Tuesday, 3 November 2020

Part V - TOTALITARIAN ECONOMICS - From Autarky to Polemos

For those who doubt the usefulness of theory in the analysis of reality, the current developments in the political and economic orientation of the Chinese Dictatorship ought to serve as a salutary corrective. The premises of the Chinese Dictatorship are those of a "totalitarian economy", which is what we are examining here. We have shown through a thorough and detailed analysis of the practico-theoretical premises of an antagonistic social economy how this becomes ungovernable except through the intervention of an external Guarantor or Sovereign - in the premises, a Totalitarian Dictatorship. Here we consider the necessary implications of such an economic system once it is forced to become "closed", either because of the need of its Party-State to preserve its rule from internal disruption, or else because - as is the case at present with the Chinese Dictatorship - its external links (trade) with open capitalistic systems are increasingly hampered and indeed bluntly cut off by the growing awareness of open capitalist economies that the Chinese Party-State remains constitutionally mercantilist externally and autarkic-imperialist in its internal military-industrial regimentation. 


 The notion of equilibrium is vital to bourgeois economics not merely because it reifies social relations of production as atomistic exchanges whose prices, albeit relative, are precisely determined – offer the Weberian exakte Kalkulation that is the essence of the bourgeois Rationalisierung -, but also because it suggests social stability and harmony, order and spontaneitypolitical tranquillity and economic sustainability. The equilibrium of bourgeois economic analysis is an ideological metaphor of the pretended stability and harmony of bourgeois capitalist politics and society! The notions of equilibrium as a “circular flow” (Schumpeter) or as “tranquillity” (J. Robinson) – both entirely similar to Marx’s own scheme of “simple reproduction or circulation” in Volume Two of Capital – are physiological metaphors that throw us back to organicist mediaeval political theory which likened the ideal of society or the State (the two were not distinguished) to the attainment of the health (Marsilius’s salus, optima dispositio) of the human body in a state of “sufficiency” (autarkia). (For the development of this “corporatist” [Latin, corpus, body] political philosophy, see O. von Gierke, The Political Theory of the Middle Age.) The notion of “tranquillity” in bourgeois thought is not confined to the social system that Neoclassical Theory seeks to theorize: it is the theory itself that becomes a source of reassurance for the bourgeoisie and its theoreticians, almost in the manner of a religious creed:


As is well known, Joseph Schumpeter was not unduly impressed with

Adam Smith’s contribution to economics; but what did impress him

(Schumpeter 1954:182) was Smith’s (1980) set of Essays on Philosophical

Subjects, and especially his ‘History of Astronomy’, in which he set forth and

illustrated his psychological theory of the emergence of science as a

consequence of the human desire for mental tranquillity. As long as objects

or events are perceived as conforming to a familiar pattern, they

fall in with the natural career of the imagination…. There is no break,

no stop, no gap, no interval. The ideas excited by so coherent a chain of

things seem, as it were, to float through the mind of their own accord,

without obliging it to exert itself or to make any effort in order to pass

from one of them to another. (F. Machlup, Methodology of Economics.)


Quite plainly implicit in the notion of equilibrium, apart from the cognate allusions to stability and harmony and health as optimal condition, is also the corollary notion of “self-sufficiency” or self-rule, of aut-arkia. Because of its lack of qualitatively and quantitatively new production and innovation, Walrasian equilibrium as a closed system is intrinsically autarkic. The concept of autarkia is derived from the very first chapter of Aristotle’s Politics where the polis (Greek for city) is described as the essence of human being as zoon politikon (political animal). The polis is autarkes because it reaches the limit of its dynamic organic and self-sufficient development at the outer border (Greek, lyra) or confines of its territorial expansion. Only within its lyra can the polis preserve its own essence, fulfil its physis and telos, retain its “soul”. Any attempt to go beyond the city limits is de-lyrium, delirious madness, in-sanity, loss of health (Latin, salus, health) – because it exposes the politeia (the citi-zens) to foreign elements and influences, to viruses and diseases that may upset and corrode or corrupt its equilibrium, its health and sanity, its optima dispositio. Here is how Marsilius of Padua draws together the disparate elements of this complex notion in the Defensor Pacis:


A city and its parts would therefore seem to be in the same relation to tranquillity as an animal and its parts is to health. We can place our trust in this inference on the basis of what everyone understands about both. For they think that health [salus] is an animal’s optimal condition [optima dispositio] according to nature [physis], and likewise that tranquillity is the optimal condition of a city established according to reason [logos, ratio].7


In Aristotle, the autarkia (self-rule) of the polity is a conceptual extension of the physis of the city which is “in accordance with reason”, with the logos. In this sense, Aristotle did not need an exogenous Guarantor of the health of the city because its “self-rule” was the very telos (the natural destiny, historical unfolding destination) of its physis (nature) which defines not just its “whole”, its totality, but also its members, its citi-zens, its “particulars”. Similarly, with Marsilius, the Defensor Pacis, the “defender of the polity’s Peace”, is the political embodiment of divine reason that supplies the Ratio et Ordo of the civitas terrena, and therefore is still dialectically connected to the interests of its individual members. Of course, the most grandiose attempt to develop a dialectical “reconciliation” (Versohnung, a politico-theological reference to the Son, Christ, returning to the Father ) of individual and society and State will come later with Hegel’s “ruse of Reason”, the Welt-weisheit (world wisdom) of the Spirit as the unfolding of the Idea. Hegel’s dialectic of individual, civil society, and eventual apotheosis of the State is important because it raises the question of the congruence of the real with the rational or, put differently, because it compels us to consider the relation between means and ends, between scientific hypothesis and ultimate values, between instrumental and substantive rationality.


The ultimate divine or essential Value or substantive rationality that we found in the Classical concept of “self-rule” which runs from Plato to Hegel – aut-arkia as auto-nomia - is missing from equilibrium analysis because its equi-librium, its “balance”, is only formally rational, and then only internally - in foro interno – because relative prices satisfy or solve its system of simultaneous equations. Externally, however, - in foro externo -, the axioms of equilibrium analysis, those of the atomicity and egoism of its market agents, are antinomic and antithetical to its internal rationality – they are irrational! This is why there is a need for the external Guarantor of Walrasian equilibrium – Walras’s auctioneer – which, as a mirror image of the irrationality of the individual agents whose systemic “rights” (ownership of endowments, perfect competition, legal exchange) it needs to enforce, is entirely extrinsic and tyrannically antithetical to the egoistic interests of the constituent market agents. The Guarantor or Sovereign of the State of equilibrium reigns over the exchange rules of the system only to the extent that he enforces the rules by stepping outside them if they are broken; but he does not make the rules because these are axiomatically postulated ab initio: they are not rules and laws with a substantive Value or telos contained in them. The Sovereign is essential to the constitution of “the state of equilibrium” understood as a civil society – a society of absolutely antagonistic atomic agents. He also represents a technical-neutral State as political society. But he is not a Creator Pacis in the Classical sense:


The problem of beginning, of course, appears first in thought
and speculation about the origin of the universe, and we know
the Hebrew solution for its perplexities - the assumption of a
Creator God who is outside his own creation in the same way as
the fabricator is outside the fabricated object. In other words,
the problem of beginning is solved through the introduction of
a beginner whose own beginnings are no longer subject to
question because he is 'from eternity to eternity'.

206 On Revolution - Arendt



Indeed, the sovereign Guarantor of Walrasian equilibrium is not even a Defensor Pacis in the classical sense. Far from defending the Peace (as in Marsilius) or fulfilling the harmony (homonoia, in Aristotle) of the system, the Guarantor enforces the internal instrumental rationality of the system not by developing the inter( homines) esse of its individual members but by dictatorially, tyrannically suppressing the egoistic interests of the market agents which would otherwise lead to chaos and stasis, to civil war. The Guarantor or Sovereign of this closed system is the legal equivalent of a State that does not represent the convergence of its members’ interests, or indeed any form of agreement or consensus between them, but is instead a “State of equilibrium” acting purely as Police.


Even in Hobbes, where the Sovereign is not divine but is a deus mortalis, he must maintain and obey the contracted Laws; if not, subjects have the right to disobey them for their self-preservation. The Sovereign reigns but he does not rule: he does not make laws; he merely enforces pre-existing, given laws.

The laws are posited at the onset of the institution of the Common-wealth. To be sure, both the positive laws of Hobbesian and equilibrium theory as well as those of the classical philosophers are based on rational values: but in Classical theory the rationality of the laws is substantivejusnaturalism - whereas in the modern bourgeois theory elaborated by Hobbes through to Neoclassical theory, the rationality is exclusively instrumentalpositivism – either convergent (Locke, Marsilius, Bodin) or divergent but ultimately contractual (Hobbes, Rousseau). The laws of classical social and political theory contain intrinsically substantive values that are created divinely (divine laws) or arise naturally and in accordance with Reason (Natural Law) and which are meant to be enforced and defended by the Sovereign. This notion of the State as “the power that contains or withholds” (St. Paul’s Catechon) the devastation of the Antichrist to protect the integrity (wholeness and health) of human society prior to the Day of Judgement is crucial to Christian eschatology. (Cf. Heidegger’s Phenomenology of Religion, C. Schmitt’s The Nomos of the Earth and, more recently, M. Cacciari’s Il Potere Che Frena [translated as The Power that Withholds].)


In complete contrast, the laws of equilibrium are reliant on Instrumental Reason, on the observance of Laws or Rules that are enforced but not created by the Sovereign. The exogenous entity that establishes equilibrium or co-ordination is the exogenous enforcer of the peace, not its defender – the guarantor of rational but still instrumental laws. The peace that is enforced is not a substantive universal Value but a negativeabsence of civil war”. This means that the rationality guaranteed and enforced by the Sovereign is purely instrumental, purely negative, it is mere Police: it is a rationality that does neither contains nor seeks a positive universal Value, moral or ethical or religious, but functions instead in a purely mechanical manner deprived of all “judgement”: it is zweckrational, not wertrational! (The ultimate theorization of this “negative thought” or negatives Denken is in Hobbes’s Leviathan and in Schopenhauer’s The World, Volume Four.) This Guarantor, as a political entity, as the State, does not make the laws inherent to the model: it simply enforces their observance – it is a mechanical enforcer of the salus publica, a deus mortalis, just like Hobbes’s Sovereign in Leviathan who is the creature of the conventum, of the contractus unionis set up to ensure the common-weal, the common interest which is the product of the metus mortis (fear of death) and the avoidance of the civil war of the state of nature - not a Defensor pacis (as in Marsilius or even in Firmer’s Patriarcha), that is, the defender or preserver of a pre-existing divine law or natural law. The laws of the State of equilibrium themselves are axiomatic: they are “given” - rational, not natural or divine; merely conventional and therefore tautological, not true! (Meinecke’s masterly study on Machiavellism [Die Idee der Staatsrason] duly insists on this opposition of Natural Law to the historicist individualism and positivism on which the raison d’etat is founded, from which it springs.)


No harmony, no Peace as a universal ethical Value, then, in the state of equilibrium: only sta-gnation and parlay-sis – the stasis of civil war. (This homologation of the Greek stasis or civil war with our “static”, absence of change, evolutionary or revolutionary, is suggestive, I think. Hannah Arendt tackles this philology of the terms in On Revolution.) The autarky of the State of equilibrium and the rapacious society that it represents is not due to any constitutional or intrinsic restraint on the part of this State and its civil society: just as the possessive, acquisitive egoism of its constituent members is ultimately limited by the egoism of other agents, so now the only limit or restraint of this autarkic nation-state from de-lyrium, from overstepping the safe boundaries of self-rule and in-dependence, is the existence of other nation-states with competing antagonistic aims. At this inter-national level, and now that the sovereign State looks to the outside of the closed system to other closed systems or nation-states in an effort to master and defuse the aggression of its own citizens, the same internal hetero-nomia, abulia and indeed a-nomia that we found in the closed system of equilibrium is repeated in terms of inter-national relations whereby the Guarantors or Sovereigns of the different systems or nation-states re-produce, re-present the same universal Eris and stasis – the conflict and antagonism – that we found between the atomic egoistic market agents of the individual system.


Correspondingly, the totalitarian dictatorship and tyranny of the closed system - of “the State of equilibrium” which acts as Police with respect to guaranteeing and enforcing the internal affairs of this State which acts now as a nation-state - must perforce act as an aggressor in the external affairs with other nation-states. This is reflected in the eventual relation of this system, now seen as a closed autarkic economy, specifically from the political analogy of it as a nation-state - to other economies and nation-states. Except that this time the internal aggression of the agents that the Sovereign, acting as Police, prevented from turning into all-out civil war, now turns its regard outward, externally to similar competing nation-states with the obvious tendency, not of stasis or civil war this time, but of all-out polemos, of total international war! 

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