Wednesday, 21 December 2011

Bill Gross on Gresham's Law

http://www.businessspectator.com.au/bs.nsf/Article/interest-rates-global-growth-economy-markets-banks-pd20111221-PQUWN?OpenDocument&src=sph

I wanted quickly to bring the article linked above to the attention of our friends because it illustrates marvelously the skewed, though perceptive, way of reasoning of a smart fellow like Bill Gross.
Gross is arguing here that "zero-bound" interest rates may actually discourage investment because "cheap money drives out the good" (a funny take on Gresham's Law that "bad money drives out good money" - which is silly because it depends on what the money is used for: people hoard "good money" just in case they may need it for "essential" transactions - so that in fact "good money drives out the bad" for essential transactions!).

But Gross never, never, never explains why "cheap money is driving out good money" - unless he is talking about "the Confidence Fairy", which by now is just as discredited as Father Christmas is for consenting adults!

Nevertheless, Gross still has some grey matter left upstairs, and so he does come to the right conclusion, though he hides it under a mountain of chaff:

Conceptually, when the financial system can no longer find outlets for the credit it creates, then it de-levers. The point should be understood from a yield as well as a credit risk point of view. When both yield and credit are at risk from the standpoint of ‘Gresham’s law’, the mix can be toxic.

Bravo, Gross! He has finally realized that the real reason why interest rates are at the "zero-bound" is that "the financial system can no longer find outlets for the credit it creates" - in other words, there is a crisis of profitability!

So why does Gross then go on to draw the wrong conclusion from the right premise and bury Keynes in the process?


"Fed chairman Ben Bernanke blames policy rate increases in the midst of the 1930s for an economic relapse, and a lack of credit expansion for Japan’s lost decades 60 years later. But all central banks should question whether ultra-cheap money continually creates expansions as opposed to destroying liquidity, de-levering and obstructing recovery. Gresham, as opposed to Keynes, may become the applicable economist of this new day."

Hang on, Bill! It is not excess liquidity or ultra-cheap money that is leading to "de-levering", you twit! It is "the crisis of profitability" that is doing it - and Bernanke and Keynes, like good bourgeois "economists" who want to save YOUR capitalist system, would do exactly what they are doing now: - provide cheap money to the financial system!

Monday, 19 December 2011

Methodology and Rationalisierung in Max Weber's Sociology


We should note further how the German Historical School and other early opponents of Neoclassical Theory objected to it on the ground that “utility” is a “homogeneous” entity whereas in fact the “motivations” behind “economic action” are quite evidently “heterogeneous” (see Schumpeter’s account of this in the last chapter of his Economic Doctrines).One of the constant objections to capitalist enterprise is precisely this – that it “reduces” all aspects of human social interaction to the “homogeneous” pursuit of “profit”. Clearly, what these ‘critics’ fail to do is to confront the central question that we are addressing here – that is, how such a reduction of the heterogeneity of human activity to “homogeneous” and “rationally calculable enterprise” or “profit” is at all possible! Here again Weber makes the colossal Neo-Kantian mistake of assuming that there is a specific “form” of human “knowledge” or “action” that is singularly “economic” – just as he conceded to Kelsen that there is a specific dimension of human social activity that is “legal”! Weber simply mistakes what are mere and highly contingent “institutions” of human groupings – the “economy” and “value”, the “law”, “the State” and “power” – for hypostatic and ineluctable “forms” of human knowledge that a social scientist or “observer” can analyse in their epistemological specificity and “autonomy” from other “disciplines”! The fact that a great mind such as Weber’s never even posed itself the question as to how and why “utility” could be adduced as the “ectoplasm”, the “metaphysical quidditas” that could constitute the “subject-matter” of the Economics bears witness to the ability of the social production of “exchange value” and its politically-enforced transmutation into money, then money capital, and then profit, to mystify human social relations – as Marx took pains to emphasise.





In reality, this stance contradicts both Weber’s own methodological approach to the “objectivity” of science (his inverted commas) and, of course, that of Nietzsche’s Umwertung, which is the culmination of the negatives Denken as the ruthless and implacable application of the “logic of the Wille zur Macht”, of the Rationalisierung, to life and the world (cf. our Nietzschebuch). Kant’s Transcendental Analytic had presumed to show how “synthetic a priori judgements” corresponding to “the laws of nature” are possible in a manner that relies on the passive intuition of human experience of external phenomena whose ultimate cause is the inscrutable “thing-in-itself” but whose “ordering” is effected by Pure Reason. Kant reasoned that the “heteronomy” of the causal nexus, the “dependence” of every “cause” upon a “prior cause”, could only be “theorized scientifically” by an “autonomous noumenon”, a Pure Reason that functioned as a causa sui, a causa causans at the very beginning of the causal chain that supplied a “rational order or rule” to the “chain” or “sequence” of events that were “heteronomous” because “effected” by prior “causes”. Already in the Opus Postumum, Kant had expressed grave concerns on the ability of the Transcendental Logic to found a Dialectic of Pure Reason “purely” on the formal “per-fection” of logico-mathematical judgements. What was missing was a Ubergang, a “bridge” that could connect necessarily logico-mathematical judgements with the empirically-observable “events” of nature so as to justify the appellation of this “causal nexus” as “laws of nature”.





It was Kant’s evident failure to establish such a link – or rather, it was the impossibility to establish such a link without the positing of an “intuitus originarius” (Leibniz), of an intuition so “intuitive” as to be “theo-logical”, as to invoke the “divine” – that prompted Schopenhauer’s pitiless critique of Kant’s entire philosophy. “Where is it written,” asks Schopenhauer, that the causal chain, already explicable with Leibiniz’s “Principle of Sufficient Reason”, should be “initiated” by a causa causans, by an “autonomous Pure Reason”, by a Ratio that can supply the e-vidence for the existence of an Ordo et connexio rerum et idearum – a necessary order and connection between  things and ideas -, of a “Truth” that can serve as the adaequatio rei et intellectus?  No such Ratio-Ordo can exist except as a “divine emanation” that reduces Kant’s critique to a “moral theology” because the “autonomous causa sui” must be toto genere dif-ferent from the e-vents that compose the causal chain as well as from their “con-nection”! Consequently, the “phenomena” that we perceive cannot be ascribed to a “Thing-in-itself” that is literally a “Thing”, but rather to a noumenon that is the most active and subjective noumenon perceptible – though not “knowable” – to us of which “the World and its Representations” are mere “objectifications”:- the Will to Life! For Schopenhauer, therefore, the World is the endless and inexhaustible “objectification of the Will”, and human activity, the operari, is subjected to “the laws of nature” not through the existence of inscrutable “objects” but quite simply through the principle of sufficient reason which elevates all “representations” to the status of “subject-object” whilst lowering Kant’s faculty of “Reason” to that of mere “Understanding”. In Schopenhauer’s critique of Kantian idealism, “the World” still ec-sists as “objectification” of the Will. But in Mach’s scientific phenomenology no such “transcendental” reality need ec-sist, outside of the “phenomena” experienced by observers – the “sensations” or Empfindungen.





Following this “reversal” or Um-kehrung of Kant’s transcendental idealism, Nietzsche proceeds then to effect his own Um-wertung or trans-valuation of Schopenhauer’s “system” and “pessimism of the Will” by eliminating the dichotomy between operari and will or “intelligible freedom”, specifically by negating the “trans-scendence” of the Will – its “freedom” - and turning it into the “immanence” of the “instincts of freedom” or the “Will to Power”, where “instinct and freedom”, “will and power” form “poles” of tension the “resultant” of which is human “in-tention” or “pro-ject” or Entwurf. Once this Entwurf is understood, it will be immediately apparent how the entire critical and indeed “scientific” approach to Weber’s oeuvre which has been based almost exclusively on the “ideal types” and “rationalism” are wholly circumvented and rendered almost misleading when they are not totally irrelevant. Weber himself is in part “responsible” (this is written tongue-in-cheek) for this mis-interpretation and mis-apprehension of his work precisely because of his repeated attempts to preserve the “scientific autonomy” or “epistemological validity” of various “fields” of the Geisteswissenschaften in the “interpretative” or “hermeneutic” mold pursued by Dilthey and Simmel in particular, whilst at the same time prescinding from the “content” of these “scientific fields” in line with the Machian obliteration of all “meta-physical” concepts that might seek “to capture” the “reality” behind the “phenomena” or “sensations” – the “facts” – of “scientific empirical research”.





As we are about to show in this section, it is this Weberian attempt to distinguish “logically” the element of “purpose” from that of “finality” (ends and means, Zweck and Wert or Ziel) in his affirmation of the “objectivity” of “social science” that leads him to forget or neglect the “finality” in the “purpose” and the “purposivity” in the “finality”. Even the early tract on Roscher und Knies betrays in fact Weber’s early jurisprudential formation in that the polarity between “freedom” and “irrationality”, the “unscientificity” of “history” as a subject-matter, recalling the a-methodon hyle (form-less matter) of early Greek historiography, was the central tenet of Savigny and his Historical School of Law whose theoretical premises were adopted and adapted faithfully by the German Historical School of Economics. Long before Weber replaced Knies at Heidelberg, Rudolf von Jhering had already applied Windelband’s distinction between “ideographic” and “nomothetic” approaches in social studies to jurisprudential history, stressing the “purpose” or causa efficiens of “laws” in serving social needs over the “ideal aims” of “Law” understood as Neo-Kantian “Norm”.  (See on this Jhering’s Der Zweck im Recht and Windelband’s Normen und Naturgesetzen in Praeludien, both published in 1882-83.) Weber’s great merit in resuming this novel approach twenty years later was to apply Nietzsche’s revolutionary critique of Western “rationality” in an original synthesis that turned it from the “formalistic” Kantian notion indicated by that “substantive noun” into the more Nietzschean “operational version” of Rationalisierung indicating the “active”, “willful” role of “the instincts of freedom” and of “the ontogeny of thought” in “intellectualization” (Freund) of practical historical conduct. (The name “negatives Denken” serves to emphasize the “negative” approach to Ratio and to Freiheit, but not its converse, the “passive” approach to the “becoming” of Being and to the operari instead of opus, facere and agree instead of factum and actus. Again on this, see Heidegger’s works on Schelling’s Essay on Freedom and on Nietzsche.)





Whereas the Historical Schools seeks to distinguish between the “natural sciences” capable of determining “laws” that con-nect phenomena causally, “regularly and predictably” and the “historical or spiritual sciences” that can merely describe the contingent and the individual e-vents or “happenings” (Geschehen) in their “idiosyncrasy”, Weber adopts von Jhering’s and Windelband’s approach that establishes instead the epistemological “continuity” of all sciences in their search for objective generalizations based on empirical facts that are never “deducible” but that rely instead on the “falsifiability” of the existing scientific generalizations. Like Nietzsche, Weber perceives that there is no difference between “natural” and “historical” sciences from an epistemological aspect but only in terms of the practical “aim” (Ziele) or purpose (Zweck) pursued by each science – not in terms of an “ultimate truth” from which all future events may be “deduced”! Such “deductionism” or, as Weber calls it, “emanationism” is yet another version of the “moral theology” of German Classical Idealism from Leibniz through Kant to Hegel and Fichte that attempts to en-compass the whole of reality in ever more “com-prehensive” concepts that end up having little connection with any “reality” whatsoever! (This is, in essence, the platform of Kierkegaard’s “existential” critique against Hegel’s “essentialism”.) In similar vein, but from a different tack, Karl Knies pauses on the impossibility of reducing sciences dealing with “history” to the predictive status of positive sciences dealing with nature because the former, though “con-fined” by natural factors or “con-ditions”, rely nevertheless on the “creative” and therefore “irrational” actions of human beings that are not open to “scientific” or logico-mathematical “measurement”.





To this position disputing the “scientificity” of “the social sciences” Weber objects as he did with Roscher that it will never be possible to deduce the whole of reality because scientific research constitutes an “infinite regressus” into reality itself, and that in any case “mathematization” of reality cannot be the ultimate aim of science nor can it indeed “define” scientific activity or methodology. The very fact that it is impossible to specify with any degree of exactitude a “scientific methodology” goes to show that scientific activity will always be “negative-regressive”, due to the inevitable “falsifiability” of its “laws”, and that the human sciences, even the most exact, will always be open to “interpretation” of human action so that they, too, or especially, involve an infinite regressus.  This goes in part also against Windelband’s ideographic-nomothetic distinction in the sense that it is incorrect to conclude that what is “irrational” [ideographic] for the individual case then becomes “rational” [nomothetic] for the “mass”!





Au niveau d'une interprétation des motifs nous avons affaire non plus à une rationalité nomologique, mais téléologique, c'est-à-dire elle ne s'exprime plus par un jugement nécessaire de causalité, mais sous la forme de la causalité adéquate. Il s'agit de ce que Weber appellera plus tard le comportement rationnel par finalité 40. Il n'y a donc pas de doute que le comportement motivé est davantage accessible à l'évaluation rationnelle et au calcul que le phénomène singulier de la nature : nous comprenons mieux l'attitude de Frédéric le Grand en 1756 que les variations météorologiques. En conséquence, il est faux d'identifier liberté de la volonté et irrationalité.Au contraire, le comportement libre, à la différence de celui du fou ou de celui de la nature, est davantage accessible à l'interprétation, parce qu'il obéit à la rationalité téléologique déterminée par la relation de moyen à fin.


(Freund, Intro to Weber, Essais, p.58).





Clearly, then, Weber still identifies “rationality” with some form of “explicability” or “significance” of human action, whether it be of the “purposive-instrumental” type (Jhering’s causa efficiens or Zweck-rationalitat) or of the “normative-teleological” type (the causa finalis or Wert-rationalitat). But the problem remains that if indeed “free behavior is even more accessible to interpretation [than that of natural phenomena] because it obeys a teleological rationality determined by the relationship of means to ends”, then clearly “the ends” come very much into the “scientific interpretation” of “instrumental rationality” – which immediately “surrenders” this “rationality” to the very “dictatorship” (it “obeys”) of “the final or teleological rationality”! But this is precisely what the natural sciences, unlike the historical studies, need not do! – Because they have no need whatsoever to invoke a “teleological rationality” to establish their “instrumental rationality”! They simply rely on their immediate instrumentality in predicting the regularity of events!




Ce que Weber leur refuse, c'est leur validité comme vision scientifique du monde, car, étant recherche indéfinie, aucune science ne saurait se laisser borner par ce genre de clôtures.

On saisit mieux maintenant la distinction indiquée plus haut entre la validité générale d'un concept et sa signification universelle qui reste pourtant singulière. Pour Weber la science est un des moyens, à côté de l'économie, de la politique, de la religion et de l'art, de prendre conscience du réel. Cette distinction prend tout son sens si on se réfère à la philosophie wébérienne de l'antagonisme irréduc-tible des valeurs. Malgré tous ses succès, la science n'est pas en mesure de se substituer aux autres activités humaines, telle la politique ou l'économie, car notre intelligence du réel dépend autant de l'action que de la connaissance. Il n'y a donc point de privilège de la connaissance, en dépit de la rationalisation et de l'intellecualisation qui caractérisent la civilisation moderne. Certes la science est indéfinie; il n'y a donc point de terme pour elle aussi bien dans le domaine des mathé-

Max Weber, Essais sur la théorie de la science. Premier essai (1904) 51

matiques que dans celui de la physique ou de la chimie, elle accroît également sans cesse son champ d'investigation par suite de la constitution d'une histoire scientifique de l'art, de la philosophie, des religions, etc. En ce sens sa signification est universelle, car il n'y a pas d'aspect de la réalité d'où l'on pourrait l'exclure. Néanmoins, cette signification reste singulière parce qu'elle n'est qu'un point de vue, spécifique certes, mais qui ne saurait remplacer ceux de l'économie, de la morale ou de la politique. En d'autres termes il y aura toujours à propos de n'importe quelle question le point de vue du savant, mais aussi celui de l'homme d'État, de l'économiste et de l'artiste, sans possibilité de les réduire à un dénominateur commun. Or, c'est à cette unilatéralité que prétend la validité générale d'un concept, car elle s'estime capable de déduire toute la réalité à partir d'une loi établie par la connaissance seule, comme si l'action politique, économique et autres n'étaient que des manières du connaître. La diversité infinie du réel s'exprime dans toutes ces activités, mais aucune ne saurait la comprendre totalement. L'hiatus entre le concept et la réalité reste insurmontable, c'est-à-dire nous ne sommes pas près de résoudre l'énigme suivante : alors qu'il ne nous est pas possible de connaître le monde autrement qu'en construisant sans cesse de nouveaux concepts, pourquoi aucun concept, ni non plus leur somme ne sont-ils à même de saisir pleinement tout le réel, c'est-à-dire pourquoi la rationalisation croissante, sous l'influence prépondérante de la science et de la technique scientifique, renforce-t-elle chaque fois d'une autre manière, au fur et à mesure de ses progrès, la puissance de l'irrationnel 32 ?





But the question here is emphatically not whether the natural sciences can “take the place of other human activities such as politics or religion”; nor is it whether historical studies can replace these other activities. The question is whether the “historical studies” can claim the status of “science”!The way of posing the question by both Weber and Freund is singularly enlightening because it brings us to the crux of the entire analysis, of what Freund calls here “the enigma”, without further ado: what neither Weber nor Freund, nor indeed the near-totality of the critics and philosophers who have dealt with this question of “scientificity”, that is to say, of the “essential limits”, the categorical Vollendung of science and metaphysics, rather than with the “boundaries” of science or of “the sciences” – what virtually none of them have dared do is to pose the question in its “converse” form – which holds the whole key to the question of the Rationalisierung. And the question is:





“pourquoi en depit de la puissance croissante  ou’ de la presence insurmontable de l’ irrationnel, est-il possible par l’influence  preponderante de la science et de la technique scientifique de saisir presque pleinement [tout] le reel sous la rationalization croissante?”





The central problem with Weber’s formulation of the question of “objectivity” or of “interpretation” is to assume that the one is “possible” despite the other (!) without even trying to explain how or why this can be so! “Despite all its successes,” surmises Freund above, “science cannot take the place of human activity…because our intelligence of the real depends as much on action as it does on knowledge. There is therefore no privilege whatsoever of [scientific] knowledge [over action], despite the rationalization and intellectualization that characterize modern civilization”! Again, Freund has the problem in reverse, which is why it must remain an “enigma” for him and for Weber! The problem must be posed in these precise terms: despite the fact that there is no privilege or priority of scientific knowledge over human action, still modern civilization is characterized by rationalization and intellectualization!

Tuesday, 13 December 2011

Foundations of the Economics

Western thought, from metaphysics to science, must end, must "close", must "com-plete", "satis-fy", "ful-fil", "ex-haust" itself with the conceptualisation of the "Ab-solute". The Ab-solute is what is not "conditioned" by anything else, what is causa sui (its own cause), both in the sphere of logico-mathematics and science (Leibniz's intuitus originarius that does not admit of "predicates" and therefore is entirely "self-evident") and in the sphere of human praxis (Kant's "autonomous" Practical Reason guided by the Will, which is the union of the posse [I can] with the nosse [I know] in the velle [I will]). The Will is the ultimate ex-pression of "freedom" - it is "the freedom of freedom", the power of the freedom of the Subject that knows itself). Of course, whatever is "self-evident" does not allow of ex-planation in that the definiens is in the definiendum and vice versa. The Ab-solute is therefore "ab-solved" from the "need" to explain itself - just as princeps legibus solutus (the prince is "ab-solved" from the laws because he is "above" the laws). Contra Donoso Cortez, then, we say that not just "the Dictator" operates a "miracle", in that dictatorship is "the suspension of all laws and rights, human and natural), but all constituted political power does. So we must peer into this "power" (potestas), because we do not believe in miracles -  miracles have no vis, no potentia for us, us the "constituent power".


The error that the Economics commits (we call it "the Economics" rather than "economics" to emphasize that the essence of "economics" is to act as a strategy of political power) is to presume that its "subject-matter" (its sub-iectum), its "quidditas" is actually a Sub-stance, a homogeneous qualitas occulta - and it presumes as much because it starts from the phenomenology of capitalist social relations of production which are "co-ordinated and measured" by money. Every economist from Smith to Marx to Jevons started from the fact that every "thing" that is exchanged in the market has a "price" and that therefore all "things" on the market must have a homogeneous "Value" - and that this "Value" must be the "subject-matter" of a "science of Economics"!
Weber’s central failure was not that he mistook “scientificity” for “science”, for its corresponding “practical conduct” – which mostly he did not! Weber’s failure was rather that his insistence on “categorizing” his “scientific pursuit” with the introduction of the “ideal types” distracted him from the fundamental question of how the Rationalisierung is possible! This failure led him to reify, to hypostatize the historical object of his studies into the “scientific categories or forms” or "the ideal types" that he presumed to adopt for that study – ignoring thereby Nietzsche’s famous warning against “systematizers”! Essentially, Weber mis-interpreted (!) Nietzsche’s Umwertung (trans-valuation of all values) to mean that “all values are interpretations of reality”, and that therefore it is possible for the “scientific observer” of a given historical reality to select a hermeneutic code of interpretation (the ideal types) linking rationally the means available to its “actors” with the “pro-jected ends” that they may envisage. Yet, as Nietzsche would have promptly reminded Weber, this framework of analysis (Entwurf), this “phenomenalism and relativism” starts from the pre-supposition that such a “rational code” of interpretation is both possible and applicable – which Nietzsche would vehemently deny on the ground that it is the very possibility and applicability of this “rational code” itself to a given historical reality – its effectuality -  that needs to be interpreted and explained as the mathesis universalis (Leibniz), as the rationalization of the world that is based on human needs, on the “system of needs and wants”! In Nietzsche’s own words,

“It is our needs that interpret the world; our instincts and their impulses for and against,” (Aphorism 481, Wille zur Macht).



Weber’s Neo-Kantian hypostatization not only of his sociology but above all of “the scientific fields of knowledge” to which he sought to apply it – from economics, to law, to music – is induced fatefully from this inability to com-prehend Nietzsche’s Umwertung, his thoroughgoing De-struktion (Heidegger) of Western metaphysics and science and the related critique of Western Kultur and Zivilisation. It should come as no surprise, then, that it remains suspended, as we noted earlier, between the Dezisionismus of “charisma” derived from the individualist relativism and the Neo-Kantian formalism of the “ideal types” necessitated by Weber’s need to ground this hermeneutic relativism on logico-mathematical – hence, “rational and systematic”, “scientific” - bases. What Weber fails to com-prehend above all else is precisely the historical character of “the metaphysical foundations of logico-mathematical rationality” whose political origins Nietzsche had made all but evident.



A brilliant illustration of these points is provided by Norberto Bobbio who, in reviewing Kelsen’s attack on Weber’s theory of the State and sociology of law in ‘Max Weber e Hans Kelsen’ (in Sociologia del Diritto), concedes that Weber’s Neo-Kantian or Simmelian ‘formalism’ enticed him to his detriment into the Kelsenian ‘Norms’, but that at the same time Weber’s “positivism” was premised on the fact that capitalism represents a historically specific intensification of this ‘positivization’ of the juridical norm, in line with its exasperation of the Rationalisierung – which would be theoretically a far more consistent and Nietzschean position for Weber to take. Commenting on Kelsen’s requirement that ‘co-action’ be added to the definition of ‘legal norm’ (the famous Grundnorm) so as to equiparate the concepts of ‘Right’ with ‘Law’ and therefore also with that of ‘State’, Bobbio goes on to reason that Weber’s notion of ‘apparatus’ (bureaucracy) must be added to Kelsen’s ‘co-action’ for this equiparation of Right, Law and State to have any historical effectuality! Bobbio then comes uncannily close to the central thesis of this study on the meaning of Rationalisierung, which we have enucleated in our Nietzschebuch and will illustrate more incisively in Parts Two and Three (of our study on Weber). In a nutshell, Bobbio perceives without actually comprehending that the notion of Right or Law or the State requires the existence of appropriate "institutions" that "en-force" these abstract concepts. The question that needs to be answered is how political enforcement can "crystallize" or "congeal" abstract concepts and how abstract concepts "dis-solve" themselves into political institutions. This is what Nietzsche attempted and others including Marx did not.

Separately, by discussing Kelsen’s claim that his  jurisprudence is intended to apply both to capitalist and to socialist States, Bobbio helps us highlight the link that we are about to trace in the following sections, dealing with the claim on the part of Neoclassical Theory to apply equally to both capitalist and socialist ‘economies’, between Neo-Kantism and Neoclassical Economics!



It cannot be doubted seriously that Marx was aware of the impossibility of reducing objectively, physically, heterogeneous labor to a homogeneous substance. Indeed, Marx counted this, the discovery of the Doppelcharakter of the “commodity” labor power (its being at once living labor that “valorizes” capital and “labor power” that is exchanged on the market), as perhaps his greatest achievement. It is just as certain, as Colletti has noted, that for Marx value was a “social hieroglyph” that, like God or the soul, has no material existence and yet is “objective” in that it conditions and guides human action. But, and here is the crux, this theory of value is inconsistent with the notion of market competition. One of two things: - either “market competition” is regarded by Marx as an autonomous and spontaneous sphere of activity not enforced politically by one class against another, in which case it is an aporetic concept because “competition” invariably ends up “destroying competition” (!); or else “market competition” is a sphere of activity that is “politically enforced”, in which case, eo ipso, there can be no competition as a reality a se stante (that can stand on its own). Yet Marx worked precisely on the grim assumption of the Law of Value, that capitalist society reproduces itself through the operation of the self-regulating market, especially its “pessimistic” feature – competition (the dira necessitas). Consequently, he had to persevere with his inconsistent theoretical framework  because to have done otherwise, to have accepted that value is an entirely political category  and that the capitalist economy is operated by concrete and identifiable social institutions would have meant for him to be lowered once again into “the kingdom of shadows”, into the shadowy world of the Political which he despised and spurned  because he identified it mistakenly with the public sphere of liberalism founded on the “optimistic” features of the market (commutative and distributive justice).



(Of course, Marx falls into this “scientistic trap” in Das Kapital, but generally not in the Grundrisse which are therefore much to be preferred as the exposition of Marx’s overall theory of capitalism. Incredibly, in “Natural Law and Revolution”, now in Theory and Practice, Habermas argues that it was Marx’s finding of “the theft of labor time” in the “pure exchange” categories of bourgeois law that “discredit[ed] so enduringly for Marxism both the idea of legality and the intention of Natural Law as such that ever since the link between Natural Law and revolution has been dissolved”! Habermas, who is almost entirely innocent of economic theoretical training, cannot see that indeed it is that “side” of Marx’s theory and of Socialism that believes in the fable of “the theft of labor time” that then must necessarily believe, vi rerum [by force of things!], in the “legitimacy” of legal categories that draw Habermas’s analysis back into the orbit of Arendt’s “liberalist and jusnaturalist” rendition of the historical reality of “revolutions”! Habermas manages therewith to undo the valid critique of Arendt’s On Revolution that he had expounded in his essay Die Geschichte von den zwei Revolutionen. See also Part Three discussion of these themes.)





We should note further how the German Historical School and other early opponents of Neoclassical Theory objected to it on the ground that “utility” is a “homogeneous” entity whereas in fact the “motivations” behind “economic action” are quite evidently “heterogeneous” (see Schumpeter’s account of this in the last chapter of his Economic Doctrines).One of the constant objections to capitalist enterprise is precisely this – that it “reduces” all aspects of human social interaction to the “homogeneous” pursuit of “profit”. Clearly, what these ‘critics’ fail to do is to confront the central question that we are addressing here – that is, how such a reduction of the heterogeneity of human activity to “homogeneous” and “rationally calculable enterprise” or “profit” is at all possible! Here again Weber makes the colossal Neo-Kantian mistake of assuming that there is a specific “form” of human “knowledge” or “action” that is singularly “economic” – just as he conceded to Kelsen that there is a specific dimension of human social activity that is “legal”! Weber simply mistakes what are mere and highly contingent “institutions” of human groupings – the “economy” and “value”, the “law”, “the State” and “power” – for hypostatic and ineluctable “forms” of human knowledge that a social scientist or “observer” can analyse in their epistemological specificity and “autonomy” from other “disciplines”! The fact that a great mind such as Weber’s never even posed itself the question as to how and why “utility” could be adduced as the “ectoplasm”, the “metaphysical quidditas” that could constitute the “subject-matter” of the Economics bears witness to the ability of the social production of “exchange value” and its politically-enforced transmutation into money, then money capital, and then profit, to mystify human social relations – as Marx took pains to emphasise.

Monday, 12 December 2011

The 'Grand Refusal' of the European Elites

Visitors to our site will know by now what I think about Europe's ruling capitalist elites, the German in particular, and of the manner in which they are systematically attempting to destroy the European polity that we are strenuously to construct and to defend against the modern equivalent of les rois fai-neants (the kings who did nothing), too self-interested to budge from dithering and indolence in the face of impending disaster.

Anyone who understands anything at all of the present crisis besetting European and global capital will also know and agree that the only way to get out of this bind into which Finanzkapital placed us in its efforts to avoid loss arising from the "fictitious value and profits" that it accumulated during the Great Moderation (1980 to 2007) at the expense of hundreds of millions of workers especially in China, aided and abetted by the Chinese dictatorship - anyone with a trace of knowledge and decency will know by now that the only way to get out of this is NOT for European workers to starve and suffer but rather for Finanzkapital (especially sovereign bond holders) to register huge "losses" on their "fictitious" balance-sheets.

Yet this is precisely what the European "leaders" failed to do in Brussels last week and have failed to do for years now - in fact, they did not even TALK ABOUT IT! The item was not on the menu! Instead. they think they can wriggle out of this bind with more "austerity", which suits German elites very well given that much of their filthy "trade" is now with economies "outside the eurozone", but means sweat blood and tears to European workers in the rest of the eurozone. Anybody who thinks that this utter and miserable nonsense has any chance of succeeding as a "rescue plan for the euro" is a complete imbecile - first and foremost of course the befuddled and comical "leaders" of the eurozone parading histrionically every month in Cannes or in Davos but finding precious few real "decisions" to make, owing to their indolence and insanity.

Meanwhile, they blame the "financial markets" and the financial markets blame them! The "meat in the sandwich" are European workers who have just about had enough of this grex venalium and will soon dispatch them to the dustbin of history.

Saturday, 10 December 2011

Europe! Europe!

It may be an appropriate time to write a brief comment on the scandalous goings-on in Europe. As many know, the view is spreading that the current crisis may ultimately be resolved if the ECB is ready to intervene in capital markets to protect both eurozone banks and sovereign bonds issues as well. Nothing could be further from the truth. Sure, the German Regierung will probably not be so foolish as to let the eurozone collapse and throw the German economy into a recession too deep for the political repercussions to be gauged with any degree of political confidence. But the more relevant and irremovable obstacle is the fact that the European bourgeoisies will have to divide up the amount of politico-economic pain that will have to be endured to redistribute "the burden of economic adjustment" that the "fictitious value" created during the Great Moderation (1980 to 2007) had hidden from view so effectively!

And this is the real obstacle beyond which it is very hard to see - because it is almost impossible to believe at the moment that the European bourgeoisies of Germany and France, and then Italy, Spain and Greece will be able to agree on how to cary out this adjustment in a way that does not precipitate far greater political cataclysms. So far, it has proved relatively simple to remove incumbent governments and replace them with "technocratic fixes". But you take no prizes for guessing that this is only the lull before the storm - and a big storm is surely brewing, from Moscow to Lisbon.

Evidently, just like the Versailles Treaty of 1919 and the return to the Gold Standard in the 1920s after the Great War, European elites have reckoned without the working class - a "class" that certainly at the moment does not have a solid political organisation or a voice, but one that exists and that is "felt" in the recurring "crises of capitalism". What produces these crises is the intransigence, the irrepressible "needs" of all of us who have to work and for whom the present system represents an intolerable barrier and obstacle to the liberation of our productive powers and the fulfilment of our needs. This is the moment of "crisis". This is the time to organise and shake this system to its foundations. 

Monday, 5 December 2011

Addendum to "On Revolution"

These notes on Weber are really a continuation of the material of "On Revolution" posted yesterday. As you can see, we are trying to formulate a conceptual framework that will allow us to integrate our critique of economic reality in an overall strategy of political trasnformation, a project of liberation from the strait-jacket (ever more hideous and odious) of capitalist command of living labor through the money-wage (the material on Keynes adumbrates these matters - just search this site using the facility on the top left-hand corner of this page). Again, apologies for the "difficult" nature of the discussion, but the task is urgent given what is happening at the moment....


Weber’s Political Sociology



If we return now to the more specifically political aspects of Weber’s social theory, we will find that our lengthy but thorough exegesis of his version of Nietzschean Rationalisierung and of capitalist society is enormously useful in the interpretation of his political theory as well as sociology. Suddenly, what seemed to be disconnected and far-flung ideas and suggestions for the “re-construction” of Germany after the Great War, fall into place and form a coherent strategy (not just an “ideology”) for the preservation and renewal of bourgeois hegemony over society. Let us take a look.



Let us now turn to parliament.

First and foremost modern parliaments are assemblies representing

the people who are ruled by the means of bureaucracy. It is,

after all, a condition of the duration of any rule, even the best

organized, that it should enjoy a certain measure of inner assent from

at least those sections of the ruled who carry weight in society. Today

parliaments are the means whereby this minimum of assent is made

manifest. (166)



Clear is the “division of labor” indicated by Weber between “the bureaucracy” on one side, which simply “administers” to “the most basic needs of social life”, that is, the “rationality” of capitalist enterprise that has now become “social capital” and on whose “profitability” the entire reproduction of “the society of capital” is dependent. It is this “bureaucracy”, which is both “official” (military and civilian) and “private” (capitalistic), that effectively “rules the people” who are in turn “re-presented” by “assemblies that constitute modern parliaments”. Weber therefore assumes the pre-existence of a pyramid of “power” (potestas) that runs from officialdom to private capitalistic enterprise that “rules the people” of a modern nation-state who are in turn merely “re-presented” by an assembly called “parliament” which they have “selected” to secure for the “rule” – that is, importantly, for the “bureaucracy”, official and private – “a certain measure of inner assent”, which means “legitimacy and authority”, “from at least those sections of the ruled who carry weight in society”!



By this last phrase Weber must mean principally the owners of capital – because we must remember that a nation-state is “a nation-state among many”, in the sense that capital is free to be withdrawn from the territory of a nation-state. Still, it is evident that not only officialdom but also private capitalist enterprise needs a minimum of legitimacy in terms of its ability to provide for the needs and wants of most members of a society, in particular its workforce which is part of “those sections who carry weight”. Yet this “assent” (legitimacy and authority) seem to depend very much on the ability of “the rulers” (the combined bureaucracies, public and private) to deliver the goods of growth and development. And the means to ensure that this happens, first, in a manner that does not endanger the wage relation and, second, in a manner that perpetuates the existing system of political domination, that is, by means of a “tool” that dispenses political power in accordance with a pool of economic resources drawn from the productive activities of workers.



There is a political discrepancy, then, between the “collection” of resources for the public budget through taxation, and the “dispensation” of these resources that go through the “filter” of the state bureaucracy. It is obvious that the greater is the role of the government budget in the economy, the more politically explosive the role of the State becomes and the more precarious will grow the role of Parliament – also in its role as “direct employer of wage labor”. In other words, the “delivery” or less of “growth and development” tends, yes, to become an “apolitical” form of control, but it also makes the failure of delivery a direct threat not just to “private capital” but to “the collective capitalist” as well!



For certain acts, the public powers are obliged to use the form of an

agreement in law after prior consultation with parliament,

the most important of these is the budget. Today, and ever since the

time when the prerogatives of the estates were first created, the right

to control the budget, the power to determine the manner in which

the state procures its finances has been parliament's decisive instrument

of power. (166)



The potestas of Parliament consists in its ability to decide over how to devolve social resources drawn from civil society, from the economically significant sectors of it, which means from those sectors that generate “profits”. In so doing, Parliament plays an intermediate role in the sense that its own operation is not “for profit”, and yet it aims at preserving the means for the generation of “profits”. The overriding aim of Parliament therefore is to preserve a “private economic sphere” in which at least “putatively” the profitability of the entire system is drawn, even if this means the “subtraction”, at least temporarily, of entire areas of “investment” from private capital. Parliament plays the role of a safety-valve that is able to release political pressure by “monitoring”, by “redistributing”, by “planning” its future distribution (“electoral promises”), and by intervening where necessary to neutralize or destroy or even prevent the formation of alternative sources of “power” (in the sense of potestas – so that in fact the State does NOT have a monopoly of “power” – only of potestas, not of potentia). This is the essence of liberalism!



There is therefore a “latency” to “power” that a “negative politics” on the part of Parliament may well not detect and that may lead to social and political upheaval. This is what Weber’s “positive politics” is meant to prevent.



Admittedly, so long as parliament’s only means of

lending weight to the population’s complaints about the administration

is to deny the government finances, to refuse its assent to legislative

proposals and to put forward motions of its own which lack binding force,

parliament is excluded from participating positively in

political leadership. It can and will then engage only in 'negative

politics’ confronting the leaders of the administration like some hostile power,

and hence being fobbed off by them with the irreducible

minimum of information and being regarded as a mere hindrance,

an assembly of impotent grumblers and know-alls. On the other hand,

the bureaucracy in turn tends to be regarded by parliament and the

voters as a caste of careerists and bailiffs ranged against the people

who are the object of its tiresome and largely superfluous arts. (166)



A “negative politics”, one in which Parliament begins to fail in its “mediating” role between social needs and “profitability”, threatens the stability of the bureaucracy as well, because the bureaucracy merely “executes” the will of the leadership – but if this “leadership” is merely hierarchical and sclerotic and wishes to preserve the status quo, it will lack the dynamism required by a capitalist system in which “labor” is “free” – “free”, that is, to indicate how the money-wage is to be spent, again, a “negative” purchasing “power” that leaves intact the “limits to production” imposed by the need of capital to re-produce or “renew” the money-wage on an expanded scale (either “quantitative expansion” or “qualitative development”).



The situation is different in countries where parliament has established

the principle that the leaders of the administration must either be

drawn directly from its own ranks (a 'parliamentary system' in the true

sense), or that such leaders require the expressly stated confidence

of a majority in parliament if they are to remain in office, or that they (166)

must at least yield to an expression of no confidence (parliamentary

selection of the leaders). For this reason they must give an account of

themselves, exhaustively, and subject to verification by parliament or

its committees (parliamentary accountability of the leaders») and they

must lead the administration in accordance with guidelines approved

by parliament (parliamentary control of the administration). In this case,

the leaders of the decisive parties in parliament at any given moment

necessarily share positive responsibility for the power of the state.

Then parliament is a positive political factor alongside the monarch,

whose role in helping to shape policy is not based on the formal

prerogatives of the crown (or at least not mainly or exclusively on such

rights), but on his influence, which will be very great in any case but

will vary according to his political astuteness and his determination

to reach his goals. Rightly or wrongly, this is what is called a popular

democracy (Volksstaat), whereas a parliament of the ruled confronting

a ruling body of officials with negative politics is a variety of authoritarian

state (Obrigkeitsstaat) , what interests us here is the practical

significance of the position of parliament; whether one loves or hates the whole parliamentary business it is not to be got rid of. (165-6)







In a modern state real rule, which becomes effective in everyday life

neither through parliamentary speeches nor through the pronouncements

of monarchs but through the day-to-day management of the

administration, necessarily and inevitably lies in the hands of officialdom,

both military and civilian. The modern high-ranking officer even

conducts battles from his ‘office’. (145)



The Beamtetum (officialdom) that Weber has in mind here is not restricted to the strictly “lifeless” machinery of production and government administration, but involves also the “leadership” of this “machine” that “embodies” within its structures “the care for external goods” that is the “autonomous market demand for the provision of needs and wants” expressed by “formally free labor”. It is this “iron cage” of needs and wants that gives “life” in the “form” of a “congealed spirit” to the “machinery”– “both military and civilian”, no less than “economic” – of “everyday life” that is subject to the “rule” of “the modern state” that “becomes effective” through the active “management of the administration”.



What matters to Weber is the re-presentation, the faithful and accurate and “effective management” – that is to say, trans-mission and co-ordination and implementation – of the system of needs and wants that constitutes the “everyday life” of “the nation” and therefore also its “political will”.



What interests us here is the question of the political legacy bequeathed

by Bismarck as a result of all these things. He left behind

a nation entirely lacking in any kind of political education, far below the

level it had already attained twenty years previously. And above all a

nation entirely without any political will, accustomed to assume that

the great statesman at the head of the nation would take care of

political matters for them. (144)



Not only does Weber believe that “the political will of the nation” is a “unity”, an entity that can be given a specific shape and expression, but he believes also that the expression of this “political will of the nation” is a “rule”, in other words, that it is imposed from above on the “ruled” below, whose “totality of interests” it both “re-presents” and “manages” through the “administration”, the bureaucracy – military and civilian and economic – that is drawn from the body politic.



At the same time his [Bismarck’s] enormous prestige had the purely

negative consequence of leaving parliament utterly without power.

It is well known that, after leaving office, he accused himself of having

made a mistake in this respect) and was then made to suffer the consequences

as part of his own fate. The powerlessness of parliament also meant that its

intellectual level was very 'low.' Admittedly, the naively moralising

legend of our litterateurs would have us believe that cause and effect

were in fact the other way found, namely that parliament deserved

to remain powerless because of the low quality of parliamentary life.

The true state of affairs, self-evident on any sober reflection, is indicated

by some very simple facts and considerations. Whether a parliament

is of high or low intellectual quality depends on whether great

problems are not only discussed but are conclusively decided there. In

other words, it depends on whether anything happens in parliament and

on how much depends on what happens there, or whether it is merely

the reluctantly tolerated rubber-stamping machine for a ruling

bureaucracy. (144-5)



The “power” (potestas) of Parliament is not derived from its formal legal statute but rather from the effective exercise of its administrative functions. Weber intends power to be the dual relationship between “the discussion of great problems” that are re-presented by members of parliament authorized from their “constituencies” or “electorates” so to do, from the bottom, but also the effective exercise of this “legislative power” into its administrative implementation. Consequently, the “power” of Parliament is “political” in a functional sense – as an extension of “the management of the administration”. No mystique here, no halo, no aura about the “role” of the leitender Geist! No “creativity”, no “innovativeness”, no Individualitat or Personlichkeit! It is not “innate talent” or “intellect” or (indeed!) “charisma” that determine the “ability” of parliamentary leadership: it is the actual performance of the “leadership functions” that hones the “task” of political “responsibility”.



The leading spirit, the ‘entrepreneur’ in the one

case, the politician in the other, is something different from an

‘official’. Not necessarily in form, but certainly in substance. The

entrepreneur, too, sits in an 'office'. An army commander does the

same. The army commander is an officer and thus formally no differ-

159

ent from all other officers. If the general manager of a large enterprise

is the hired official of a limited company, his legal position is also no

different in principle from that of other officials. In the sphere of the

state the same applies to the leading politician. The leading minister

is formally an official with a pensionable salary. The fact that, according

to all known constitutions, he can be dismissed at any time and

can demand to be discharged distinguishes his position outwardly

from that of many, but not all other officials. Yet much more striking

is the fact that, unlike other officials, he and he alone is not required

to demonstrate any kind of qualification based on training.



What the bureaucracy “cannot do” is actually “to decide” – this is the “function” of the leitender Geist, but not in a “Caesarist” sense! Even when Weber “mentions” the term “Caesarism”, he clearly and explicitly does not intend it to be as a
charismatic leader” whose task or role in government is “special” or “elevated” or different in quality from other “managerial administrative functions”: it is simply a “function”!



For it is not the many-headed

assembly of parliament as such that can 'govern' and 'make’ policy.

There is no question of this anywhere in the world, not even in

England. The entire broad mass of the deputies functions only as a

following for the 'leader' - or the small group of leaders who form

the cabinet, and they obey them blindly as long as the leaders are

successful. That is how things should be. The 'principle of the small

number' (that is the superior political manoeuverability of small leading

groups) always rules political action. This element of 'Caesarism' is

ineradicable in mass states.

But it is also this element alone which guarantees that responsibility

towards the public rests with particular individuals whereas it would

be completely dissipated within a many-headed governing assembly.

This is particularly evident in true democracy. (174)



“True democracy” is then a parliamentary “oversight” of “bureaucratic rule” based on the “exact calculation of profit” consequent upon the “autonomous demand of workers” (free labor) whose “industrial work” is a homogeneous “force” (labor power) to be “organized rationally” by capitalists in accordance with this “autonomous demand” or “iron cage” – an “oversight” that is “governed” by “leaders selected” by Parliament through debate and compromise and whose continued leadership is dependent on their “continued success”. Weber does not define “success” but we can take it that this pivots on the “profitability” of the system which is the ultimate sanction of its “rationality”. Once more, Weber’s reliance on the Hobbesian and Schopenhauerian “pessimist or eristic individual possessivism”, – refined by Nietzsche (philosophically) and by the Neoclassics (economically) - is unmistakeable.



The point Weber makes above about the “speed of decision-making” which he calls “the superior political maneuverability of ‘small’ leading groups” is something that Robert Michels takes up in Political Parties to substantiate their supremacy over more “democratic” or “consiliar” deliberative bodies. The “responsibility” of the leitender Geist, then, is something that is owed to “the public”, especially in “mass states”, and that “would be completely dissipated within a many-headed governing assembly” if it did not “rest with particular individuals”. Again, “political responsibility” is conceived of in terms of “results”, of “economy”, of “efficiency” – not in terms of “political freedom”. Given that the “power” (potestas) of the “rulers” is derived from “the provision for the system of needs and wants” (“rational” under bureaucratic rule), it is entirely evident here how Weber relies on an external or extrinsic notion of “free labor”, one based on “labor power” and not on “living labor” which he would identify with “the politics of conviction” as against “the politics of responsibility”!



But the main question here, the impellent one, is: - what happens when “responsibility” (read “profitability”) becomes “ir-responsible” because “profit” becomes “a barrier to production”? This “barrier” is not a “technical” or “economic” one: it is a “political” barrier in the broadest sense – and with this notion of “living labor as a barrier to the accumulation of dead labor” both Arendt’s and Weber’s notions of “freedom” (voluntaristic the first, mechanical the latter) can be overcome. Of course, the only way in which Weber’s “rationality” can be reconciled with the “freedom” of “labor” is if this “freedom”, by which he means “autonomous demand for consumption goods on the part of workers” is limited prepotently, violently, by capitalists so as to ensure the “profitability” of “capitalist economic action” – that is to say, the “renewed exchange(!) of living labor with dead labor”. As Arendt reminds us in chapter five of “On Revolution”, “every builder stands outside the object built”, and therefore it is utterly impossible “to exchange” the human “ability to act” with an object pro-duced by that living activity! (Although, to cavil at it, Arendt does not see that the “distinction” between artist and artifact, worker and work, is valid only to establish the impossibility of an equal or free exchange between living and dead labor outside of “violence”. This is not to say, however, that the artifact has nothing to do with the artist: indeed, this “identity” of being human with the objectification of being human is the aim of our historical project.)

Sunday, 4 December 2011

On Revolution

These are notes on a much larger piece on some of the conceptual and practical matters involving "Revolution". It is a topic that is destined to become increasingly relevant in coming years as this miserable "system" implodes and we are called upon to erect a new one. It's the question of new beginnings... Apologies for the quotations in Italian from Arendt's "On Revolution" (please use Google Translate). This piece will be updated from time to time, so please keep checking. What I am trying to do here is to toss up some ideas about a new Constitution for our societies, and in the process find out what is going wrong not merely from the strictly "economic" angle, but also in terms of the more strictly "political" one - in terms of the inability of existing bourgeois social and political institutions to hide the enormously "repressive" role of capitalist production in posing a barrier to our own equally "enormous" productive potential! This notion of "capital as a barrier to production" is central to the theory that we are developing and to the critique of capitalism that we are carrying out. Cheers.



In this sense, affluence and wretchedness are only two sides of the same coin; the bonds of necessity need not be of iron, they can be made of silk. Freedom and luxury have always been thought to be incompatible, and the modern estimate that tends to blame the insistence of the Founding Fathers on frugality and 'simplicity of manners' (Jefferson) upon a Puritan contempt for the delights of the world much rather testifies to an inability to understand freedom than to a freedom from prejudice. (H. Arendt, On Revolution, ch.3, p.193)



62.

OnRevolution

[I]t is beyond doubt [62] that the young Marx became convinced that the reason why the French Revolution had failed to found freedom was that it had failed to solve the social question. From this he concluded that freedom and poverty were incompatible. His most explosive and indeed most original contribution to the cause of revolution was that he interpreted the compelling needs of mass poverty in political terms as an uprising, not for the sake of bread or wealth, but for the sake of freedom as well. What he learned from the French Revolution was that poverty can be a political force of the first order. (ch.2, pp.61-2)





The subject-matter of the Economics – its subjectum, its substratum, its nervus rerum – is the “system of needs and wants”, it is the sphere of “necessity”, of “pro-duction” that “gravitates” ultimately around the “reproduction” of a society. Whether “labor” is seen as the source of “value” or whether value is seen as arising from the “saving” of “labor”, the fundamental reality is that “labor” remains at the heart of “the social question”. That “freedom and poverty” may be incompatible is a problem or “social question” that may be resolved simply by eliminating poverty: but if “freedom and luxury” also are incompatible, as Arendt suggests, then humanity has an even greater problem – and freedom has found an insurmountable barrier!



What Arendt means here, if one subtracts the verbosity, is that “the pursuit of luxury” or “private happiness”, may tend to shrink the social, “public” space or universe of human beings so as to render them a-political – with the consequent neglect of the forms of political activity that “freedom” must stand for, in opposition to “passive” liberties. To be “free” is for Arendt to engage actively in the political life of one’s community. To be “at liberty” to do something, instead, is to be the passive beneficiary of a right or benefit “conceded” to oneself by the powers that be. In this sense, one may say that “freedom” and “the pursuit of luxury” – not “luxury” itself! - may well be at odds, but not be necessarily “incompatible”!



With Classics and Neoclassics, the sphere of “happiness” or “utility” (for the Classics “labor” has utility because it “creates value” positively, whereas for Neoclassics it “consumes” the world so that “utility” or “value” consists in the “saving of labor” instead, which therefore has “dis-utility”) is always “private” because “labor” can be “divided” so the whole point of the “sociality” of social labor, its phylogenetic interdependence, is lost. The private sphere, civil society or the status civilis, is what must be protected from the State, which was constituted for this purpose by political convention as a way of prevention or escape from the state of nature or status naturae and its scientific hypothesis as the domain of necessity. But because in this status civilis, in this State, the individuals composing civil society have necessarily alienated the “freedom” they enjoyed in the state of nature, now this “freedom” is reduced to and even confused with “liberty”. Whether it be under Hobbes’s “Leviathan” or State-machine, or else under Locke’s consensual “common-wealth”, what the State protects are the “individual possessions” of the individual – life, liberty and estate – that these individuals possessed already in the state of nature but were under constant threat from aggression. There is no notion of “public happiness” in this political theory because “happiness” or “utility” or “pleasure” is limited to the oikos – the household (Alberti in Della Famiglia, to Franklin).



Arendt rebukes Weber (implicitly) because the latter assumes that the “frugality” of the Founding Fathers was purely Puritanical – when in fact it could have been the “opposite” of retreat from the world, the opposite of “renunciation”: the “frugality” and “industry” of the Puritans could have been due to a greater concern for “public happiness” and therefore “freedom” than for “private happiness” and therefore “luxury”. This again would contrast with Weber’s interpretation of the spirit of capitalism. Here the “citizen” would prevail over the “bourgeois”. We note that in Weber this “antithesis” does not even begin to exist because the Political is identified immediately with the protection of the “needs and wants” of civil society – of what he calls “free labor”.



At the same time, Arendt is chastising Marx for equating “freedom from poverty” with “freedom” itself. So the mere fact that people are de-livered from poverty and lifted into luxury does not mean that “freedom” will be instored. Here Arendt is divorcing “wealth” or “value” – economic action – from political institutions: - which is something that neither Marx nor Weber are prepared to do because they tie “the most basic needs of social life”, including that for “freedom”, to the sphere of “social reproduction” in Marx and “the care for material or external goods” in Weber, thereby “reducing” the notion of “freedom”, the Political, to the sphere of the social relations of production, to Economics.



This helps explain why in Weber there is concern for parliamentary democracy only to the extent that it is “functional” to “the rational organisation of labor” and ultimately to “the iron cage”. Both the ascetic ideal and the iron cage are “irrational”. Weber sees the “freedom” of “labor” only as “autonomous market demand” and not in broader “political” terms. This is Arendt’s reproach to Weber. But she forgets, as Marx would pointedly remind her, that her own high-brow conception of “freedom” does not deal integrally, let alone fairly, with what is the most important aspect of human existence under capitalism: - wage labor, which Weber confuses with human living labor.

There can be precious little “freedom” if one is under the yoke of “the rational organisation of ‘free’ labor under the regular discipline of the factory”, as Weber defines “capitalism”. Arendt succeeds only in demonstrating her “poverty of philosophy” by mistaking Marx with Proudhon, the bathetic author of “The Philosophy of Poverty”! That poverty and freedom are two different concepts is blatantly evident. But that Marx ever made the mistake of confusing de-liverance (Latin, liber, freed slave) from poverty with freedom when in fact he was stating merely that any “freedom” that fails to abolish poverty offers very little solace to those who are poor, is an accusation unworthy of Arendt’s otherwise admirable intellect. Perhaps the fundamental flaw in her entire thesis in On Revolution is the fact that her ethereal notion of “freedom” is brought down to earth with a heavy thud when she comes to consider the leaden and corruptive role that “private interests” have played in any “Constitution” known to humanity. – Which once again only serves to show that no “Constitution” can preserve her notion of “freedom” unless “the social question” is resolved first – which is exactly what Marx was arguing! (Unfortunately, Arendt does not tackle this ineluctable problem, fatal to her entire argument, until the very end of her book! As Camus says in La Peste, “too late to turn it to account”!)



The crucial difference between Marx and Proudhon is that Marx did not waste time “philosophising” about poverty, preferring instead to find out the social “causes” behind its indisputable existence in capitalism. And the difference between Marx and Weber is that, having found out that capitalism reduces “living labor” to “labor power” – that is, in Weber’s own words, to “the rational organisation of (formally) ‘free’ labor under the regular discipline of the factory” -, Marx could see that the social power of the bourgeoisie consists precisely in this violent “reduction” of human living labor to mere “labor power”. Weber’s phrase “free labor” is not an oxymoron because his “labor” is an entity that can be either “free” or “not free” only in a “formal” sense, given that he wrongly identifies all human activity with “labor power”. For Marx, instead, it is impossible for “living labor” to be anything but (philosophically) “free”: it is only under the violent command of the capitalist that living labor is turned into unfree “labor power”.



The problem is then to understand what relationship there is between “freedom” and “labor” in Weber’s work. If Weber is concerned about “profit” or “capitalistic economic action”, it is because it is this that “provides” rationally and most efficiently for those “freely expressed” wants and needs of workers through “the rational organisation of labor (meaning, “labor power”) under the regular (capitalist) discipline of the factory”.



There is a sense in which the Neoclassical notion of “equilibrium” has to do with the “necessity” of “scarcity” of “provisions” in proportion to endless “wants”. Both Schopenhauer and Robbins understand the Will and “wants”, respectively, as “insatiable”. But whereas Schopenhauer sees this as a motive “to renounce” the world of wants (the Entsagung), Robbins takes it more realistically as the “budget constraint” of Neoclassical Theory that allows it to become “the science of choice” – what makes “choice” subject to “scientific and rational” treatment. It in order to escape from the “gravitational orbit” of “equilibrium” that the “freedom” of the entrepreneur is needed for Schumpeter. Indeed, the entire point to Neoclassical value theory is precisely the ability of the capitalist-entrepreneur “to free” himself from “immediate consumption” by “deferring” it and thereby “substituting” it with “labor-saving tools”. It is not the “renunciation” of Schopenhauer whose society is entirely “eristic” and the State can only keep individuals from descending back into the bellum civium. For Neoclassical theory the State can reward the productivity of labor by protecting the “deferral of consumption” of the capitalist entrepreneur. But Schumpeter sees this “deferral” or “renunciation”, this Askesis, as still limited to the “Statik” framework of general equilibrium analysis, insufficient to explain the “Dynamik” features of the capitalist economy, its “development”, its ability to defeat “stagnation”.



For Schumpeter the “deferral” or “saving” of the Neoclassics is inadequate to explain value and profits because these can arise only from the “creativity” of the entrepreneur who “elevates” and therefore “frees” himself from the gravitational pull of the “circular flow” (Kreislauf), reaching thereby the heights of “innovation” by distinguishing his “individuality-personality” (Unternehmer-personalitat) from that of the “mass”. The State must therefore do more than just protect property rights: it must also protect intellectual property from the “rentier” capitalists (finance). Not “labor” but “enterprise” is the gateway to “freedom” and “profit” as against “interest” and “rent”.



With Classical theory, instead, the capitalist appears “redundant” from the start, because “labor” is the source of value. Even Marx’s version preserves this “socially necessary labor time” and the “reproduction of society”. – Whence comes the “surplus value” that capitalists exploit from workers. For Schumpeter, “surplus” is the domain of entrepreneurial “creativity”, instead. But Marx introduces the “use value” of living labor. - So here the sphere of “necessity” is labor-power and that of potential “freedom” is “living labor” (Grundrisse) whereas surplus value is both exploitation and “potential” for freedom.





È insito nella natura stessa di ogni inizio portare in sé un

certo grado di completo arbitrio. Non solo un inizio non è legato

in una catena fissa di cause ed effetti, una catena in cui ogni effetto

si trasforma immediatamente nella causa di sviluppi futuri;

ma non ha nulla a cui potersi riattaccare, è come se uscisse dal nulla,

nel tempo e nello spazio. Per un momento, il momento dell'inizio,

è come se l'iniziatore avesse abolito la stessa sequenza di temporalità,

o come se i protagonisti fossero proiettati fuori dall'ordine

temporale e dalla sua continuità. Il problema dell'inizio natural-

236

mente compare dapprima nel pensiero e nella speculazione sulle

origini dell'universo: e conosciamo bene la soluzione ebraica —

l'assunzione di un Dio Creatore che sta al di fuori della sua creazione,

allo stesso modo in cui ogni costruttore sta al di fuori dell'oggetto

costruito. In altre parole, il problema dell'inizio si risolve

con l'introduzione di un iniziatore, i cui stessi inizi non

sono più argomento di domande perché egli è "da eternità a eternità".

Questa eternità è l'assoluto della temporalità: e nella misura

in cui l'inizio dell'universo risale a questa regione dell'assoluto,

non è più arbitrario ma viene a radicarsi in qualche cosa

che, anche se può essere al di là delle capacità razionali dell'uomo,

possiede però una ragione, una razionalità sua propria. Il curioso

fatto che gli uomini delle rivoluzioni si gettarono nella loro disperata

ricerca di un assoluto proprio nel momento in cui erano

stati costretti ad agire potrebbe esser dovuto, almeno in parte, all'influenza

delle vecchie, abitudini di pensiero dell'uomo occidentale,

secondo le quali ogni cominciamento completamente nuovo ha

bisogno di un assoluto da cui uscire e da cui essere "spiegato".



In Hobbes the “absolute” is all Euclidean: the legitimacy and legality of the Sovereign is founded upon the “necessity” of the social contract – which is “philosophically” free, as in Montesquieu, but coerced “externally” ob metum mortis. The State is the ultima ratio in foro externo (the inter-national state of nature) whilst it preserves “the law” for its subjects in foro interno: similarly, the subjects are “free” in foro interno” (the psyche), but not free “in foro externo”, because subject to the law. It is exactly the same in Weber – that is why he is more the descendant of Hobbes than of Machiavelli (pace Aron). The leitender Geist is certainly no Principe.



The same can be said of Nietzsche. But here, as with Weber who copies him, the Sovereign is not “ab-solved” (Heidegger in Schelling) from the Political because the “scientific hypothesis”, the “truth” of the intuitus (Leibniz) in the identity of “laws” with “self-evidence” or “necessity” is impossible – because Nietzsche denies that anything – including logico-mathematics! – is “self-evident”! The meaning of the Rationalisierung is all here! (Marcuse sees right, but he simplifies the problematic by not tackling this “link-lex-nomos” between “labor” as “labor power” and as “living labor” and the “sociality” underlying both! Arendt, true to Jasperian-Heideggerian form, does the same! “On Revolution” is dedicated to Karl! Cf. Jaspers’s notion of “tutto-circonfondente” and Heidegger on “Ab-solute” in Schelling’s) The Hobbesian geometric (Spinoza’s more geometrico) “system” is “stagnant”, it is an “equilibrium”, a Schumpeterian Kreislauf that does not allow for “a remnant of ‘individual’ freedom” in the sense of Entwicklung – it is the impossible “re-solution” or “equilibration” or Ver-gleichung or “balance of forces” that “ab-solves” the Sovereign from all need to justify or found its legitimacy and legality: the “laws of the commonwealth” become “self-evident” like Euclid’s and can dispense with explanation or foundation – they are the Absolute, the Sovereign, the State-Machine is the Absolute.



As Arendt remarks, the “laws” of States and those of mathematics differ (p.221?) because the latter describe the constitution of the mind – they do not! (psychologism). Both “laws” are conventional (Nietzsche) but when juridical laws are made ab-solute they become mathematics, they become “fate”, which is the opposite of what “truth” is supposed to be! So, in fact, “self-evident truths” (Jefferson) are not “truths” at all (whence the Jeffersonian “we hold”) – indeed, their “ab-soluteness” demonstrates that there can be no truth except “truth as a value”. (If “truth” existed we could not “think” it – it would be Leibniz’s intuitus originarius.) (See also her remarks on “the Absolute” and temporality on p.237 of Italian translation where Arendt posits the human “initium” as a pure act of will: and recall Schopenhauer’s insistence that “the causal chain” has no Kantian “unconditioned beginning” because this is “toto genere” different from “the chain of events” – and must be therefore the thing-in-itself! Marx distinguishes similarly between living labor and dead labor. Also, the thought of the “unity” of the Founder, at p.238 and 239, is neither Machiavelli’s nor Harrington’s but goes back to Descartes on the “Maker” of the world required to be One to be perfect. Russell [on Leibniz] shows that this “monism” belongs to Leibniz as well [cf. also Heidegger in “The End of Philosophy” and MfoL].)

For Weber the Rationalisierung “overcomes” the opposition of freedom and necessity. The “freedom” of labor is a by-product of conflict over the provision for wants. And the “quantification” of this conflict, together with its specification in terms of how much is produced and what, depends for its “maximisation” on the “rational organisation of labor” upon condition that it be “free” to formulate its “choices” through autonomous demand, not just in terms of “goods”, but also in terms of the “exchange value” of itself, of “labor”. It is the market mechanism that allows this “osmosis” or “synthesis” of the “necessity” of the provision for wants” given the “insatiability” of the latter and the “scarcity” of the former, and therefore it is possible for a Hobbesian common-wealth to be established in which the provision for wants becomes “rational” through capitalistic economic action.



The question that Arendt poses by way of implicit criticism of Weber (so does Marcuse in terms of “industrialisation” and “science”, or Heidegger with his ‘Technik’) is that “the iron cage” is taken by him to be naturaliter the entirety of the Political, as it was for Hobbes, in that “civil society” now is identical with the State because the entire “task”, legality and legitimacy, of the State is precisely this “guarantee” of the market mechanism as the ultima ratio, the scientific hypothesis of the self-interests of atomised individuals whose only aim in social life, in exiting the state of nature, is the pursuit of “private happiness” or “utility”. The Political becomes absorbed into the Economic – except that the “freedom” of labor involves the “specification” of its wants and needs not merely through the market mechanism but also through “compromise” in Parliament of the necessarily conflicting self-interests that are filtered by the market.



Therefore Weber does not think that the market is capable of being a “mechanism” that “develops” through entrepreneurial “creativity”. Rather, the “crisis” represented by conflict can be “negotiated” in a peaceful battleground, in sparring matches in parliament whereby “the will to power” of individual leaders can be accommodated and integrated in the overall “system of production” and indeed become its “motor”, its guide and “government”. This is what political parties as “mass parties” are supposed to do. But the “socialisation” of production is simply inescapable precisely because of the “system of wants and needs”, the iron cage, that has formed in “the Occident”.



Arendt says that “the social question” is separate from “freedom” – hence her effort to distinguish “power” from “authority”, potentia from potestas. Weber thinks that this is “romanticism” pure and simple because the Political assumes an increasingly technical character. Marx instead insists that the Political is the tool that poses a barrier to the development of the forces of production, to the “freedom” of living labor, until these break loose from its strictures, or rather, the social relations of production come into contra-diction with the Political, and force the “abolition” the State. Marx does not explain the process of this “liberation” of living labor from wage labor: but Arendt assumes naively that a revolution and a constitution can be “freed” from the “social question”! But at the very end of her reflections, she has to capitulate and admit that “private interests” will always interfere with “public” ones (ch.6, sec.3, p.291).





Nessun poeta o filosofo posteriore ha espresso l'intimo significato

di questa coincidenza più elegantemente e più succintamente di Platone,

quando, verso la fine della sua vita, osservò quasi casualmente: ….

"L'inizio infatti, poiché contiene il suo proprio principio, viene a essere anche

un dio, il quale, finché dimora fra gli uomini, finché ne ispira

le imprese, salva tutto". Era la stessa esperienza che qualche secolo

dopo faceva dire a Polibio: "L'inizio non soltanto metà dell'impresa,

ma arriva già verso la fine"33. Ed era sempre la stessa intuizione,

dell'identità  principium e principio che alla fine persuase

la comunità americana a guardare "alle proprie origini per

trovare una spiegazione delle proprie qualità distintive e così un'indicazione

su ciò che teneva in serbo il futuro" 5 9; intuizione che

già aveva condotto Harrington — che certamente non conosceva

5 7 Le Leggi, libro V I , 7 7 5 .

5 8 POLIBIO, V, 32.1. "L'inizio è più della metà del tutto" è un antico proverbio,

citato così anche da Aristotele, Etica nicomachea, 1198b.

S ' W . F . CRAVEN, op. cit., p. 1.

245

Agostino e probabilmente non aveva una consapevole nozione della

frase di Platone — alla convinzione: "Come nessuno potrà mai

indicarmi una comunità nata diritta che sia mai diventata storta,

così nessuno potrà mostrarmi una comunità nata storta che sia

mai diventata diritta" M.

Per quanto profonde e significative siano queste intuizioni, la

loro importanza politica emerge in piena luce solo quando ci si

sia resi conto che sono in netta contrapposizione con le vecchie

nozioni ancor oggi diffuse sulla violenza che detta legge, necessaria

per qualsiasi fondazione e quindi, si suppone, inevitabile in tutte

le rivoluzioni. Sotto questo aspetto il corso della rivoluzione americana

racconta una storia indimenticabile e insegna una straordinaria

lezione: perché questa rivoluzione non scoppiò da sola ma fu

fatta da uomini per comune deliberazione e sulla base di reciproci

impegni. Il principio che venne alla luce durante quegli anni fatidici

in cui furono poste le fondazioni — non con la forza di un

solo architetto ma col potere combinato di molti — era il principio

della mutua promessa e della comune deliberazione; e l'evento

stesso infatti decise, come Hamilton aveva auspicato, che gli uomini

sono "realmente capaci [...] di darsi, per propria scelta e

attraverso matura riflessione, un buon governo": che essi non sono

"condannati a far dipendere dal caso e dall'uso della forza le proprie

costituzioni politiche" 6 1.



Here Weber is called directly into question for his definition of a “State” (in PaB). But once again Arendt misses the point that “the social question” intruded on the making of the US Constitution just as much as it did on the dis-solution of the French! Instead, she dwells on Jefferson’s insistence for “constituencies” that remind Arendt of Luxemburg’s exaltation of “soviets” (ch.6, p306).



So for Weber (PaB) the State is “necessarily” the dispenser of violence, which is its “power” (meaning potestas), and the “mechanism” is kept “alive” (the living machine) by the leitender Geist which is NOT “free”, just as “labor” is not “free” except “formally” so long as its “market demand” remains “framed” within the parliamentary rules, the con-ventum (convention), that “select” the Politiker but pre-vent (prevention) the bellum civium. Unlike the Hobbesian “Sovereign”, the State-machine, Weber envisages a “parliamentary system” that can “select” and “assign” responsibility so that “politics” does not become a game of “conviction”. Here “the machine” is able “to select” its “leadership” not “mechanically” but within “rules” that maintain any “promises” within the realm of “possibility” – no “false prophets” (like Trotzki). No “beautiful souls” like Arendt or Rosa Luxemburg (exalted in the final chapter of On Revolution) either. Freedom and necessity are much more “specific” or “rational” in Weber, down to the “constitutional design or Frage”.



This “compromise”, this “dis-cutio” or “dia-lectic” that Weber envisages almost socratically, is what Schmitt denies is possible (remember accusations of “dithering” and “filibuster”): the State cannot have both legitimacy and legality at the same time – either the laws are “arbitrary” or else the legislator is illegitimate. Only potestas can give legitimacy to law provided we accept the “legitimacy” of the “power to decide over the exception”.



For Weber and Schumpeter as for Locke, the “scientific” inevitability of capitalism – identified absolutely with the market economy – is what makes the “potestas” and the potentia of the State indisputable or “common-sensical”. Thus Weber sides a little more with Hobbes and Nietzsche on the “pessimistic” side, whereas Schumpeter is more Lockean in his optimism – but then is as elitarian as Weber or Pareto and Mosca: for Hobbes the State prevents the state of nature, for Locke it simply protects it (especially the “estate”). There is no “initium” in the Treatises, as Arendt observes. But there is in Hobbes. So Weber “needs” a constitution whereas Schumpeter (his entrepreneur) does not. Weber does not have to explain conflict, but then has difficulty explaining how “parliamentary democracy” is able to function, whereas Schumpeter needs only to presume that it “may not” function to come up with elitarian democracy or with an authoritarian state. We know that Weber eventually concedes defeat.