Capitalism in the Age of Revolution: Burke, Smith, and the Problem of Value

I’ve got an essay in Raritan about Edmund Burke, Adam Smith, and the problem of value.

The essay is part of my long-term book project, on the political theory of capitalism, which I’ll be coming back to once I’m done with my book on Clarence Thomas (though I’ve been periodically teaching on the topic at the Graduate Center as a preparatory to writing the book). You could read the essay as a kind of prequel to this other essay I wrote on Nietzsche and Hayek and the problem of value.

The idea of the book is to look at how theorists and philosophers (and even some economists) conceived of capitalism less as an economic system and more as a political system, at several junctures in time. Part I will look at the idea of capitalism in the so-called Age of Democratic Revolution, from 1776 to 1848, mostly focused on Britain and France, with an extended detour through Haiti. Part II will turn to the US and the Americas, with a special focus on the idea of capitalism during the Age of Slavery and Emancipation, roughly 1830 to 1876. Part III will return to Europe, taking us from 1865 to 1945, with a focus on the idea of capitalism during the rise of fascism and the radical right as a counter to socialism and the left. Part IV will take us across the globe, in the post-1945 era, as we look as the idea of capitalism during the slow ascendancy of neoliberalism as a second counter, or answer, to socialism and the left.

This Raritan essay, on Burke and Smith, reflects some of the ideas I intend to explore in Part I. Among other things, it challenges the widespread notion of Burke the traditionalist as somehow a steadfast critic of the emerging order of the monied man. It is Smith rather than Burke, as we’ll see, who offers the more scathing critique of that emerging order.

Here are some excerpts:

Introduction

Yet it was in this crucible of value, heated to the highest degrees by the French Revolution, that Burke found a potential if uneasy settlement between the market—including, critically, an unregulated market of wage labor designed to serve the cause of capital accumulation—and the aristocratic order. In the meeting ground of the market, where personal identities were opaque but roles transparent, where the preferences of the buyer were as whimsical and weighty as the judgments of a king, Burke found an analogue to the irregular theater of the ancien régime. Burke knew the days of that regime were numbered. Not just in revolutionary France, where even a restoration of the monarchy would “be in some measure a new thing,” as he admitted to an émigré, but also in Britain, where the “antient divisions” of old Whigs and Tories were “nearly extinct.” But with the help of his new vision of value, Burke laid the foundation, in these last years of his life, for a system of rule in which the market might replicate the manor.

That he could not, in the end, fully envision the edifice that would be erected upon that foundation—and to the extent that he could, would shield his eyes from it—matters less than we might think. In the centuries that followed, others—most notably the conservative economists of the so-called Austrian School emerging out of fin-de-siècle Vienna—would take up his cause, creating an understanding of the economy in which the demiurges of capital would step forth as the modern equivalent of the feudal aristocracy. As Joseph Schumpeter was to write of these men in 1911, “What may be attained by industrial and commercial success is still the nearest approach to medieval lordship possible to modern man.” That vision was first mooted in these late works of Burke.

Value in the Age of Revolution

There is a reason that Burke found himself, despite these differences of context and circumstance, repeatedly driven back to the question of value. Looming over all the particular controversies and arguments was the specter of revolution and the destruction of the ancien régime. Not only had the French Revolution toppled the ancien régime but it also pried open, as Burke predicted it would, a great many other regimes to scrutiny….

With so many traditional orders of rule under siege, it’s not surprising that the systems of value that undergirded them would be subject to the most ruthless criticism as well. As Nietzsche would later argue, all systems of value are predicated upon a hierarchy of judgment and status, taste and place. Rank entails reward—offices, privileges, wealth—and reward must be worthy of rank. It was simply impossible to threaten so many orders of society without raising the question of their ranks and rewards, and the schemes of value that underlay them. At a moment of free fall like the mid-1790s, when the usual justifications for rule had been taken away or challenged, how could questions of value be resolved without interrogating the contributions of the persons who composed these ranks and received these rewards? What had any of these men done to merit his position? What contributions ought to merit rank or reward? Even those most resistant to raising these questions, like Burke, found themselves dragged into discussions of value—whether it was the wage of the laborer, the rate of the financier, or the rank and reward of the statesman.

The crisis of value that the French Revolution inaugurated found a corollary in the economic sphere with the imposition of price controls, grain requisitions, bread rations, and other market regulations. The latter were hardly new, but since the 1770s they had been implemented against a backdrop of growing unease about the conflict between equality and laissez-faire. With the arrival of the French Revolution, that conflict intensified. Every economic choice was now refracted through the vocabulary of morals and politics; every economic development seemed a portent of a larger renovation of the human estate. Robespierre and the Convention had made it their top priority to keep Paris pacified with bread, at times nearly starving the provinces with requisitions for the capital. When the Directory began to loosen those controls and the bread lines started growing, Paris remembered. As one policy spy explained in March 1795, “There is talk of the regime of before 9 Thermidor, when goods were not as dear and money and assignats [the paper money of the Revolution] were worth the same.”

The fact that value was now up for debate in so many realms meant that whatever systems of value came out of that debate—and whatever ranks and rewards were determined to coincide with these systems—would forever carry the taint of their having been debated. It would be difficult to forget that these values had once been argued over and chosen. Where theological notions of chosenness—Moses receiving the tablets at Sinai—endow the chosen and their values with an aura of the holy, secular chosenness does not generate the same glow. Values that are chosen in secular (as opposed to sacred) time are stained by their originating moment: they were chosen, but they might not have been chosen. Any chosen system of value, and the social distributions (of rights, resources, powers, and privileges) that follow from it, will seem contingent, even arbitrary. More important than its content is the fact that it has been ordained by real men and women at a not-so-distant moment in the past. Having been made in time, it must bear the weight of its contingency, the possibility of its nonbeing, throughout time. A sense of the accidental and the arbitrary will continue to haunt it.

The fact that values were now understood to have been made, rather than given, focused men and women on the activity of making more generally, on the act of bringing things into the world. While there are many ways of conceiving that activity of introduction and inauguration, no model at that moment seemed as pertinent as the production of commodities and the creation of wealth. Still in its infancy in the eighteenth century, the discourse of political economy captured this sense of creating something from nothing, of generating more from less. Labor epitomized that activity, as even Burke acknowledged when he associates the commandment to labor with God’s“creation wrought by mere will out of nothing.” So labor— with its concomitant theory of value—was put at the center of political economy. The Wealth of Nations does not open with the landlord or the merchant or the market; it opens with workers in a pin factory, figuring out ways to economize their actions, increase the pace of production, and thereby create the conditions for the creation of value.

It is thus not surprising that Burke should have returned to questions of value in the last years of his life. The French Revolution had unsettled the distribution of ranks and rewards throughout all of Europe. Whether the topic was the price of bread or the wage of the worker, the fees of the money man or the rank of the man of state, the question of value could not be avoided. Nor could its contingency or the labor that went into its making.

From Markets to the Capitalist

Burke here anticipates a celebration of the market that the historian Daniel Rodgers has argued is more characteristic of social thought since the 1970s than it is of the classical economics of Smith and Ricardo. More than producers or consumers, it is the impersonal market that grounds and drives the argument. More than individuals pursuing their self-interest, it is the market that does the work of creating harmony out of dissonance, settlement from conflict.

Deeper into the argument, however, Burke moves away from the market as the settler or maker of value. We hear less of two estimates materializing as one price and more of the man of money as the decider, the diviner, of value. In the same way that Marx, in moving from the market to the workshop, speaks in Capital of a change “in the physiognomy of our dramatis personae”—“the money owner now strides out in front as a capitalist; the possessor of labour-power follows as his worker. The one smirks self-importantly and is intent on business; the other is timid and holds back, like someone who has brought his own hide to market and now has nothing else to expect but—a tanning”—so does Burke effect a change in his dramatis personae. It is no longer the market settling price but the man of capital determining value, whether he’s buying or selling, whether the commodity is labor or money.

Burke v. Smith

That Burke should have come to these positions at all—much less when and how he did—is more surprising than we might think. Whether one takes Burke to be arguing that the market settles price and that price is value, or that the men of money determine the price and thus the value of commodities, his position is sharply at odds with the arguments of Adam Smith, whose writings already dominated the age and whose thinking Burke believed to be in harmony with his own. In this respect, as in so many others, Burke wrote less as a conventionalist than as a controversialist, the lead player of a still incipient avant-garde.

What ultimately undergirds Smith’s specific claims about labor as the measure of value—and concomitant claims about the distortions wrought by capital’s power and control of the legislature—is a vision of labor as the prime mover in the world. Insofar as labor is a universal measure of value, it is also a marker of our common humanity: what we, as human beings, have to do in the world in order to secure what we want from the world. It is how we make our way in the world.

That picture, in all its detail, is different from Burke’s. Where Smith insists on distinguishing between value and price, Burke collapses the two. Where Smith sees labor as the measure of value, Burke sees the market as the measure of value. Where Smith sees the needs and contributions of labor as partial determinants of the price of labor, Burke disclaims any interest in the needs or contributions of labor. The price of labor is a function of capital’s demand for labor; any consideration beyond that, says Burke, is “passed out of that department” of commerce and justice and “comes within the jurisdiction of mercy” and Christian charity. Where Smith sees capital using its economic and legal power to extract the most damaging contracts from labor, Burke sees the free market at work. Where Smith seems to countenance those legislative interventions that favor labor—and points out all the ways in which the legislature already favors capital—Burke insists that “the moment that Government appears at market, all the principles of market will be subverted,” while remaining silent about all the ways in which the government already appears at market on behalf of capital. And where Smith sees labor as the driving agent of the world, Burke sees capital contributing “all the mind that actuates the whole machine.”

Subjectivism in the Market v. Objectivism in the Social Order

Thus we have in Burke two views of value. On the one hand, value is subjective, dependent on the wit and whimsy of the men of capital. On the other hand, there is a hierarchy of value that divides and distinguishes rich from poor, capital from labor. That value is objective. In the case of labor, it can be quantified and measured; in the case of capital, it is beyond measure. So it is the task of capital to set the value at market of whatever it is selling and whatever it is buying. The final intimation of Burke, never developed or realized but hinted at and suggested, was of an objective order of ranks and rewards, in which the better man occupied the superior rank, while the worse man occupied the lower one.

Two moves would follow, for Burke, from the blend of subjectivism in the market and objectivism in the social order. The first would be to call into question not the legitimacy of social hierarchy as such, but the composition of the higher orders, to raise the question of who is rewarded by membership in the nobility. The second would be the growing sense that the proving ground of that social hierarchy—the determination of higher and lower value, not just in the economy but throughout society—was to be found in the market. In A Letter to a Noble Lord, Burke toys with both moves…

Take it away, I can’t look!

In that context, it might prove the better part of prudence to embrace the market as the proving ground of a new ruling class.

As I said, Burke never really could go there. He flirted with the idea but in the end had to pull back from it. He distrusted new money as much as he distrusted new power. That he himself was a creature of both sorts of novelty—his political and financial rewards were founded on a system of value closer to that of the coming society he rejected than they were to that of the dissolving society he mourned—was but one of the many contradictions he could never quite resolve. It would fall to later theorists, most notably the Austrian economists, to take up those contradictions and work out their kinks and implications.

 

 

 

14 Comments

  1. ron bruno September 18, 2016 at 3:33 pm | #

    Fascinating post, Corey. I greatly enjoyed re-reading your 2013 article regarding Nietzsche’s profound influence on Hayek. I was especially amused by the conservative reaction to your post, attempting to disassociate Hayek from Nietzsche, the avowed atheist and moral relativist of a sort. To oversimplify for the sake of brevity, Hayek substituted liberty for God, and posited the rule of law as a moral code. Nietzsche was still held in contempt in the academic world of the 1950s, and Hayek, who meticulously footnoted his sources, neglected to cite Nietzsche as an influence but he correctly portrayed economics as a morality play. Price valuations are moral valuations, whether or not the buyer and seller are aware of the moral implications of their transaction. The person who sells his labor is at a decided disadvantage in an increasingly automated economy, one of Hayek’s other neglected topics.

    I cringe at the notion that Nietzsche’s philosophical musings were sympathetic to fascism. Nietzsche’s sister, who was a rabid anti-Semite and took control of his estate upon his breakdown, is responsible for much of the misconception. The fact that Nietzsche is also notoriously difficult to translate accounts for most other misconceptions. Nietzsche returned from the Franco-Prussian War with both his health and his idealism shattered. In its wake, he was highly skeptical of German nationalism, militarism and state-sponsored education. His vehement rejection of anti-Semitism also discredits accusations of fascist tendencies. As you note, his teaching duties at the university of Basel included public lectures. In early 1872, he delivered a series of critical lectures on the topic of German public education and the university system. Nietzsche was primarily concerned with the cultivation of genius, a concept whose Latin root connotes the creative spirit that dwells in every individual. He criticized the German university system for promoting conformity in service to the state and began referring to his professorship as his “doghouse at Basel.” He doubted that formal education could successfully recognize genius, let alone promote it. Much of Nietzsche’s criticism of the German university system is germane to the problems plaguing the current American university system. These provocative lectures were recently published by the New York Review of Books:

    http://www.nyrb.com/products/anti-education?variant=2196194497

    Best wishes on your book projects, Corey. I’m looking forward to reading both of them.

    • Roquentin September 20, 2016 at 11:20 pm | #

      I’ve been down the “Was Nietzsche a proto-fascist?” road many time, some of them in the comments section of this blog way back when. After years to think about it and a pretty solid familiarity with his work (reading something like 2/3 or 3/4 of ouvre) I take more moderated approach. While Nietzsche loathed nationalism, mass movements, and spoke out contemptuously of racism against Jews in his work, the affinity many on the political far right had for his thought can not simply be brushed off as misinterpretation. The association goes a lot deeper than that. I don’t have the time or energy to prove this case point by point here, but to try and keep it short a few of the following aspects of his work which lend themselves to fascist interpretations are as follows. His obsession with power and domination, explicitly calling for a new set of ethics which embraced this in art (The Birth of Tragedy) or otherwise (Beyond Good and Evil). His general belief that the weak or the mediocre do not deserve protection and merely get in the way of the great and the noble. The general belief in an elite, albeit one based on his own peculiar definition of merit, which was in no way ethically bound to the rest of society.

      To preemptively fend off s couple of retorts, no this doesn’t mean a leftist reading of Nietzsche is incoherent or impossible. Only a fool would argue that, given his influence on the French intellectuals of the 1960s and 70s (Foucault, Deleuze, Derrida, etc). However, this can be done with nearly any text. Heidegger, an unapologetic and public supporter of National Socialism, had as much or more influence on 20th century philosophy than any other author. The essay Corey wrote is largely based on a reading of Burke, for that matter.

      The TLDR version is, while I roll my eyes at people who write Nietzsche off as a fascist hack, to let him off the hook completely is as bad or worse.

      • Glenn September 22, 2016 at 3:15 pm | #

        The unspoken core of fascism is capitalism. Neither can one write off the fascist tendencies of both the Democratic and Republican Parties.

        I read Nietzsche’s Beyond Good and Evil as absurd and satirical in parts, such as his reference to the “sun-seeking climbing plants in Java” and of a society not allowed to exist for its own sake, but only as a foundation and a scaffolding for a select class of beings.

        Academics know, but deny, the extent of fascism in the United States in the same way that Heidegger knew that (Falstaff: discretion being the better part of valor) explicit provocation of the capitalist hegemonically ruled herd will only result in being crushed under their proverbial hooves, or having tenure denied or revoked by the highest flowers of society.

        • Frank Wilhoit September 22, 2016 at 7:47 pm | #

          The nexus between capitalism and fascism is a content-free Marxist shibboleth, tiresomely familiar to the people you’re trying to talk to and rejected by them out of hand — UNLESS you tell them why.

          As you didn’t, I shall.

          It is because capitalism cannot operate in an accountable environment and fascism is about selective accountability.

          • Glenn September 22, 2016 at 10:06 pm | #

            What I wrote was a comment, not an essay.

            You can rest assured that I know more than what I wrote here.

          • GRH September 25, 2016 at 11:45 am | #

            I’ve just started reading -“Tragedy and Hope-A History of the World in Our Time” – and he refers to “The Quartet” (meaning- the army, bureaucracy, landlords and industrialists).
            Nazism enabled by the Quartet as a counter-revolutionary (Reactionary) force against the dangers of social revolution (Socialism and Communism).

            The Nazi system was dictatorial capitalism—that is, a society organized so that everything was subject to the benefit of capitalism.
            In order to secure profits the Quartet sought to avert six possible dangers to the profit system. ….(1) the Wiemar Republic (2) organized labor (3) competition (4) and Communism.

            Basically, the Capitalists could not stand by and watch ‘Marxists’ take over – they could easily imagine another Bolshevik revolution in Germany – capitalism could easily collapse under the Wiemar Republic.

            Which reminds me of this quote…
            “Fascism is the iron hoop around the collapsing barrel of Capitalism” — Karl Radek

        • Roquentin September 24, 2016 at 11:56 pm | #

          The short version of my reply is, I find it dangerous and a little irresponsible to make no distinction whatsoever between liberal capitalism and fascism. Liberal, even neoliberal capitalism, for all of its many problems and failings is not the same as fascism.

          While I am in total agreement that you can find similarities between a fascist or national socialist state or government and the US, the same could be said for nearly any other government. Fascism didn’t exist in a vacuum, it wasn’t historically unique. Anything I have the time and energy to write here would be a gross oversimplification, but fascism in the most general terms was an adoption of the symbol, rhetoric, and imagery of the worker’s movement in order to shore up support for anti-democratic (many were former monarchists who hated democracy) while making some concessions to state ownership of the means of production in order to avoid private industry losing control completely.

          Fascism gets through around so loosely and sloppily these days that most of the time I don’t even like talking about it. Fascism and National Socialism were specific to a certain social and economic mileu in early 20th century Europe, a certain set of productive relationships and historical factors. People through the term around now as a vague, empty slur. In the US it’s so bad “fascist” may as well mean “any political movement I strongly disapprove of.” I generally cringe when people say it about Trump.

          However, Goodwin’s Law exists for a reason. The Germans and the Italians in the early 20th century weren’t as different from us as we like to think they were. People turn it into a kind of mythology to avoid recognizing those parts of themselves.

          • Glenn September 26, 2016 at 10:33 am | #

            Words like “fascism” and “terrorism” find more use in demonization of an Other posited as an existential threat rather than for purposes of enlightenment.

            There is no universal definition of “terrorism”, for example, that will exclude American operations in the world except for one that explicitly states that America is an exception to the definition within that definition.

            The word “fascism” is both overused and underused because there is no universally accepted definition that allows comparison with American policies. Whether America is “fascist”, “democratic”, “inverted totalitarian”, or “terrorist” depends entirely on the aspect of American policy one has the fortune or misfortune to have encountered.

            Milton Mayer’s “They Thought They Were Free” demonstrates that “decent men” became Nazis, that is to say, became selectively unaware of the atrocities that should have challenged their identities as such.

            This problem is not unique to the so designated “fascist” states or by a state that holds itself as an exception.

  2. mark September 19, 2016 at 10:24 am | #

    I saw an interview with the current Conservative MP Jesse Norman, author of ‘Edmund Burke: Philosopher, Politician, Prophet’ (2013), which was retitled for the American audience as ‘Edmund Burke: The First Conservative’ (paperback, 2015), in which he made the claim in the interview that Smith and Burke held the same economic views.

    The US paperback has 50 reviews on Amazon, mostly praising the book. It is an idea that still seems to have current credence, and Norman has edited the Everyman ‘Reflections on The Revolution in France And Other Writings’ (1 Oct 2015).

    Emma Rothschild in her ‘Economic Sentiments’ (2001) pp64-66 and accompanying endnotes shows like this essay how little Smith and Burke were in contact and of the same views.

    Of Burke, F M Barnard in his ‘Herder on Nationality, Humanity, and History’ (2003) pp55-6 wrote that, “most conservative political thinkers, particularly since Burke, have invoked organism in their defence of the status quo and in their warnings against the dangers of change based on rational principles. Burke himself, to be fair, seems to have shown greater insight than his self-professed followers in recognizing the limits of growth as a rationale for conservatism…what such a perfect instrument as the British constitution now demanded was no longer growth or change, but preservation and permanence. As far as the present and future were concerned, therefore, Burke felt no compunction in abandoning biological imagery in favour of the imagery of mechanical construction. Buildings suggested far greater durability than organisms: there was infinitely more scope for keeping buildings in a state of good repair. Maintenance, not change, accordingly became the operative rhetoric of Burke’s political stance.”

    This essay nicely shows that perhaps it was not maintenance but progress of however a reluctant sort that continued to pull Burke forward into the economic Sublime.

    As Jesse Norman told Rupert Murdoch’s Times about his Etonian schooling:

    “Other schools don’t have the same commitment to public service. They do other things…It’s one of the few schools where the pupils really do run vast chunks of the school themselves. So they don’t defer in quite the same way, they do think there’s the possibility of making change through their own actions.” (April 2013)

    Jesse Norman, one hundred percent Burke.

  3. G Richard September 19, 2016 at 10:59 am | #

    Thank you for this post, can’t wait to read the new book.

    Has anyone read “The Invention of Capitalism” by Micheal Perelman ?

    https://archive.org/stream/pdfy-LuLDoAesqb6uwxVU/The%20Invention%20of%20Capitalism#page/n0/mode/2up

    It was a real eye-opener for me.

    Quotes like…
    “Legal constraint [to labor] is attended with too much trouble, violence, and noise, . . . whereas hunger is not only a peaceable, silent, unremitted pressure, but as the most natural motive to industry, it calls forth the most powerful exertions. Hunger will teach civility, obedience and subjugation to the brutish, obstinate, and the perverse.” – Reverend Joseph Townsend

    and…
    Sir James Steuart advocated that the state (his fellow aristocrats) should forcibly evict the peasants from the “common” land, and turn their farms into pastures to create the hunger, poverty and misery necessary to force people to labor in factories. Once entrapped, even four-year-old’s were put to work in the factories — ‘‘for by these means, we hope that the rising generation will be so habituated to constant employment that it would at length prove agreeable and entertaining to them.’’

    • LFC September 20, 2016 at 3:23 pm | #

      There was/is a commenter on Crooked Timber who recommended the Perelman book more than once. (The particular commenter in question hasn’t been posting there for a while; probably taking a break.)

      Btw, James Steuart was far from the only advocate of ‘enclosures’, as you prob. know.

      • LFC September 23, 2016 at 6:48 pm | #

        p.s. on Steuart: See the discussion of Steuart’s Inquiry into the Principles of Political Oeconomy [sic] (1767) in Hirschman’s The Passions and the Interests, pp. 81-87, where H. points out, among other things, that Steuart thought that what he called “the complicated modern oeconomy” would restrain the arbitrary or despotic exercise of power by rulers. (This ties in w/ the general pt about commerce (‘interest’) restraining ‘the passions’, a view also expressed by Montesquieu among others.)

  4. Frank Wilhoit September 21, 2016 at 10:30 am | #

    Burke should have said what he meant. An accountable aristocrat is a contradiction in terms; so is an accountable capitalist. There’s the parallel, and that is why capitalism is, indeed, primarily a political category and only secondarily an economic category.

    Aristocracy was deprecated because of its lack of accountability, but all that resulted was the creation of new kinds of unaccountable actors. Capitalism ditto ditto of the ditto. This is not progress.

  5. Chip Daniels September 26, 2016 at 3:02 pm | #

    I saw this article on communal living arrangements with Millenials over at The Atlantic, and it caught my eye with regard to Corey’s thesis about conservatism being about the preservation of private and domestic power:

    “By the 1500s, the idea of a household as a father, a mother, and their biological children caught on among Europe’s new urban middle class, at least as something to strive for. This “godly household” owes a lot to the Protestant Reformation, in which religious leaders started rejecting the Catholic Church as the center of life and replaced it with a domestic divine: the father as a stand-in for God, the mother for a priest, and the children for congregants. It’s around this time that nativity scenes became popular, emphasizing Jesus’s role as a member of a nuclear family rather than as a lone preacher.”

    The article implies, but doesn’t address directly, how the “new communal living arrangements threaten the status of fathers as the unchallenged lord over their household.

Leave a Reply to LFC Cancel reply