Commentary on Political Economy

Thursday 19 September 2013

Max Weber and the Iron Cage

This piece establishes an important thesis, to wit, that Max Weber's famous "iron cage" does not refer to the institutions of modern capitalism, as is almost universally believed, but rather to the "system of needs and wants" or “the inexorable power of material goods over the lives of men” that, Weber maintains, leads to irresoluble conflict between individuals and yet can be filtered and mediated most efficiently and democratically by "the market mechanism". This is a crucial plank in the entire negatives Denken that runs across reactionary thought from Hobbes through to Mandeville and even Adam Smith until its pivotal reformulation by Schopenhauer. Thereafter, the whole notion of an insatiable "Will to Life" is taken up and developed by Nietzsche first, and then by Weber in sociology, the Austrian School (Menger to Hayek) in economics, and Schmitt in political theory. On this blog we have touched again and again on the negatives Denken. Friends can search this site for all relevant articles simply by entering "negatives Denken" in the appropriate search slot top right of the home page.


The ‘Iron Cage’ as “System of Needs and Wants”

….In theory one could probably conceive of the progressive elimination of private
capitalism - although this is certainly not the trivial matter some literati, who are
unfamiliar with it, imagine it to be, and it will quite certainly not be a consequence
of this war. But assuming this were to be achieved at some point, what would it
mean in practice? Would it perhaps mean that the steel housing (stahlhartes Gehause)
of modern industrial work would break open? [Etwa ein Zerbrechen des stählernen Gehäuses der modernen gewerblichen[332] Arbeit?]  No! It would mean rather that the
management of businesses taken into state ownership or into some form of ‘communal
economy' would also become bureaucratised.

The juxtaposition – indeed, the seamless transition that Weber effects from bureaucracy to “private capitalism” seems at first blush to be surprising given that he had earlier taken pains to distinguish the bureaucracy from “the factory”. Yet here Weber seems to conjoin the two without the slightest hesitation. And, in all fairness, this was to be expected given that Weber had earlier stressed the dependence of “the entire organization of providing the most basic needs of social life”, which also becomes the function of capital as it turns into “social capital”, on the performance of bureaucratic duties. It follows that for Weber “bureaucracy”, whether it be in “the modern state apparatus” or in “modern private capitalism”, has ultimately to do with that “concentration” and “socialization” of “the means of production and operation” that serve the essential aim of “providing even the most basic needs” of society.

The quintessential question and “problem” of modern societies, therefore, is not so much whether they are “capitalistic” or “socialistic”, that is to say, under “state ownership or some form of ‘communal economy’”. No! The quintessential question of modern societies – the “problematic” that is common to both capitalist bourgeois and socialist worker parties is that of “the steel-hard housing [the iron cage] of modern industrial labor”! It is not then the nature of “modern industrial labor” that determines “the iron cage” of bureaucratic, machine-like, “rationally calculable” rule: the genitive here is “subjective”!  Instead, it is the “iron cage” that is the content, the social force or drive or impetus that conditions and effects the “nature” or the “technically-given” and “rational and systematic” form of “modern industrial labor”. “The iron cage” does not in the least refer to “the machinery” of “modern industrial labor”, of modern industry or to its labor process. Nor does it refer to, as is most commonly believed, “the rational conduct of modern business [that] creates a rigid structure in which work is carried out in a mechanical fashion” (as the editors of Weber’s Collected Political Writings wrongly define it in fn12 at p.90). It is not “the mechanical fashion of work” that concerns Weber, nor is it “the rational conduct of modern business” that induces “modern industrial labor [Arbeit]”. Weber himself expressly denies any such “rigidity” or “mechanical fashion” to “modern industrial labor”. This “homogenization” or “equalization” of tasks in the “modern industrial” labor process is not only an essential pre-condition for “the rational conduct of modern business”, but also it represents for Weber the only way to understand human living activity, as we will see later in this piece. Weber resolutely and expressly dismisses and refutes the “socialist” fable of a capitalist labor process that, eo ipso, in and of itself (!), leads to the “socialization” of production and the inevitable “expropriation of the capitalist expropriators”! (Cf. his explicit remarks on this in Der Sozialismus discussed in this section.)

The iron cage refers instead to the “economic demands” or “needs and wants” of atomized individuals in capitalist mass society that “modern industrial labor” is meant to provide for and satisfy – a condition that “the Protestant ethic” with its Askesis (a-scension, climbing) turning to “acquisitive greed” unleashed initially in the guise of “the spirit of capitalism” until that “spirit” escaped, leaving behind only a “soul-less machine”. It is this Ent-seelung (out-soul-ing, reification, mortification), this “crystallization” of social life caused by “the care for external goods” that is “the iron cage” – certainly not the industrial machinery and the organization of free labor of modern capitalism! It is this “system of needs and wants” (Hegel and Marx seen through the “Eristic” filter of the negatives Denken and the Schematismus of Neo-Kantism) that leads inexorably and “inescapably” – “rationally” – to modern industrial capitalism and to the rise of bureaucracy: but the two are not identical! It is irrelevant for Weber whether the form of government in a modern nation-state is “capitalist” or “socialist”. Whether in bourgeois Europe or in communist Bolshevik Russia, the common “Problematik” will be that of “the organization of labor”, of “modern industrial labor” as it is “created and maintained” by the “steel-hard housing” or “iron cage”. Weber takes this “modern industrial labor” as a “given”, as a technical fact. And the inevitability of “modern industrial labor”, its “rationally calculable” attributes in the sphere of production, is derived from the urgency and massive scale of the “needs and wants” that individuals have in capitalist society.

Let us recall that Weber had already defined this “iron cage” explicitly in the closing paragraphs of his Protestantische Ethik published thirteen years earlier in 1904. But he had been unable or unwilling or not ready to define yet the precise nature of the process whereby “the Protestant work ethic” had led to “a specifically bourgeois economic ethic”, except to stress that it consisted entirely in the glorification of “labor as an end in itself” through the ascetic religious ideal – an ideal that, in any case, had now been “dissolved into utilitarianism” (Nietzsche had described in quasi-Hegelian terms the “self-dissolution” [Selbst-Aufhebung] of the ascetic ideal in the Genealogie).

The Puritan wanted to work in a calling; we are condemned to do so. For when
asceticism was carried out of monastic cells into everyday life, and began to
dominate worldly morality, it did its part in building the tremendous cosmos of
the modern economic order. This order is now bound to the technical and economic
conditions of machine production which to-day determine the lives of all the
individuals who are born into this mechanism, not only those directly concerned
with economic acquisition, with irresistible force. Perhaps it will so determine them
until the last ton of fossilized coal is burnt. In Baxter's view the care for external
goods should only lie on the shoulders of the saint like a light cloak, which can be
thrown aside at any moment. But fate decreed that the cloak should become an
iron cage.
Since asceticism undertook to remodel the world and to work out its ideals in the
world, material goods have gained an increasing and finally an inexorable power
over the lives of men as at no previous period in history.
To-day the spirit of religious asceticism—whether finally, who knows?—has
escaped from the cage. But victorious capitalism, since it rests on mechanical [181]
foundations, needs its support no longer.

Der Puritaner wollte Berufsmensch sein, – wir müssen es sein. Denn indem die Askese aus den Mönchszellen heraus in das Berufsleben übertragen wurde und die innerweltliche Sittlichkeit zu beherrschen begann, half sie an ihrem Teile mit daran, jenen mächtigen Kosmos der modernen, an die technischen und ökonomischen Voraussetzungen mechanisch-maschineller Produktion gebundenen, Wirtschaftsordnung erbauen, der heute den Lebensstil aller einzelnen, die in dies Triebwerk hineingeboren werden – nicht nur der direkt ökonomisch Erwerbstätigen –, mit überwältigendem Zwange bestimmt und vielleicht bestimmen wird, bis der letzte Zentner fossilen Brennstoffs verglüht ist. Nur wie »ein dünner Mantel, den man jederzeit abwerfen könnte«, sollte nach Baxters Ansicht die Sorge um die äußeren Güter um die Schultern seiner Heiligen liegen389. Aber aus dem Mantel ließ das Verhängnis ein stahlhartes Gehäuse werden. Indem die Askese die Welt umzubauen und in der Welt sich auszuwirken unternahm, gewannen die äußeren Güter [204] dieser Welt zunehmende und schließlich unentrinnbare Macht über den Menschen, wie niemals zuvor in der Geschichte. Heute ist ihr Geist – ob endgültig, wer weiß es? – aus diesem Gehäuse entwichen. Der siegreiche Kapitalismus jedenfalls bedarf, seit er auf mechanischer Grundlage ruht, dieser Stütze nicht mehr.

The present “system of needs and wants”, that is to say “the care for external goods” is the “iron cage” that has replaced “the light cloak” it once was, now that “the spirit of religious asceticism has escaped from the cage [the care for external goods]”, and has therefore become irrelevant to the now “mechanical foundations of capitalism” whose inspiring “spirit” or “soul” it had been earlier, at the very beginnings of this mode of production. It is this “care for external goods” diabolically transmuted into an “iron cage” that constitutes and effects (Weber might say “creates and maintains”, see below) “modern industrial labor and machinery” as well as “bureaucratic rule”: - it is certainly not modern industrial labor and machinery or indeed bureaucratic rule that constitute and effect “the iron cage”!

It is abundantly clear that in the Ethik Weber had understood “the iron cage” to mean the “increasing and finally… inexorable power over the lives of men” on the part of “material and external goods” – although as yet in 1904 there is no careful specification of what this “inexorable power” might be – except the transmutation of “the ascetic ideal” that treated “labor as an end in itself” into a “victorious capitalism” that has dug by now “mechanical foundations” and that has jettisoned thereby the erstwhile “religious asceticism” whose “support it needs no longer”.

Once we accept Weber’s proposition that the modern “system of wants and needs” has turned into an “iron cage” - how it has “congealed” or “crystallized” into “mechanical foundations” or a “lifeless machine” -, we can then see how and why Weber can argue without hesitation that there can be no difference between capitalism and socialism as political forms of the rational organization of “modern industrial work” except perhaps in the sense that the latter would be far more “bureaucratic” than the former, and therefore “less free”!

Is there any appreciable difference between the lives of the workers and clerks in
the Prussian state-run mines and railways and those of people
working in large private capitalist enterprises? They are less free,
because there is no hope of winning any battle against the state bureaucracy
and because no help can be summoned from any authority
with an interest in opposing that bureaucracy and its power whereas
this is possible in relation to private capitalism. That would be the
entire difference. If private capitalism were eliminated, state bureaucracy
would rule alone. Private and public bureaucracies would then
be merged into a single hierarchy, whereas they now operate alongside
and, at least potentially, against one another, thus keeping one
another in check. The situation would resemble that of ancient Egypt,
but in an incomparably more rational and hence more inescapable form.

As further proof of Weber’s reasoning, and to put the matter of the meaning of “the iron cage” entirely beyond doubt, let us parse carefully an analogous passage on the ‘Gehause’ in an essay (“Suffrage and Democracy in Germany”) that covers much of the ground of Parlament und Regierung but was published a little earlier in 1917. Having discussed the harm done to the German economy by government policies that would encourage “rentier” investments based on “dividends” as against “entrepreneurial” ones based on “profits”, Weber lashes the reactionary ‘literati’ who cannot tell the difference between the two. In referring to the “casing” (Gehause), Weber this time uses the attribute “ehern” or “brazen” (rather than “stahlhartes”) – and this is an adjective that (as the editors here adroitly point out) is most often used in German with nouns such as “Gesetz” (Law), Schicksal (Fate) and Notwendigkeit (Necessity). Clear is the intention on the part of Weber to stress the “harsh necessity”, the “iron law”, the “inexorable fate” of the concept he is about to elucidate.

Much more significant is the fact that they [the ‘literati’] have not the faintest idea of the
gulf of difference separating the kind of capitalism which lives from
some momentary, purely political conjuncture - from government
contracts, financing wars, black-market profiteering, from all the
opportunities for profit and robbery, the gains and risks involved in
adventurism all of which increased enormously during the war - and
the calculation of profitability that is characteristic of the bourgeois
rational conduct of business (Betrieb) in peacetime. As far as the litterateurs
are concerned, what actually happens in the accounts office of
this type of business is a book with seven seals. They do not know
that the underlying ‘principles' - or 'ethics’ if this term is preferred - of
these two different types of capitalism are as mutually opposed as
it is possible for two mental and moral forces to be. They have not
the slightest inkling that one of them, the 'robber capitalism' tied
completely to politics, is as ancient as all the military states known to
us, while the other is a specific product of modern European man.
Weber: Political Writings
(90) If one wants to make ethical distinctions (and that is at least possible
here) the peculiar situation is as follows: the brazen casing
(eherne Gehause) which gives economic labor its present stamp and fate
and naturally will do so even more in future, was created and is maintained
precisely by the ethics of professional duty and professional honour,
[die Ethik der Berufspflicht und Berufsehre es ist, welche jenes eherne Gehäuse hergestellt hat und erhält, durch das die wirtschaftliche Arbeit ihr heutiges Gepräge und Schicksal empfängt und natürlich nur um so mehr und endgültiger empfangen wird,]
which, generally speaking, stand far above the average economic ethics which
have really existed in any historical age (as opposed to those which have merely
been preached by philosophers and litterateurs). Of course, the fate and
character of economic life will be determined increasingly and irrevocably
by this rigid casing if the opposition between state bureaucracy
and the bureaucracy of private capitalism is replaced by a system of
bringing firms under ‘communal control' by a unitary bureaucracy to
which the workers will be subordinated and which would no longer
be counterbalanced by anything outside itself. Let us consider this
opposition further. The bearer of the specifically modern form of
capitalism as an inescapable system ruling the economy and thereby
people's everyday fate was not profits made on the infamous principle
that, ‘you can’t make millions without your sleeve brushing against
the prison wall'; rather, it was precisely that type of profitability which
is achieved by adopting the maxim, 'honesty is the best policy'. (89-90, CPW)

On the face of it, Weber is referring to the fact that it is “this second type of capitalism”, the one based on “that type of profitability achieved through honesty”, rather than the one based on “opportunistic profit”, that “created and maintained” the “eherne Gehause”. Yet this does not mean that the “eherne Gehause” is identical with it. And of course this “honest capitalism”, unlike the first type, is based on “the ethics of professional duty and honour”. But the aspect that counts most here is definitely not “professional duty and honour” or “rational conduct of business”, but rather most certainly the aspect of “calculation of profitability” – in other words, profitability based on “sustainable and renewed business (Betrieb)”. It is this “sustainability and renewability” of “business”, this “profitability” that “created and maintained the brazen casing”. But neither of these properties of business would be possible if they did not respond to an autonomous market demand that sets the discipline for the efficient allocation of resources to the industrial production of consumer goods for which “economic work with its present stamp and fate” is required. It follows that what makes possible “the calculation of profitability”, its indispensable ingredient, is precisely this “autonomous market demand” based on “individual consumer choice” (“the care for external goods”) which, in turn, conditions the rational allocation (“its present stamp and fate”) of the available quantity of “economic work” for the production and “supply” of the various “external goods” that provide for and satisfy “market demand” - “the care”.

That the autonomous nature of this “demand for material goods” (or “the care for external goods” of the Ethik) is the kernel of the concept of “brazen casing” is made evident once more by Weber’s insistence that

the fate and character of economic life will be determined increasingly and
irrevocably by this rigid casing if the opposition between state bureaucracy
and the bureaucracy of private capitalism is replaced by a system of bringing
firms under ‘communal control' [socialism] by a unitary bureaucracy to which
the workers will be subordinated and which would no longer be counterbalanced
by anything outside itself.

Now, if Weber had meant that “the second type of capitalism and its ethics of honest and calculable profitability” or “the rational conduct of business” was identical with the iron cage, he would never have said instead, as he did just before this long sentence, that it was  these “ethics” that “created and maintained” the iron cage! And he would also reason that the “replacement” of the private capitalist bureaucracy with the state bureaucracy would bring about the extinction of the iron cage as well as of those “ethics” and not, as he does here, the further “increasing and irrevocable rigidification” of this “rigid casing”!

Weber puts the issue beyond doubt when he equates “the fate and character of economic life” with the “subordination of the workers” to the “unitary bureaucracy” that will “no longer be counterbalanced by anything outside itself”!  It is “the workers” – not the professional ethics of the private capitalists or “the rational conduct of business” or the capitalists – who “will be subordinated” to this proto-totalitarian “unitary bureaucracy”. And in the very next sentence, Weber explains how it is most emphatically not the “rationality” of the profitability of this “second capitalism” that is “the bearer of the specifically modern form of capitalism as an inescapable system ruling the economy and thereby people's everyday fate”, but rather its “profitability” – which, again, is based on the “autonomous market demand” flowing from the formal “freedom” of “the workers” who are still “not subordinated to a unitary bureaucracy”!

It follows that the “brazen casing” would be further “rigidified” if a unitary bureaucracy replaced private capitalist enterprise based on “sustainable and renewable” or “honest and calculable profitability” for the evident reason that then “workers would be wholly subordinated to the rule of a unitary bureaucracy no longer counterbalanced by (in “opposition” to) private enterprise that would determine more than ever before the inescapable system of their needs and wants [the brazen casing] ruling the economy and thereby “workers’ everyday fate” or, what amounts to the same thing, their “economic work” – which is the resultant of the necessarily political conflict over wants and provision.

Perfectly aligned with this interpretation of “the brazen casing” or “iron cage” is the detailed discussion that Weber undertakes immediately and seamlessly after this paragraph on the quintessential role of “autonomous”, “independent”, “voluntary” and “free” determination of “individual preferences and needs and wants” in both the political and the economic spheres for the efficient functioning of government and economy, and therefore for the health and power of the nation-state, in strident opposition to the “romantic fantasies” (p.100) of the proponents of various forms of “socio-economic corporatism”.

It is, however, sheer naivete on the part of our scribbling ideologues
to believe that this is the way
104 Suffrage and Democracy in Germany
to weaken or eliminate the rule of the 'profit motive' and the interest
in producing goods 'for gain' which they so despise, and to replace
them with a 'natural’, ‘communal economic' interest in providing
good and as far as possible cheap commodities to the people who
desire and consume them! What abysmal nonsense! The interest of
the capitalist producers and profit-makers represented by these cartels
would itself then rule the state exclusively, unless that organisation of
producers' interests is confronted by a power strong enough to control
and steer them as the needs of the population require. But an
individual's needs are not determined by his position in the machinery
of goods-production. The worker has exactly the same needs for bread,
housing and clothing, regardless of the type of factory he works in.
Thus if that method of organising the economy is imminent, it is
absolutely imperative before it begins to function - which means
immediately - for us to have a parliament elected on the principle
that the needs of the masses must be represented, and not one which
represents the way an individual is employed in the production of
goods - in other words a parliament of equal suffrage, wholly sovereign
in its power, which can take an independent stand in relation to
this type of economic organisation. Parliament must be much more
sovereign in its powers than hitherto, for in the past its position of
power has not sufficed to break the power of vested commercial interests
nor the inevitable rule of fiscal interests in state-run industries.
This is a negative reason for equal suffrage. (pp.104-5, CWP)

One could wish for no better definition from Weber of his identification of the iron cage with “the system of needs and wants” based on “free labor”! But note that both here and in the quotation above in which Weber did not notice “any appreciable difference between the lives of the workers and clerks in the Prussian state-run mines and railways and those of people working in large private capitalist enterprises”, Weber vehemently emphasises the primacy of “consumption needs” on the part of workers rather than their demands over working conditions. For him,

an individual's needs are not determined by his position in the machinery
of goods-production. The worker has exactly the same needs for bread,
housing and clothing, regardless of the type of factory he works in. (Weber’s emphases.)

This skewed emphasis on the part of Weber on the “consumption” side of what we have called here “autonomous market demand” of workers, and the relative occultation of the conflict over “modern industrial work” is conclusive evidence of our thesis on the ‘iron cage’, but also an early portent of the insuperable problems that Weber’s formulation of the nature of capitalism will run into once he tries to give it a much more systematic and coherent definition in the Vorbermerkungen. More specifically, this inability to com-prehend the historical specificity of capitalist social relations of production will rigidify Weber’s sociological analysis into a “value-free positivistic” formalism of the Rationalisierung akin to the experimental science of Mach, the Neo-Kantian Forms and Norms, the Sollen of Cohen, Simmel, and Kelsen, and their equivalent in economics, the marginalism of Neoclassical Theory and the Austrian School,– all significantly removed from Nietzsche’s original and far more coherent critical exposition of this concept. Ultimately, this incomprehension will expose the intrinsic limitations of Weber’s plans for parliamentary democracy. We will return to these themes repeatedly in the remainder of this study.

(Now that we have cleared some initial theoretical hurdles, it may be appropriate to emphasize the dramatic departure of this study from the almost universally standard manner in which Max Weber’s political sociology is approached in academic disciplines – something that will become even clearer and more dramatic as the reader ventures further into our study when we deal with the Weberian concept of ‘charisma’. Almost invariably, these approaches begin with the erroneous interpretation of Weber’s stahlhartes Gehause as “modern rationalism” that turns Weber’s sociology precisely into that “romantic fantasy” that he himself denounced so vehemently! It is the mistaken equation of ‘the iron cage’ with “modern rationalism” that leads to a much more catastrophic misinterpretation and hypostatization of Weber’s entire work by hiding the immanent materiality and historical concreteness of the Nietzschean-Weberian Rationalisierung, its foundation upon “the system of needs and wants” (“the care for material and external goods”) and the ‘labor’ needed to provide for them that is the problem not just in Weber, but also in the greatest theoreticians of the bourgeois era from Hobbes through to Hegel and Marx, and then Schopenhauer, Nietzsche and Schumpeter, not to speak of the “liberal” tradition from de Tocqueville to Croce!)


The “system of needs and wants” can be satisfied best, most efficiently, as well as optimally through the “rational and systematical” application of industrial machinery, or means of production to the “steel-hard casing”, to the “increasing and finally… inexorable power over the lives of men” on the part of “material or external  goods”. The “opposition” between private capitalism and the proposed Socialist “socialization of the means of production” on the part of a “state bureaucracy and its power” consists precisely in this: - that the “inexorable power of material goods over the lives of men” – or the iron cage – would then become even more binding, their “lives” or “labor” even less “free” than they are under “private capitalism”! The “rational organization of labor” on the part of “private capitalism” allows “a remnant of ‘individual’ freedom of movement” (Weber quoted below), of “autonomy” to “the lives of men” in terms of the “individual choices” that they make about the production of the “material and external goods” to which they are now almost “ascetically” devoted through “the system of needs and wants”. The “inexorable power” exercised by “material goods” over “the lives of men” induces the “rational organization of their labor”, of “modern industrial labor” so as to maximize the provision for and satisfaction of these needs and wants - which leads in turn to “concentration”, to “socialization” and to “bureaucratic rule” in the “provision of the most basic needs of social life”. But the “market mechanism” allows at least a modicum of “autonomy” between the “selection” of “material goods”, between “the rational organization” of their production and the “individual choices” of workers as to the nature and kind and quantity of the material goods that are produced!

Because the “Socialists” understand social relations of production as governed by a “scientific” Law of Value, the only point of disagreement with capitalists has to be ultimately not so much about the “separation” of the worker from the means of production, not about “the ownership of the means of production”, but rather about how this “separation” and “ownership” affect the production and distribution of this Value taken as a “rationally calculable” entity! That is why Weber can confidently dismiss the protestations of Socialists about “the anarchy”, the Planlosigkeit, of capitalist industry as the pathetic foibles of “lazy literati” and as “romantic fantasies”! “Socialism” in its current form, as the “cult” of “labor value”, its “deification” in the advent of the Socialist utopia of “bureaucratically planned production” is so infinitely inferior to the capitalist market system of consumer-driven production that its “ideals” can be dismissed with Nietzschean haughtiness and contempt! The Socialist Utopia is “Wille zur Ohnmacht” (will to powerlessness) right from the very start because any velleity toward its implementation would seek to deny the “conflict” inherent in production and promptly result in the erection of a “socialist bureaucracy” made up of “technocratic experts” that the workers themselves would be sure to oppose resolutely and violently precisely for their absurd denial of the existence or even the possibility of “conflict” in their “socialist paradise”! Weber would have relied here on the massive studies of the “massification” of German industry carried out by two of his Archiv colleagues, Werner Sombart (Der Moderne Kapitalismus and Sozialismus und die soziale Bewegung) and Robert Michels, whose well-researched Die deutsche Sozialdemokratie (published in Archiv für Sozialwissenschaft und Sozialpolitik XXIII (1906), S. 471-556) he would have appreciated much more than the ridiculous anecdotal generalities about the “Iron Law of Oligarchy” contained in his later “theoretical” compendium Political Parties, instantly translated in many languages! (The “controversy” is mentioned by G. Roth in his introduction to Economy and Society [at p.LXXI].)

Note that Weber intends the inevitable “conflict” over “the system of needs and wants” to cover not merely the “distribution” of material goods but also their “production” in terms of both working conditions and the choice of material goods produced. Yet the overall “rational conduct of capitalist business” will be dictated by the fact that for any given level of “conflict” there is only a given “rational conduct of business” possible for capitalists, related to the degree of market competition with other capitalists. Private capitalism allows this “conflict” to take place on two levels: - at the industrial level in terms of wages and conditions to be offered in the “labor market”, and at the broader market level in terms of workers’ demand for consumer goods. Private capitalism allows therefore the settlement of the conflict inherent to the wage relation both at the industrial-productive level of supply and also at the market-distributive level of demand. It is the relative political autonomy of demand for “labor” that determines its political “freedom” and permits thereby its “political organization and representation” – and it is this last that turns “free labor” into the real “motor of development” of capitalist industry and society overall.

If the worker goes to the entrepreneur today and says, ‘We cannot
live on these wages and you could pay us more', in nine out of ten
cases - I mean in peacetime and in those branches of industry where
there is really fierce competition - the employer is in a position to
show the workers from his books that this is impossible: 'My competitor
pays wages of such and such; if I pay each of you even only so
much more, all the profit I could pay to the shareholders disappears
from my books. I could not carry on the business, for I would get no
credit from the bank.' Thereby he is very often just telling the naked
truth. Finally, there is the additional point that under the pressure
of competition profitability depends on the elimination of human
labour as far as possible by new, labour-saving machines, and especially
the highest-paid type of workers who cost the business most.
Hence skilled workers must be replaced by unskilled workers or
workers trained directly at the machine. This is inevitable and it
happens all the time. (‘Socialism’, p.284 in CPW).

Were the entirety of private capitalist “industry” to fall into the hands of a “socialist state bureaucracy”, even this “remnant of ‘individual’ freedom of movement” would vanish, preventing the “political organization and representation” of conflict over wants and provision that private capitalism utilizes as the motor of its development! Were the “consumer choice” that the “free market” allows through its “price mechanism” regulating the allocation of “labor” to be abolished – labor intended as “modern industrial labour”, as a “rationally calculable” entity -, then the “rational organization” of industrial production would necessarily be eliminated, and so would the competitive dynamic of inter-capitalist rivalry and industrial conflict over wages and conditions; – were all this to be abolished through the “socialization of the means of production” and “socialist planning”, the disastrous consequence would be not only that workers, “labor”, would not achieve their socialist utopia because its “implementation” would be taken out of their hands by a “socialist technocratic elite”, but also that they would no longer be even “free” to choose which “material and external goods” are “rationally produced” by “modern industrial labour” or to negotiate the conditions and remuneration of that labour!

In other words, “labor” - a technically calculable quantity applicable rationally to the production of “material goods” - would no longer be “free” because its rational application to the production of “material goods” would also be “bureaucratically ruled” through the removal of “individual consumer choice” and the “market competition” between capitalist employers over wages and conditions that private capitalism allows! The “difference” between “wants” and their “provision” would no longer exist, and yet the conflict between the two - were the safety-valve of “the market” to be removed - would swell to the point of explosion! The elimination of the “anarchy” of capitalist production would lead straight to the elimination of “free labor” – that is, of the ability of “labor” to be “free to choose and to negotiate” the “material and external goods” (that make up “the iron cage”) and the working conditions for the satisfaction and provision of those wants and needs that jointly exercise their “inexorable power over the lives of men”.

It is entirely obvious here that whilst capitalist enterprise is able to rationalize the employment of labor power and the production process it adopts, it is unable to rationalize the “needs and wants” of workers! And this is why it is imperative that “labor” remain “free” if capitalist enterprise is to be run “rationally for profit” at all!

By removing the market pricing mechanism as a system of regulation, of social synthesis, as the ultimate “rationality” or “discipline” of private capitalism, Socialism would remove “the last remnant of ‘individual’ freedom of movement” within the iron cage – it would remove politics! -, and all this in the name of “a society finally free from conflict”!

The embarrassing thing would be that whereas the political and private-economic
bureaucracies (of syndicates, banks, and giant concerns) exist alongside one another
at present, as separate entities, so that economic power can still be curbed by political
power, the two bureaucracies would then be a single body with identical interests and
could no longer be supervised or controlled. In any event, profit would not be done
away with as the lode-star of production. Yet the State as such would then [286] have
to take its share of the workers' hatred, which is directed at the entrepreneurs at present.
(ibid., ‘Socialism’, pp.285-6)

Sunday 15 September 2013

Nietzsche and Economics

To show our enduring gratitude to friends who keep visiting this site, we wish to regale them with a special "gift" - an entire section of the Nietzschebuch establishing a wholly original thesis on Nietzsche's novel approach to the sphere of inquiry known generally as "Economics". Enjoy!

The Ontogeny of Thought – Two
Nietzsche’s Eristic Genealogy of Law and Political Economy

A. Will to Power As Resolve and Standard of Value

Not only is “consciousness”, this simulacrum of “sociability”, this velleity of “humanity”, this patina of civility, this “everyday self” – this Vermittlung (mediation) of different “instincts of freedom”, of Wills to Power -, not only is it a “danger”, a “disease”, but it is so for a far greater reason than the “epistemological” or even “metaphysical” rodomontades of idealist philosophy, “the toils of grammar” (subject, object), or the “obscure veil” of “noumena” and “phenomena”, of which we cannot even speak (cf. Wittgenstein). It is so because this shadowy, mystified world of “Sprache-Metaphysik” (language metaphysics) and “reverences”, of “idolatry” and “slave morality” – this “most fatal stupidity by which we shall one day be ruined” - is “politically harmful”, because it induces us to accept and even pro-mote the Demokratisierung, the behaviour of the “Man-Herd”, the “Species”: - a behaviour, a “politics” that even its Rationalisierung and its pragmatic “utility” cannot redeem (an allusion perhaps to Peirce and James) and one that, in its “political manifestations” such as the Demokratisierung, actually pre-vents or emasculates  the grosse Politik.

To be able to act politically, in relation to other humans, man must be able “to digest” experiences – to select from the totality of past moments, those that are important and those that are not. Without “memory” action would be impossible because (as for Benjamin Colton in William Faulkner’s ‘The Sound and the Fury’) without the power “to retain” experiences, life would be “a tale told by an idiot, full of sound and fury, signifying nothing” (Shakespeare’s Macbeth).  Yet similarly, action would also not be possible without forgetfulness, because like a man who cannot digest, such dyspepsia of the mind would not allow the “meta-bolism” (Greek for “change and assimilation”) necessary for the “selection” of past moments now “frozen” in historical time. So the “paradox” arises of how “memory” is possible, given that forgetfulness must have been, by analogy with the rest of the animal world, the original condition of human beings.

Ess2,1. The breeding of an animal that can promise - is not this just that very paradox of a task which nature has set itself in regard to man? Is that not the very problem of man? The fact that this problem has been to a great extent solved, must appear all the more phenomenal to one who can estimate at its full value that force of forgetfulness which works in opposition to it. Forgetfulness is no mere vis inertiae, as the superficial believe, rather is it a power of obstruction, active and in the strictest sense of the word, positive — a power responsible for the fact that what we have lived, experienced, taken into ourselves, no more enters into consciousness during the process of digestion (it might be called psychic absorption) than all the whole manifold process by which our physical nutrition, the so-called "incorporation," is carried on. The temporary shutting of the doors and windows of consciousness, the relief from the clamant alarums and excursions, with which our subconscious world of servant organs works in mutual co-operation and antagonism; a little quietude, a little tabula rasa of the consciousness so as to make room again for the new, and above all for the more noble functions and functionaries, room for government and foresight, predetermination (for our organism is an oligarchic model) – this is the utility, as I have said, of the active forgetfulness - which is a very sentinel and nurse of psychic order, repose, etiquette; and this shows at once why, it is that there can exist no happiness, no gladness, no hope, no pride, no real present, without forgetfulness. The man in whom this preventative apparatus is damaged and discarded, is to be compared to a dyspeptic, and it is something more than a comparison—he can "get rid of" nothing. But this very animal who finds it necessary to be forgetful, in whom, in fact, forgetfulness represents a force and a form of robust health, has reared for himself an opposition-power, a memory, with whose help forgetfulness is, in certain instances, kept in check—in the cases, namely, where promises have to be made;—so that it is by no means a mere passive inability to get rid of a once indented impression, not merely the indigestion occasioned by a once pledged word, which one cannot dispose of, but an active refusal to get rid of it, a continuing and a wish to continue what has once been willed, an actual memory of the will, so that between the original "I will," “I shall do” and the actual discharge of the will, its act we can easily interpose a world of  new strange phenomena, circumstances, veritable volitions, without the snapping of this long chain of the will.

But what is the underlying hypothesis of all this? How thoroughly, in order to be able to regulate the future in this way, must man have first learnt to distinguish between necessitated and accidental phenomena, to think causally, to see the distant as present and to anticipate it, to fix with certainty what is the end, and what is the means to that end; above all, to reckon, to have power to calculate — how thoroughly must man have first become calculable, disciplined, necessitated even for himself and his own conception of himself, that, like a man entering into a promise, he could guarantee himself as a future.

1. Ein Thier heranzüchten, das versprechen darf — ist das nicht gerade jene paradoxe Aufgabe selbst, welche sich die Natur in Hinsicht auf den Menschen gestellt hat? ist es nicht das eigentliche Problem vom Menschen?… Dass dies Problem bis zu einem hohen Grad gelöst ist, muss Dem um so erstaunlicher erscheinen, der die entgegen wirkende Kraft, die der Vergesslichkeit, vollauf zu würdigen weiss. Vergesslichkeit ist keine blosse vis inertiae, wie die Oberflächlichen glauben, sie ist vielmehr ein aktives, im strengsten Sinne positives Hemmungsvermögen, dem es zuzuschreiben ist, dass was nur von uns erlebt, erfahren, in uns hineingenommen wird, uns im Zustande der Verdauung (man dürfte ihn „Einverseelung“ nennen) ebenso wenig in's Bewusstsein tritt, als der ganze tausendfältige Prozess, mit dem sich unsre leibliche Ernährung, die sogenannte „Einverleibung“ abspielt. Die Thüren und Fenster des Bewusstseins zeitweilig schliessen; von dem Lärm und Kampf, mit dem unsre Unterwelt von dienstbaren Organen für und gegen einander arbeitet, unbehelligt bleiben; ein wenig Stille, ein wenig tabula rasa des Bewusstseins, damit wieder Platz wird für Neues, vor Allem für die vornehmeren Funktionen und Funktionäre, für Regieren, Voraussehn, Vorausbestimmen (denn unser Organismus ist oligarchisch eingerichtet) — das ist der Nutzen der, wie gesagt, aktiven Vergesslichkeit, einer Thürwärterin gleichsam, einer Aufrechterhalterin der seelischen Ordnung, der Ruhe, der Etiquette: womit sofort abzusehn ist, inwiefern es kein Glück, keine Heiterkeit, keine Hoffnung, keinen Stolz, keine Gegenwart geben könnte ohne Vergesslichkeit. Der Mensch, in dem dieser Hemmungsapparat beschädigt wird und aussetzt, ist einem Dyspeptiker zu vergleichen (und nicht nur zu vergleichen — ) er wird mit Nichts „fertig“ … Eben dieses nothwendig vergessliche Thier, an dem das Vergessen eine Kraft, eine Form der starken Gesundheit darstellt, hat sich nun ein Gegenvermögen angezüchtet, ein Gedächtniss, mit Hülfe dessen für gewisse Fälle die Vergesslichkeit ausgehängt wird, — für die Fälle nämlich, dass versprochen werden soll: somit keineswegs bloss ein passivisches Nicht-wieder-los-werden-können des einmal eingeritzten Eindrucks, nicht bloss die Indigestion an einem ein Mal verpfändeten Wort, mit dem man nicht wieder fertig wird, sondern ein aktives Nicht-wieder-los-werden-wollen, ein Fort- und Fortwollen des ein Mal Gewollten, ein eigentliches Gedächtniss des Willens: so dass zwischen das ursprüngliche „ich will“ „ich werde thun“ und die eigentliche Entladung des Willens, seinen Akt, unbedenklich eine Welt von neuen fremden Dingen, Umständen, selbst Willensakten dazwischengelegt werden darf, ohne dass diese lange Kette des Willens springt. Was setzt das aber Alles voraus! Wie muss der Mensch, um dermaassen über die Zukunft voraus zu verfügen, erst gelernt haben, das nothwendige vom zufälligen Geschehen scheiden, causal denken, das Ferne wie gegenwärtig sehn und vorwegnehmen, was Zweck ist, was Mittel dazu ist, mit Sicherheit ansetzen, überhaupt rechnen, berechnen können, — wie muss dazu der Mensch selbst vorerst berechenbar, regelmässig, nothwendig geworden sein, auch sich selbst für seine eigne Vorstellung, um endlich dergestalt, wie es ein Versprechender thut, für sich als Zukunft gut sagen zu konnen!

An aphorism this, to ironise Nietzsche’s reasoning here, of “incalculable” importance! To think causally! It is the interaction with other “wills”, then, the exchange of promises, that occasions the development of memory; and it is the measurement and calculability of the surrounding world that allows the pro-jection of future actions and exchanges (literally, in financial parlance, of “futures”). In actual fact, as a matter of pure observation or perception, without “memory” life would be for humans truly “a tale told by an idiot, full of sound and fury” – and just as lack of memory is the essential characteristic of “idiocy” (as in William Faulkner’s “The Sound and the Fury”), equally it is the presence of memory that makes possible what Nietzsche will occasionally deprecate as the “calculability” and “regimentation” that industrial and commercial society brings (as in Jason Colton, to return to Faulkner, the infamously cynical character in his novel whose mind is “glued” to the Wall Street “ticker”; in BGE Nietzsche will poke fun at this “regimentation” of metropolitan life in the New World).

The inability “to draw causal links between events” because of the limited “mnemonic” powers or “forgetfulness” of the “idiot” (the term is used in its psychological acceptation, of course) is counterbalanced by the “memory” that can permit the attribution of calculation and causality – the essential ingredients of “responsibility”. Only through “forgetfulness” is it possible “to act”: a human being that does not forget is like one who is not able to sleep or to digest (“Use and Abuse of History”, ‘UB’, Aph.1, and quotation above). Action requires only so much “historical sense”. Too much of it and “knowledge will overpower life” and make action impossible. Forgetfulness is our most “natural state”; and “memory” had to be “conquered” by an immense effort of will – a “memory of the will” – that enabled human beings “to make promises”, to become “competent to promise” and therefore “reliable”, “calculating” and “measuring” – and thereby “to think causally”!

2. This is simply the long history of the origin of responsibility. That task of breeding an animal which can make promises, includes, as we have already grasped, as its condition and preliminary, the more immediate task of first making man to a certain extent, necessitated, uniform, like among his like, regular, and consequently calculable….

2. Eben das ist die lange Geschichte von der Herkunft der Verantwortlichkeit. Jene Aufgabe, ein Thier heranzuzüchten, das versprechen darf, schliesst, wie wir bereits begriffen haben, als Bedingung und Vorbereitung die nähere Aufgabe in sich, den Menschen zuerst bis zu einem gewissen Grade nothwendig, einförmig, gleich unter Gleichen, regelmässig und folglich berechenbar zu machen. (GM)

2…If, however, we place ourselves at the end of this colossal process, at the point where the tree finally matures its fruits, when society and its morality of custom [Sittlichkeit der Sitte] finally bring to light that to which it was only the means [Mittel], then do we find as the ripest fruit on its tree the sovereign individual, that resembles only himself, that has got loose from the morality of custom, the autonomous " super-moral " individual (for "autonomous" and "moral" are mutually exclusive terms),—in short, the man of the personal [eignen, intrinsic], long and independent will, competent to promise [der versprechen darf] and we find in him a proud consciousness (vibrating in every fibre), of what has been at last achieved and become vivified in him, a genuine consciousness of power and freedom [Macht- und Freiheits-Bewusstsein], a feeling of human perfection [Vollendungs-Gefuhl] in general….

Stellen wir uns dagegen an's Ende des ungeheuren Prozesses, dorthin, wo der Baum endlich seine Früchte zeitigt, wo die Societät und ihre Sittlichkeit der Sitte endlich zu Tage bringt, wozu sie nur das Mittel war: so finden wir als reifste Frucht an ihrem Baum das souveraine Individuum, das nur sich selbst gleiche, das von der Sittlichkeit der Sitte wieder losgekommene, das autonome übersittliche Individuum (denn „autonom“ und „sittlich“ schliesst sich aus), kurz den Menschen des eignen unabhängigen langen Willens, der versprechen darf — und in ihm ein stolzes, in allen Muskeln zuckendes Bewusstsein davon, was da endlich errungen und in ihm leibhaft geworden ist, ein eigentliches Macht- und Freiheits-Bewusstsein, ein Vollendungs-Gefühl des Menschen überhaupt. (GM)

And, as already adumbrated above, the whole genealogy of “retaliation” and “obligation” and “conscience”, culminating in the notion of “responsibility” calls for a re-examination of the “freedom of the will” – because the “Will to Power” or “the instinct of freedom”  bears little resemblance to the Freiheit of Western metaphysics. The very fact that “responsibility” is a “duty” or a “calling” that represents the culmination, the apex, of an entire sequence of “physio-logical, natural events” (the tree bearing fruit) and institutions whose entire ec-sistence (Entstehung, “origin” as sprouting or “coming-into-being”) was effectively to be a means (Mittel) so that the person who is “competent to promise”, the “sovereign individual” can e-merge or “sprout” from such a “soil”, - this very “primordial fact” (Ur-Faktum) must entail that this sovereign individual musters the pre-existing or “stored-up force” (aufgestauter Kraft) at his disposal that pre-conditions the choices available to him! Again, in the Gaya Scienza Nietzsche lays emphasis on this critical “advance” of his (Fortschritt, forward step; one that will play a central role in Weber’s political theory):

360. Two Kinds of Causes which are Confounded.— It seems to me one of my most essential steps and advances [Fortschritt] that I have learned to distinguish the cause of an action generally from the cause of an action in a particular manner, say, in this direction [Richtung], with this aim [Ziel]. The first kind of cause is a quantum of stored-up force [aufgestauter Kraft], which waits to be used in some manner, for some purpose; the second kind of cause, on the contrary, is something quite unimportant in comparison with the first, an insignificant hazard for the most part, in conformity with which the quantum of force in question "discharges" itself in some unique and definite manner: the Lucifer-match in relation to the barrel of gunpowder.
Among those insignificant hazards and Lucifer-matches I count all the so-called "aims," and similarly the still more so-called "occupations" of people: they are relatively optional, arbitrary, and almost indifferent in relation to the immense quantum of force which presses on, as we have said, to be used up in any way whatever. One generally looks at the matter in a different manner: one is accustomed to see the impelling force [triebende Kraft] precisely in the aim (object, calling, &c.), according to a primeval error,—but it is only the directing force, the steersman and the steam have thereby been confounded. And yet it is not even always a steersman, the directing force [dirigiende Kraft] .... Is the "aim", the "purpose," [“Zweck”] not often enough only an extenuating pretext, an additional self-blinding of conceit, which does not wish it to be said that the ship follows the stream into which it has accidentally run? That it "wills" to go that way, because it must go that way? That it has a direction [Richtung], sure enough, but—not a steersman? We still require a criticism of the conception of "purpose." (GS)

360. Zwei Arten Ursache, die man verwechselt. — Das erscheint mir als einer meiner wesentlichsten Schritte und Fortschritte: ich lernte die Ursache des Handelns unterscheiden von der Ursache des So- und So-Handelns, des In-dieser Richtung-, Auf-dieses Ziel hin-Handelns. Die erste Art Ursache ist ein Quantum von aufgestauter Kraft, welches darauf wartet, irgend wie, irgend wozu verbraucht zu werden; die zweite Art ist dagegen etwas an dieser Kraft gemessen ganz Unbedeutendes, ein kleiner Zufall zumeist, gemäss dem jenes Quantum sich nunmehr auf Eine und bestimmte Weise „auslöst“: das Streichholz im Verhältniss zur Pulvertonne. Unter diese kleinen Zufälle und Streichhölzer rechne ich alle sogenannten „Zwecke“, ebenso die noch viel sogenannteren „Lebensberufe“: sie sind relativ beliebig, willkürlich, fast gleichgültig im Verhältniss zu dem ungeheuren Quantum Kraft, welches darnach drängt, wie gesagt, irgendwie aufgebraucht zu werden. Man sieht es gemeinhin anders an: man ist gewohnt, gerade in dem Ziele (Zwecke, Berufe u.s.w.) die treibende Kraft zu sehn, gemäss einem uralten Irrthume, — aber er ist nur die dirigirende Kraft, man hat dabei den Steuermann und den Dampf verwechselt. Und noch nicht einmal immer den Steuermann, die dirigirende Kraft… Ist das „Ziel“, der „Zweck“ nicht oft genug nur ein beschönigender Vorwand, eine nachträgliche Selbstverblendung der Eitelkeit, die es nicht Wort haben will, dass das Schiff der Strömung folgt, in die es zufällig gerathen ist? Dass es dorthin „will“, weil es dorthin — muss? Dass es wohl eine Richtung hat, aber ganz und gar — keinen Steuermann? — Man bedarf noch einer Kritik des Begriffs „Zweck“.

That is why Nietzsche, when speaking of this “Steuermann”, places “free” in inverted commas – because it is a special “kind” [Art] of “freedom” that he considers. “Freedom” is merely a “store of force”, a “potentiality”, an incalculable energy that can be “exercised” or “ad-opted” responsibly by those who have the necessary “resolve” (Ge-wissen, “certainty”, often but not very accurately translated as “conscience”), who are aware of the “limits” of their “aim” or “purpose”, those who are “competent to promise”. And it is precisely this “resolve”, this mixture of certainty and a-wareness – this “responsibility” or “accountability” –, this “resolute conscience” that determines the ultimate “test” of wills, the “measure” of force against force, - the measure or “standard of value”.

2…The “free man”, the owner of a long unbreakable will, finds this possession his standard of value: looking out from himself upon the others, he honours or he despises, and just as necessarily as he honours his peers, the strong and the reliable (those who can bind themselves by promises),—that is, every one who promises like a sovereign, with difficulty, rarely and slowly, who is sparing with his trusts but confers honour by the very fact of trusting, who gives his word as something that can be relied on, because he knows himself strong enough to keep it even in the teeth of disasters, even in the “ teeth of fate,” [“gegen das Schicksal”] — so with equal necessity will he have the heel of his foot ready for the lean and empty jackasses, who promise when they have no business to do so, and his rod of chastisement ready for the liar, who already breaks his word at the very minute when it is on his lips. The proud knowledge of the extraordinary privilege of responsibility, the consciousness of this rare freedom, of this power over destiny [Geschick],  has sunk right down to his innermost depths, and has become an instinct, a dominating instinct - what name will he give to it, to this dominating instinct, if he needs to have a word for it? But there is no doubt about it—the sovereign man calls it his conscience [Gewissen]…

Der „freie“ Mensch, der Inhaber eines langen unzerbrechlichen Willens, hat in diesem Besitz auch sein Werthmaass: von sich aus nach den Andern hinblickend, ehrt er oder verachtet er; und eben so nothwendig als er die ihm Gleichen, die Starken und Zuverlässigen (die welche versprechen dürfen) ehrt, — also Jedermann, der wie ein Souverain verspricht, schwer, selten, langsam, der mit seinem Vertrauen geizt, der auszeichnet, wenn er vertraut, der sein Wort giebt als Etwas, auf das Verlass ist, weil er sich stark genug weiss, es selbst gegen Unfälle, selbst „gegen das Schicksal“ aufrecht zu halten —: eben so nothwendig wird er seinen Fusstritt für die schmächtigen Windhunde bereit halten, welche versprechen, ohne es zu dürfen, und seine Zuchtruthe für den Lügner, der sein Wort bricht, im Augenblick schon, wo er es im Munde hat. Das stolze Wissen um das ausserordentliche Privilegium der Verantwortlichkeit, das Bewusstsein dieser seltenen Freiheit, dieser Macht über sich und das Geschick hat sich bei ihm bis in seine unterste Tiefe hinabgesenk und ist zum Instinkt geworden, zum dominirenden Instinkt: — wie wird er ihn heissen, diesen dominirenden Instinkt, gesetzt, dass er ein Wort dafür bei sich nöthig hat? Aber es ist kein Zweifel: dieser souveraine Mensch heisst ihn sein Gewissen…

So this is “the standard of value” – indeed “the measure of value” [Werthmaass]: it is “responsibility”, the “consciousness of the sovereign individual [who has] this power over destiny [that] has sunk right down to his innermost depths, and has become an instinct, a dominating instinct”! This is the meaning of “resolve” (“conscience”, Gewissen). It is deceptive here to translate Nietzsche’s word “Gewissen” with “con-science”. The word “con-science” (con-scientia, common knowledge) is too redolent of that “inter-subjectivity”, of that universal “oceanic feeling”, of the “sym-pathy” or “com-passion” (Mit-Leid) that Schopenhauer names and indicates as the ultimate “root” (Wurzel) of ethics and moral behaviour. Clearly, Nietzsche would never tolerate such a “universal humanistic” notion. By “Ge-wissen” Nietzsche intends the “literal” meaning of the word – “certainty”, firm knowledge. This “Ge-wissen”, this “certainty” represents the opposite of the “moral com-pulsion” denoted by “con-science”. On the contrary, Nietzsche wishes to emphasise the “internal im-pulsion”, the “drive” or “motive” that “im-pels” the maker of a “promise”, the “ower”, from the height of his “competence to promise”, to be “certain” of being able to keep it!

B. Price As Punishment

Whereas “conscience” preserves the “intelligible freedom” of the Will, of one’s conscience or “soul”, “Gewissen” stresses the “certainty”, the necessary awareness and “drive” that comes from the “instinct of freedom”, from the “Will to Power”.

4… Have these current genealogists of morals ever allowed themselves to have even the vaguest notion, for instance, that the cardinal moral idea of "ought" originates from the very material idea of "owe"? Or that punishment developed as a retaliation absolutely independently of any preliminary hypothesis of the freedom or un-freedom of the will?...

Haben sich diese bisherigen Genealogen der Moral auch nur von Ferne Etwas davon träumen lassen, dass zum Beispiel jener moralische Hauptbegriff „Schuld“ seine Herkunft aus denn sehr materiellen Begriff „Schulden“ genommen hat? Oder dass die Strafe als eine Vergeltung sich vollkommen abseits von jeder
Voraussetzung über Freiheit oder Unfreiheit des Willens entwickelt hat?

Throughout the longest period of human history, punishment was never based on the responsibility of the evil-doer for his action, and was consequently not based on the hypothesis that only the guilty should be punished ;—on the contrary, punishment was inflicted in those days for the same reason that parents punish their children even nowadays, out of anger at an injury that they have suffered, an anger which vents itself spontaneously [sich auslasst] on the author of the injury — but this anger is kept in bounds and modified through the idea that every injury has somewhere or other its equivalent price, and can really be paid off, even though it be by means of pain to the author. Whence is it that this ancient deep-rooted and now perhaps ineradicable idea has drawn its strength, this idea of an equivalency between injury and pain? I have already revealed its origin, in the contractual relationship between creditor and ower, that is as old as the existence of “legal rights” at all, and in its turn points back to the primary forms of purchase, sale, barter, and trade.

Es ist die längste Zeit der menschlichen Geschichte hindurch durchaus nicht gestraft worden, weil man den Übelanstifter für seine That verantwortlich machte, also nicht unter der Voraussetzung, dass nur der Schuldige zu strafen sei: — vielmehr, so wie jetzt noch Eltern ihre Kinder strafen, aus Zorn über einen erlittenen Schaden, der sich am Schädiger auslässt, — dieser Zorn aber in Schranken gehalten und modifizirt durch die Idee, dass jeder Schaden irgend worin sein Äquivalent habe und wirklich abgezahlt werden könne, sei es selbst durch einen Schmerz des Schädigers. Woher diese uralte, tiefgewurzelte, vielleicht jetzt nicht mehr ausrottbare Idee ihre Macht genommen hat, die Idee einer Äquivalenz von Schaden und Schmerz? Ich habe es bereits verrathen: in dem Vertragsverhältniss zwischen Gläubiger und Schuldner, das so alt ist als es überhaupt „Rechtssubjekte“ giebt und seinerseits wieder auf die Grundformen von Kauf, Verkauf, Tausch, Handel und Wandel zurückweist.

Extraordinary stuff! (Even more extraordinary is the complete, total, “idiotic” inability of people like Deleuze or Foucault or Derrida so much as to mention [!] this entire “onto-geny” [“paradoxical”, Nietzsche calls it], let alone [psycho]-analyse it!) Not only is there no “freedom of will” involved here; not only is “retaliation” a purely “mechanical” retributive response – but also Nietzsche makes obvious again and again that he is not talking about “history” in the “historicist sense” (!), but rather of “the longest time”, of “destiny and fate”, of “innermost depths”, of “instincts” – to which, with ferocious realism and antithesis, he even gives the name of “conscience” (almost a piercing sarcastic dart thrown at Schopenhauer’s “con-scientia”)!

The notion that “value” or “price” constitutes a “balance or exchange of utilities” between seller and purchaser is thus exploded!The price to be paid” refers to the “penalty” that the injurer (ower) must “suffer” so as to “satisfy” the “injured” party (the creditor). (Cf. here the Italian “pena”, which stands for “pain” and “punishment” to compensate for “injury”.) Nor does “price” constitute a “balance of forces or of values” – for no such “equi-librium” or “Aquivalenz” is possible with Nietzsche! Once again, Nietzsche understands by “balance of forces” not their “equi-valence” or “mutual neutralization”, but the active “matching” of one force against the other as judged by the holder of the “balance”, the “scales” (Wagschalen) that can be likened also to the “scales of justice”! (With remarkable perspicuity, Merquior detects this subtle and rare interpretation of Nietzsche’s expression “the balance of forces” in the Meditations: “Has he not taught that truth is not objectivity but a will to ‘justice’ [Thoughts Out of Season, II, 6]? Justice, to be sure, in the hands of hanging judges, strong personalities whose very vitality puts them high above the mass of mankind” [p.74].)

“Price” and “debt” always and everywhere must be approached from the “active” side – just as “law” and “justice” must: and the active side is that of the strong who impose the price on the weak without the prior intervention or “mediation” of a “free will”: - “punishment” is a “pain” that is inflicted by the “injured” party (creditor) as an “anger that vents itself mechanically on the author (of the “debt”, the “ower” or “Schuldner”, the party at fault)!

No equi-valence, no equality of “values”, no equi-librium is possible in contractual transactions – for the simple and overwhelming reason that there is no “sub-stratum of value” that can make such “equi-valence” possible! There is no “balance-of-forces” because the “forces” do not respond to a “common” metre or measure, they cannot be “reconciled”. Rather, there is a “resultant of forces” that “vye with one another”, that joust incessantly for domination and overpowering that has no “common” object or stake or prize or “utility” or goal or purpose. Similarly, no “reconciliation”, however dialectically “mediated” (as in Hegel), or phenomenologically (in Heidegger) or “bio-politically” (Foucault) is allowed in the act of “consciousness” – there is no “Aufhebung”, no negation, or negation of the negation, no “authenticity”, no “liberation” because there is no “inter-esse” over which different “wills” may hope “to reconcile” themselves or to be reconciled!

 The “Will to Power”, the “instinct of freedom” is a “stored-up force” that is “physio-logical” in nature, a force that contains in its “material” traits the “genealogy” of its “destiny” – a “drive” that can be “traced back historically”, like a “fossil” that is still extant, like a virus neither dead nor living; - not through its passive “function” or as-signed “utility”, but rather through its “self-assertion”, its “instinctive-ness”, its irrepressible violence. In this regard, Nietzsche’s conception of “genealogical history” – and here one is reminded of his preoccupation with the origins of the Greek “ghens” or nobility, whence “gene” and “genealogy” – is comparable to psycho-analytic anamnesis (recollection) or analepsis (flash-back), or even hypnosis used in the reconstruction and the interpretation of dreams. In this praxis, “disease/malaise” or “illness” (Erkrankung, Krankenheit) are as “a-historical” as buried memories, - just like a virus or a gene, they have a “source” and “mutations” but no “history” because they are not human constructs; they can be “frozen in time” and hibernate, lie dormant like Camus’s plague. The same goes for the “history of the instincts”: this is a “force” that is not “com-mensurable” with any other, except in its “opposition” to others, except in its “conflict”, in its constant struggle to overwhelm, overturn and dominate another force, another Will!

5. The realisation of these contractual relations excites, of course (as would be already expected from our previous observations), a great deal of suspicion and opposition towards the primitive society which made or sanctioned them. In this society promises will be made ; in this society the object is to provide the promiser with a memory; in this society, so may we suspect, there will be full scope for hardness, cruelty, and pain: the "ower," in order to induce credit in his promise of repayment, in order to give a guarantee of the earnestness and sanctity of his promise, in order to drill into his own conscience the duty, the solemn duty, of repayment, will, by virtue of a contract with his creditor to meet the contingency of his not paying, pledge something that he still possesses, something that he still has in his power, for instance, his life or his wife, or his freedom or his body…

5. Die Vergegenwärtigung dieser Vertragsverhältnisse weckt allerdings, wie es nach dem Voraus-Bemerkten von vornherein zu erwarten steht, gegen die ältere Menschheit, die sie schuf oder gestattete, mancherlei Verdacht und Widerstand. Hier gerade wird versprochen; hier gerade handelt es sich darum, Dem, der verspricht, ein Gedächtniss zu machen; hier gerade, so darf man argwöhnen, wird eine Fundstätte für Hartes, Grausames, Peinliches sein. Der Schuldner, um Vertrauen für sein Versprechen der Zurückbezahlung einzuflössen, um eine Bürgschaft für den Ernst und die Heiligkeit seines Versprechens zu geben, um bei sich selbst die Zurückbezahlung als Pflicht, Verpflichtung seinem Gewissen einzuschärfen, verpfändet Kraft eines Vertrags dem Gläubiger für den Fall, dass er nicht zahlt, Etwas, das er sonst noch „besitzt“, über das er sonst noch Gewalt hat, zum Beispiel seinen Leib oder sein Weib oder seine Freiheit oder auch sein Leben…

Let us make the logic of the whole of this equalisation process clear; it is strange enough. The equivalence consists in this : instead of an advantage directly compensatory of his injury (that is, instead of an equalisation in money, lands, or some kind of chattel), the creditor is granted by way of repayment and compensation a certain sensation of satisfaction—the satisfaction of being able to vent, without any trouble, his power on one who is powerless,…

Machen wir uns die Logik dieser ganzen Ausgleichungsform klar: sie ist fremdartig genug. Die Äquivalenz ist damit gegeben, dass an Stelle eines gegen den Schaden direct aufkommenden Vortheils (also an Stelle eines Ausgleichs in Geld, Land, Besitz irgend welcher Art) dem Gläubiger eine Art Wohlgefühl als Rückzahlung und Ausgleich zugestanden wird, — das Wohlgefühl, seine Macht an einem Machtlosen unbedenklich auslassen zu dürfen,…

6. It is then in this sphere of the law of contract [Obligationen-Rechte] that we find the cradle [Entstehungsheerd – spring or source] of the whole moral world of  the ideas of " guilt," " conscience," "duty," the "sacredness of duty," — their commencement, like the commencement of all great things in the world, is thoroughly and continuously saturated with blood

6. In dieser Sphäre, im Obligationen-Rechte also, hat die moralische Begriffswelt „Schuld“, „Gewissen“, „Pflicht“, „Heiligkeit der Pflicht“ ihren Entstehungsheerd, — ihr Anfang ist, wie der Anfang alles Grossen auf Erden, gründlich und lange mit Blut begossen worden…

In other words, long before our notions of “justice” and “compensation” and “fairness” became “pacified” with the “quantitative exchange” of commercial “values” (money, land), the primordial “equivalence” was the infliction of “violence”, the exertion of one’s “power” over a power-less “breaker of the promise” (Ver-brecher, “breaker”, the German word for “criminal”). Again, “contract” here does not even remotely stand for “agreement”, for a “meeting of minds” (the legal periphrasis for “contract” is itself most “revealing”), for “conciliation or reconciliation”! It stands for its opposite – for “obligation”, for “bond”, for “promises” founded on mutual fear and aggression. Contract is “war pursued by other means” (to invert VonClausewitz). It resembles in its realism Hobbes’s notion of the status civilis as a “contractual cessation of hostilities”, a suspension of civil war: – except that where Hobbes still admitted of a “forum internum” of reason and utility that founded the individual decision “to alienate” his “natural rights” so as to put a “contractual” end to civil war, Nietzsche cannot admit of such a “state by institution” but only of a “state by acquisition”, or rather “a state by violent, brutal imposition”. The “logic” of Nietzsche’s “contract” is the ability “to vent power [and punishment] on the powerless…” The world of morality, “like all great things in the world…is thoroughly and continuously saturated with blood…”! Far from being the “consensual fruits” of “utility and adaptation”, “all the great things in the world” originate from violence and struggle (recall Marx’s description of the rise of the bourgeoisie, “oozing blood from head to toe”!).

The historical origin of this “competence to promise”, of this “conscience-as-certainty”, of “resolve” and “responsibility”, can be found in “the relationship between buyer and seller, creditor and ower”. It is in this “contractual” and exquisitely “economic” sphere that “person confronted person”, “person matched himself against person”! Far from an “agreement” or “co-operation” or “con-sensus”, let alone “conciliation”, we have “confrontation” and “combat” (“matching against”)!

8. The feeling of "ought," of personal obligation [Verpflichtung, impellent duty] (to take up again the train of our inquiry), has had, as we saw, its origin in the oldest and most original personal relationship that there is, the relationship between buyer and seller, creditor and ower: here it was that individual confronted individual, and that individual matched himself against individual. There has not yet been found a grade of civilization [Civilisation] so low, as not to manifest some trace of this relationship. Making prices, assessing values, thinking out equivalents, exchanging— that is what preoccupied the primal thinking [Denken] of man in such measure [in einem solche Maasse], that this in a certain sense is thinking itself: it was here that was trained the oldest form of sagacity, it was here in this sphere that we can perhaps trace the first commencement of man's pride, of his feeling of superiority over other animals.

8. Das Gefühl der Schuld, der persönlichen Verpflichtung, um den Gang unsrer Untersuchung wieder aufzunehmen, hat, wie wir sahen, seinen Ursprung in dem ältesten und ursprünglichsten
Personen-Verhältniss, das es giebt, gehabt, in dem Verhältniss zwischen Käufer und Verkäufer, Gläubiger und Schuldner: hier trat zuerst Person gegen Person, hier mass sich zuerst Person an Person. Man hat keinen noch so niedren Grad von Civilisation aufgefunden, in dem nicht schon Etwas von diesem Verhältnisse bemerkbar würde. Preise machen, Werthe abmessen, Äquivalente ausdenken, tauschen — das hat in einem solchen Maasse das allereste Denken des Menschen präoccupirt, dass es in einem gewissen Sinne das Denken ist: hier ist die älteste Art Scharfsinn herangezüchtet worden, hier möchte ebenfalls der erste Ansatz des menschlichen Stolzes, seines Vorrangs-Gefühls in Hinsicht auf anderes Gethier zu vermuthen sein.

So here is what marks the difference between Civilisation (Zivilisation) and Culture (Kultur)! The ability “to fight back” forgetfulness so as to become “competent to promise”, so as to abide by one’s “resolve” (Gewissen), the e-mergence of a “memory of the will” is connected with the “antagonism” that comes from a “clash of wills”. From this “clash”, this “conflict”, from the exertion of the “instinct of freedom”, human beings are forced to stake out their “need-necessity” against those of other human beings. And part of the self-preservation of humans consists in their ability to enter into agreements and therefore “to bind themselves” by means of “personal obligations” or contracts (Obligationen-Rechte). Memory or the fight against forgetfulness plays a vital role in the institutional “out-growth” or “result” (Folge) of these promises, of this conscience-as-certainty. And the “out-growth”, the “out-come” or “result” of this process is “Civilisation”.

Every exchange, trade and commerce and “the market” itself, are not a simple matter of “do ut des” (I give so that you may give), a mutually beneficial “utilitarian” exchange: there is much more “antagonism of values” than that! “Exchange” is the “clash” of op-posing wills. Every “sale and purchase”, no matter how “mutually beneficial” or “con-sensual”, involves a constant “confrontation of individual against individual” (“Person gegen Person”): “hier mach sich zuerst…” – here for the first time individual “measured” or “matched” himself against individual! Society and its institutions are nothing more than a physio-logical means (Mittel) to this “outcome” (Folge, result) – like a tree that bears fruit!

Not only! But this constant “measuring and matching” of wills, of “instincts of freedom”, becomes so intense, it “preoccupies the primal thoughts of man to such an extent that in a certain sense it is thinking itself”! In other words, the very ability “to think”, which involves that “struggle against forgetfulness”, that “will to remember” whereby “memory” introduces “history” to humanity and to that extent re-duces its ability for “happiness” – that “memory” that enables causal links to be made from the “measurement and matching” of “Person against Person” – that (!) is the very origin (Ursprung) of the human capacity for “thought”! And, as we have seen, also for the ability “to promise”, to enter binding commitments or “bonds” or “obligations”!

Nietzsche insists on the point so much that he stresses that not only did this occur in the remotest past, but also (much more important) it persists to the present: “dass es in einem gewissen Sinne das Denken ist [!]”) – “that is what in a certain sense ‘thinking’ is…” - to this day! And despite the consequent loss of “happiness” (Gluck) that memory begets, this complex “evolution” of thought and memory gave humans their sense of superiority over animals:

8… Perhaps our word "Mensch" (manas) still expresses just something of this self-pride: man denoted himself as the being who measures values, who values and measures, as the "assessing" animal par excellence [das „abschätzende Thier an sich“]. Sale and purchase, together with their psychological concomitants, are older than the origins of any form of social organisation and union : it is rather from the most rudimentary form of individual right that the budding consciousness [Gefuhl, feeling] of exchange, commerce, debt, right, obligation, compensation was first transferred to the rudest and most elementary of the social complexes (in their relation to similar complexes), together with the habit of comparing, measuring and calculating force with force, [better translation: zugleich mit der Gewohnheit, Macht an Macht zu vergleichen, zu messen, zu berechnen]. His eye was now focussed to this perspective ; and with that ponderous consistency characteristic of ancient thought, which, though set in motion with difficulty, yet proceeds inflexibly along the line on which it has started, man soon arrived at the great generalisation, "everything has its price, all can be paid for," the oldest and most naive moral canon of justice, the beginning of all "kindness," of all "equity," of all "goodwill," of all "objectivity " in the world.

Justice in this initial phase is the goodwill among people of about equal power to come to terms with one  another [sich mit einander abzufinden], to come to an “understanding” [“Verstandigen”] again by means of a settlement [Ausgleich], and with regard to the less powerful, to compel them to agree among themselves to a settlement.

8.…Vielleicht drückt noch unser Wort „Mensch“ (manas) gerade etwas von diesem Selbstgefühl aus: der Mensch bezeichnete sich als das Wesen, welches Werthe misst, werthet und misst, als das „abschätzende Thier an sich“. Kauf und Verkauf, sammt ihrem psychologischen Zubehör, sind älter als selbst die Anfänge irgend welcher gesellschaftlichen Organisationsformen und Verbände: aus der rudimentärsten Form des
Personen-Rechts hat sich vielmehr das keimende Gefühl von Tausch, Vertrag, Schuld, Recht, Verpflichtung, Ausgleich erst auf die gröbsten und anfänglichsten Gemeinschafts-Complexe (in deren Verhältniss zu ähnlichen Complexen) übertragen, zugleich mit der Gewohnheit, Macht an Macht zu vergleichen, zu messen, zu berechnen. Das Auge war nun einmal für diese Perspektive eingestellt: und mit jener plumpen Consequenz, die dem schwerbeweglichen, aber dann unerbittlich in gleicher Richtung weitergehenden Denken der älteren Menschheit eigenthümlich ist, langte man alsbald bei der grossen Verallgemeinerung an „jedes Ding hat ein Preis; Alles kann abgezahlt werden“ — dem ältesten und naivsten Moral-Kanon der Gerechtigkeit, dem Anfange aller „Gutmüthigkeit“, aller „Billigkeit“, alles „guten Willens“, aller „Objektivität“ auf Erden.
Gerechtigkeit auf dieser ersten Stufe ist der gute Wille unter ungefähr Gleichmächtigen, sich mit einander abzufinden, sich durch einen Ausgleich wieder zu „verständigen“— und, in Bezug auf weniger Mächtige, diese unter sich zu einem Ausgleich zu zwingen. (GM)

C. Nietzsche and the Sphere of Exchange

As we saw earlier, justice is a “balance of forces”, not at all in the sense that these “forces” have found a “natural, harmonious and lasting equi-librium” – but in the sense that “justice” is the “balance” (or “scales”, Wagschalen!) with which the “op-posing and con-flicting forces” are “weighed”! Justice is likened to the “scales” that “weigh up”, not the different “rights” of the opposing parties, but their different, even “ir-reconcilable”, “weight (Wichtigkeit) and strength (Kraft)”! Justice is therefore only a temporary truce, yet another tactic or stratagem in the overall “strategies” of the warring factions, imposed by the dominant and overpowering party to secure the subservience of the dominated and overpowered.

At the core of all the “metaphysical needs” that Nietzsche denounces even in Schopenhauer’s “reversal” of the Kantian “thing-in-itself” with his own “Will-to-Life” is this ultimate goal, this supreme attempt to find in life and the world a “homo-noia”, an “agreement” and “harmony”, an “equi-librium” - a “commutative justice”! – that “homo-logates”, that enables the “translation” and equi-paration of every element of the cosmos into every other element – a Leibnizian mathesis universalis, a “pre-established harmony” that is the apex of the Ratio-Ordo. Even Schopenhauer (!), the philosopher of Eris, the prophet of Heraclitean struggle and conflict, of Strife, had preferred in the end the renunciation (Entsagung) of the endless irrepressible strife of the Will-to-Life in the name of this “harmony”, this “homo-noia” – this Nirvana! – that is nothing other than the absurd “preference” for a metaphysical “Value” that he himself had agreed could not be found in life and the world (“Where is it written?” he asked Kant), but that he nevertheless chooses and wills as the ultimate goal of Life!

Nietzsche sees in this Schopenhauerian Wille zur Ohn-macht (Will to Powerlessness) the very same “metaphysical need” that the “English and French psychologists”, from Darwin to Spencer and Comte, locate in “Utility” and that the Socialists measure in “Labour”. Such is their Wille zur Ohn-macht, pursued in the name of an Objective Truth, a Will-to-Truth, a search for “Value” that is nothing more that a Will-to-Death, a manifestation of the Will to Power in its “nihilistic” interiorisation (Verinnerlichung) that chooses and wills to renounce life and the world for the sake of a different world, of an “ascetic Ideal”!

In reality, the Instinct of Freedom, the Will to Power is the only real “need-necessity” of choice, the competence to promise, the responsibility to decide – it is a “need-necessity” in an “affirmative” sense – a “resolve” (Gewissen), the resoluteness of decision!

Contemporaneously with the rise of the neoclassical theory of marginal utility, both Schopenhauer and Nietzsche devalue and discount even the possibility of “labour” forming the basis of the inter-esse, of the com-unitas, of the social synthesis. Far from being a “Value” or “the source and measure of value”, for the negatives Denken living labour is only a means to satisfy a “need-necessity” intended in a passive, “negative” sense – not as a “utility” but rather as a “dis-utility” – as the instant gratification of this “need-necessity”! Labour understood as “bare”, “destitute” living labour separated (Marx’s Trennung or “alienation”) from its “means of pro-duction or object-ification”, can only work and thus consume its “object”, its “means of production” and its “means of subsistence” (Lebensmittel, life-means, food – the classical and neoclassical “wage fund”). Only those capable of “renouncing” this need, of post-poning it, of “denying” the Will-to-Life – its agon or conatus or appetitus – can absolve themselves from the “need-necessity” of the Arbeit, from its “pain” (Leid), from its “reification” into brute “labour power” (Kraft; Heinrich Gossen, the founder of marginal utility, will employ the phrase “Arbeits-leid” interchangeably with “Arbeits-kraft”) by means of their “endowments” or “wealth” to which they can lay rightful claim of “ownership” due to their earlier “abstinence” or “sacrifice” or “abnegation”: – in this consists the A-skesis, the a-scent to and the reward of Nirvana!

In similar vein, in his attempt to define the “subject-matter” of Economics, Robbins will observe that “Nirvana is not necessarily single bliss. It is merely the complete satisfaction of all requirements,” (in Essay, p.13). In other words, Nirvana is “freedom from want”, the very opposite of the Arbeit with its “need-necessity”! Nirvana is “not having to choose”! But this is the contrary of the agon of the Economics: for Robbins, economics is the science of choice between the alternative uses of scarce resources (see ibid., p.15). It follows that Nirvana is also the “freedom from the hard choices” to which “scarcity” forces us. Nirvana is freedom from the compulsion of Economics. Robbins cites Karl Menger’s pathbreaking work introducing the concept of marginal utility right on this point (p.13, fn.1). And then, to stress his point further, he prefers Irving Fisher’s “analytical” definition of capital as “an aspect of wealth” to Adam Smith’s “classificatory” one as “a kind of wealth” (ibid., p.16).

From this entirely Nietzschean “perspective” (one that belongs properly to the negatives Denken), living labour must be dis-placed from its role as the sole source of “value” in Classical Political Economy to the ancillary role of “factor of production” in Neoclassical Theory! Already with Schopenhauer, the operari, the “striving” for happiness and satisfaction by the Will-to-Life was “de-valued” (hence the Entwertung) as a self-defeating exercise because the “pleasure” induced by the achievement of the Will’s aims was inevitably nullified in the very act of its satis-faction (Latin, satis, enough, and facere, to make), in its ful-filment, in its com-pletion (plenus, full). The “renunciation” of the Will (Ent-sagung), then, became itself an active operari, an active “quest” or “a-scension” (A-skesis), a “climbing” toward the Freiheit of the esse, of Nirvana – “the complete satisfaction of all requirements”! Whence, to say it again, the “de-valuation” (Entwertung) of the Arbeit, its dis-utility in contrast with the “utility” of capital, of “already-objectified labour” as “capital”, as a mere appendage or “aspect of wealth”.

It is obvious that for this Economics the “Political” of Classical Political Economy has been totally eclipsed by the abstract quantitative analysis of the adequation of axiomatically defined means and ends; and so the “advantage” to be derived from “society” is reduced only to what can be derived from the ability “to exchange” these endowed resources so as to maximize one’s “requirements”, to ensure their “complete satisfaction”, to secure one’s Freiheit. But the active “pro-duction” of those “requirements” is the result of a “science of choice”, an “axiology” or “praxeology” that ineluctably involves “human action” – importantly, individual action! – considered abstractly, axiomatically. Consequently, neoclassical theory eliminates “social labour” and its “division” from all analysis of the Economics. (On all this, we refer to our study on ‘The Pure Logic of Choice’.)

Robbins (at p.19) is quite explicit in this regard: “it is clear that the phenomena of the exchange economy itself can only be explained by going behind such [exchange] relationships and invoking the operation of those laws of choice which are best seen when contemplating the behaviour of the isolated individual”! In this analytical framework, (as Robbins implies in this quotation) Walrasian equilibrium will form only the extension or “generalization” to “the market” of what are strictly “individual choices and actions” (which explains the expression “general equilibrium analysis”)! In reply to Schumpeter’s “Walrasian” formulation of “economics” (in Hauptinhalt), Robbins objects: “But it is one thing to generalise the notion of exchange as a construction. It is another to use it in this sense as a criterion [of Economics],” (p.20). (Recall that for Schumpeter, Walras was “the greatest of economists”. Nevertheless, he himself was to abandon the Walrasian ‘Statik’ analysis in favour of the much more Nietzschean notion of Entwicklung with its ‘Dynamik’ approach centred on the Unternehmergeist, the “entrepreneurial spirit” as the source of the capitalist Innovationsprozess. We discuss this in our ‘Entwicklung: Capitalism as Trans-crescence’, a study devoted to the Austrian economist.)

This “science of choice” leaves to one side all considerations of “ownership” and “entitlement” to what it calls “scarce” – decidedly not “social”! – resources by calling them (individual) “endowments”! At the same time, however, by “reducing” itself to a “pure logic of choice” (Hayek’s phrase), to a “science”, such an Economics rapidly loses its “practical” character – what allows it to be a “choice” (this will be von Mises’s bitter recrimination against Hayek) – and therefore turns itself into a formal mathematical or engineering exercise. (In the case of Walrasian equilibrium, for instance, Hayek will show conclusively that its equations can apply “practically” only to a single individual who can be taken to process the information they contain simultaneously, like a totalitarian, omniscient socialist “planner”.)

As Nietzsche notes with customary sagacity, far from being a purely “negative” state of pure “contemplation”, the a-void-ance of the Will-to-Life, Nirvana is the A-skesis, its active operari, the reward for the deferral of consumption – its abnegation! The opposite of “hedonism” (Greek hede, now), its renunciation (Entsagung), is placed thus at the centre of limitless capitalist accumulation, as the ascetic Ideal – Nirvana, “the complete satisfaction of all requirements” (Robbins). In effect, the “freedom from want” that Nirvana represents is freedom from the Arbeit understood as “toil”, as “dis-utility”: it is Will to Power over living labour! Except that all the “priests”, all the “pessimists”, all the peddlers of the “ascetic ideal” wish to disguise “ideologically” its clear “choice” or “resolve” to accumulate social resources as “pious renunciation”, as “abnegation”, as “entrepreneurship”.

Cf. Weber’s Protestantische Ethik. Even Weber overlooks, except perhaps at the very end of his monograph when he alludes to the new thrust of entrepreneurial capitalism, this dis-guised Will to Power beneath the veil of the religious Askesis whereby the positive urge to accumulate capital, the Spirit of Capitalism, is camouflaged as the Protestant Ethic! This is a Will to Power that de Mandeville had exposed scabrously in The Fable of the Bees as “Private Vices, Publick Benefits”, and whose “Hobbesian” origins were lately rediscovered by Hannah Arendt, in Vol.I of The Origins of Totalitarianism. Arendt fails to detect, however, the infinite superiority, in complexity and sophistication and philosophical depth and insight, of the Nietzschean formulation of the antagonistic bases of capitalist social relations of production. These themes are canvassed in our Catallaxia study.

Conversely, the “socialist” glorification of “labour” in its alienated form under capitalism becomes the cruel parody of “communist” aspirations for human emancipation. The “con-fusion” of all “labour” with “toil” or “alienated labour”, that is, the failure to distinguish the two, is one of the most disappointing denouements of many recent “left-wing” studies.

As we shall soon see, Nietzsche understood perfectly this “apory” of neoclassical and classical economic analysis – their “ideological” Eskamotage to remove all conflict and antagonism from economic categories. Yet rather than tackle this ideology, he completely side-steps the corpus of the relationship creditor-debtor when he considers the relationship between individual and community – so much so that he even mis-construes “poverty” (Elend) in the quotation below as the mere “exclusion” by outlawing or ostracism of the individual from the community! Completely elided or sublated is what surely must be the most essential “advantage” of human society, of “civil society” – the “expanded reproduction of needs” by means of the division of social labour! Beyond “civil society”, Nietzsche ultimately ignores the fact that it is impossible to conceive of a human being without its “phylogenetic” attributes that turn it into a “being human”.

9. Measured always by the standard of antiquity (this antiquity, moreover, is present or again possible at all periods), the community stands to its members in that important and radical relationship of creditor to his "owers." Man lives in a community, man enjoys the advantages of a community (and what advantages! we occasionally underestimate them nowadays), man lives protected, spared, in peace and trust, secure from certain injuries and enmities, to which the man outside the community, the "peaceless" man, is exposed, —a German understands the original meaning of "Elend" [misery, poverty] (elend) — secure because he has entered into pledges and obligations to the community in respect of these very injuries and enmities. What happens when this is not the case? The community, the defrauded creditor, will get itself paid, as well as it can, one can reckon on that. In this case the question of the direct damage done by the offender is quite subsidiary: quite apart from this the criminal* [Verbrecher] is above all a breaker, a breaker of word and covenant to the whole, as regards all the advantages and amenities of the communal life in which up to that time he had participated. The criminal [Verbrecher] is an "ower" [Brecher] who not only fails to repay the advances and advantages that have been given to him, but even sets out to attack his creditor: consequently he is in the future not only, as is fair, deprived of all these advantages and amenities — he is in addition reminded of the importance of those advantages. The wrath of the injured creditor, of the community, puts him back in the wild and outlawed status from which he was previously protected : the community repudiates him — and now every kind of enmity can vent itself on him. Punishment is in this stage of civilisation simply the copy, the mimic, of the normal treatment of the hated, disdained, and conquered enemy, who is not only deprived of every right and protection but of every mercy; so we have the martial law and triumphant festival of the vae victis! in all its mercilessness and cruelty. This shows why war itself (counting the sacrificial cult of war) has produced all the forms under which punishment has manifested itself in history.

9. Immer mit dem Maasse der Vorzeit gemessen (welche Vorzeit übrigens zu allen Zeiten da ist oder wieder möglich ist): so steht auch das Gemeinwesen zu seinen Gliedern in jenem wichtigen Grundverhältnisse, dem des Gläubigers zu seinen Schuldnern. Man lebt in einem Gemeinwesen, man geniesst die Vortheile eines Gemeinwesens (oh was für Vortheile! wir unterschätzen es heute mitunter), man wohnt geschützt, geschont, im Frieden und Vertrauen, sorglos in Hinsicht auf gewisse Schädigungen und Feindseligkeiten, denen der Mensch ausserhalb, der „Friedlose“, ausgesetzt ist — ein Deutscher versteht, was „Elend“, êlend ursprünglich besagen will —, wie man sich gerate in Hinsicht auf diese Schädigungen und Feindseligkeiten der Gemeinde verpfändet und verpflichtet hat. Was wird im andren Fall geschehn? Die Gemeinschaft, der getäuschte Gläubiger, wird sich bezahlt machen, so gut er kann, darauf darf man rechnen. Es handelt sich hier am wengisten um den unmittelbaren Schaden, den der Schädiger angestiftet hat: von ihm noch abgesehn, ist der Verbrecher vor allem ein „Brecher“, ein Vertrags- und Wortbrüchiger gegen das Ganze, in Bezug auf alle Güter und Annehmlichkeiten des Gemeinlebens, an denen er bis dahin Antheil gehabt hat. Der
Verbrecher ist ein Schuldner, der die ihm erwiesenen Vortheile und Vorschüsse nicht nur nicht zurückzahlt, sondern sich sogar an seinem Gläubiger vergreift: daher geht er von nun an, wie billig, nicht nur aller dieser Güter und Vortheile verlustig, — er wird vielmehr jetzt daran erinnert, was es mit diesen Gütern auf sich hat. Der Zorn des geschädigten Gläubigers, des Gemeinwesens giebt ihn dem wilden und vogelfreien
Zustande wieder zurück, vor dem er bisher behütet war: es stösst ihn von sich, — und nun darf sich jede Art Feindseligkeit an ihm auslassen. Die „Strafe“ ist auf dieser Stufe der Gesittung einfach das Abbild, der Mimus des normalen Verhaltens gegen den gehassten, wehrlos gemachten, niedergeworfnen Feind, der nicht nur jedes Rechtes und Schutzes, sondern auch jeder Gnade verlustig gegangen ist; also das Kriegsrecht und Siegesfest des vae victis! in aller Schonungslosigkeit und Grausamkeit: — woraus es sich erklärt, dass der Krieg selbst (eingerechnet der kriegerische Opferkult) alle die Formen hergegeben hat, unter denen die Strafe in der Geschichte auftritt.

There is no “satisfaction” of the opposing forces in this “balancing act”, there is no extinction of antagonism – there is only a dynamic “vying and wrestling with and against one another” to produce a “resultant force”, a result that is a success and a succession (a play on Folge, result, and Erfolg, success, and Aufeinanderfolge, succession, that is, a fresh outcome) – an overpowering (Uberwaltigung) that is a “commandeering”, a “putting to new use”. This applies not merely between individual and individual, but first and foremost between individual and community – from antiquity to the present, and is “again possible at all periods”. (For all this section, see our fundamental study, ‘Catallaxia: Philosophical Antecedents of the Sphere of Exchange’.)

The notion of “equal and free exchange” or “barter”, in fact turns out to be much more complex than what it sounds in the sense that “equal” denotes “commutative justice” which, as Nietzsche demonstrates, is a far from straightforward concept:

92… Justice (fairness) originates among approximately equal powers [Gleichmachtigen], as Thucydides (in the horrifying conversation between the Athenian and Melian envoys)30 rightly understood. When there is no clearly recognizable supreme power and a battle would lead to fruitless and mutual injury, one begins to think of reaching an understanding and negotiating the claims on both sides: the initial character of justice is barter. (HATH)

Barter or exchange involve a notion of “equal powers”, of “value”, whether this be use value or exchange value: exchange is a “relation” between people. Because Nietzsche always sees the world sub specie individui, “ontogenetically” and not “phylogenetically”, he can see only the “exchange” but not its “basis” (even “biological”!), not its “inter-esse”, not the division of social labour. Therefore he fails to see that the “inter-dependence” of the “exchange” need not be “destructive”, depending on how this “exchange” takes place. Even the entire basis of knowledge, communication and consciousness is not immune to these eristic forces (the same “Gesichtspunkt” or “gene-alogy” characterizes Schopenhauer’s “social” philosophy and Freud’s psychoanalysis).

This element comes out weightily in the “inter-esse” that is required to ensure that a “market” is “competitive”. The market is the “place” where “competing parties”, just like competing “impulses” or “drives”, gather so as to exchange their “endowments” or “values”. Whether or not “the market” remains “competitive” depends entirely on the kind of “relations” that obtain between the parties. It is meaningless therefore to insist on “free and fair competition”, on “free and equal exchange” because these terms “pre-suppose” an agreement on the “rules” of the “com-petition” that is not “natural” or “automatic” or “objective”, but one that is eminently “social” – because “exchange” involves “equal powers” which involve a “social relation”. Yet this social relation, this “value”, is for Nietzsche the “valor”, the antagonistic “strength” of the “relating” or competing parties, as in a knightly mediaeval joust.

Quite perceptively, Nietzsche’s concept of “barter” or “agreement” makes absolutely clear that the “market exchange” of classical political economy (its “utilitarian” version) which assumes the “equality” and “freedom” of commutative justice, is simply not possible if the “individuals” involved in the exchange are presumed to act on the basis of their “self-interest” alone! Because otherwise these “unmediated” self-interests would quite simply annihilate one another or not be capable of any “exchange” at all! Even the antagonism of com-petition must have an agreed foundation on which it can proceed without mutual annihilation. But this can be the case only if we define “self-interest” further, because “self interest” on its own cannot be “enlightened”: by definition, it can only be “one-sided” [einseitig] and therefore “irreconcilable”!

“Competition” is the one “activity” that is supposed to lead to “growth” through greater specialization. Now, first we would need to specify what “the aim” or “goal” of competition is. Even assuming that it is “utility maximization” until equilibrium is reached, the insurmountable problem remains that if “self-interested individuals” seek to exchange their goods to maximize their private “utilities”, then it is obvious that because they are “self-interested” they will seek to hide market information or engage in other conduct that will give them a “competitive advantage” over other self-interested individuals. But then, either no-one obtains any “advantage” out of this “competitive activity”, in which case competition cannot lead to “growth” or trans-crescence; or else some individuals do succeed in obtaining an advantage, but in that case their “competitive activities” will eventually lead to the establishment of a “monopoly”, which is the antithesis of “competition” and leads us therefore to an insoluble “antinomy”! (Note, by the way, that the term “monopoly” itself presumes the existence of a “market” that has been “monopolized”. This means that the concepts of “market” and “competition” in economic theory live or die together!)

“Enlightenment” or “intelligible freedom” when applied to “self-interest” pre-supposes what remains to be established, namely, the “agreement” and therefore the “inter-esse” of the “self-interested individuals”! This “impossible” aspect of “competition”, free trade or “market” theory, is discussed by Nietzsche in ‘HATH’, where he draws the analogy with Kant’s Categorical Imperative:

25 Private- and World-Morality…The older morality, namely Kant's ,25 demands from the individual those actions that one desires from all men--a nice, naive idea, as if everyone without further ado would know which manner of action would benefit the whole of mankind, that is, which actions were desirable at all. It is a theory like that of free trade, which assumes that a general harmony would have to result of itself, according to innate laws of melioration. (HATH)

25. Privat- und Welt-Moral. — Seitdem der Glaube aufgehört hat, dass ein Gott die Schicksale der Welt im Großen leite und, trotz aller anscheinenden Krümmungen im Pfade der Menschheit, sie doch herrlich hinausführe, müssen die Menschen selber sich ökumenische, die ganze Erde umspannende Ziele stellen. Die ältere Moral, namentlich die Kant's, verlangt vom Einzelnen Handlungen, welche man von allen Menschen wünscht: das war eine schöne naive Sache; als ob ein Jeder ohne Weiteres wüsste, bei welcher Handlungsweise das Ganze der Menschheit wohlfahre, also welche Handlungen überhaupt wünschenswert seien; es ist eine Theorie wie die vom Freihandel, voraussetzend, dass die allgemeine Harmonie sich nach eingeborenen Gesetzen des Besserwerdens von selbst ergeben müsse. Vielleicht lässt es ein zukünftiger Überblick über die Bedürfnisse der Menschheit durchaus nicht wünschenswert erscheinen, dass alle Menschen gleich handeln, vielmehr dürften im Interesse ökumenischer Ziele für ganze Strecken der Menschheit specielle, vielleicht unter Umständen sogar böse Aufgaben zu stellen sein. — Jedenfalls muss, wenn die Menschheit sich nicht durch eine solche bewusste Gesamtregierung zu Grunde richten soll, vorher eine alle bisherigen Grade übersteigende Kenntnis der Bedingungen der Kultur, als wissenschaftlicher Maßstab für ökumenische Ziele, gefunden sein. Hierin liegt die ungeheure Aufgabe der großen Geister des nächsten Jahrhunderts.

In the absence of an “inter-esse” that allows us to agree on the “rules of competition” in the “market”, no “self-regulating market” is possible. A meaningful notion of “com-petition” must therefore set out “the inter-esse”, the agreement or “the goal” (Zweck) of the competitive game, even when the inter-esse remains antagonistic at any given historical stage. But this runs counter to economic theory, both Classical and Neoclassical, because the “spelling out” of these rules would presuppose a real political foundation of “inter-ests” between the market participants that precedes market exchange and competition and that fundamentally distorts and vitiates the putative “equality” of “self-interested individuals” that underpins bourgeois economic theory! This is what Cacciari would call “politics without foundation”. (The entire project of the Freiburg School of “regulating” capitalism in accordance with a “scientifically-constituted liberal order” must founder on the rock of this reality! The same fate is met by the attempts of the “New Institutional Economics”, inspired by Douglass North, to identify a historical and theoretical “legal foundation” for capitalism. See Giulio Palermo’s excellent review of Alchian-Demsetz called ‘Misconceptions of Power’.)

Ultimately, in the absence of such an “inter-esse”, the economic notion of “competition” cannot form the basis of the “self-regulating market” and its “free and equal exchange”, which are therefore unmasked as specific antagonistic historical institutions. In Nietzsche’s words, these concepts are analogous to “a snake that bites its own tail” – in our own words, they are “autophagous”, they “eat themselves” – because either we say that they are “purposeless” (abulic) in that they have “no aim or goal” outside themselves (!), in which case they cease to be “com-petitive” (Latin for “seeking the same things”), or else we say that the goal of competition is… “to destroy the competition” (!), in which case it is an “aporetic” notion, one that cannot sub-sist practically as “self-regulationg”! Here is Nietzsche’s identical conclusion by analogy with the pursuit of “art for art’s sake”:

24. L’Art pour l’art…When the end of the ethical preacher and improver of mankind has been excluded from art, it does not at all follow that art in itself is without an end, without a goal, meaningless ; in short, L’ art pour L’ art is a serpent which bites its own tail. ‘No end at all, rather than a moral end!’ - thus speaks pure passion. A psychologist [Nietzsche means himself as the analyst examining art as an activity], on the other hand, asks, what does all art do? does it not praise? does it not glorify? does it not select? does it not bring into prominence? In each of these cases it strengthens or weakens certain valuations [Werthschatzungen] ... (ToI)

Wenn man den Zweck des Moralpredigens und Menschen-Verbesserns von der Kunst ausgeschlossen hat, so folgt daraus noch lange nicht, dass die Kunst überhaupt zwecklos, ziellos, sinnlos, kurz l'art pour l'art — ein Wurm, der sich in den Schwanz beisst — ist. „Lieber gar keinen Zweck als einen moralischen Zweck!” — so redet die blosse Leidenschaft. Ein Psycholog fragt dagegen: was thut alle Kunst? lobt sie nicht? verherrlicht sie nicht? wählt sie nicht aus? zieht sie nicht hervor? Mit dem Allen stärkt oder schwächt sie gewisse Werthschätzungen ...

An activity that does not make explicit its “goal” (Ziel) and therefore its “premises” will inexorably be without an “end” – without “target”, aim or purpose (Zweck) – Nietzsche incorrectly speaks of “meaning” in this quotation. Indeed, the very fact that human beings “engage” in the “activity” of exchange and barter, sale and purchase, and “promising” (through contracts or obligations or bonds) – that fact itself (!) shows that there is a “need-necessity” in the “exchange relationship” itself – because there would be no “exchange or barter” without a “need-necessity” behind it as a “motive”, as an “impulse”, a “drive” – an “instinct”! It cannot be said therefore that “exchange and barter” can ever be “free”. The “freedom of the will” is brought into question ipso facto – by the very deed!

Remember that Adam Smith attributed the division of labour to the “act” or “propensity” of human beings to exchange, truck and barter. Similarly, Nietzsche begins his entire analysis of “Value” – indeed, of the entire “onto-geny of thought”! - from this primordial “exchange and barter”. Like Smith, he treats the division of labour as the product of “individual actions”, even though unlike Smith he does not believe that these “individual actions” are “free”. Both Nietzsche’s as well as Smith’s analyses of “exchange and barter” are founded entirely on an “ontogenetic” conception of human being – one that excludes ab initio and absolutely the “phylogenetic” notion of “species-conscious being-human”! For Adam Smith, it is the natural human tendency to truck, barter and exchange that induces “specialization” and the division of labour (see the famous Ch.2 of The Wealth of Nations).

But Smith misses the obvious objection that no “truck, barter, and exchange” is possible without a pre-existing “specialization”, that is to say, without thedivision of social labour”! In other words, and contra Adam Smith, not only is the activity of “exchange and barter” not “free”, as Nietzsche correctly perceives; not only is it not “equal”, as Nietzsche also explains; but above all this lack of “freedom and equality” in human interaction arises from the “phylogenetic inter-dependence of human beings” – from our existence as “species-conscious being-human”!

Little wonder then that equilibrium analysis with its notion of “pure competition” excludes any and all activities that come under the definition of “competition” (Hayek in Individualism & Economic Order, discussed by Demsetz in “Competition”) so that, like Kant’s thoughts without  human intuitive senses, it remains an “empty category”. Empty and blind - in fact purposeless, because given that self-interested individuals are not at equilibrium, it is impossible for them to know how to price their endowments for exchange. (Purposeless but not meaningless, pace Myrdal, because the very “mathesis” of reality that equilibrium analysis carries out is itself a “strategy” that allows its practitioners “to act effectively” on that reality. This fundamental insight is enucleated in our Pure Logic of Choice and in our Catallaxia.) This is so because there are no “rules” to agree on the “valuation” of these endowments, which can be valued only if their “prices” are already known! - The classic circulus vitiosus.

Little wonder also that equilibrium analysis cannot admit of “time” – because “everything” must happen “at once”! (See Hayek, ‘I&EO’, on this.) Expressed in terms of “equilibrium analysis”, market participants would need to have all the information available at equilibrium for them to fix their prices accordingly. – Which is why Hayek correctly points out that Walrasian equilibrium can really apply only to one individual, not to a “market” case with separate individuals in competition with one another! Because the “self-interests” of these theoretically separate individuals co-incide by definition, and therefore they are axiomatically already at equilibrium (!), which defeats the purpose of the whole analysis – namely, to determine the “content” of prices not as simple exchange-ratios or relative prices but rather in terms of “what makes the goods commensurable” and therefore what the basis and purpose, the “value” of the exchange is! As with Robbins, the bourgeois “hypostatization” of economic relations ends up “devouring” their “materiality”, their corpus, their “practical object and substance”, literally, their “subject-matter”:

“For it is not the materiality of even material means of gratification which gives them their status as economic goods; it is their relation to valuations. It is their form rather than their substance which is significant,” (Essay, p.21)

For Nietzsche, this “circularity” of “science”, this “auto-phagy” or “anti-nomy”, this loss of “sense” as direction [Richtung] and purpose [Ziel, Zweck], of “will” (a-bulia) – indeed, of “materiality”, and therefore their “hypostatization” - not in a “voluntaristic”, “decisionist” or “arbitrary”, but in a “physiological” sense as Will to Power - , is the ultimate meaning of scientific “Nihilism”! The very “pursuit of truth”, the “search for objectivity”, for “value-neutrality”, undermines the very “(interested!) motive” or “impulse” of the quest! What Nietzsche does here, his greatest service even to us, is to un-mask the “metaphysics of utility”, the fact that marginal utility theory is itself pure metaphysics, just as much as the labour theory of value that it was supposed to replace!

In a study we are preparing (The Pure Logic of Choice), where we examine these matters systematically, we discuss how Wittgenstein likened the “impossibility” of this concept to that of “moving” a vector (a car, a wheel, or simply walking) on a perfectly smooth surface: it cannot be done without “friction” (in Philosophical Investigations, par.107). And the “friction”, far from being “exogenous” or “accidental” or “adventitious” to the analysis, constitutes the very “meaning and purpose” of “competition”: the “friction”, that is to say, the conflict of interests, the antagonism of values, the clash of impulses or instincts is what we need to study! Frank Hahn, quoted in T. Lawson, ‘The (Confused) State of Equilibrium Analysis’, concedes that equilibrium analysis involves the setting of conditions that can yield a given outcome, namely, the existence of equilibrium: in other words, the “game” is “rigged” from the outset. But the essential point, the one that Lawson fails completely to appreciate despite his honest efforts, is that, as we shall soon see in Part Two extrapolating Nietzsche’s reflections on logic to Wittgenstein’s on language, the outcome of general equilibrium analysis is “inexorable”! (For a full discussion of these themes, see also our Catallaxia study.)

Because “self-interest” can never be the foundation of “equal exchange”, of commutative justice in the “self-regulating market”, Nietzsche genially re-defines “exchange”, “sale and purchase” or “barter” as the “settlement” of “equal powers”, as an unresolved and irresoluble “antagonism of values”, a “clash of impulses, instincts or wills’ to which only a “temporary truce” is applicable in an unending struggle for supremacy, for “overpowering” and “domination”. For him, only this “friction”, this ongoing, incessant “conflict” can give “meaning” (we would say “purpose”) to the act of exchange, sale and purchase, or barter - never as a “final extinguishment of the “need-necessity” in the act of “exchange”, but only as a “trans-formation” (Veranderung) of these “Antagonistic Values” or “impulses”, this continuous “ordering of rank” (Rangordnung) of values! Once again, as we quoted above, the “temporary”, “precarious”, “critical” result (Folge) is

a sort of justice and agreement: for in virtue of the justice and agreement all those impulses [Triebe, drives] can maintain themselves in existence and retain their mutual rights.

95 Morality of the mature individual. Until now man has taken the true sign of a moral act to be its impersonal nature; and it has been shown that in the beginning all impersonal acts were praised and distinguished in respect to the common good [allgemeinen Nutzen, utility]. Might not a significant transformation of these views be at hand, now when we see with ever greater clarity that precisely in the most personal respect [personliche Rucksicht, personal hindsight] the common good [Nutzen fur die Allgemeine] is also greatest; so that now it is precisely the strictly personal action [streng personliche Handeln] which corresponds to the current concept of morality (as a common profit [allgemeinen Nutzlichkeit])? To make a whole person of oneself and keep in mind that person's greatest good [hochstes Wohl] in everything one does--this takes us further than any pitying impulses [mitleidigen Regungen] and actions for the sake of others. To be sure, we all still suffer from too slight a regard for our own personal need; it has been poorly developed. Let us admit that our mind has instead been forcibly diverted from it and offered in sacrifice to the state, to science, to the needy, as if it were something bad which had to be sacrificed. Now too we wish to work for our fellow men, but only insofar as we find our own highest advantage [Vorteil, share] in this work [Arbeit]; no more, no less. It depends only on what one understands by his advantage. The immature, undeveloped, crude individual will also understand it most crudely. (HATH)

95. Moral des reifen Individuums. — Man hat bisher als das eigentliche Kennzeichen der moralischen Handlung das Unpersönliche angesehen; und es ist nachgewiesen, dass zu Anfang die Rücksicht auf den allgemeinen Nutzen es war, derentwegen man alle unpersönlichen Handlungen lobte und auszeichnete. Sollte nicht eine bedeutende Umwandelung dieser Ansichten bevorstehen, jetzt wo immer besser eingesehen wird, dass gerade in der möglichst persönlichen Rücksicht auch der Nutzen für das Allgemeine am größten ist: so dass gerade das streng persönliche Handeln dem jetzigen Begriff der Moralität (als einer allgemeinen Nützlichkeit) entspricht? Aus sich eine ganze Person machen und in Allem, was man tut, deren höchstes Wohl in's Auge fassen — das bringt weiter, als jene mitleidigen Regungen und Handlungen zu Gunsten Anderer. Wir Alle leiden freilich noch immer an der allzugeringen Beachtung des Persönlichen an uns, es ist schlecht ausgebildet, — gestehen wir es uns ein: man hat vielmehr unsern Sinn gewaltsam von ihm abgezogen und dem Staate, der Wissenschaft, dem Hilfebedürftigen zum Opfer angeboten, wie als ob es das Schlechte wäre, das geopfert werden müsste. Auch jetzt wollen wir für unsere Mitmenschen arbeiten, aber nur so weit, als wir unsern eigenen höchsten Vorteil in dieser Arbeit finden, nicht mehr, nicht weniger. Es kommt nur darauf an, was man als seinen Vorteil versteht; gerade das unreife, unentwickelte, rohe Individuum wird ihn auch am rohesten verstehen.

As we have emphasised, no “Automatik”, no “general harmony”, no “co-incidence” of “personal action” or “self-interest” and “common profit” is possible for Nietzsche. Yet he is advocating the supremacy or paramountcy of “the person’s greatest good… [which has been] forcibly diverted… and offered in sacrifice to the state, to science, to the needy”. It is not a utilitarian summum bonum that he seeks, then, but rather a system of “strictly personal action which corresponds to the current concept of morality (as a common profit)”. Nowhere does he discuss or explain how “the person’s greatest good” can simultaneously lead to “a common profit”. Nietzsche here as in the discussion of “justice and equality” seems to believe that self-assertion and self-interest may still lead to each person’s “own highest advantage in this work”, so long as this is not understood “most crudely” as it is bound to be by “the immature, undeveloped, crude individual”. There is the seed here of the “ideal” that Nietzsche will seek to articulate later: - the yearning for an “unanswerable state of blamelessness” or “irresponsible state of innocence”. Again, such “spontaneous order” or even “settlement” (Ausgleich) could never be more than a chimaera.

In order to go “beyond good and evil”, Nietzsche has to posit history, not as a “pro-gress”, an evolving “inter-esse”, but rather as a “physis” as manifest “nature” (Wesen als Werden) in-comprehensible to human beings who are “within life”, “in the world”, intra-mundane, and therefore incapable of “valuing” life and the world. And yet, for humans to be aware of this need-necessity of physis and to accept and affirm the need-necessity of this awareness, it is evident that history must either remain “meaningless” or else “repeat itself indefinitely”, “ana-logically”. Even in a purely “pragmatical” sense, it can be argued that Nietzsche is wrong “in the e-vent” (!), in the historical “e-venience” or “de-velop-ment” or “e-volution” of material forms of inter-dependence through “social labour” – be it “mechanical” (“soul-less”, “dis-enchanted” Rationalisierung) or “organic” (communal solidarity or sym-biosis). (We are reversing here, of course, the Durkheimian terminology of “solidarity” in the division of social labour.)

And although he is able to show the “historicity” of human traits and connotations both physical and mental, he is never quite equal to the task of focusing on their “phylogenesis” as opposed to “ontogenesis”. His historical remarks refer almost exclusively to a stage of human evolution that belongs clearly to homo sapiens and even then are restricted to the documented phase of our history (especially from pre-Socratic times).

35. Critique of the morality of decadence. -- An "altruistic" morality--a morality in which self-interest wilts away--remains a bad sign [Anzeichen, indication] under all circumstances. This is true of individuals; it is particularly true of nations. The best is lacking when self-interest begins to be lacking. Instinctively to choose what is harmful for oneself, to feel attracted by "disinterested" motives, that is virtually the formula of decadence. "Not to seek one's own advantage"--that is merely the moral fig leaf for quite a different, namely, a physiological, state of affairs: "I no longer know how to find my own advantage." Disintegration [Disgregation] of the instincts! Man is finished when he becomes altruistic. Instead of saying naively, "I am no longer worth anything," the moral lie in the mouth of the decadent says, "Nothing is worth anything, life is not worth anything." Such a judgment always remains very dangerous, it is contagious: throughout the morbid soil of society it soon proliferates into a tropical vegetation of concepts--now as a religion (Christianity), now as a philosophy (Schopenhauerism). Sometimes the poisonous vegetation which has grown out of such decomposition poisons life itself for millennia with its fumes.

35. Kritik der Décadence-Moral. — Eine „altruistische” Moral, eine Moral, bei der die Selbstsucht verkümmert —, bleibt unter allen Umständen ein schlechtes Anzeichen. Dies gilt vom Einzelnen, dies gilt namentlich von Völkern. Es fehlt am Besten, wenn es an der Selbstsucht zu fehlen beginnt. Instinktiv das Sich-Schädliche wählen, Gelockt-werden durch „uninteressirte” Motive giebt beinahe die Formel ab für décadence. „Nicht seinen Nutzen suchen” — das ist bloss das moralische Feigenblatt für eine ganz andere, nämlich physiologische Thatsächlichkeit: „ich weiss meinen Nutzen nicht mehr zu finden” ... Disgregation der Instinkte! — Es ist zu Ende mit ihm, wenn der Mensch altruistisch wird. — Statt naiv zu sagen, „ich bin nichts mehr werth,” sagt die Moral Lüge im Munde des décadent: „Nichts ist etwas werth, — das Leben ist nichts werth” ... Ein solches Urtheil bleibt zuletzt eine grosse Gefahr, es wirkt ansteckend, — auf dem ganzen morbiden Boden der Gesellschaft wuchert es bald zu tropischer Begriffs-Vegetation empor, bald als Religion (Christenthum), bald als Philosophie (Schopenhauerei). Unter Umständen vergiftet eine solche aus Fäulniss gewachsene Giftbaum-Vegetation mit ihrem Dunste weithin, auf Jahrtausende hin das Leben ...

The time fast approaches when we must ask what this “actual man” is: what can be the object of the “gaya scienza”? For does not the obliteration of “trans-valuation of values” leave a vacuum, moral as well as material? What Zivilisation do we choose to have? For after all, living is “necessarily” evaluating! Or is it that we do not have a “choice”? Nietzsche seems to fall back on a curious mixture of “naturalism” and “spontaneity” (spontaneous order?) in the concluding aphorism of “First and Last Thing”:

34 Some reassurance. But does not our philosophy then turn into tragedy? Does not truth become an enemy of life, an enemy of what is better? A question seems to weigh down our tongues, and yet not want to be uttered: whether one is capable of consciously remaining in untruth, or, if one had to do so, whether death would not be preferable? For there is no "ought" anymore. Morality to the extent that it was an "ought" has been destroyed by our way of reflection, every bit as much as religion. Knowledge can allow only pleasure and unpleasure, benefit and harm, as motives. But how will these motives come to terms with the feeling for truth? These motives, too, have to do with errors (to the extent that inclination and disinclination, and their very unfair measurements, essentially determine, as we have said, our pleasure and unpleasure). All human life is sunk deep in untruth; the individual cannot pull it out of this well without growing profoundly annoyed with his entire past, without finding his present motives (like honor) senseless, and without opposing scorn and disdain to the passions that urge one on to the future and to the happiness in it. If this is true, is there only one way of thought left, with despair as a personal end and a philosophy of destruction as a theoretical end?

I believe that a man's temperament determines the aftereffect of knowledge; although the aftereffect described above is possible in some natures, I could just as well imagine a different one, which would give rise to a life much more simple, more free of affects than the present one. The old motives of intense desire would still be strong at first, due to old, inherited habit, but they would gradually grow weaker under the influence of cleansing knowledge. Finally one would live among men and with oneself as in nature, without praise, reproaches, overzealousness, delighting in many things as in a spectacle that one formerly had only to fear. One would be free of appearance 32 and would no longer feel the goading thought that one was not simply nature, or that one was more than nature. (HATH)

A spectacle that one formerly had to fear”: Nietzsche seems to distinguish between institutions that allow the affirmation of life and those that seek to repress it. He even seems to be tempted by “enlightened self-interest” at times, for providing the “spontaneity” he seeks: “to be free of appearance”, “no longer [to] feel the goading thought that one was not simply nature, or that one was more than nature”. Nietzsche is almost “physiologically” impelled to read “physis” or “nature” as a “destiny” of conflict and strife, as “Will to Power” - not over life itself, but “at one” with life, in mimetic unison and harmony with it. Yet it is his “perspectivism” and “naturalism” that become problematic – engender a nostalgic paralysis, even nihilism – because it is impossible to evaluate “life” out of “need-necessity” or “fate”, and then “to be conscious or aware” of such need-necessity – and then again believe in the necessity of such evaluation or even will it! Whilst Nietzsche may well refrain from evaluating “life” in the past, as it has transpired historically, he must then decide whether to accept the present as it is – and therefore “preserve” it as “substance”, as permanence, against the “becoming” he exalts -, or else to trans-form it by pro-jecting (dia-noia) its “ad-vantageous” elements into the future.

There are times when he clearly wishes he did not have to make a “choice” – and is tempted, cosmically, to affirm the “cyclical” returning of the Dyonisian mysteries to which all life is bound and, socially, to accept the “automaticity”, the “self-regulation” of the “market mechanism”.

3… This tremendous inward tension then discharged itself in terrible and ruthless hostility to the outside world: the city-states tore each other to pieces so that the citizens of each might find peace from themselves. One needed to be strong: danger was near, it lurked everywhere. The magnificent physical suppleness, the audacious realism and immoralism which distinguished the Hellene constituted a need, not "nature." It only resulted, it was not there from the start. And with festivals and the arts they also aimed at nothing other than to feel on top, to show themselves on top. These are means of glorifying oneself, and in certain cases, of inspiring fear of oneself…
For it is only in the Dionysian mysteries, in the psychology of the Dionysian state, that the basic fact of the Hellenic instinct finds expression - its "will to life." What was it that the Hellene guaranteed himself by means of these mysteries? Eternal life, the eternal return of life, the future promised and hallowed in the past; the triumphant Yes to life beyond all death and change; true life as the overall continuation of life through procreation, through the mysteries of sexuality. (ToI)