Thursday, 10 May 2018

From List to Weber: Economics and Politics

Pg.109: In order duly to estimate the influence which liberty of thought and conscience has on the productive forces of nations, we need only read the history of England and then that of Spain. The publicity of the administration of justice, trial by jury, parliamentary legislation, public control of State administration, self-administration of the commonalties and municipalities, liberty of the press, liberty of association for useful purposes, impart to the citizens of constitutional states, as also to their public functionaries, a degree of energy and [110] power which can hardly be produced by other means. We can scarcely conceive of any law or any public legal decision which would not exercise a greater or smaller influence on the increase or decrease of the productive power of the nation.

With admirable prescience, Friedrich List foreshadows a most incisive and valid critique of the labour theory of value first expounded by British political economy (Smith, Ricardo, Mill) soon to be perfected by Marx, and also - as a corollary of that critique - he advances an early version of the neoclassical value theory (Goss, Menger, Jevons) that will rise out of the German negatives Denken (Schopenhauer, Kierkegaard, Nietzsche, Weber). List sees quite correctly that capitalism is not about wealth but rather about “the ability to produce wealth”. And he sees also that capitalism is not about “economics” but rather about social and political institutions. In this precise regard, List is contradicting what was to become one of Marxism’s main items of faith. Lenin’s maxim that “politics is a concentrate of economics” lends itself to two possible interpretations - one false and the other quite plausible. The first interpretation sees this maxim in light of Marx’s theory of human historical social development as arising from “the law of value” whereby human history is the tale of development of social relations of production that constitute an “economic base”, a solid rock of reality upon which is erected a “political superstructure” of ideological constructs from religion to culture and the State. In this optic, the history of human society is one of conflict over the distribution of social wealth which, in turn, gives rise to different modes of production. These conflicts represent diverse forms of social antagonism that will ultimately result in the attainment of a communist republic that will see spontaneous social harmony replace the violence of the State as the cement of social life. The compression of socially necessary labour time for the reproduction of society as a result of the antagonism between capital and workers will ultimately ensure that private property and the State, which ensure the violent separation of workers from the means of production become “a miserable basis” for social existence such that they are no longer legitimate and sustainable. 

Central to this dialectical - quasi eschatological - interpretation of human history is the notion that the amount of labour time socially necessary for the reproduction of society is quantifiable for a given state of technology and, therefore, that the social needs of a specific social formation are also materially quantifiable. In this Marxian perspective, it is clear that given that social needs and the labour time socially necessary to satisfy them are both quantifiable entities, then the political superstructure becomes a function of the distribution of the available social surplus and therefore clearly deducible if not calculable from the economic base, that is to say, from “the law of value” - which is why politics cannot but be... “a concentrate of economics”.

Apart from being a non sequitur (why should political institutions be determined by the production of social wealth?), what is false in this Marxist reading of human social history is that not only are human needs unquantifiable, and therefore it is impossible to determine what labour time is “socially necessary” for the reproduction of society - and not only is “labour time” itself a concept impossible to define with any clarity - but also and above all the very definition and identification of what are “social needs” is an exquisitely political question that makes the reduction of politics to economics wholly devoid of sense, let alone truth!

List’s attack on labour theory of value is entirely valid and it relies intrepidly on challenging the erroneous reduction by the political economists (British and Marxist) of all “value” to a quantifiable entity, and then again to the conflation of intellectual and manual labour or, in other words, the reduction of skilled labour to manual labour:

Pg.110: If we consider merely bodily labour as the cause of wealth, how can we then explain why modern nations are incomparably richer, more populous, more powerful, and prosperous than the nations of ancient times? The ancient nations employed (in proportion to the whole population) infinitely more hands, the work was much harder, each individual possessed much more land, and yet the masses were much worse fed and clothed than is the case in modern nations. In order to explain these phenomena, we must refer to the progress which has been made in the course of the last thousand years in sciences and arts, domestic and public regulations, cultivation of the mind and capabilities of production. The present state of the nations is the result of the accumulation of all discoveries, inventions, improvements, perfections, and exertions of all generations which have lived before us; they form the mental capital of the present human race, and every separate nation is productive only in the proportion in which it has known how to appropriate these attainments of former generations and to increase them by its own acquirements, in which the natural capabilities of its territory, its extent and geographical position, its population and political power, have been able to develop as completely and symmetrically as possible all sources of wealth within its boundaries, and to extend its moral, intellectual, commercial, and political influence over less advanced nations and especially over the affairs of the world.

The impossibility of reducing intellectual labour to its manual labour components is merely an expression of the utter senselessness of reducing the question of value to mere quantities (the Law of Value whereby values can be reconciled with prices). Once again, this is the precise reason why politics cannot be reduced to economics:

Pg.110: The popular school of economists would have us believe that politics and political power cannot be taken into consideration in political economy. So far as it makes only values and exchange the subjects of its investigations, this may be correct; we can define the ideas of value and capital, profit, wages, and rent; we can resolve them into their elements, and speculate on what may influence their rising or falling, &c. without thereby taking into account the political circumstances of the nation. Clearly, however, these matters appertain as much to private economy as to the economy of whole nations. We have merely to consider the history of Venice, of the Hanseatic League, of Portugal, Holland, and England, in order to perceive what reciprocal influence material wealth and political power exercise on each other.

Quite simply, the notion of “economic value” is inseparable from that of political power: the word “value” itself (from the Latin valor, strength) has obvious political and even psychological connotations. Yet there is a specificity to the sphere of economics at least to the extent that it involves what List himself describes as “the productive power of the nation” - and that is the point where the Political can be narrowed down to the Economic. For someone who must have come across neo-Kantian thought, List fails almost completely to confront the crucial issue of what, if anything, constitutes the discrimen - the distinction - between economics and politics. It is certainly true that the Political cannot be reduced to Economics. But then, we still have to tackle the very relevant question of what precisely constitutes the specificity of what we call Economics. To do that, we will turn to the work of the great sociologist Max Weber in our next post.

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