Commentary on Political Economy

Wednesday 12 August 2015

Postcard from Sicily

A land in the middle of the sea in the middle of land. In this moiety, in this medi-ation or standing in the middle, lies perhaps the true historical significance of this island, my birthplace, which was once known by the Greeks when they first settled it as Megale Hellas (Greater Greece) for its inordinate beauty and for the fertility of its soil. To this day, “if rocks could speak”, the myriad temples and theaters and castles and urban remains left by the ancient Greeks and the invaders who followed them would bear witness to the unique history of this place occupied and then relinquished by virtually all civilizations facing the Mediterranean. Mediation here stands both for negation and ultimate reconciliation – the dynamic poles of dialectics (cf. H-G Gadamer, Hegel’s Dialectic).

The history of Sicily reveals the mediation of contrasting forces. The logos of dia-lectics is the resolution (Auf-hebung) of the conflict (stasis) that is an ineradicable aspect of social life, of the polis or city-state. This “inland sea” itself – the Medi-terranean -, known as mare nostrum (our sea) by the Romans who ruled over it from coast to coast, provided the contrast between city-states and empires based on territorial domination (Sparta or even Persia) and those thriving on maritime mobility and hegemony (notably Athens and Carthage). The seemingly eternal conflict of the European polity could be broadly categorized as one between land-based nation-states devoted to agriculture and husbandry ruled almost always by landed aristocracies, and ones whose power depended on the sea and therefore on commerce, which symptomatically tended to be democracies. This alternation of land and sea is indeed a recurring geopolitical theme in the history of the Mediterrranean (cf. Carl Schmitt, Land and Sea, and M. Cacciari, Geo-Filosofia dell’ Europa.)

Both Plato and Aristotle accepted that the nature (physis) of the city was to grow and  toexpand – because they saw cities as extensions of the family household whose only purpose (telos) was to facilitate procreation. But this “growth” is more than just demographic: it is also “eco-nomic” (Greek, oikos, household); it pertains to “property” and to “wealth”. The study of the “laws” (nomoi) of the household (oikos, which later became vicus or “village” in Latin) and its wealth then became literally the central object of “eco-nomics”. Adam Smith quite perspicuously identified the object of economics even before the word was coined as “the nature and causes of the wealth of nations”. He thus laid the emphasis quite correctly on the “nature” of “wealth”, as well as on the fact that this “wealth” belongs not to “individuals” but rather to the “nation”, to the polis. It is the polis, the city-state or the nation, that “grows”, however much this growth may depend ultimately on the efforts of each of its households or individual members. “Growth” therefore cannot be seen or studied in purely quantitative terms: - because as the city or nation “grows” it undertakes a meta-morphosis, a trans-formation: this “growth” is not tumescence or inflation; it is rather “development” or ex-crescence or trans-crescence: it is never reducible to a set of quantities because these quantities encapsulate ineluctably what are unmistakably social relations that can never be reduced to mere ciphers. (See, on all this, my Schumpeter-buch.)

The “wealth” that economics seeks “to measure” can be measured numerically only in reference to its intrinsically qualitative and historical nature – because wealth is an exquisitely “political” concept that refers, once again, to the “development” of the “nation” - and not just in relation to itself but also, as a “nation among nations”, to the outside world with which it is in a conflict (polemos) similar to the one that it nurtures internally among its “households” (stasis).

External war and internal conflict are tied together (Simone Weil, Cahiers) – they are inextricably linked, inextricably intertwined. It is the recognition of this logos, of this “dia-lectic” – this alternation of land and sea, this medi-ation of Medi-terranean historical origins – that makes possible the peaceful co-existence or “harmony” (homo-noia, agreement) of all the “members” of the city, of the nation, and then of nations amongst themselves. – Because “harmony” cannot exist without the possibility of dis-harmony, of stasis, of potential civil war. Without such recognition, the only outcome is war (polemos) – but a war not just between nations or cities: more frightfully it is also a civil war (stasis) that will affect the very internal balance (metabole) of the city or nation itself, upsetting its ever-changing internal dynamics that form the essential core of the definition of “wealth” and of its “development”, and therefore also of its trans-crescence and meta-morphosis.

The city-state or modern nation must be seen not as an agglomerate of atomistic individuals but rather as an organism whose history displays its “nature” understood not in its “static” sense as in the Latin natura but rather in its dynamic evolutionary dimension as physis. Understood in this sense, the “nature” of a polity or “nation”, let alone its “wealth”, cannot be grasped without peering into its “history”, its past. Indeed, the notion of wealth cannot be separated from that of what constitutes a nation or polity. (In this regard, the German Historical School of Roscher and Knies was truer to economics proper than its antagonist, the Austrian School of Menger and Mises.)

It is thus that Western history, from its Herodotean origins in pre-Socratic Greece, is fundamentally an inquiry (historia) into the logos of the polity. Right from its beginning, the pro-phetic aim of history – to advise on the future – has a truly Epimenidean root (arche): it is to prophesy or guide the future by means of the past; history is, as it were, “a prophecy of the past”; it is the past as prophecy, autopsy and diagnosis as prognosis, remembrance and hindsight as reflection and foresight – Epimetheus correcting his brother Prometheus. As Aristotle puts it in the Retorica,

Right from its beginnings, the purpose of historia and of its logos was to preserve the internal “harmony” (homo-noia or “agreement”) of the city even as its incessant development and metamorphosis (metabole) renew its internal conflict (stasis). Every agon (striving), every strife or conflict, must entail a search for harmony – just as every union, every inter esse, must entail also a multiplicity of inter-ests. Failure to recognize and take conscience of this dialectical logos – forgetfulness of the past - amounts to hubris. And the most obvious metaphorical outcome of historical reflection, the most potent lesson we derive from history to help us combat hubris (superbia in Latin – from super, over, as in “going overboard”, exceeding every limit of reason) is that of irony. It is irony, the ability to recognize the absurdity of “repeating past historical mistakes” by reversing our historical roles – conversely put, it is the ability to laugh at our present conduct by comparing it to our past errors - that is the indispensable ingredient for irene’, the Greek word for “peace”. Irony and irene’ are etymologically and politically related.

The affinity of Sicily with Greece is unmistakable, their proximity almost visible as I gaze eastwards at the hazy horizon of the Ionian Sea from the earliest Greek settlement on this island at Giardini Naxos in Taormina, which dates back to 800 B.C. So it stands to reason that the recent financial vicissitudes faced by our Greek neighbours should touch us closely – even because they are replicated almost identically in the Italian peninsula and on this island as well. It is this “historical” essence of “economics” – the necessary nexus between the production of goods and services and social relations - that the ordo-liberalists in Germany have forgotten completely. Much of the execrable hubris exhibited by German negotiators with Greece recently consists precisely in their forgetting that there are no rigid cut-and-dried, precise and inflexible “scientific laws” of economics but that instead the nomos of eco-nomics refers to the “rules of the household” which belong to a fluid and complex social reality. Behind the German demand that Greece respect the commercial pact and the Greek request that the pact (pactum) be varied so as to preserve peace (pax) – behind this stand-off (stasis again) there lies a fundamental difference in the ethos of the two sides – in their approach to what constitutes “wealth”.

Mercantile powers believe in exchange: that is why they tend to be also maritime powers. Here maritime rhymes with mercantile and democratic, because maritime and mercantile powers tend to have a very fluid political structure based on the social mobility and physical mobility of their citizens; whereas land-based powers tend to rely on fixed social relations through rigid political hierarchies that mirror the division of social labour. And because mercantile powers believe in the equivalence of exchanges, in their lack of “change” or difference, they are indifferent to the social repercussions of exchange; they are insensitive to the consequences of trade, to the “changes” operated by commercial exchange! – Just like the Athenians were when they acquired hegemony over the Mediterranean by means of their mercantile exchanges that went hand in hand with the expansion of their maritime power.

There is an ironic reversal of roles in the confrontation between Germans and Greeks from the infamous dialogue between Athenians and Melians described by Thucydides in The Peloponnesian Wars: for, this time it is no longer the Athenians who represent the hegemonic maritime might against the Melians but it is the Germans who seek to impose their mercantile might on present-day Athenians. Once again, it is the German inability to learn from past mistakes and to laugh at themselves – their lack of the sense of irony – that can lead to tragic denouements – even to wars foreign and domestic. The irony is that the Germans do not see the conspicuous historical irony in this reversal of roles! And they do not see it because they are so thoroughly entranced by their “science of choice” - their science of market exchange - that they cannot see that it is not a “science” at all because market exchange does not deal with quantities but with qualities, with social relations. They fail to see that market exchange involves both the commutative justice of exchange and above all else the distributive justice of production. Germans believe “the laws of market economics” to be as sacrosanct as the Gospels – forgetting that the Gospels lack that sense of irony indispensable to the avoidance of hubris. (It is a regrettable fact that in the Gospels Jesus never laughs, least of all at himself!)

The German Ordo-liberalists who see the market – what they think is the exchange of equivalents! - as the only possible foundation of a stable social order and therefore insist on their pound of flesh because “a deal is a deal” are the foolish paragons of Oscar Wilde’s cynic who knows the price of everything and the value of nothing! Here it is the Doppelcharakter of “value” as price and Value as the content of human experience that the Germans wholly fail to grasp. Whence comes their lack of irony; and therefore the impossibility of irene’, of peace in their relationship with Medi-terranean people! Our Graeco-Roman culture that has been inherited and assimilated in the highest degree even by our Teutonic relatives teaches us that this German hubris must inevitably end in tragedy – they will get their come-uppance, they will meet their nemesis.

It is now the Germans who believe that pacta sunt servanda (“a deal is a deal”) and therefore immutable – as if every agreement implied the exchange of equivalents among equals; as if agreements were the product not of a “meeting of minds” but rather of incontrovertible natural forces that can be determined “scientifically” – like “market forces”. This is at once the one-sided logos and the hubris of capitalism and of its “science”, economics. Yet, if that were so, what use would be an ex-change that did not engender an immediate “change” in the relationship between the trading parties? Like all mercantile regimes, the Germans believe in the equivalence of exchanges and in their commutative fungibility – that is, in the fact that one exchange equals another. But, again, this cannot be so because each exchange always involves use values and not exchange value or money. If all exchanges were merely a matter of “exchanging money”, then there could never be any real trade because the exchange of a kilogram of bread worth one dollar for a litre of milk also worth one dollar – this exchange of equivalents would mean that I exchange one dollar for one dollar, which reduces the exchange to an absurdity! (Again, there is no “change” in the ex-change of money, but it is the exchange of money that fools us into believing that in trade we are exchanging equivalents!)

In their mercantilistic ex(h)uberance – hubris again -, Germans have forgotten that chronic trade surpluses are unsustainable simply because their trade partners by definition will never be able to replace their current deficits with compensating surpluses with which to repay their current debts. The internecine European struggle between Germans and Mediterranenans has taken a novel twist in that it is no longer motivated by “scientific” arguments but has reached the stage where it has become “personal”. There is more than the right of reason in the vehemence with which German politicians and bourgeoisie have involved their people in the attack on Greece: there is also a conspicuous element of ressentiment. (Nietzsche, perhaps inspired by Schleiermacher who first used the term sociologically, had a lot to say on this.)

The notion of resentment, of course, has a very negative content: it is envy and jealousy coupled with hatred of other people who possess something we do not have. The German polity viscerally resents the sunny disposition of Mediterranean Hellenistic culture: it abhors it with a passion only too thinly disguised by learned admiration. The German bourgeoisie, right from its origins in the Protestant work ethic, has always resented every ethos that stands in the way of the capitalist accumulation of wealth. Capitalism is the civilization of alienated labour imposed on workers by employers. It is not the worker who “gives work” to the employer: it is rather the employer (Arbeit-geber, “work-giver” or employer in German) who “gives work” to the employed (Arbeit-nehmer, “work-taker”).

What stands at the centre of capitalist accumulation, its essence, is the command over the living labour of others, the transformation of living labour into alienated labour to the point where neither the exploited workers nor their exploitative employers understand the resentful negativity of their pursuit of wealth. Here is Lukacs:

The bourgeois way of life, when it is like this,
really consumes a man's life, because life should be its very opposite:
splendour and brilliance, the rejection of all bonds, a drunken,
orgiastic triumphal dance of the soul in the ever-changing grove of
poetic moods. This bourgeois way of life is the whip that drives the
life-denying man to work without cease. The bourgeois way of life is
merely a mask that hides the bitter, useless pain of a failed and
ruined life, the life-pain of the Romantic born too late.
This bourgeois way of life is only a mask, and like all masks it is negative:
it is only the opposite of something, it acquires meaning
solely through the energy with which it says ''No'' to something.
This bourgeois way of life signifies only a denial of everything that
is beautiful, everything that appears desirable, everything the life-instinct
longs for. This bourgeois way of life has no value whatsoever
in itself. For only the works which it brings forth confer
value upon a life lived within such a framework and in such a form. (G. Lukacs, Soul and Form, p.56.)

Of course, few have penetrated the Doppelcharakter of “the bourgeois way of life” – its profound, deep-seated irrationality behind the veneer of formal rationality - better than the great sociologist who first gave a name to the Protestant work ethic:

Rationalism is a historical concept which covers a whole world of different things. It will be our task to find out whose intellectual child the particular concrete form of rational thought was, from which the idea of a calling and the devotion to labour in the calling has grown, which is, as we have seen, so irrational from the standpoint of purely eudaemonistic self-interest, but which has been and still is one of the most characteristic elements of our capitalistic culture. We are here particularly interested in the origin of precisely the irrational element which lies in this, as in every conception of a calling.
(Max Weber, Vorbermerkung, pp.75-8).

Enjoy your holidays!

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