Commentary on Political Economy

Thursday 23 February 2012

'Free-dom' vs. 'Greed-dom': Benjamin Constant as Precursor of Max Weber

For our loyal friends, this is the beginning of Part Four of the Weber-buch and it draws on the intriguing similarities or cor-respondence between Constant's early theorisation of Liberalism and its evident assimilation in Weber's political sociology. Constant's important texts are available here:

One hundred years before Max Weber “crystallised” the entire Romantic opposition to the ravages of capitalist industry, of its “iron cage”, of its “soul-less bureaucratisation” and “dis-enchanted” Rationalisierung of all aspects of social life; one hundred years before Weber had finally isolated and identified the source of this otherwise inexplicable socio-political and politico-economic development in the Vorbermerkungen as the “exact calculation” enabled by the constitution of “rational organisation of free labor under the regular [calculable] discipline of the [capitalist] factory”, Benjamin Constant, one of the greatest exponents of the European Liberalism that emerged triumphant out of the upheaval of the Age of Revolution, summarised what he perceived to be the great transformation of human society from Antiquity to Modernity as follows:

Cette différence en amène une autre. La guerre est antérieure au commerce; car la guerre et le commerce ne sont que deux moyens différents d'atteindre le même but, celui de posséder ce que l'on désire. Le commerce n'est qu'un hommage rendu à la force du possesseur par l'aspirant à la possession. C'est une tentative pour obtenir de gré à gré ce qu'on n'espère plus conquérir par la violence. Un homme qui serait toujours le plus fort n'aurait jamais l'idée du commerce. C'est l'expérience qui, en lui prouvant que la guerre, c'est-a-dire, l'emploi de sa force contre la force d'autrui, l'expose à diverses résistances et à divers échecs, le porte à recourir au commerce, c'est-à-dire, à un moyen plus doux et plus sûr d'engager l'intérêt d'un autre à consentir à ce qui convient à son intérêt. La guerre est l'impulsion, le commerce est le calcul. Mais par la’ même il doit venir une époque où le commerce remplace la guerre. Nous sommes arrivés a cette époque.

Utterly evident is the Hobbesian derivation of Constant’s hypothesis, which however he does not seem to appreciate in its explicit and dramatic implications. If, indeed, “commerce has replaced war” as the ex-pression of human individualist antagonism, of human conflict in the state of nature or of the degeneration of civil society into civil war (remember von Klausewitz, “War is the continuation of politics by other means”), Constant is unable to explain how and why this switch, how and why this quasi-religious conversion has taken place historically  and  indeed how and why this “commerce” can take place at all (!) beyond the mere statement that “le commerce n'est qu'un hommage rendu à la force du possesseur par l'aspirant à la possession; c'est une tentative pour obtenir de gré à gré ce qu'on n'espère plus conquérir par la violence”. Had Constant read Hobbes more carefully, or had he lived long enough to read Nietzsche, he would have realised that commerce can replace war as a manifestation of human conflict whilst still providing the basis of the social synthesis, only if commerce or exchange involve not the exchange of mere “possessions”(however “gradual”) but rather that of dead labor (Constant’s “possessions”) with living labor – that is to say, only if this “exchange” is categorically incommensurable in that it involves the reduction of human living labor to mere  dead objectified labor so that the former may be commanded politically by means of the latter! - And that such “exchange” can take place if and only if living labor is “separated” from the means of its reproduction and of production. It is only if living labor is politically and violently reduced to dead objectified labor that its pro-duct can be “calculated” or “measured” under “the regular discipline of the factory”.

As we explained in Part Two, contrary to Marx’s own account of this “reduction” (or “fetishism” as he styles it), there is absolutely no way in which this can occur by means of “market forces” or a “market mechanism” that operates automatically! There is no way therefore, contrary to Marxian theory and orthodoxy, how a capitalist society can function without the wilful and conscious action of specific political institutions (whose operation and function we will describe in this Part). Our task in this Part is not to describe how capitalist society is politically regulated but simply to show that it must be so regulated if it is to function at all!

Similarly Weber, in reprising a century later “the brilliant Constant hypothesis” with its functionalist and organicist ideal type of “the ancient State”, as he himself acknowledges in ‘Objektivitat’, is entirely silent about the real historical and theoretical foundations of this exakte Kalkulation that he too places at the centre of capitalist society and industry:

The constructs of the natural law and the organic theories of the state have

exactly the same function and, to recall an ideal type in our sense, so does

Benjamin Constant's theory of the ancient state. It serves as a harbor

until one has learned to navigate safely in the vast sea of empirical

facts. The coming of age of science in fact always implies the transcendence

of the ideal-type, insofar as it was thought of as possessing

empirical validity or as a class concept (Gattungsbegriff) . However,

it is still legitimate today to use the brilliant Constant hypothesis to

demonstrate certain aspects and historically unique features of ancient

political life, as long as one carefully bears in mind its ideal-typical

character. (p.104, MoSS)

In effect, Weber adopts much more than what he, following Simmel’s neo-Kantian theory of “social forms”, styles as merely Constant’s “ideal-type” analysis of “ancient political life”: by exploiting the contrast that Constant so ably draws between the State in Antiquity and “the modern State”, Weber effectively assimilates and elaborates the Frenchman’s “brilliant hypothesis” to erect upon it his entire analysis of capitalism and theory of society as well! – In doing so, Weber wholly eludes and elides and even obfuscates Constant’s genial distinction between the importance of “political freedom” (liberte’) for the citizens of Antiquity and the functional retreat from this “public happiness” (jouissance publique) occasioned by the spread of “commerce and circulation of property” under the novel capitalist regime, in favour of “private happiness” (jouissance privee), of the pursuit of private wealth and luxury. The reason for this apparent “omission” is that Weber’s rigorous intellectual training, and in particular his thorough grounding in and assimilation of the negatives Denken of Schopenhauer and Nietzsche, prevent him from com-prehending the fundamental dif-ference (the different practical effect) between that “public happiness”, that political “freedom” that had been so precious to the artificers of the American and French Revolutions, and the mere “private happiness”, the petty and restricted “liberties” – what Constant calls “garanties” – to which the rise of the bourgeoisie and its “commerce”, or the rule of capital, have dramatically reduced and confined human political freedom.

Constant continues,

Il résulte de ce que je viens d'exposer, que nous ne pouvons plus jouir de la liberté des anciens, qui se composait de la participation active et constante au pouvoir collectif. Notre liberté à nous, doit se composer de la jouissance paisible de l'indépendance privée. La part que dans l'antiquité chacun prenait à la souveraineté nationale n'était point, comme de nos jours, une supposition abstraite. La volonté de chacun avait une influence réelle: l'exercice de cette volonté était un plaisir vif et répété. En conséquence, les anciens étaient disposés à faire beaucoup de sacrifices pour la conservation de leurs droits politiques et de leur part dans l'administration de l'État. Chacun sentant avec orgueil tout ce que valait son suffrage, trouvait dans cette conscience de son importance personnelle, un ample dédommagement.

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” into “individual labors” and can thereby be alienated in exchange for dead objectified labor, so that the whole point of the “sociality” of social labor, its phylogenetic interdependence, is lost. This is the root cause for the fact that

nous ne pouvons plus jouir de la liberté des anciens, qui se composait de la participation active et constante au pouvoir collectif.

Under the rule of capital with its Trennung or enforced separation of living labor from means of production, and its parcelisation of social labor into “individual labors”, 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 preventing or escaping from the state of nature or status naturae into civil society or the status civilis and its concomitant scientific hypothesis as the domain of necessity. Already, therefore, the “everyday life” of “citizens” is subjected to the “sovereignty” of the constituted powers and cannot itself act as a constituent power. The original contractum unionis, by virtue of the fact that it always understood the subjects of this “union” to be individuals in opposition to one another under the dire necessity (Hobbes) or the simple “necessity” (negatives Denken) that leads to the alienation of individual political “freedom” to a Sovereign who will “pre-vent civil war” and assure “public safety”– by virtue of this fact, the con-vention of the contractum unionis between “individuals” was bound to degenerate into a contractum subjectionis of these “individuals” by the Sovereign or State. Put differently, 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”, that is to say, with the “protection” of their “possessions” and the preservation of the salus publica (public safety).

This is the essence of liberalism. And this is what Constant, and Weber who copies his analytical blueprint, both fail to grasp. Constant mistakes for a “technical” fact – the difficulty and complexity of “modern life” – what is indeed the reality of the dis-enfranchisement of the entire class of workers from ownership and decision-making in capitalist society under the rule of the bourgeoisie. 

Ce dédommagement n'existe plus aujourd'hui pour nous. Perdu dans la multitude, l'individu n'aperçoit presque jamais l'influence qu'il exerce. Jamais sa volonté ne s'empreint sur l'ensemble, rien ne constate à ses propres yeux sa coopération. L'exercice des droits politiques ne nous offre donc plus qu'une partie des jouissances que les anciens y trouvaient, et en même temps les progrès de la civilisation, la tendance commerciale de l'époque, la communication des peuples entre eux, ont multiplié et varié à l'infini les moyens de bonheur particulier.

Whether it be under Hobbes’s “Leviathan” or State-machine, or else under Locke’s consensual “common-wealth”, what the State protects are the “possessions” of “self-interested individuals” – life, liberty and estate – to which they had either a “natural right” (Locke) or a de facto claim (Hobbes) already in the state of nature but which were then under constant threat from mutual aggression. There is no notion of “public happiness” in this political theory because “happiness” or “utility” or “pleasure” is limited to the sphere of “individual possessions”, which includes the power “to possess and alienate” human living labor as if it were a mere “object”, as if it were mere dead objectified labor – in such a way that the “pro-ducer” (the worker) is homologated with and mistaken for the object, the pro-duct of the work! Indeed, the social, political and economic reality that underpins the concomitant social theory of liberalism is that this “private happiness” made up of the ownership of private property is entirely dependent on the “separation” (Trennung) of living labor from its means of production, its “parcelisation” from social labor into “separate individual labors”, and its violent “exchange”and therefore homogenisation with dead labor (Constant’s “possessions”): this and this alone is the basis of the capitalist social synthesis.

The problem arises, as Constant and Tocqueville perceive, when this “protection” comes to permeate every aspect of the “private sphere” through the process of what Constant calls “commerce” and Weber describes more aptly as “socialisation”, that is, the development of social capital. Both Constant and Weber, following the classic lines of liberalist doctrine, mistake the effect for the cause: - they believe that the Parlamentarisierung is the “result” of a “natural progression” to the Demokratisierung, dictated by “the system of needs and wants”, by “the state of nature”, by the “freedom of the will” occasioning “the iron cage”, from the political model of Antiquity to that of “modern capitalism”, rather than being the “instrumental political expression” of capitalist relations of production.

Car, de ce que la liberté moderne diffère de la liberté antique, il s'ensuit qu'elle est aussi menacée d'un danger d'espèce différente.
Le danger de la liberté antique était qu'attentifs uniquement à s'assurer le partage du pouvoir social, les hommes ne fissent trop bon marché des droits et des jouissances individuelles.
Le danger de la liberté moderne, c'est qu'absorbés dans la jouissance de notre indépendance privée, et dans la poursuite de nos intérêts particuliers, nous ne renoncions trop facilement à notre droit de partage dans le pouvoir politique.

Il s'ensuit que nous devons être bien plus attachés que les anciens à notre indépendance individuelle; car les anciens, lorsqu'ils sacrifiaient cette indépendance aux droits politiques, sacrifiaient moins pour obtenir plus; tandis qu'en faisant le même sacrifice, nous donnerions plus pour obtenir moins.
Le but des anciens était le partage du pouvoir social entre tous les citoyens d'une même patrie: c'était là ce qu'ils nommaient liberté. Le but des modernes est la sécurité dans les jouissances privées; et ils nomment liberté les garanties accordées par les institutions à ces jouissances….

In the uni-versal Eris of the newly-constituted liberal bourgeois society, the overriding function of the State can be one and one only: the “security” of its component “self-interested individuals” from the rapacity of one another that threatens always to erupt into the “war of all against all”! The essential apory in Constant’s and Weber’s “formulation” of this problem – of how “conflicting self-interests” in their “freedom” can ever “converge” so as to found a “rationality”, whether economic or still less “political”, or else of how these self-interests can “diverge” and still found a sphere of “necessity” or “scarcity”! – is that this Schopenhauerian and Hobbesian “universal Eris” cannot resolve these conundrums of political “freedom” and of economic “necessity” except by sublating and reducing the former to the latter (determinism) or by hypostatising the former by postulating its “autonomy”. By contrast, Nietzsche understood all too well that Schopenhauer’s postulate of this universal Eris (in Book IV of Die Welt) was “powerless” (ohnmachtig) to confront Hegel’s problematic of the social synthesis - of the actual existence of society, of human com-unitas, of co-operation and even of inter esse! That is why he gave the problem of the Rationalisierung a “solution” that we have explored in the Nietzschebuch. And this “solution” involves the definition of “parliamentary democracy”, of the Weberian reconciliation of Demokratisierung with Parlamentarisierung, as an oxymoron, a contradictio in adjecto. So important, so “apocalyptic”, so “fundamental”, is this Nietzschean pitiless critique of the Political in both its Hegelian and Liberal forms, that Weber would surely have made it explicit in his work had he truly understood it rather than simply “pass it by” (allusion to ‘On Passing-By’ in Zarathustra). Instead, Weber follows faithfully the lead proffered by the “liberal” Constant:

Que le pouvoir s'y résigne donc; il nous faut de la liberté, et nous l'aurons; mais comme la liberté qu'il nous faut est différente de celle des anciens, il faut à cette liberté une autre organisation que celle qui pourrait convenir a la liberté antique; dans celle-ci, plus l'homme consacrait de temps et de force a l'exercice de ses droits politiques, plus il se croyait libre; dans l'espèce de liberté dont nous sommes susceptibles, plus l'exercice de nos droits politiques nous laissera de temps pour nos intérêts privés, plus la liberté nous sera précieuse.

De la vient, Messieurs, la nécessité du système représentatif. Le système représentatif n'est autre chose qu'une organisation à l'aide de laquelle une nation se décharge sur quelques individus de ce qu'elle ne peut ou ne veut pas faire elle-même. Les individus pauvres font eux-mêmes leurs affaires: les hommes riches prennent des intendants. C'est l'histoire des nations anciennes et des nations modernes. Le système représentatif est une procuration donnée à un certain nombre d'hommes par la masse du peuple, qui veut que ses intérêts soient défendus, et qui néanmoins n'a pas le temps de les défendre toujours lui-même. Mais a moins d'être insensés, les hommes riches qui ont des intendants examinent avec attention et sévérité si ces intendants font leur devoir, s'ils ne sont ni négligents ni corruptibles, ni incapables; et pour juger de la gestion de ces mandataires, les commettants qui ont de la prudence se mettent bien au fait des affaires dont ils leur confient l'administration. De même, les peuples qui, dans le but de jouir de la liberté qui leur convient, recourent au système représentatif, doivent exercer une surveillance active et constante sur leur représentants, et se réserver, à des époques qui ne soient pas séparées par de trop longs intervalles, le droit de les écarter s'ils ont trompé leurs voeux, et de révoquer les pouvoirs dont ils auraient abusé.

For both Constant and Weber, then, the “trans-formation” of the experience of “freedom” from that of “active participation” in the affairs of State in Antiquity to that of “passive protection” under the State, of bourgeois Sekuritat and salus publica in “modern capitalism”, is related functionally and organically to the progress and evolution of the “system of needs and wants”, of the “iron cage of modern industrial labor” (Weber). This helps explain why in Weber there is concern for the State and parliamentary democracy only to the extent that they are functional and organic to “the rational organisation of free 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.

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’, as “ideology”) 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” (cf. Benjamin Constant, Reflexions sur les Constitutions et les Guaranties) of the market mechanism as the ultima ratio, the necessitas(either “dire” or not, given that for Weber the will is not identical with Hobbesian liberum arbitrium and there ec-sists a “technical rationality”), the scientific hypothesis of the equi-librium of 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.

Indeed, as we pointed out above, Weber’s position represents a regression with regard to Constant’s still clear and sharp distinction between “freedom” and “guarantees”, between active participation in politics and passive “enjoyment” of constitutional “rights and liberties”. Both Constant and Weber maintain the metaphysical notion of “possession”, of the “in-dividual’s” natural right to the pro-duct of individual labors. But whilst Constant still preserves the validity of the Classical notion of “freedom” which, to his mind, has been eclipsed by the complexity of the “socialisation” occasioned by “the system of needs and wants”, for Weber, instead, this classical “freedom” or Freiheit never existed! It was never “real”, but was only a “meta-physical” delusion. What is real for Weber, what is physical is the “greed-dom” of conflicting individual self-interests that have finally found their most “rational” expression as the end-result of the “ascetic Ideal”that has debouched into “the iron cage of modern industrial labor”.

Arendt rebukes Weber (implicitly) for assuming that the “frugality” of the Founding Fathers was exclusively “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”.

However that may be, of one thing at least we may be sure: the Declaration of Independence, though it blurs the distinction between private and public happiness, at least still intends us to hear the term 'pursuit of happiness' in its twofold meaning: private welfare as well as the right to public happiness, the pursuit of well-being as well as being a 'participator in public affairs'. But the rapidity with which the second meaning was forgotten and the term used and understood without its original qualifying adjective may well be the standard by which to measure, in America no less than in France, the loss of the original meaning and the oblivion of the spirit that had been manifest in the Revolution…. Tocqueville again is quite right when he remarks that 'of all ideas and sentiments which prepared the Revolution, the notion and the taste of public liberty strictly speaking have been the first ones to disappear' .31 (p.132)

For abundance and endless consumption are the ideals of the poor: they are the mirage in the desert of misery.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.139)

What Arendt means here, if one subtracts the verbosity, is that “the pursuit of luxury” or Constant’s “private happiness”, may tend to shrink the political or “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”, and the “public happiness” it inspires, must stand for, in opposition to “passive” liberties. To be “free” is for Arendt, as it was for Constant, 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 constituted powers, 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”! That “freedom and poverty” may be incompatible is a problem or “social question” that may be resolved simply by eliminating poverty through the diffusion of the institutions of “freedom”. But if “freedom and luxury” also are incompatible, then humanity has an even greater problem – and freedom has found an insurmountable barrier!

This is Arendt’s reproach to Weber and indirectly also to Marx in that she highlights the need to avoid the reduction of political freedom to the “technical” sphere of the economy: it is most enlightening from a conceptual or analytical perspective, and it is also quite appropriate in some respects. But she forgets, as Marx would pointedly remind her, that her own high-brow, neo-Aristotelian 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 neither Weber nor Arendt, and least of all Constant, ever distinguish from human living labor. Arendt therefore re-presents the nostalgic apotheosis of the dichotomy of bourgeois and citoyen that has been the bane of Western political theory since Hobbes. She forgets that whilst the American Founding Fathers may well have preferred the “public happiness” of active participation in the political affairs of the newly-founded nation-state (the famed spectemur agendo coveted by John Adams), their ability to do so depended exclusively or predominantly on that “luxury” that she says they eschewed and self-righteously (hypocritically) denigrated!

Tuesday 21 February 2012

Michael Pettis

Michael Pettis's Blog (at is unfortunately one of the very few "must reads" available in the blogosphere. Although its main focus is on China, Professor Pettis often and delightfully "expatiates" on other areas of political economic developments, trends and even "hypotheses and theories". When it went mysteriously "off the air" recently I was quite concerned - but mercifully the Blog is back at the site linked above.

I certainly recommend it to our friends because Pettis - who most probably would not entirely share our more "extreme" views, or indeed our more "philosophical penchant" - has an uncanny knack of coming up with analyses and conclusions that are far ahead, for acumen and accuracy, of those provided by most other pundits. Even in view of the fact that my own more "theoretical" pursuits make it difficult for me to engage in a running commentary on current affairs, I would encourage our friends (as I have done in the past) to peruse his blog for the more up-to-date analysis that I am either unable or unwilling to provide at present.

I will be posting some excerpts from Part Four of the Weber-buch that I think are quite enlightening. There is a lot of hard thinking to be done in social and politico-economic theory, and I feel it is my duty to persevere with this quest. After Weber, as friends may be aware, I will be turning to Keynes (some entries on his 'General Theory' are already available here) - so those of a more progressive 'Keynesian' persuasion may well be rewarded with more studies in that direction. Cheers to all!

PS: Quite by chance - just now as I posted this! - I have come across a piece in the Melbourne Age that mentions Pettis and discusses his conclusions on China. Here it is:

Tuesday 14 February 2012

Max Weber's Sociological Ontology of 'Ideal Type'

As the Weber-buch nears completion, here is another excerpt from it that we hope will concentrate the minds of our friends. Cheers!

The “ideal-type constructions of political economy,” writes Weber, do not have pretensions to a “general empirical validity” that is “problematic” because they cannot sustain or provide the foundations for themselves: political economy, just like politics, is “without foundation” and its axioms remain purely heuristic and “silent” as to the “prescription” of the final goals or “ends” to be pursued through their “means”. But this time Weber goes on to state (we translate from above):

It is only because and uniquely because the categories of means and ends condition – the moment that one begins to utilize them – the rationalization of empirical reality, that it is possible to construct them [!].

This is an extraordinary statement which, if taken literally and at face value, seems to confirm our central thesis in this Part: - namely, that “rationalization” has nothing to do with the ec-sistence of an “objective rationality” that is “technically correct” and that is determined autonomously by an independent “empirical reality”; rather, it has everything to do with the strategic and practical political “ordering” (not simply and solely the “inter-pretation”!) of a “reality” that serves the political interests of those who “construct” these “ideal types”, these “axiomatic disciplines” such as “political economy”! To be sure, this “strategic” approach to the self-understanding of his craft had been outlined quite explicitly by Weber as early as 1904 in what was then his clearest and most comprehensive discussion of “objectivity” in social science. Here it is not the “truth” of the entire analysis that is claimed or aimed at, and not even the “moving average” of the “results” of the analysis, but rather – precisely! - its “strategic” efficacy – its Position.

The distinctive characteristic of a problem of social policy is indeed the fact that it cannot be resolved merely on the basis of purely technical considerations which assume already settled ends. Normative standards of value can and must be the objects of dispute in a discussion of a problem of social policy because the problem lies in the domain of general cultural values. And the conflict occurs not merely, as we are too easily inclined to believe today, between "class interests" but between general views on life and the universe as well. This latter point, however, does not lessen the truth that the particular ultimate value judgment which the individual espouses is decided among other factors and certainly to a quite significant degree by the degree of affinity between it and his class interests — accepting for the time being this only superficially unambiguous term. One thing is certain under all circumstances, namely, the more "general" the problem involved, i.e., in this case, the broader its cultural significance, the less subject it is to a single unambiguous answer on the basis of the data of empirical sciences and the greater the role played by value-ideas (Wertideen) and the ultimate and highest personal axioms of belief. It is simply naive to believe, although there are many specialists who even now occasionally do, that it is possible to establish and to demonstrate as scientifically valid "a principle" for practical social science from which the norms for the solution of practical problems can be unambiguously derived….[p.57]

The fate of an epoch which has eaten of the tree of knowledge is that it must know that we cannot learn the meaning of the world from the results of its analysis, be it ever so perfect; it must rather be in a position to create this meaning itself. It must recognize that general views of life and the universe can never be the products of increasing empirical knowledge, and that the highest ideals, which move us most forcefully, are always formed only in the struggle with other ideals which are just as sacred to others as ours are to us.

Only an optimistic syncretism, such as is, at times, the product of evolutionary-historical relativism, can theoretically delude itself about the profound seriousness of this situation or practically shirk its consequences. It can, to be sure, be just as obligatory subjectively for the practical politician, in the individual case, to mediate between antagonistic points of view as to take sides with one of them. But this has nothing whatsoever to do with scientific "objectivity." Scientifically the "middle course" is not truer even by a hair's breadth, than the most extreme party ideals of the right or left. (pp57-58)

Obvious is the attempt “to recuperate” the validity of bourgeois “science”, its “scientificity”, in terms of a “greater truth” (meta-logical or dialectical or ontic) that abandons the notion of “totality” and “system” – of universality - the better “to intervene” tactically to safeguard the overriding politico-institutional asset of capitalism, of “class interests” broadly understood. The “truth” ec-sists: it can refer to a “reality”, a “totality”, a “thing-iness”. The truth must be “falsifiable”, however; it cannot “close” the “system”, it cannot “circumscribe” or “en-compass” (um-greifen, Jaspers) the “totality of reality” which is “irrational and incommunicable”; it can-not reconcile the ineluctable conflict of class interests.

In the method of investigation, the guiding "point of view" is of great importance for the construction of the conceptual scheme which will be used in the investigation. In the mode of their use, however, the investigator is obviously bound by the norms of our thought just as much here as elsewhere. For scientific truth is precisely what is valid for all who seek the truth.

However, there emerges from this the meaninglessness of the idea which prevails occasionally even among historians, namely, that the goal of the cultural sciences, however far it may be from realization, is to construct a closed system of concepts, in which reality is synthesized in some sort of permanently and universally valid classification and from which it can again be deduced. The stream of immeasurable events flows unendingly towards eternity. (p.84)

Two fallacies in Weber’s reasoning here leap immediately to our attention and we have sought to expose them in this Part: First, Weber attempts erroneously to distinguish “scientific method”, which for him is “value-neutral”, from its “focus”, which he thinks is “evaluative”. We have shown that this is an erroneous distinction because the very “act” of “seeking the truth” – this very “will to truth” (Nietzsche) – is a political act. Second, Weber still considers this “stream”, this “system” and its “totality” as real and the Ratio-Ordo as scientifically communicable (therefore “true”, Jaspers) to that extent. Yet in actual fact, Weber here is openly acknowledging the “instrumentality” of his “science”, its effectuality, because “in an age that has eaten of the tree of knowledge” this “science” cannot become a “closed system” and therefore will be able to tell “the political practitioner” what he “can” do rather than what he “should” do, but still from the point of view of his “class interests”! To be effective, to have Power, “science” must be “dynamic”, it must “move and adapt”, “capture” reality “as it is now” (!) and dominate it, subjugate it, command it, exploit it, put it to its use, its service. This is the “use value” of “science” as an instrument that is inseparable, indistinguishable from the “uses” to which it is put! Just as the use value of living labour for the capitalist class is that it can be commanded so as to pro-duce dead objectified labour for the “re-production” of living labour – but only (!) “separated” (Trennung), divided (Krisis) from the means of production of those use values. The “measure” of this command is “money”, because it indicates the “availability” of living labour for its exploitation in the institutional shape of “the money-wage”.

(Note in this regard the similar approach adopted by Langlois and Loasby to the com-prehension of general equilibrium economic analysis in terms of “closed” and of economic “development” or “growth” in terms of “open” systems – one that clearly refers back to Heidegger’s and Jaspers’s phenomenology and one that was applied by Schumpeter on the back of Schelling. Lawson for his part, with his distinction between “knowledge” [mathematical] and “ontic” [historical] being, reprises uncritically and simplistically this schema.)

What, then, is the “knowledge” that “this [capitalist] epoch” has acquired after it has –with Nietzsche! - “eaten from the tree of knowledge”? Precisely this: that “science” is not an “autonomous”, “neutral”, “scientific” or “objective” activity (enterprise!) except in its being a “tool” for the Macht of the capitalist class, of the political leitender Geist that can govern and direct its instrumental use! As we saw in Part One, Weber does not turn to Schumpeter’s Unternehmergeist despite the fact that he had studied the origins of the capitalist entrepreneur well before Schumpeter published his Theorie! Instead, Weber’s great diptych of 1918-19 will remain the lectures “Politik als Beruf” and “Wissenschaft als Beruf” as if to emphasise the direct instrumental sub-sumption by politics of “science as activity”. The “aura” of Schumpeter’s entrepreneur remained that of the “freedom” of Romanticism, of German Idealism, of “the beautiful souls” that preceded Nietzsche’s De-struktion of Western metaphysics. Weber’s leitender Geist instead shares nothing of the “trans-scendence” of Schumpeterian “creative destruction”: not “entrepreneurial Innovation” but a highly specific mediation of “class interests”, of conflict over needs and wants is the “rational scientific task” of the new Politiker “in an epoch that has eaten from the tree of knowledge”.

This is the point at which Weber will turn to the Parlamentarisierung as a means of governing and directing the “trans-crescence” of the society of capital amidst “the struggle of conflicting values” that the rise of the industrial working class has occasioned in the form of the Demokratisierung. The real social “foundations” of this social reality will form the subject of the next and final Part of this study. As we anticipated in Part Two, it is “the money wage” that constitutes the standard of value that allows the osmosis, the “exchange value” at the base of all social relations in the society of capital. For Weber, instead, it is “the nation state” – but only because he believes in that “free play of economic forces” (the stahlhartes Gehause) and their “autonomous development”, in that “system of needs and wants” that we have shown to be illusory but that Weber believes to be “apparently self-evident things”.

The science of political economy is a political science. It is a servant of politics, not the

day-to-day politics of the persons and classes who happen to be ruling

at any given time, but the enduring power-political interests of the

nation. For us the nation state is not something vague which (as some

believe) is elevated ever higher the more its nature is shrouded in

16 The Nation State and Economic Policy

mystical obscurity. Rather, it is the worldly organisation of the

nation’s power. In this nation state the ultimate criterion for economic

policy, as for all others, is in our view ‘reason of state'. By this we do

not mean, as some strange misunderstanding would have it, 'help

from the state' rather than 'self-help’, state regulation of economic

life rather than the free play of economic forces. In using this slogan

of ‘reason of state' we wish to present the demand that the economic

and political power-interests of our nation and their bearer, the

German nation-state, should have the final and decisive say in all

questions of German economic policy, including the questions of

whether, and how far, the state should intervene in economic life, or

of whether and when it is better for it to free the economic forces of

the nation from their fetters and to tear down the barriers in the way

of their autonomous development.

Was there no need tor me to remind you of these apparently self-evident

things? Was it particularly unnecessary for one of the younger

representatives of economic science to do so? I think not, for our

generation in particular seems frequently to lose sight of these very

simple foundations of judgement more easily than most. (CWP, p.17.)

Yet the question that we posed above still remains, the one to which Keynes will seek to provide a “scientific” answer, of how it is possible to ensure the expanded reproduction of the society of capital on its own terms, in a language that is specific to its schema, to its “ideal type” – to its “Utopia”.

Sunday 5 February 2012

European Crisis

For those friends who are not versed in economic analysis, here is an excellent summary of the European crisis from Stratfor. Friends will note that the "German dilemma" described in this piece neatly sums up the internal contradictions (the implicit antagonism) of the wage relation and therefore of capitalism as we have enucleated them on this site to date. Cheers.

Saturday 4 February 2012

Reason and Revolution - The Role of Crisis

The chief result of our study of Weber’s theory of “rationalization” so far is that it is not and cannot be “scientific” because its “unit of measurement” relies on the homogeneity of “labor”. Weber ignores the fact that living labor is not and cannot be homogeneous for at least two reasons: the first is that it is impossible to divide social labor into “individual labors”; the second is that the maker of a pro-duct should never be mistaken with the product itself! And the third reason is that, in any case, even if “individual labor” is “measured” in terms of “output” by means of sheer violence, as in the capitalist labor process, that “output” is not “homogeneous” across product industries (as even the greatest bourgeois economic theoreticians concede – see Chamberlin and Robinson and Sraffa on “imperfect competition”) so that it cannot serve as a "measure" on which this output can be "priced" for market exchange! It is for this reason that both Weber and Marx rely ultimately on fiction of “the self-regulating market” (the law of supply and demand) to determine “the exchange value” (the prices) of output and to provide “the social synthesis”, or the “co-ordination” necessary for the “reproduction” of the society of capital. (Hayek’s entire work was dedicated to this conundrum of how a mass of atomized individuals can reproduce a society through “the market”. That the paramount and insurmountable problem, the impasse, of the Economics is precisely the “co-ordination of economic activity” is also cleverly perceived, acknowledged and intelligently discussed by Brian Loasby in Equilibrium and Evolution. Our own discussion of these matters will be the subject of a forthcoming study called Catallaxy: The Bourgeois Utopia of Equilibrium.) Marx’s inability to determine “value” and “prices” independently of the market “mechanism” induced him to seek the “objectification” of value in the “fetishism of commodities” which served the same purpose as Weber’s “rationalization” – that of “measuring” the social synthesis, which is what Lukacs translated into the concept of “reification”.

Just as with Weber’s “rationalization”, the Marxian concept of “commodity fetishism” or the Lukacsian equivalent of “reification” simply cannot account for “the social synthesis”. Marx and Lukacs understand that if this “social synthesis” is objectively valid – if, in other words, it is possible “to measure” value independently of political institutions, of violence -, then capitalism would be made “scientifically legitimate” and the only “objection” to it would rest with the “efficiency” as a mode of production of social wealth. If, on the contrary, this “social synthesis” is achieved through a “necessary illusion” (fetishism of commodities, reification, formalism), then we have a contradiction because no “fiction” can keep a social system in “reproduction” – let alone a “necessary fiction”, which is an oxymoron! (We dealt before with Lukacs’s description of “necessary illusion” – which is an oxymoron because “illusions” cannot be “necessary” and “necessity” cannot be “illusory”.)

Lukacs perceives this problem when he asserts, albeit still from the viewpoint of the opposition of “fragmented alienated labor” against the “(lost!) totality of artisanal labor”, that “the limit to reification is its ‘formalism’” (in HCC, p.101). Habermas understands Lukacs’s statement to mean that workers understand that the “reification” of labor time is “an illusion”, however “necessary” it may be “objectively” and that therefore the bourgeoisie cannot be “the individual subject-object of history”. As if “history” required anything like “individual subject-objects” for exploitation to occur! (Nietzsche would have a fit if he ever read Lukacs!) Quite obviously, Lukacs’s analysis does not deal with the problem because, as Habermas rightly notes, this “formalism” can be overcome only “philosophically” – through “class consciousness”, which entails opposing one “illusion” with another (as the old Frankfurt School realized, only to preserve the idolatry of “[Instrumental] Reason”). [See Habermas, Theory of Communicative Action, Vol.1.] The only way to lend validity to Lukacs’s position is to reflect that the “formalism” of reification, of the mythical law of value, will defeat capitalism for the precise reason that what makes it possible is a reality of “antagonism”, of capitalist command over living labor that ensures its “abstraction”. In other words, there is no “real” or “necessary” illusion behind reification but the naked blunt violence of the capitalist – “the discipline of the factory”. This is why “formalism” is the limit of capitalism: - because “rationalization” is not an “objective” (Weber) or merely “ideological” (Marx-Lukacs, then Heidegger-Marcuse) phenomenon, but rather (with Nietzsche’s invariance, the “unreality” of values) an “arbitrary” one that responds to a strategy of command and exploitation.

It must be stressed that capitalism in its guise as “social capital” becomes as much a “mode of consumption” as it is a “mode of production”. This is intuited by Weber and then “theorized” by Keynes in terms of the money-wage as the fundamental unit of measurement in capitalist industry. Capital must impose not just its “mode of production” through the labor process and technologies used in the production process; it must also impose and define “the mode of consumption” for workers so that their living labor may be “rationally calculable” according to the law of value and the equalization of the rate of profit! But careful! The mode of consumption “closes the circle” of the circulation of capital, of valorization, - which does not mean that the “foundation” of capitalism is not “the wage relation”, that is, the process of production first and foremost, “the regular discipline of the factory”. Consumption simply allows that “osmosis” that makes antagonism “measurable” after the event, as “realization” of what had preceded as “valorization” of capital, as “profit” and provides that “sphere of autonomy” to workers (Weber’s “free labor”) – through “the market” and the welfare state or Sozialstaat – that supplies “the unit of measurement”, the money-wage acting as a “social wage” that ensures the “reproduction” of the wage relation.

This solves the conundrum of “the affluent society”, the seeming integration of workers in the society of capital that Habermas correctly identifies as the overriding theoretical concern of Western Marxism since Lukacs. This is the apparent paradox (apparent even to Tocqueville [Democratie en Amerique, Livre IV, chpts. 6 to 10] and Arendt [discussion in Negri, ‘Insurgencies’, ch on ‘Pol.Eman.inAm.Const.’, who does not see the point] to Marcuse and Baran and Sweezy) of the “apathy” of workers in the face of “material (consumption) affluence” – the “welfare state” or Sozialstaat fully implemented under the New Deal. Those who accept “un-critically” the notion of “integration” (see especially Marcuse’s One-Dimensional Man or even the “cultural” pages in Baran and Sweezy’s Monopoly Capital) have effectively forgotten Schumpeter’s great discovery (adopted wholesale from Marx) that capitalism is “crisis”, that it is based on antagonism. “Crisis” does not just mean a “dysfunction” in the “production” of value or profit, as if these were “quantities” rather than “social relations” that need special political intervention (regulation) to avoid “crises”. Crisis is not something that happens “occasionally” or “accidentally” or “exogenously” or “by mistake” because of failure to apply the “correct economic measures or policies”. Crisis is instead the perennial, fundamental impossibility of measuring social antagonism in monetary terms, which is due to the incongruence between production and consumption derived from the corresponding impossibility of making “value in production” equal “value in consumption”. The problem is not that “there is not enough profit” (overproduction) or “not enough demand” (underconsumption): the problem is that “profit” and “value” can no longer be “measured” monetarily whenever the “political equilibria” (the only “equilibria” that are possible) explode in a full-blown crisis. (See below, quote from p.312.) That is why Joan Robinson, with characteristic genial intuition, preferred to speak of “tranquility” rather than “equilibrium” as a category of economic analysis (in The Accumulation of Capital).

The “apathy” and “integration” of workers is a direct result of the “division” of social labor into “individual labors” remunerated or rewarded with “individual money-wages” and the corresponding “concentration” of monetary social resources in the “central government” which then uses the existing structure of government administration to impose its “constituted power”. This is achieved through various strategies that include various degrees of political “violence”, from physical all the way to “cultural” and propagandistic violence. Thus, the “Sozialisierung” that Weber considered to be a result of “rationalization” simply cannot be explained unless we penetrate and enucleate – explode – this notion by removing it from the field of “science” and by re-interpreting the entire notion of mathesis, of Kalkulation, of “profit”. Weber’s account (for it cannot be called a “theory”) of the Rationalisierung yields, as we have seen, a notion of “freedom” that is confined to rational-technical instruments connecting available means to proposed ends that far from being “scientifically” indicated by “axiomatic disciplines” based on “ideal types”, fail to specify the conditions under which the means are “available” and the ends are “proposed”. Ultimately, Weber has to postulate the “purposive rationality” of human “free will” that arises not from its idealistic universality (as in German Idealism and in jusnaturalism) but rather from the very “conflict”, as the resultant of “the clash of wills” that he (like Nietzsche) sees as a “universal condition”.

What we need to delineate therefore is a new strategy of emancipation from the wage relation, a fresh notion of “political freedom” that supersedes the economic-political, historical-materialist “rupture”. The society of capital is far from “free from difficulties”. The “crises” that it experiences regularly are really the most “visible” manifestations of its underlying antagonism. Indeed, it may even be said that even the “absence” of conspicuous open conflict may be a sign that explosive antagonism is being “swept under the carpet” or “repressed” until it reaches the point of social explosion, of open revolt and revolution. This is precisely what is happening at the moment with the evident decline and “implosion” not just of the “financial system”, but also of the parliamentary “partitocracy” that has dominated government in advanced industrial capitalist countries since the New Deal Settlement. (See on all this, Jean Meynaud, Les Pouvoirs de Decision dans l’Etat Moderne.)