” But then why was Smith compelled to devote so much ink to showing why and how civilization after civilization failed to take full advantage of this natural propensity. In fact, though Smith could not have known it at the time, most human beings would spend 2.49 million years avoiding settled communities, wandering from one hunting or gleaning ground to another, steering clear of one another, before, over time markets began to emerge. It would, however, be several millennia before markets would become the dominant and, then, universal determinant of social life.
Nevertheless, the fact is that these classical economists felt compelled to engage in historical reflection, to explain themselves, their world, and to naturalize the unnatural and unprecedented way of life that was emerging. They could not simply out and admit, “Hey guys, we’re making it up as we go along.” Instead they had to try to make the connection between the novelty of the emerging capitalist world and what human beings had always been or had always been predisposed to be (but for the obstacles placed in their path by family, clan, tradition, religion, superstition, and the like). Human beings had always been made for trucking, bartering, and exchanging. And, so, against all evidence, these worldly philosophers set to work showing how this had to be so.
So, how was it that economists began to shed their interest in the historical and social foundations for their young profession? Although scholars still argue over the specific events that brought economists to turn their backs on history and society, there is broad agreement over the logic that justified their move. And, even two centuries later, the elegance of this logic has to be admired.
The two axioms of economic rationality
For, ask yourself: what is it that makes human beings human? It is, you say, freedom. Well, then, what is it that makes primitive peoples primitive? What makes primitive peoples primitive is their lack of freedom. Fair enough.
But, what is freedom? For centuries, in every community and civilization around the globe, freedom had been understood as the conditions that make for freedom. Freedom is the consequence of obeying the commandments of God, observing the proper rituals, honoring the leader chosen by the gods, following the advice of the local shaman, eating the sacred roots, honoring my elders, remembering the stories that have been told forever, and so on. In every community, wherever we look, prior to the fifteenth century freedom is understood as the conditions that make for freedom.
But, does this understanding of freedom make sense? How can freedom be conditioned? Isn’t that the very definition of an oxymoron?
And, so, classical political economists came up with an alternative definition. Freedom, they said, is the absence of constraint. But, note what this definition of freedom does to all traditional communities and their understanding of freedom. All of a sudden, their very notion of freedom has been transformed into its very opposite. And what they took to be the conditions that make for freedom actually turn out to be the constraints that make for bondage.
More importantly, this new understanding of freedom suggests that the new way of life that had begun to dominate Europe, a life of trucking, bartering, and exchanging, was not so new after all. Indeed, it was as old as humanity itself. For, what else was humanity if not those beings who by nature are free?
This, then, was the first axiom of the new science. The second one was equally important: all things in nature, by definition, are constrained. Of course, this axiom provided the foundation for all of the new natural scientific disciplines. For, by definition, any natural scientific explanation that sought to introduce freedom as a condition cannot help but fail.
Armed with these two axioms—freedom is the absence of constraint, natural scientific explanation is devoid of freedom—the new discipline of political economy could move forward. Or could it? For the question remained: was economics a science (in which case it could not allow freedom to enter into its calculations) or was it, like History or Philosophy or Theology, a branch of moral philosophy?
To answer this question, the new economists found their new definition of freedom extremely helpful. For, it turned out, there was nothing to prevent these new scientists of economic behavior from measuring, calculating, and formalizing this behavior without ever touching upon the whole question of freedom, which, of course, remained beyond calculation.
History, which looks at the conditions that make for human life, need never enter into the discussion. And, so, economics could become that unique social science in which the social and the historical play no visible role.
Of course, not all of the worldly philosophers were equally pleased with this solution. When economists bracketed history and society did they not at the same time bracket all that was most interesting and worth exploring in human beings? What about religion, art, dance, poetry, literature, culture, and so on?
Needless to say, eventually, economists would find a way to reduce all of these human activities to numbers, points, and lines on their graphs and regression tables. But, at least initially, the twin axioms covering freedom and science drove a wedge between those disciplines that explored the world of historical change and difference, on the one hand, and those that explored the immutable world of scientific cause and effect on the other.
But, how could these two worlds really exist side by side? Are there really two worlds and not one?
Of all the worldly philosophers, none perhaps was more troubled by these questions than was Georg Friedrich Wilhelm Hegel. Where Hegel’s colleagues were perfectly happy to abandon history and society to the less than fully scientific instruments of their less than fully scientific colleagues in the humanities, Hegel did not share their glee. No amount of mental gymnastics could free humanity, human history, or human society from the fact that even our highest thoughts are clothed in and shaped by the worlds in which human beings and human communities remain embedded. Freedom is conditioned.
But, here is where things get interesting. Even if we accept Hegel’s objection, even if we reject the binary world of the classical political economists, it is still possible that the world itself, or at least the world of western Europe, was increasingly assuming a shape that lent itself to the kinds of mathematical tools and models championed by these economists. Let us suppose, for example, that things like family, clan, religion, and guilds were becoming less and less important forces shaping people’s lives. Let us further suppose that economic markets and relationships of pure economic exchange were exercising ever greater influence over people’s day-to-day decision-making. Might it not then follow that the tools and models championed by the new economists actually had greater explanatory power than the old models built on the hunches and guess-work of historians, philologists, and philosophers?
Indeed, it might. But, by restating the problem in this way, it is now clear that this new way of thinking about the world, as well as the new world that lends itself to such thinking, are not by any stretch of the imagination “natural” or “given.” To the contrary, they are as much the products of history and change as any other social formation that scholars might study.
Enter Karl Marx, the Hegelian
Karl Marx was an Hegelian. At the very least, this means that, along with Hegel, Marx could did not accept the classical political economists’ understanding of freedom as the absence of constraint. So, although Marx would come to disagree vehemently with Hegel over a wide variety of things, at least where freedom is concerned Marx was an Hegelian. Freedom needs to be understood as the conditions that make for freedom. And this, by itself, would have been sufficient to explain why Marx is irrelevant to practicing economists.
In other respects, however, Marx was (at least initially) much influenced by the classical economists. Thus, for example, although we often mistakenly identify the so-called “labor theory of value” as a principle of Marxism, it was, in fact, a leading principle of mainstream classical political economy. Consider, for example, the justly famous opening paragraph to Adam Smith’s Wealth of Nations, Chapter Five:
Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniencies, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man’s own labour can supply him. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities. (Emphasis added).
When Marx adopted the “labor theory of value,” he was simply embracing what other political economists accepted as a given.
Similarly, even when the early Marx called attention to the fact that this value had been “alienated” from its producers, he was really saying nothing that other political economists had not said before him. The truth is, as Professor DeLong has already noted, there was not a great deal in the early Marx to distinguish his theories from the theories of his colleagues. So it is entirely un-noteworthy that both left-wing Hegelians and French socialists had long called upon labor to “reclaim” the “value” that had originally been alienated from them.
Even the very heart of the early Marx’s theory—the contradiction that, according to the early Marx, lends capitalism its peculiar directional dynamic—is not particularly noteworthy. Here the socialized forces of production (epitomized by and embodied in the industrial working class) are said to stand in tension with the private relations of production (epitomized by and embodied in the bourgeoisie’s private ownership of the means of production). This contradiction, however, was only the latest and “most advanced” iteration of a “dialectic” that had been at play since the beginning of human history; a history which was itself nothing more than the “history of class conflict.”
But peel back the surface of this dialectic and Marx’s theory is fairly mundane. It says, in effect, that labor produces all value, that the bourgeoisie have stolen this value, and that labor should take it back. Once labor does take it back, history will end because the socialized creators of all value will be the socialized owners of all value. End of dialectic. End of History.
Except for the “taking back” part, there is nothing particularly revolutionary about Marx’s theory. What is more, it wasn’t particularly historical either. And Marx knew it.
Karl Marx’s Mature Social Theory
Which is why, beginning in the late 1850s, Marx began to rethink his overall theory. The problem, as Marx saw it, was that his original theory was hopelessly anachronistic. Instead of setting out to explain how an unprecedented system like capitalism could have arisen, historically, he had, in effect, gone to the same well and even used the same pail as the classical political economists. That is to say, rather than seeking an historical explanation for capitalism, Marx had taken capitalism as a given and then had interpreted all of previous history in the light of that given. Had history, in fact, been the history of class struggle? Of course not. And Marx knew it.
So, in the late 1850s Marx began to set out an alternative explanation for capitalism. As evidence of this new approach, Marx elected not to begin his magisterial Das Kapital, as he might have, with a fanciful account of the history of class struggle, but, rather, reflecting his new understanding, with a lengthy, if somewhat pedantic, explanation of what he called the “commodity form.”
This new approach reflected Marx’s dramatically reworked explanation for the central contradiction in capitalism. The problem with the old approach was that its concept of freedom was all wrong. How, in any stretch of the imagination, could the universalization of labor be deemed emancipatory? Were the value created by labor restored to labor, that would in no way free labor from the form of domination under which it was laboring.
What is more, the contradiction between social forces and private relations of production failed to accurately reflect how capitalism actually worked. Instead, according to Marx’s new explanation, the social logic embedded in capitalism moved in an entirely different direction. This social logic revealed a contradiction not between social forces and private relations, but, rather, between material wealth and immaterial value. Thus, Marx’s new focus on the commodity form, a combination of material wealth and immaterial value.
But, how did Marx feel that this contradiction worked? According to Marx, in a competitive market, capitalists are preoccupied with producing ever greater immaterial value with ever fewer material inputs. In other words, they are preoccupied with what we would call productivity. But to achieve this productivity, they must always be searching for means to lower their costs: reducing the cost or volume of labor, finding cheaper sources for the means of production, cheaper raw materials or basic capital goods, cheaper transportation, additional markets, more effective and efficient mechanization. In a competitive market, this drive toward ever greater efficiency led to continuous, ongoing, unceasing industrial revolution.
For Marx, this also helped to explain why non-capitalist social formations appeared to be going nowhere. Social relations in these societies are mediated by a variety of different value spheres: family, religion, craft and trade guilds. And because these different value spheres bear no necessary logical relationship to one another, they are incapable of generating a dialectical directional dynamic. Rather, in non-capitalist societies, these relationships have always to be either practically or discursively negotiated.
In capitalist societies, by contrast, all social relations and all social value had come to be mediated by abstract labor time expended. What this means is that all dimensions of social life can actually be reduced to price, cost, time, interest, and value. In other words, all dimensions of life are linked to one another in ways that can be calculated and charted, mapped and formulated, logically and even mathematically.
But—and here’s the rub—as all capitalists busy themselves producing ever greater material wealth at ever decreasing labor costs, this universal compulsion cannot help but lead to a contradiction between labor and material wealth. Put differently, the more efficient capital becomes, the less labor it requires, the more cheaply it can produce material wealth. But, since the value of material wealth is linked to labor, this also means that the per unit value of this ever growing volume of material wealth is simultaneously declining.
Traditional Marxists have described this increasing tension between material wealth and labor in a variety of ways, either as a crisis of overproduction or a crisis of underconsumption, or both. And, building upon Marx’s early theory, traditional Marxists have a ready solution. If only the production and distribution of goods was better coordinated by the socialized workers, we would never face these periodic crises.
The mature Marx had a radically different take. In his view, these periodic crises showed that the production of material wealth was, in fact, growing increasingly independent from abstract labor time expended. Thus, one of the cornerstones both of classical political economy and traditional Marxism was now up for grabs. If material wealth was no longer dependent on abstract labor time expended—i.e., on abstract value—then this growing independence might point the way to human emancipation from the sphere of production per se.
But, now, instead of thinking about this emancipation in terms of restoring to labor the value that capital had stolen from labor—i.e., labor reclaiming its alienated labor time, labor “returning to itself”—Marx began to think about emancipation in terms of the end of labor.
Needless to say, this new way of thinking about emancipation created huge problems for Marx. For, on the one hand, the very notion of a working class movement was based on industrial production and the kind of working class solidarity that is forged on the shop floor and in the political organizations that represent working class interests. If, on the other hand, the very logic of capitalism entailed a gradual liberation of workers from the production process, then this clearly could deprive the labor movement of one of its most powerful weapons in the class struggle. And, yet, if Marx’s new understanding was correct, then did it not call into question the very notion of a class struggle itself.
As evidence of this new understanding, consider this tortured paragraph from volume three of Das Kapital:
In fact, the realm of freedom actually begins only where labour which is determined by necessity and mundane considerations ceases; thus in the very nature of things it lies beyond the sphere of actual material production. Just as the savage must wrestle with Nature to satisfy his wants, to maintain and reproduce life, so must civilized man, and he must do so in all social formations and under all possible modes of production. With his development this realm of physical necessity expands as a result of his wants; but, at the same time, the forces of production which satisfy these,wants also increase. Freedom in this field can only consist in socialized man, the associated producers, rationally regulating their interchange with Nature, bringing it under their common control instead of being ruled by it as by the blind forces of Nature and achieving this with the least expenditure of energy and under conditions most favourable to, and worthy of, their human nature. But it nonetheless still remains a realm of necessity. Beyond it begins that development of human energy which is an end in itself, the true realm of freedom, which, however, can blossom forth only with the realm of necessity as its basis. The shortening of the working day is its basic prerequisite.
There is surely much to criticize in this passage, from Marx’s characterization of savages to his naïve portrayal of “socialized man, the associated producers,” to his perhaps overly optimistic faith in our ability to rationally regulate our relationship with nature. And, yet, these concerns are overshadowed by the overall direction of the passage.
Marx is not claiming that human beings could (or should) free themselves from their relationship with nature. The realm of necessity persists in all forms of society. And, yet, he is claiming that human beings might steadily reduce the control that these “blind forces” have over them, among which Marx counts “labour.” Why? So that they can cultivate those dimensions of their “human nature” that are not dictated by necessity, of course. In other words, Marx no longer considers labour to be among those activities “favorable to” and “worthy” of “human nature.” Marx is not suggesting that human activity would cease, but that it would shift, away from the “labour” that we must perform in order to satisfy “the realm of physical necessity” to activities that we would perform as free individuals.
But, if labor no longer mediates social relations, then what could possibly take its place? In this iteration, Marx could not have been clearer. “Socialized” human beings would regulate their relationships with one another and with nature “rationally.” They would think and they would talk.
Yet, even this dramatic shift in perspective pales when we consider how Marx felt this revolution would be achieved. It would be achieved, writes Marx, by “the shortening of the working day.” Our initial response to Marx’s proposal might be, “Yes, but how is this revolutionary?” Through its own internal logic, capital is already predisposed to reducing the role that labor plays in production. And, indeed, over the past two centuries, have we not already observed a natural shortening of the working day, from twelve hours to ten, from ten to eight, and, in some places, from eight to five? Not to mention the elimination of Sundays and then Saturdays from the working week and the seemingly unending piling up of holidays, sick leave, maternity leave, paternity leave, and family leave. So, how is the shortening of the working day in any way revolutionary?
It is revolutionary because, although capital proves itself to be ever more productive over time, this productively does not translate naturally into the shortening of the working day. To the contrary, May Day itself, that beacon of international labor, commemorates the massacre of workers in Chicago’s Haymarket who had gone on strike for nothing more radical than precisely the shortening of the work day. For, even though its own internal logic creates an increasingly broad gap between material wealth and abstract labor time expended, capital would just as soon translate this broad gap into ever greater volume of commodities or lower prices for these commodities as translate it into an ever shorter working day.
And is this not precisely the direction that capital in fact took over the next century and a half?
Marx’s Mature Social Theory and the Contemporary Economy
Consider, for example, the Great Crash in 1929 and the subsequent Great Depression. Traditional Marxists have interpreted the Great Crash as a classic case of overproduction and/or underconsumption. This, they argue, is precisely what we can expect when capital accumulation is not deliberately, self-consciously, and socially coordinated with labor. Capital produces more wealth than demand can satisfy. The solution, according to traditional Marxists, is the planned economy.
Yet, if we interpret the Great Crash in light of Marx’s mature social theory, we get a completely different story. Never had capital been more productive than it was in the late 1920s; more material wealth was now being created with fewer per unit labor inputs than ever before. This productivity showed, beyond a shadow of a doubt, that wealth could be produced with far less labor time expended, clearly suggesting the possibility of a far shorter work day and work week. And, yet, because capital continued to quantify the value of its output in units of abstract labor time expended, capital could not sustain these high levels of material production alongside ever decreasing labor inputs. At some point, investors would realize that there was insufficient labor time to underwrite the value ascribed to this volume of material wealth. And, when investors made that realization, they would act accordingly: Sell!
The British economist John Maynard Keynes’ interpretation of the crisis was spot-on. Capital had never been so productive than it was in the 1920s. It was creating wealth hand-over-fist. But, since there was insufficient labor time to consume that wealth, this meant either that its value would have to retreat to the level of actual labor time expended or that the value necessary to underwrite this wealth would have to come from somewhere else. In the end, the public elected to deliberately, self-consciously, and socially recalibrate the volume of wealth that capital could produce with the volume of labor necessary to consume that wealth. In other words, it instituted something like the the solution recommended by the traditional Marxists. But—and this is the revolution—it adopted this solution because it recognized that the production of material wealth had grown increasingly independent from abstract labor time expended.
The social welfare state that emerged from this solution, first in Sweden and the United States, then in Great Britain and, following the war, in France and West Germany as well, would have received the hearty approval of the early Marx. This is because the social welfare state was, if nothing else, the return of the value labor had created, but which capital had appropriated, to labor itself—in the form of health care, education, housing, secure employment, secure retirement, vacation time, and so on.
How—or rather why—did capital so willingly buy into this arguably Marxian solution? There is obviously no single, satisfying answer to these questions. To be sure, the working class movement in the United States was growing increasingly militant in the 1930s and 40s. So, too, capital could see where it too would benefit from more active public, social, coordination of wealth and labor. But, even more decisive was the simple fact that in order to wage and win its war against Germany, Japan, Spain, and Italy, the United States needed to ramp up its industrial production and direct that production toward specific goods. This publicly coordinated effort proved so successful, both for capital and for labor, that both quickly bought into at least the premise of the social welfare state. Add to this the fact that Europe’s and Japan’s industrial capacity had been devastated by the war, and you have the makings for the longest industrial boom of the twentieth century.
But, again, we need to bear in mind what precisely this means. It means that, in spite of rising labor costs, capital itself was far more productive than it had ever been before. It was producing ever more material wealth not only with decreasing abstract labor time expended, but also with increasing social costs to boot.
Of course, precisely because of the productivity of capital, it was only a matter of time before the gap between material wealth and abstract value would grow so large as to once again generate a crisis. What is more, by the mid-1960s both Japan’s and Germany’s economies had recovered sufficiently to join the global race to the bottom. That is to say, Japan and Germany too were creating more material wealth than could be backed by ever decreasing labor time expended. This dramatic increase in productivity, now on a global level, clearly could not be sustained.
Different nations have taken different paths in response to the now half-century old crisis in capital accumulation. In light of its experience with fascism, Europe has been reluctant to sacrifice social and political stability to the potentially insatiable appetite of unregulated capital. Europeans have therefore been more willing than either their Asian or their US counterparts to translate gains in productivity into shorter working days and the broadening of the social franchise (e.g., education, health, housing, pensions, parks, public support of the arts, and so on). Yet, because they are linked globally to other economies—chiefly the US and China—even Europe is having to consider other ways of addressing the growing gap between material wealth and abstract value.
Thus, for example, when the crisis of capital accumulation hit the US in the late 1960s and early 1970s, rather than translate the productivity of capital into shorter working days or a broader social franchise, the US instead, on the one hand, elected to reduce the value of its material wealth to the actual level of labor time expended, creating massive unemployment and inducing an actual reduction in production capacity in the process. And, on the other hand, to relieve the resulting costs these steps placed on capital, the US also loosened up credit, making it possible for capital to expand its debt both temporally (over time) and spatially (around the globe). China, which in 1989 became the lone remaining major communist nation, adopted a path not dissimilar for the United States. It too refused to translate gains in capital productivity to shorter working days or a broader social franchise. But, unlike the US, China did not exchange its productive capacity for debt. To the contrary, China instead made a point of purchasing the growing US debt.
In the end, however, it is likely that the pressure of the US, on the one hand, and China, on the other, will compel Europe to rethink its solution to the growing gap between material wealth and value.
Longer-term economic patterns
Giovanni Arrighi found nothing particularly unusual in this pattern of capital accumulation followed by crisis. Indeed, following a model suggested by Ferdinand Braudel, Arrighi found evidence of this same pattern all the way back to the fifteenth century. According to Arrighi, capital is attracted to certain specific conditions—predictable, stable laws of trade, secure production and markets, and a reasonable rate of return. Once any nation has proven itself able to secure such conditions, it, by definition, deserves the title “hegemon,” and is acknowledged as such by all of those nations that benefit from its hegemony. Yet, eventually, every hegemon inevitably undergoes a systemic crisis of capital accumulation, followed by a period of financialization and war.
Arrighi believed he could discern four such cycles of capital accumulation in history, each of successively shorter duration that its predecessor. The first, northern Italian, cycle took root in the early fifteenth century and by mid-century had already reached its maximum productive capacity. The very success of the northern Italian city states helped fuel the growth of western and northern Europe’s emerging powers, most notably Spain and Holland. Indeed, the conflict between Spain and Holland offered a more productive investment opportunity to northern Italian capital than did the continuing production of material wealth. So, at the very moment that northern Italian capital was financializing, Dutch investors were beginning to plow their capital into material production. When Spain and Holland went to war, northern Italian money wisely sided with the Dutch, thereby in fact hand-picking their own successor.
Arrighi found this same pattern repeated again and again, next in the rise of English hegemony and then in the rise of US hegemony. And in each case, Arrighi found parallels. When the Dutch reached their productive capacity and began to financialize, their investments ultimately secured the victory of England over France; and when in the nineteenth century the British reached their productive capacity and began to invest heavily in the US and Europe, they helped underwrite the industrial booms in Germany and the US. When Germany and the US went to war (1914-1945), the UK sided with the US, the successor hegemon. And when the US reached its industrial peak in the 1960s and sought to maintain and extend its gains through financialization, it inadvertently helped boost the industrial growth of China and other creditor nations, which, should Arrighi’s model hold true, would presumably go to war. Whichever block the US put its not inconsiderable weight behind would then emerge victorious as the next hegemon. Or (and Arrighi himself allowed for this possibility), the world’s nations would opt for effective economic regulation on a global scale.
But, with this alternative, we find ourselves seated squarely back in the early Marx: that is, we end up overcoming the contradictions inherent in capitalism by coordinating material wealth and abstract value. Yet, if what we have said so far holds, then the re-coordination of wealth and value globally will not overcome the logic implicit within capitalism for the production of material wealth to shed its dependence on abstract labor time expended. And we are back with the mature Marx’s insistence that “freedom begins only where labor . . . ends” and therefore that “the shortening of the working day is its basic prerequisite.” In other words, what is required is not a mere adjustment or recalibration of the relationship between material wealth and abstract value, but a radical reconfiguration of our relationships with one another and with our world.
Put differently, if capitalism initially took hold and spread in the fifteenth century owing to the logical relationship it established between abstract labor time expended and material wealth, which was what classical political economy claimed, then we can only move beyond this interdependence by practically freeing material wealth from labor and labor from material wealth. Yet, since our social relations, institutions, laws, and cultural forms are all grounded in and mediated by this dependence, it is easy for us to fall back into these familiar patterns whenever we are faced by economic crisis.
The result is that we are never quite able to fully restore autonomy and dignity to those spheres of life that under capitalism have assumed, at best, secondary roles. Thus, for example, freeing material wealth from abstract value could open up space for parents to spend more time with their children and take greater responsibility for bringing up their children. Touting “family values” from the campaign trail is one thing; implementing laws (such as the Family Leave Act) that create real space and time for families is quite another. We say that consumerism and shopping have come to dominate every corner of our lives. And, yet, we are reluctant to translate the unprecedented productivity of our capital into better funding for parks, recreation, museums, libraries, music, and the arts that could enrich all of us. “Think of the drag this funding would place on economic efficiency and productivity!” And, yet, that is precisely the point.
Or, to take another example, we often hear complaints that traditional values no longer play a central role in our public life. And, yet, we fail to draw the connection between this retreat of traditional values and the dominant role that abstract, exchange value has come to play. If the very logic of capitalism is driven forward by the dynamic relationship between material wealth and abstract value, and if it is the dynamism in this relationship that has forced traditional values from public and into private life, then there may be more than passing interest for religious practitioners to challenge the dominant position we have allotted to the relationship of material wealth to abstract exchange value.
(Oddly enough, Milton Friedman, the father of neoliberalism, set out a similar argument in the Introduction to his Capitalism and Freedom (1963). There Friedman argued that, given the pluralism of values in modern democratic societies, it was difficult to see how all of our competing interests could possibly not drive us toward civil war. Happily, Friedman argued, the free market solves this problem by reducing all of our most important relationships to market relationships. Lucky us.)
Religious practitioners often articulate this problem in oppositional terms, claiming that economic rationality and religious practice are, by definition, incompatible. That is not what I am claiming here. Rather, what I am suggesting is that, when economics turned its back on history and society or bracketed history and society, and elected instead to reduce economics (in the name of science) to mathematical modeling, it could not help but lose sight of the historical and social dimensions of its own science, which obviously include religion (and art, and education, and literature, and human relationships, etc.). But, rather than approaching economics and religion in an oppositional manner, what if we were to instead restore history and society to economic reflection?
Of course, this was precisely the sticking point for GFW Hegel and for Marx. It distinguished their way of thinking about economics from their French, British, and then Austrian and American counterparts. And it drove a wedge between the “scientific” approach to economics and the so-called “historical school.” Yet, as I have attempted to illustrate here, it is the latter, historical approach, that is better able to take up and consider the complex relationship between economics and those other dimensions of human life that we value. And this is because it enables us to reflect more critically on the ways that abstract value has come to dominate all other dimensions of our thought and practice.
But, if Marx offers us critical tools and perspectives that enable us to better understand the contemporary world, then why does Marx remain irrelevant to practicing economists? I am sorry, can you please operationalize that question?
St Mark’s concluded its parish retreat this morning viewing the first episode of Krzysztof Kieslowski’s Decalogue, a story about a father, who is a theoretical mathematician, and his admiring son. Like Claudel’s “I’ve Loved You So Long,” Kieslowski’s film touches upon the death of the innocents. And, like Claudel’s film, it brings us face to face with our impotence in the face of the tragedies that life sets in our path.
But where Claudel’s film invites us to see Juliette as a type of Christ, a suffering parent who silently endures the accusations of those she loves, in Kieslowski’s First Commandment, the parent’s love for his son and trust in rationality can only emerge as a confrontation with God following his son’s death.
In both films, pa/maternal love, as well as the care of extended family and friends is complicated by the events of everyday life.
This is the first time St Mark’s has gathered for retreat around contemporary movies: Claudel’s I’ve Loved You So Long, Pasolini’s Gospel According to St Matthew, Monty Python’s Life of Brian, Wim Wenders’ Wings of Desire, Woody Allen’s Crimes and Misdemeanors, and Kieslowski’s Decalogue. These theologically, socially, and spiritually rich films will continue to inspire hours of reflection and discussion.