Social democracy or feudalism
Yesterday, I attended a Zoominar featuring Matthew C. Klein and Brad DeLong, which was unsurprisingly excellent. The conversation was inspired by Klein’s book with Michael Pettis, Trade Wars are Class Wars, which I’ve not read yet, but hope to very soon. The conversation skewed sweeping and historical, discussing dual themes, first balance-of-payments wonkery and the challenges associated with managing international financial flows, then elite and government incentives, are better choices possible and why haven’t they been taken? Delong and Klein are more sane and sensible than I tend to be. Both pointed out, in different ways, that managing the swelling waves and yawning canyons that emerge when funds can be lent and spent across borders, and withdrawn at the drop of a hat, presents challenges even for the best placed and most well intentioned governments. Coordination problems rather than conspiracy might explain some of the ugly outcomes (fragility and inequality) these flows have been let to engender. But judging from Klein and Pettis’ title, I think they have more than a little sympathy for my less sane and sensible view that, while not choreographed as conspiracy, our failure to manage these flows and their costs has something to do with the interests of those to whom the costs are paid (incompletely, for sure, but the deadweight losses fall elsewhere).
Very Delong-ianly, the conversation ranged over a sweep of centuries rather than decades, with discussions of the historical transition from overt imperialism and strategies where colonial powers coercively outsourced demand and indebtedness to conquered peripheries, into parallel dynamics that have emerged between (notionally) independent nations today with less explicit recourse to the point of a gun. (This is a tale told in bleedingly broad watercolor brushstrokes, but it places the contemporary United States in an interesting, paradoxical position.) Things change, things stay the same, in international (trade) affairs then also perhaps in social (class) affairs. Trade wars are class wars.
This got me to thinking that if we should recognize an echo of empire in contemporary trade imbalances, should we not also recognize an echo of feudalism in contemporary class dynamics? The class wars embedded in trade wars of the past generation have provoked growing chasms of inequality (within societies inscribed by nation-state borders), along with (oh Gatsby curve) declining mobility and dynamism between classes.
Nothing has grown so stale, I think, as the argument between “capitalism” and “socialism”. It is, in the scheme of things, a quarrel between cousins, a squabble among friends. Adherents of capitalism and socialism both share a deeper enemy, traditional caste-ordered society in which ones station is fixed and determined by birth, and social relations are ordered by customary — but coercively enforced — obligations between classes. Marx, at least in my vulgar Cliff-Notes understanding of his oeuvre, predicts a progression like
Feudalism ⇒ (revolution of the bourgeoisie) ⇒ Capitalism ⇒ (contradictions of capitalism) ⇒ Socialism.
But perhaps it’s more parsimonious to imagine that, in the face of contradictions, society might revert to its most historically stable prior form, rather than inventing a new one. Maybe rather than a progression, we risk a cycle
Feudalism ⇒ (new technological possibility yields a revolutionary bourgeoisie) ⇒ Capitalism ⇒ (contradictions of capitalism yield conflict and backlash) ⇒ Feudalism (at a new technological level, but with uses controlled and further development suppressed).
During the early capitalist period, feudalism is mocked as primitive, a “dark age”. During the late capitalist period, it becomes appealing, a source of order, stability, community. The contradictions of capitalism yield social pathology, and a caste-based communitarianism offers remedy without revolution, appealing to the winners of the capitalist period. Feudalism can derive from experiments in socialism. That was the experience of Soviet communism. Feudalism can also arise from liberal capitalism. That is the precipice on which we stand right now. It is modernity itself that is at stake, this conceit of a continually dynamic society upon which the contours of power are not rigidly and durably inscribed.
Delong asked, when I made an inchoate attempt to express these reflections after the Zoominar, whether I wasn’t echoing Rosa Luxemburg’s “socialism or barbarism”. I wish I was, because that’s a pretty easy choice. One might be optimistic that the humans, like Winston Churchill’s probably apocryphal Americans, will do the right thing after exhausting all the alternatives. The choice between modernity and feudalism is actually a difficult choice, one to which there is not a universally agreed better answer. Lots of conservatisms are tacit calls for feudalism as the practical grounding of an ordered community. If you call it “feudalism” it has few defenders, but by other names it is an ascendant creed. Over the past few years, in the United States, it has become fashionable among modernists — liberal capitalists and left-ish socialists both — to use the term “fascism”. At least in part, this can be understood as a desperate attempt to blunt the appeal of feudalism by tarnishing it with its most garishly malignant strain. But the appeal of feudalism, along with the social forces that are drawing us towards it, is not a messaging problem.
For a while, in the West, we thought we had proved Marx wrong. We had experienced contradictions of capitalism, but rather than succumbing to revolution, we coordinated via democratic states to work towards reasonably just, reasonably stable, still dynamic, hybrids of capitalist forces and socialist solidarity. Within the modernist camp, there are lots of capitalists and lots of socialists who consider a social-democratic hybrid not viable, inherently unstable. After all, if social democracy was sustainable, why did it prove vulnerable to the neoliberal turn that destroyed it? Why have we “retrenched” so far from the great societies we were building?
However, one historically contingent datapoint constitutes pretty thin grounds to discredit a whole class of social experiments — by far the most successful of modernity’s social experiments, while it lasted. Despite tremendous correlative forces that move “the West” together, despite decades of pressure towards a Washington consensus, social democracy survives and thrives in Scandinavia in a form stronger than anything that ever took hold in the United States. Social democracy is certainly no more discredited than capitalism (which has now failed spectacularly at least twice), or socialism (to which some responsibility for the catastrophes of Soviet communism and Maoism must be ascribed). Perhaps there are better capitalisms or better socialisms that we have not tried. And perhaps there are better hybrids, better social democracies. Rather than thinking of social democracy as a point between, a detente or armistice of two implacably opposed systems, maybe it’s best to think of it as a union, a full surface at whose opposing edges sit “pure” capitalisms or socialisms in their many varieties, between which lies a field of points that draw in different ways and degrees from both. That surface is a map of modernity, and its undiscovered best sits more likely in the interior than at an edge.
The choice before us, then, is not capitalism or socialism, not socialism or barbarism, but social democracy or feudalism.
(Or perhaps there are syntheses there, too. Perhaps China is an emerging example of a country neither modern nor feudal, but a hybrid, with social democracy and feudalism together proving adaptive if not quite appealing. As a positive matter, it remains to be seen how durably the contradictions of such a hybrid can be assuaged. As a normative matter, I am ideological. I’d rather explore the full space of social democracy before making any kind of peace with a journey, however partial, towards legitimating permanent hierarchy and caste warily enforced by deployment of coercive violence against internal threats.)
Update History:
- 15-Nov-2020, 12:35 p.m. EDT: “…maybe it’s best to think of it as a union, a full surface at whose opposing edges sit “pure”
communismscapitalisms or socialisms…” Thank you commenter Ivan!
Is there a recording of that zoominar anywhere in cyberspace?
November 14th, 2020 at 5:05 pm PST
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“…at whose opposing edges sit “pure” communisms or socialisms…” should end “capitalisms or socialisms”, or maybe I’m misunderstanding.
November 14th, 2020 at 10:34 pm PST
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Interesting. I’m not convinced by the use of the term feudalism, which already doesn’t capture much of what was going on in either medieval Europe, “feudal” Japan, etc. I think you mean the widespread, often forced, adherence to the norms, practices and relative status of ascriptive communities as against the individualism of capitalism or the administrative rationality of the various flavors of socialism. Modernism suffers from gaps and frictions, so people fall back on the flawed but holistic frameworks of the past. Maybe, but those holisms generated their own frequent crises too.
Ironically, revolutionary socialism rests on an unstated premodern assumption about an underlying organic community that will rise to the surface when the deformations of capitalism are dissolved. I found Norman Cohn’s Pursuit of the Millennium convincing in that regard. Jettisoning that really changes how you think about socialism.
I’ve been a sporadic follower of Michael Pettis, since he tries to wed a structuralist Keynesianism with a political economic theory of agency. Some version of that is the way to go, IMO. Haven’t read his new book yet but plan to.
I would have liked to sat in on this zoominar. Are these things by invitation only?
November 15th, 2020 at 11:00 am PST
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Perhaps this is lost from my reading of your article, but it seems the issue is the constraining of the “winners” from skewing the overall society/economic system to their own benefit.
In Scandinavia, homogeneity and culture conspire to keep relatively egalitarian societies functional – yet Scandinavian nations are also somewhat larger versions of Singapore: small and externally subsidized in the form of large trade surpluses.
Would the former occur without the latter? Unclear to me.
Equally, the rise of the US can as easily be ascribed to its geographic isolation combined with a huge amount of natural resources and arable land – seized from the Native Americans – followed by 2 generations of European World Wars further enriching American growth.
The rise of China in the past generation serves as a counterpoint: China isn’t isolated but used exports to the US and EU as its growth hinterland.
Or put another way: without a net-positive path to growth – the West in the first 120 years of the United States of America, then European wars and rebuilding in the next 70 – the only path left for the ambitious in this country is to cannibalize their fellows…
November 20th, 2020 at 6:04 am PST
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A quick chime-in on this very stimulating discussion:
So from the point of view of those running things for the past 200+ years (the “bourgeosie” or whatever you want to call them), for the first 100+ years, classic capitalism makes sense (“competition” and “individual rights” etc.), but then as this regime starts having more and more severe crises (all the low-hanging fruit is exhausted, and Immanuel Wallerstein’s ideas that they are starting to run out of exploitable people and resources begins to kick in more and more), those at the top become more entrenched and something that looks like feudalism starts to become more attractive. First rumblings of that are the European fascisms that led to WWII (though we can see precursors of this in the reaction to US post-civil war Reconstruction). Is this to say that the second coming of feudalism might just look like capitalism with less competition and social mobility?
I write this in great haste, but hopefully there is some food for thought here. Assuredly, these are not original thoughts, and I would like to know where to go to read up on this line of reasoning.
November 20th, 2020 at 7:43 am PST
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There are some very interesting ideas here, most especially ” Nothing has grown so stale, I think, as the argument between “capitalism” and “socialism”. ” But I think that all such economic debates are inherently crippled by refusing to enter the realm of political economy. Basically, there are not only the two options of Adam Smith or Karl Marx, there is a third, which the reigning economic paradigm of neoliberalism has carefully excluded: Alexander Hamilton. Arrayed with Hamilton are some economists who the orthodox high priests are clearly uncomfortable with: Henry Carey, Friedrich List, Thorstein Veblen, Simon Patten, and even John Kenneth Galbraith.
Hamilton was creating a national economy at a point in human history that the machine age had barely just begun. Newcomen’s atmospheric engine hardly provided adequate power for almost any purpose, and Watt had applied a condenser to a steam engine – finally making steam an adequate source of power – in 1765, just a decade before the Revolution, and two decades before the Constitution. Oliver Evans was perfecting his automated flour mill during this time, and would not develop the high-pressure steam engine until 1801 through 1806. If you don’t understand this historical context of machinery and technology, it is impossible to intelligently understand what Hamilton was doing, and to fully appreciate why the establishment of the American experiment in republican self-government is a turning point in human history.
The key to understanding Hamilton is his 1791 Report to Congress on the Subject of Manufactures, most especially “Section II: As to an extension of the use of Machinery…” viz.:
“The employment of Machinery forms an item of great importance in the general mass of national industry. ‘Tis an artificial force brought in aid of the natural force of man; and, to all the purposes of labour, is an increase of hands…” Hamilton’s economic system shifts the value of human labor from mere muscle power – on the same level as an animal – to brain power, on an entirely new level.
This is what shatters feudalism. Before Hamilton, a nation’s wealth is based on its possession of land; serfs, peasants, or slaves; and hard monetary assets, such as silver or gold, the value of which fluctuated depending on the capricious feelings and emotions of merchants and speculators. After Hamilton, a nation’s wealth comes to be based more and more on the development, diffusion, and application of science an technology, resulting in increases in the human power over nature.
Because increasing the human power of nature then becomes the true source of national wealth and power, the zero-sum nature of feudalism is shattered. Focusing on the productive power of labor completely upends that zero-sum nature because now the wealth of nation or a clan or a person is determined by their technological abilities. Hamilton is explicit on this issue: “To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients by which the wealth of a nation may be promoted.” And in his December 1790 Second Report on the Public Credit, Hamilton wrote, “the intrinsic wealth of a nation is to be measured, not by the abundance of the precious metals, contained in it, but by the quantity of the productions of its labor and industry….”
The classical economics definition of itself as a study of how society allocates scarce resources, is an inherent and insurmountable obstacle to ever understanding a real economy and its need for the lifeblood of scientific and technological advancements. And this takes us to statement that the debate between capitalism and socialism has become stale — because the orthodox practitioners of both completely ignore the breakthrough in political economy Hamilton achieve. Indeed, socialists and left dismiss Hamilton entirely as an authoritarian elitist who disliked democracy. Socialists and the left entirely fail to see how an emphasis on increasing the human power over nature is inherently more democratic than feudalism, or the imperial economics of Adam Smith. It was not accidental that Karl Marx hotly attacked Henry Carey for Carey’s repudiation of Ricardo.
By offshoring, deindustrializing, and financializing, USA has largely discarded Hamilton except for military research and development. It should be no surprise that by discarding Hamilton, USA has experienced a resurgence of feudal forms of hierarchy and economic inequality. Veblen captures this far better than Marx, with Veblen’s analysis of the contest and conflict between business and industry. Basically, in Veblen’s analysis, industry is organized along the lines of extending Hamiltonian economics, while business hates industry, and seeks to control it and reorient along lines of hierarchical dominance, hence, feudalistic. Basically, capitalistic economies actually become less capitalistic, in that capitalism becomes ever less willing to actually invest capital in industry.
Veblen, therefore, can explain why hierarchical structures arise in both capitalistic and socialistic economies, while Marx can only explain the rise of hierarchical structures in capitalism — and then by relying on “dialectical” forces of “history” that almost entirely deny the human agency of developing and applying science and technology. In other words, while Marxism accurately describes the symptoms, Marxism gets much of the diagnosis wrong and consequently botches the prescription of treatment.
It is crucial to restore the question of human agency in political economy, and end the analytical reliance on things like “market forces,” “the magic of the market” or “inherent contradictions of capitalism.” What is important for understanding Hamilton is to recognize that the promotion and advance of the machine age was fully intended and hoped for, as a means of ameliorating and improving the material condition of humanity. To free humanity from being just another beast of burden, you had to increase the productive powers of labor. Or as almost any history of steam power, technology, or the Industrial Revolution, notes: make it possible for one man to do the work of a hundred.
The idea is in Hamilton’s Report on Manufactures, but is perhaps inaccessible to modern eyes and ears because of its language is of two centuries ago. To help get the full sense of it, look at the history of science. To be precise, the history of scientific societies in the United States. The letters, speeches, and actions of men like Franklin, Priestly, Rittenhouse, Bartram: they constantly repeated their desire to cultivate and spread the fruits of “science and the mechanic arts.” Go and read, for example, the charter of the American Philosophical Society, or the Society for the Promotion of Useful Manufactures. Only by ignoring the establishment of these and many similar institutions, such as the colleges, can you focus reach the conclusion favored by many on the left: that the Founders were engaged in plain and simple class warfare.
A list of the earliest members of the American Philosophical Society speaks for itself: George Washington, John Adams, Thomas Jefferson, Alexander Hamilton, Thomas Paine, James Madison, Marquis de Lafayette, Baron von Steuben, Tadeusz Kościuszko, James McHenry, David Rittenhouse, Nicholas Biddle, Owen Biddle, Benjamin Rush, and John Marshall.
A problem today is that the idea of progress has been bastardized, corrupted, and deformed – indeed, nearly destroyed – by the past century of advertising this or that “new and improved” gadget or geegaw. If you want to truly understand Hamilton, and his focus on increasing the productive powers of labor, spend a few hours some night investigating how people in the late 1700s and early 1800s conceived of progress. Just look up some dedication speech or other for something, anything, like a new road, railroad, canal, harbor improvement, lighthouse, or post office. Even the lowliest local politician back then was usually more erudite and eloquent that a US Congressman or Senator today.
Finally, one of the most unforgivable crimes of de-contextualizing history is to decry the desire to “concentrate wealth and power” without painting a picture of what the United States faced at the time. To the South, the Spanish empire ruled Florida, and the Gulf coast. To the north, our recently defeated enemy, Britain, controlled Canada, with a chain of forts extending to the Great Lakes, and greatly influencing the hostile Native American peoples. The Appalachian mountains presented a massive obstacle to westward movement by all but the hardiest and most adventurous – no less a frontiersman than Daniel Boone was not heard from for two years and presumed dead. And even if you did cross the mountains, the Mississippi River valley was being contended for by the British, French, and Spanish. Use of the Mississippi River was regularly prohibited by one or the other of these European powers; the original instructions that led to the Louisiana Purchase were only to secure free passage on the river to and from New Orleans. In the far west, the Spanish controlled California, with some areas contested by the Russians, and the British, who were claiming all of the Oregon territory, whatever that might being defined as.
I find it ironic that many critics of Hamilton like to cite Charles Beard. Let me put it this way: Charles Beard did not write what they think he wrote. His commentary on Hamilton is exactly the opposite of what Hamilton’s critics today charge. And Beard was always bothered by the explanation that his analysis of the Constitution was merely a carefully cloaked form of Marxist analysis. So, in 1945, Beard published The Economic Basis of Politics, in which he explicitly wrote that Marx was incorrect in believing that a dictatorship of the proletariat would bring and end to class conflict, but that, in contrast, Madison, Hamilton, and the other founders were more historically accurate and more realistic in arguing, per The Federalist “Number 10,” that political factions will always arise based on different economic interests, and the never ending, and most important, role of government was to regulate those conflicting interests.
November 20th, 2020 at 10:13 am PST
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Cheers, Steve –
As I recall I put forward the argument for neo-feudalism many years ago (10?) on this site, in comments. What the WEF, Gates, Schwab, et al. have given us recently is the exact specification of how it will be implemented (prototyped in China).
BTW, in my view, an American kinetic civil war has already begun if one posits that the release of the virus was an act of war, designed to get rid of Trump when all else failed, and apparently, to advance the neo-feudal agenda.
Let’s the good guys win.
November 20th, 2020 at 11:20 am PST
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@Tony Wikrent
Perhaps you might elaborate on the “national economy” Hamilton actually accomplished as opposed to centralizing power and control via financialization.
I am also curious as to the extent by which European powers “controlled” Florida, California and the MidWest prior to the Louisiana Purchase.
Were Spanish forts and ships blockading the Mississippi? Blocking who, given the non-Native American population along the Mississippi was pretty much nonexistent until the mid-1850s.
Chicago wasn’t even founded until 1833, for example, 29 years after Hamilton died.
Were there even 5000 Spaniards in all of California at any single moment in time prior to 1820?
The Spanish were present in force in Central and South America due to gold and silver, but California prior to the canal systems was largely unpopulated, as far as I understand it.
November 20th, 2020 at 1:00 pm PST
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after having read kant–“critique of pure reason” and “practical reason”, then hegel “lectures on the philosophy of history” followed up with smith “wealth of nations” and ricardo “principles of political economy and taxation” i am now about halfway through with marx “capital”. what i find most remarkable is how unremarkable “capital” is.
November 20th, 2020 at 5:09 pm PST
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Nice write-up. Sounds uncomfortably like a small group of people intellectually edging away from any change to the status quo. Shame.
November 21st, 2020 at 2:30 am PST
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I think the original post, regarding the desirability of a middle ground between capitalism and socialism, is right on. Tony Wikrent’s long comment is also fascinating! C1ue adds some good perspective questioning Wikrent’s polemic.
Governing the United States and its global empire is not easy. The original post by Steve properly describes the necessary nuance — the best governance is not either capitalist or communist, but somewhere in between considering the inevitable tradeoffs. Wikrent’s emphasis on technology is fundamental, but doesn’t address the more basic issues of sustainability and humanity itself often being overwhelmed by technology. These issues fit comfortably into Waldman’s framework.
November 27th, 2020 at 8:23 am PST
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