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Chapter 10: Historicism

1. The Meaning of Historicism

HISTORICISM developed from the end of the eighteenth century on as a reaction against the social philosophy of rationalism. To the reforms and policies advocated by various authors of the Enlightenment it opposed a program of preservation of existing institutions and, sometimes, even of a return to extinct institutions. Against the postulates of reason it appealed to the authority of tradition and the wisdom of ages gone by. The main target of its critique was the ideas that had inspired the American and the French Revolutions and kindred movements in other countries. Its champions proudly called themselves anti-revolutionary and emphasized their rigid conservatism. But in later years the political orientation of historicism changed. It began to regard capitalism and free trade both domestic and international-as the foremost evil, and joined hands with the "radical" or "leftist" foes of the market economy, aggressive nationalism on the one hand and revolutionary socialism on the other. As far as historicism still has actual political importance, it is ancillary to socialism and to nationalism. Its conservatism has almost withered away. It survives only in the doctrines of some religious groups.

People have again and again stressed the congeniality of historicism and artistic and literary romanticism.

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The analogy is rather superficial. Both movements had in common a taste for the conditions of ages gone by and an extravagant overestimation of old customs and institutions. But this enthusiasm for the past is not the essential feature of historicism. Historicism is first of all an epistemological doctrine and must be viewed as such.

The fundamental thesis of historicism is the proposition that, apart from the natural sciences, mathematics, and logic, there is no knowledge but that provided by history. There is no regularity in the concatenation and sequence of phenomena and events in the sphere of human action. Consequently the attempts to develop a science of economics and to discover economic laws are vain. The only sensible method of dealing with human action, exploits, and institutions is the historical method. The historian traces every phenomenon back to its origins. He depicts the changes going on in human affairs. He approaches his material, the records of the past, without any prepossessions and preconceived ideas. The historian utilizes sometimes, in preliminary, merely technical, and ancillary examination of these sources, the results of the natural sciences, as for instance in determining the age of the material on which a document of disputed authenticity is written. But in his proper field, the exposition of past events, lie does not rely upon any other branch of knowledge. The standards and general rules to which he resorts in dealing with the historical material are to be abstracted from this very material. They must not be borrowed from any other source.

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The extravagance of these claims was later reduced to a more modest measure when Dilthey stressed the role psychology plays in the work of the historian.[1] The champions of historicism accepted this restriction and did not insist on their extreme description of the historical method. They were merely interested in the condemnation of economics and had no quarrel with psychology.

If the historicists had been consistent, they would have substituted economic history for then their opinion counterfeit-science of economics. (We may pass over the question how economic history could be treated without economic theory.) But this would not have served their political plans. What they wanted was to propagandize for their interventionist or socialist programs. The wholesale rejection of economics was only one item in their strategy. It relieved them from the embarrassment created by their inability to explode the economists' devastating critique of socialism and interventionism. But it did not in itself demonstrate the soundness of a prosocialist or interventionist policy. In order to justify their "unorthodox" leanings, the historicists developed a rather self-contradictory discipline to which various names were given such as realistic or institutional or ethical economics, or the economic aspects of political science (wirtschaftliche Staatswissenschaften)[2].


[1]. See below, p. 312.

[2]. For various other names suggested see Arthur Spiethoff in the Preface to the English edition of his treatise on ?Business Cycles,? International Economic Papers, No. 3 (New York, 1953), p. 75.

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Most champions of these schools of thought did not bother about an epistemological explanation of their procedures. Only a few tried to justify their method We may call their doctrine periodalism and their supporters periodalists.

The main idea underlying all these attempts to construct a quasi-economic doctrine that could be employed to justify policies fighting the market economy was borrowed from positivism. As historicists the penodalists talked indefatigably about something they called the historical method, and claimed to be historians. But they adopted the essential tenets of positivism, which rejected history as useless and meaningless chatter, and wanted to inaugurate in its place a new science to be modeled after the pattern of Newtonian mechanics. The periodalists accepted the thesis that it is possible to derive from historical experience a posteriori laws which, once they are discovered, will form a new-not yet existing-science of social physics or sociology or institutional economics.

Only in one regard did the periodalists' version of this thesis differ from that of the positivists. The positivists had laws in mind that would be valid universally. The periodalists believed that every period of history has its own economic laws different from those of other periods of economic history.

The periodalists distinguish various periods in the course of historical events. Obviously the criterion according to which this distinction is made is the characteristics of the economic laws determining economic becoming in each period. Thus the periodalists'

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argument moves in a circle. The periodization of economic history presupposes knowledge of the economic laws peculiar to each period, while these laws can only be discovered by examining each period without any reference to the events that happened in other periods.

The periodalists' image of the course of history is this: There are various periods or stages of economic evolution succeeding one another according to a definite order; throughout each of these periods the economic laws remain unchanged. Nothing is said about the transition from one period to the next one. If we assume that it is not brought about at one blow, we must assume that between two periods there is an interval of transition, a transition period as it were. What happens in this interval? What kind of economic laws are operative in it? Is it a time of lawlessness or has it its own laws? Besides, if one assumes that the laws of economic becoming are historical facts and therefore changing in the flux of historical events, it is manifestly contradictory to assert that there are periods in which there is no change, i.e., periods in which there is no history, and that between two such periods of rest there is a period of transition.

The same fallacy is also implied in the concept of a present age as resorted to by contemporary pseudo economics. Studies dealing with the economic history of the recent past are mislabeled as dealing with present economic conditions. If we refer to a definite length of time as the present, we mean that in regard to a special issue conditions remain unchanged throughout this period. The concept of the present is therefore

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different for various fields of action. [3] Besides, it is never certain how long this absence of change will last and consequently how much of the future has to be included. What a man can say about the future is always merely speculative anticipation. Dealing with some conditions of the recent past under the heading "present conditions" is a misnomer. The most that can be said is: Such were the conditions yesterday; we expect they will remain unchanged for some time to come.

Economics deals with a regularity in the concatenation and sequence of phenomena that is valid in the whole field of human action. It can therefore contribute to the elucidation of future events; it can predict within the limits drawn to praxeological prediction.[4] If one rejects the idea of an economic law necessarily valid for all ages, one no longer has the possibility of discovering any regularity that remains unchanged in the flux of events. Then one can say no more than: If conditions remain unchanged for some time, they will remain unchanged. But whether or not they really remain Unchanged can only be known afterward.

The honest historicist would have to say: Nothing can be asserted about the future. Nobody can know how a definite policy will work in the future. Ml we believe to know is how similar policies worked in the past. Provided all relevant conditions remain unchanged, we may expect that the future effects will not widely differ from those of the past. But we do not know whether or not these relevant conditions will

[3]. Mises, Human Action, p. 101.

[4]. Ibid., pp. 117-18. See below, p. 309.

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remain unchanged. Hence we cannot make any prognostication about the necessarily future effects of any measure considered. We are dealing with the history of the past, not with the history of the future.

A dogma supported by many historicists asserts that tendencies of social and economic evolution as manifested in the past, and especially in the recent past, will prevail in the future too. Study of the past, they conclude, discloses therefore the shape of things to come.

Leaving aside all the metaphysical ideas with which this trend-philosophy has been loaded, we have only to realize that trends can change, have changed in the past, and will change in the future too.[5] The historicist does not know when the next change will occur. What he can announce about trends refers only to the past, never to the future.

Some of the German historicists liked to compare their periodization of economic history with the periodization of the history of art. As the history of art deals with the succession of various styles of artistic activities, economic history deals with the succession of various styles of economic activities (Wirtschaftsstile). This metaphor is neither better nor worse than other metaphors. But what the historicists who resorted to it failed to say was that the historians of art talk only about the styles of the past and do not develop doctrines about the art styles of the future. However, the historicists are writing and lecturing about the economic conditions of the past only in order to derive from them conclusions

[5]. Mises, Planning For Freedom (South Holland, Ill., 1952), pp. 163-9.

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about economic policies that necessarily are directed toward the economic conditions of the future.

2. The Rejection of Economics

As historicism sees it, the essential error of economics consists in its assumption that man is invariably egoistic and aims exclusively at material well-being.

According to Gunnar Myrdal economics asserts that human actions are "solely motivated by economic interests" and considers as economic interests "the desire for higher incomes and lower prices and, in addition, perhaps stability of earnings and employment, reasonable time for leisure and an environment conducive to its satisfactory use, good working conditions, etc." This, he says, is an error. One does not completely account for human motivations by simply registering economic interests. What really determines human conduct is not interests alone but attitudes. "Attitude means the emotive disposition of an individual or a group to respond in certain ways to actual or potential situations." There are "fortunately many people whose attitudes are not identical with their interests."[1]

Now, the assertion that economics ever maintained that men are solely motivated by the striving after higher incomes and lower prices is false. Because of their failure to disentangle the apparent paradox of the use-value concept, the Classical economists and their

[1]. Gunnar Myrdal, The Political Element in the Development of Economic Theory, trans. by P. Streeten (Cambridge, Harvard University Press, 1954), pp. 199-200.

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epigones were prevented from providing a satisfactory interpretation of the conduct of the consumers. They virtually dealt only with the conduct of the businessmen who serve the consumers and for whom the valuations of their customers are the ultimate standard. When they referred to the principle of buying on the cheapest market and selling on the dearest market, they were trying to interpret the actions of the businessman in his capacity as a purveyor of the buyers, not in his capacity as a consumer and spender of his own income. They did not enter into an analysis of the motives prompting the individual consumers to buy and to consume. So they did not investigate whether individuals try only to fill their bellies or whether they also spend for other purposes, e.g., to perform what they consider to be their ethical and religious duties. When they distinguished between purely economic motives and other motives, the classical economists referred only to the acquisitive side of human behavior. They never thought of denying that men are also driven by other motives.

The approach of Classical economics appears highly unsatisfactory from the point of view of modern subjective economics. Modern economics rejects as entirely fallacious also the argument advanced for the epistemological justification of the Classical methods by their last followers, especially John Stuart Mill. According to this lame apology, pure economics deals only with the "economic" aspect of the operations of mankind, only with the phenomena of the production of wealth "as far as those phenomena are not modified by the pursuit of any other object." But, says Mill, in order to deal

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adequately with reality "the didactic writer on the subject will naturally combine in his exposition, with the truth of pure science, as many of the practical modifications as will, in his estimation, be most conducive to the usefulness of his work."[2] This certainly explodes Mr. Myrdal's assertion, so far as Classical economics is concerned.

Modern economics traces all human actions back to the value judgments of individuals. It never was so foolish, as Myrdal charges, as to believe that all that people are after is higher incomes and lower prices. Against this unjustified criticism which has been repeated a hundred times, Bohm-Bawerk already in his first contribution to the theory of value, and then later again and again, explicitly emphasized that the term well-being" (Wohlfahrtszwecke) as he uses it in the exposition of the theory of value does not refer only to concerns commonly called egoistic but comprehends everything that appears to an individual as desirable and worthy of being aimed at (erstrebenswert )[3].

In acting man prefers some things to other things, and chooses between various modes of conduct. The result of the mental process that makes a man prefer one thing to another thing is called a judgment of value. In speaking of value and valuations economics refers to such judgments of value, whatever their content may

[2]. John Stuart Mill, Essays on Some Unsettled Questions of Political Economy (3d ed. London, 1877), pp. 140-1.

[3]. Bohm-Bawerk, ?Grundzuge der Theorie des wirtschaftlichen Guterwerts,? Jahrbucher fur Nationalokonomie und Statistik, N. F., 13 (1886), 479, n. 1; Kapital und Kapitalzins (3d ed. Innsbruck, 1909), 2, 316-17, n. 1.

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be. It is irrelevant for economics, up to now the best developed part of praxeology, whether an individual aims like a member of a labor union at higher wages or like a saint at the best performance of religious duties. The "institutional" fact that most people are eager to get more tangible good is a datum of economic history, not a theorem of economics.

All brands of historicism-the German and the British historical schools of the social sciences, American institutionalism, the adepts of Sismondi, Le Play, and Veblen, and many kindred "unorthodox" sects-emphatically reject economics. But their writings are full of inferences drawn from general propositions about the effects of various modes of acting. It is, of course, impossible to deal with any "institutional" or historical problem without referring to such general propositions. Every historical report, no matter whether its theme is the conditions and events of a remote past or those of yesterday, is inevitably based on a definite kind of economic theory. The historicists do not eliminate economic reasoning from their treatises. While rejecting an economic doctrine they do not like, they resort in dealing with events to fallacious doctrines long since refuted by the economists.

The theorems of economics, say the historicists, are void because they are the product of a priori reasoning. Only historical experience can~ lead to realistic economics. They fail to see that historical experience is always the experience of complex phenomena, of the joint effects brought about by the operation of a multiplicity of elements. Such historical experience does not give

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the observer facts in the sense in which the natural sciences apply this term to the results obtained in laboratory experiments. (People who call their offices, studies, and libraries "laboratories" for research in economics, statistics, or the social sciences are hopelessly muddleheaded.) Historical facts need to be interpreted on the ground of previously available theorems. They do not comment upon themselves.

The antagonism between economics and historicism does not concern the historical facts. It concerns the interpretation of the facts. In investigating and narrating facts a scholar may provide a valuable contribution to history, but he does not contribute to the increase and perfection of economic knowledge.

Let us once more refer to the often repeated proposition that what the economists call economic laws are merely principles governing conditions under capitalism and of no avail for a differently organized society, especially not for the coming socialist management of affairs. As these critics see it, it is only the capitalists with their acquisitiveness who bother about costs and about profit. Once production for use has been substituted for production for profit, the categories of cost and profit will become meaningless. The primary error of economics consists in considering these and other categories as eternal principles determining action under any kind of institutional conditions.

However, cost is an element in any kind of human action, whatever the particular features of the individual case may be. Cost is the value of those things the actor renounces in order to attain what he wants to

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attain; it is the value he attaches to the most urgently desired satisfaction among those satisfactions which he cannot have because he preferred another to it. It is the price paid for a thing. If a young man says: "This examination cost me a week end with friends in the country," he means: If I had not chosen to prepare for my examination, I would have spent this week end with friends in the country." Things it costs no sacrifice to attain are not economic goods but free goods and as such no objects of any action. Economics does not deal with them. Man does not have to choose between them and other satisfactions.

Profit is the difference between the higher value of the good obtained and the lower value of the good sacrificed for its obtainment. If the action, due to bungling, error, an unanticipated change in conditions, or to other circumstances, results in obtaining something to which the actor attaches a lower value than to the price paid, the action generates a loss. Since action invariably aims to substitute a state of affairs which the actor considers as more satisfactory for a state which he considers less satisfactory, action always aims at profit and never at loss. This is valid not only for the actions of individuals in a market economy but no less for the actions of the economic director of a socialist society.

3. The Quest for Laws of Historical Change

A widespread error confuses historicism and history. Yet the two have nothing in common. History is the presentation of the course of past events and conditions,

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a statement of facts and of their effects. Historicism is an epistemological doctrine.

Some schools of historicism have declared that history is the only way to deal with human action and have denied the adequacy, possibility, and meaningfulness of a general theoretical science of human action. Other schools have condemned history as unscientific and, paradoxically enough, have developed a sympathetic attitude toward the negative part of the doctrines of the positivists, who asked for a new science which, modeled on the pattern of Newtonian physics, should derive from historical experience laws of historical evolution and of "dynamic" change.

The natural sciences have developed, on the basis of Carnot's second law of-thermodynamics, a doctrine about the course of the history of the universe. Free energy capable of work depends on thermodynamic instability. The process producing such energy is irreversible. Once all free energy produced by unstable systems is exhausted, life and civilization will cease. In the light of this cognition the universe as we know it appears as an evanescent episode in the flux of eternity. It moves toward its own extinction.

But the law from which this inference is drawn, Carnot's second law, is in itself not a historical or dynamic law. Like all other laws of the natural sciences, it is derived from the observation of phenomena and verified by experiments. We call it a law because it describes a process that repeats itself whenever the conditions for its operation are present. The process is irreversible, and from this fact scientists infer that the conditions

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for its operation will no longer be given once all thermodynamic instability has disappeared.

The notion of a law of historical change is self-contradictory. History is a sequence of phenomena that are characterized by their singularity. Those features which an event has in common with other events are not historical. What murder cases have in common refers to penal law, to psychology, to the technique of killing. As historical events the assassination of Julius Caesar and that of Henry IV of France are entirely different. The importance of an event for the production of further events is what counts for history. This effect of an event is unique and unrepeatable. Seen from the point of view of American constitutional law, the presidential elections of 1860 and of 1956 belong to the same class. For history they are two distinct events in the flux of affairs. If a historian compares them, he does so in order to elucidate the differences between them, not in order to discover laws that govern any instance of an American presidential election. Sometimes people formulate certain rules of thumb concerning such elections, as for instance: the party in power wins if business is booming. These rules are an attempt to understand the conduct of the voters. Nobody ascribes to them the necessity and apodictic validity which is the essential logical feature of a law of the natural sciences. Everybody is fully aware that the voters might proceed in a different way.

Carnot's second law is not the result of a study of the history of the universe. It is a proposition about phenomena that are repeated daily and hourly in precisely

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the way the law describes. From this law science deduces certain consequences concerning the future of the universe. This deduced knowledge is in itself not a law. It is the application of a law. It is a prognostication of future events made on the basis of a law that describes what is believed to be an inexorable necessity in the sequence of repeatable and repeated events.

Neither is Darwin's principle of natural selection a law of historical evolution. It tries to explain biological change as the outcome of the operation of a biological law. It interprets the past, it does not prognosticate things to come. Although the operation of the principle of natural selection may be considered as perennial, it is not permissible to infer that man must inevitably develop into a sort of superman. A line of evolutionary change may lead into a dead end beyond which there is no further change at all or a retrogression to previous states.

As it is impossible to deduce any general laws from the observation of historical change, the program of "dynamic" historicism could only be realized by discovering that the operation of one or several praxeological laws must inevitably result in the emergence of definite conditions of the future. Praxeology and its until now best-developed branch, economics, never claimed to know anything about such matters. Historicism, on account of its rejection of praxeology, was from the outset prevented from embarking upon such a study.

Everything that has been said about future historical events, inevitably bound to come, stems from prophecies

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elaborated by the metaphysical methods of the philosophy of history. By dint of intuition the author guesses the plans of the prime mover, and all uncertainty about the future disappears. The author of the Apocalypse, Hegel and, above all, Marx held themselves to be perfectly familiar with the laws of historical evolution. But the source of their knowledge was not science; it was the revelation of an inner voice.

4. Historicist Relativism

The ideas of historicism can be understood only if one takes into account that they sought exclusively one end: to negate everything that rationalist social philosophy and economics had established. In this pursuit many historicists did not shrink from any absurdity. Thus to the statement of the economists that there is an inevitable scarcity of nature-given factors upon which human well-being depends they opposed the fantastic assertion that there is abundance and plenty. What brings about poverty and want, they say, is the inadequacy of social institutions.

When the economists referred to progress, they looked upon conditions from the point of view of the ends sought by-acting men. There was nothing metaphysical in their concept of progress. Most men want to live and to prolong their lives; they want to be healthy and to avoid sickness; they want to live comfortably and not to exist on the verge of starvation. In the eyes of acting men advance toward these goals means improvement, the reverse means impairment. This is the meaning of

the terms "progress" and "retrogression" as applied by economists. In this sense they call a drop in infant mortality or success in fighting contagious diseases progress.

The question is not whether such progress makes people happy. It makes them happier than they would otherwise have been. Most mothers feel happier if their children survive, and most people feel happier without tuberculosis than with it. Looking upon conditions from his personal point of view, Nietzsche expressed misgivings about the "much too many." But the objects of his contempt thought differently.

In dealing with the means to which men resorted in their actions history as well as economics distinguishes between means which were fit to attain the ends sought and those which were not. In this sense progress is the substitution of more suitable methods of action for less suitable. Historicism takes offense at this terminology. Ml things are relative and must be viewed from the point of view of their age. Yet no champion of historicism has the boldness to contend that exorcism ever was a suitable means to cure sick cows. But the historicists are less cautious in dealing with economics. For instance, they declare that what economics teaches about the effects of price control is inapplicable to the conditions of the Middle Ages. The historical works of authors imbued with the ideas of historicism are muddled precisely on account of their rejection of economics.

While emphasizing that they do not want to judge the past by any preconceived standard, the historicists in fact try to justify the policies of the "good old days."

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Instead of approaching the theme of their studies with the best mental equipment available, they rely upon the fables of pseudo economics. They cling to the superstition that decreeing and enforcing maximum prices below the height of the potential prices which the unhampered market would fix is a suitable means to improve the conditions of the buyers. They omit to mention the documentary evidence of the failure of the just price policy and of its effects which, from the point of view of the rulers who resorted to it, were more Undesirable than the previous state of affairs which they were designed to alter.

One of the vain reproaches heaped by historicists on the economists is their alleged lack of historical sense. Economists, they say, believe that it would have been possible to improve the material conditions of earlier ages if only people had been familiar with the theories of modern economics. Now, there can be no doubt that the conditions of the Roman Empire would have been considerably affected if the emperors had not resorted to currency debasement and had not adapted a policy of price ceilings. It is no less obvious that the mass penury in Asia was caused by the fact that the despotic governments nipped in the bud all endeavors to accumulate capital. The Asiatics, unlike the Western Europeans, did not develop a legal and constitutional system which would have provided the opportunity for large-scale capital accumulation. And the public, actuated by the old fallacy that a businessman's wealth is the cause of other people's poverty, applauded whenever rulers confiscated the holdings of successful merchants.

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The economists have always been aware that the evolution of ideas is a slow, time-consuming process. The history of knowledge is the account of a series of successive steps made by men each of whom adds something to the thoughts of his predecessors. It is not surprising that Democritus of Abdera did not develop the quantum theory or that the geometry of Pythagoras and Euclid is different from that of Hilbert. Nobody ever thought that a contemporary of Pericles could have created the free-trade philosophy of flume, Adam Smith, and Ricardo and converted Athens into an emporium of capitalism.

There is no need to analyze the opinion of many historicists that to the soul of some nations the practices of capitalism appear so repulsive that they will never adopt them. If there are such peoples, they will forever remain poor. There is but one road that leads toward prosperity and freedom. Can any historicist on the ground of historical experience contest this truth?

No general rules about the effects of various modes of action and of definite social institutions can be derived from historical experience. In this sense the famous dictum is true that the study of history can teach only one thing: viz., that nothing can be learned from history. We could therefore agree with the historicists in not paying much attention to the indisputable fact that no people ever raised itself to a somewhat satisfactory state of welfare and civilization without the institution of private ownership of the means of production. It is not history but economics that clarifies our thoughts about the effects of property rights. But we

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must entirely reject the reasoning, very popular with many nineteenth-century writers, that the alleged fact that the institution of private property was unknown to peoples in primitive stages of civilization is a valid argument in favor of socialism. Having started as the harbingers of a future society which will wipe out all that is unsatisfactory and will transform the earth into a paradise, many socialists, for instance Engels, virtually became advocates of a return to the supposedly blissful conditions of a fabulous golden age of the remote past.

It never occurred to the historicists that man must pay a price for every achievement. People pay the price if they believe that the benefits derived from the thing to be acquired outweigh the disadvantages resulting from the sacrifice of something else. In dealing with this issue historicism adopts the illusions of romantic poetry. It sheds tears about the defacement of nature by civilization. How beautiful were the untouched virgin forests, the waterfalls, the solitary shores before the greed of acquisitive people spoiled their beauty! The romantic historicists pass over in silence the fact that the forests were cut down in order to win arable land and the falls were utilized to produce power and light. There is no doubt that Coney Island was more idyllic in the days of the Indians than it is today. But in its present state it gives millions of New Yorkers an opportunity to refresh themselves which they cannot get elsewhere. Talk about the magnificence of untouched nature is idle if it does not take into account what man has got by "desecrating" nature. The earth's marvels were

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certainly splendid when visitors seldom set foot upon them. Commercially organized tourist traffic made them accessible to the many. The man who thinks "What a pity not to be alone on this peak! Intruders spoil my pleasure," fails to remember that he himself probably would not be on the spot if business had not provided all the facilities required.

The technique of the historicists' indictment of capitalism is simple indeed. They take all its achievements for granted, but blame it for the disappearance of some enjoyments that are incompatible with it and for some imperfections which still may disfigure its products. They forget that mankind has had to pay a price for its achievements - a price paid willingly because people believe that the gain derived, e.g., the prolongation of the average length of life, is more to be desired.

5. Dissolving History

History is a sequence of changes. Every historical situation has its individuality, its own characteristics that distinguish it from any other situation. The stream of history never returns to a previously occupied point. History is not repetitious.

Stating this fact is not to express any opinion about the biological and anthropological problem of whether mankind is descended from a common human ancestry. There is no need to raise the question here whether the transformation of subhuman primates into the species Homo sapiens occurred only once at a definite time and in a definite part of the earth?s surface or came to pass

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several times and resulted in the emergence of various original races. Neither does the establishment of this fact mean that there is such a thing as unity of civilization. Even if we assume that all men are scions of a common human ancestry, there remains the fact that the scarcity of the means of sustenance brought about a dispersal of people over the globe. This dispersal resulted in the segregation of various groups. Each of these groups had to solve for itself man's specific problem of life: how to pursue the conscious striving after improvement of conditions warranting survival. Thus various civilizations emerged. It will probably never be known to what extent definite civilizations were isolated and independent of one another. But it is certain that for thousands of years instances of such cultural isolation existed. It was only the explorations of European navigators and travelers that finally put an end to it.

Many civilizations came to an impasse. They either were destroyed by foreign conquerors or disintegrated from within. Next to the ruins of marvelous structures the progeny of their builders live in poverty and ignorance. The cultural achievements of their forefathers, their philosophy, technology, and often even their language have fallen into oblivion, and the people have relapsed into barbarism. In some cases the literature of the extinct civilization has been preserved and, rediscovered by scholars, has influenced later generations and civilizations.

Other civilizations developed to a certain point and then came to a standstill. They were arrested, as Bagehot

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said.[1] The people tried to preserve the achievements of the past but they no longer planned to add anything new to them.

A firm tenet of eighteenth-century social philosophy was meliorism. Once the superstitions, prejudices, and errors that caused the downfall of older civilizations have given way to the supremacy of reason, there will be a steady improvement of human conditions. The world will become better every day. Mankind will never return to the dark ages. Progress toward higher stages of well-being and knowledge is irresistible. All reactionary movements are doomed to failure. Present-day philosophy no longer indulges in such optimistic views. We realize that our civilization too is vulnerable. True, it is safe against external attacks on the part of foreign barbarians. But it could be destroyed from within by domestic barbarians.

Civilization is the product of human effort, the achievement of men eager to fight the forces adverse to their well-being. This achievement is dependent on men's using suitable means. If the means chosen are not fit to produce the ends sought, disaster results. Bad policies can disintegrate our civilization as they have destroyed many other civilizations. But neither reason nor experience warrants the assumption that we cannot avoid choosing bad policies and thereby wrecking our civilization.

There are doctrines hypostatizing the notion of civilization. In their view a civilization is a sort of living being. It comes into existence, thrives for some time,

[1]. Walter Bagehot, Physics and Politics (London, 1872), p. 212.

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and finally dies. All civilizations, however different they may appear to the superficial observer, have the same structure. They must necessarily pass through the same sequence of successive stages. There is no history. What is mistakenly called history is in fact the repetition of events belonging to the same class; is, as Nietzsche put it, eternal recurrence.

The idea is very old and can be traced back to ancient philosophy. It was adumbrated by Giovanni Battista Vico. It played some role in the attempts of several economists to develop schemes of parallelisms of the economic history of various nations. It owes its present popularity to Oswald Spengler's Decline of the West. Softened to some extent and thereby rendered inconsistent, it is the main idea of the voluminous Study of History on which Arnold J. Toynbee is still working. There is no doubt that both Spengler and Toynbee were prompted by the widespread disparagement of capitalism. Spengler's motive clearly was to prognosticate the inevitable breakdown of our civilization. Although unaffected by the chiliastic prophecies of the Marxians, he was himself a socialist and entirely under the sway of the socialists' vilification of the market economy. He was judicious enough to see the disastrous implications of the policies of the German Marxians. But, lacking any economic knowledge and even full of contempt for economics, he came to the conclusion that our civilization has to choose between two evils each of which is bound to destroy it. The doctrines of both Spengler and Toynbee show clearly the poor results engendered by neglect of economics in any treatment of human concerns.

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True, Western civilization is decadent. But its decadence consists precisely in the endorsement of the anti-capitalistic creed.

What we may call the Spengler doctrine dissolves history into the record of the life span of individual entities, the various civilizations. We are not told in precise terms what marks characterize an individual civilization as such and distinguish it from another civilization. All that we learn about this essential matter is metaphorical. A civilization is like a biological being; it is born, grows, matures, decays, and dies. Such analogies are no substitute for unambiguous clarification and definition.

Historical research cannot deal with all things together; it must divide and subdivide the totality of events. Out of the whole body of history it carves separate chapters. The principles applied in so doing are determined by the way the historian understands things and events, value judgments and the actions prompted by them and the relation of actions to the further course of affairs. Almost all historians agree in dealing separately with the history of various more or less isolated peoples and civilizations. Differences of opinion about the application of this procedure to definite problems must be decided by careful examination of each individual case. No epistemological objection can be raised to the idea of distinguishing various civilizations within the totality of history.

But what the Spengler doctrine means is something entirely different. In its context a civilization is a Gestalt, a whole, an individuality of a distinct nature. What

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determines its origin, changes, and extinction stems from its own nature. It is not the ideas and actions of the individuals that constitute the historical process There is in fact no historical process. On the earth civilizations come into being, live for some time, and then die just as various specimens of every plant species are born, live, and wither away. Whatever men may do is irrelevant to the final outcome. Every civilization must decay and die.

There is no harm in comparing different historical events and different events that occurred in the history of various civilizations. But there is no justification whatever for the assertion that every civilization must pass through a sequence of inevitable stages.

Mr. Toynbee is inconsistent enough not to deprive us entirely of any hope for the survival of our civilization. While the whole and only content of his study is to point out that the process of civilization consists of periodic repetitive movements, he adds that this "does not imply that the process itself is of the same cyclical order as they are." Having taken pains to show that sixteen civilizations have perished already and nine others are at the point of death, he expresses a vague optimism concerning the future of the twenty-sixth civilization.[2]

History is the record of human action. Human action is the conscious effort of man to substitute more satisfactory conditions for less satisfactory ones. Ideas determine what are to be considered more and less satisfactory conditions and what means are to be

[2]. A. J. Toynbee, A Study of History, Abridgment of Volumes I-VI by D. C. Somervell (Oxford University Press, 1947), p. 254.

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resorted to alter them. Thus ideas are the main theme of the study of history. Ideas are not an invariable stock that existed from the very beginning of things and that does not change. Every idea originated at a definite point of time and space in the head of an individual. (Of course, it has happened again and again that the same idea originated independently in the heads of various individuals at various points of time and space.) The genesis of every new idea is an innovation; it adds something new and unheard of before to the course of world affairs. The reason history does not repeat itself is that every historical state is the consummation of the operation of ideas different from those that operated in other historical states.

Civilization differs from the mere biological and physiological aspects of life in being an offshoot of ideas. The essence of civilization is ideas. If we try to distinguish different civilizations, the differentia specifica can be found only in the different meanings of the ideas that determined them. Civilizations differ from one another precisely in the quality of the substance that characterizes them as civilizations. In their essential structure they are unique individuals, not members of a class. This forbids us to compare their vicissitudes with the physiological process going on in an individual man's or animal's life. In every animal body the same physiological changes come to pass. A child ripens in the mother's womb, it is delivered, grows, matures, decays, and dies in the consummation of the same cycle of life. It is quite another thing with civilizations. In being civilizations they are disparate and incommensurable because

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they are actuated by different ideas and therefore develop in different ways.

Ideas must not be classified without regard to the soundness of their content. Men have had different ideas concerning the cure of cancer. Up to now none of these ideas has produced fully satisfactory results. But this would not justify the inference that therefore future attempts to cure cancer will also be futile. The historian of past civilizations may declare: There was something wrong with the ideas upon which those civilizations that decayed from within were built. But he must not derive from this fact the conclusion that other civilizations, built on different ideas, are also domed Within the body of animals and plants forces are operating that are bound to disintegrate it eventually. No such forces could be discovered in the "body" of a civilization which would not be the outcome of its particular ideologies.

No less vain are efforts to search in the history of various civilizations for parallelisms or identical stages in their life span. We may compare the history of various peoples and civilizations. But such comparisons must deal not only with similarities but also with differences. The eagerness to discover similarities induces authors to neglect or even to conjure away discrepancies. The first task of the historian is to deal with historical events. Comparisons made afterward on the basis of a knowledge of events as perfect as possible may be harmless or sometimes even instructive. Comparisons that accompany or even precede study of the sources create confusion if not outright fables.

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6. Undoing History

There have always been people who exalted the good old days and advocated a return to the happy past. The resistance offered to legal and constitutional innovations by those whom they hurt has frequently crystallized in programs that requested a reconstruction of old institutions or presumably old institutions. In some cases reforms that aimed at something essentially new have been recommended as a restoration of ancient law. An eminent example was provided by the role Magna Charta played in the ideologies of England's seventeenth-century anti-Stuart parties.

But it was historicism which for the first time frankly suggested unmaking historical changes and returning to extinct conditions of a remote past. We need not deal with the lunatic fringe of this movement, such as German attempts to revive the cult of Wodan. Neither do the sartorial aspects of these tendencies deserve more thin ironical comments. (A magazine picture showing members of the Hanover-Coburg family parading in the garb of the Scottish clansmen who fought at Culloden would have startled the "Butcher" Cumberland.) Only the linguistic and economic issues involved require attention.

In the course of history many languages have been' submerged. Some disappeared completely without leaving any trace. Others are preserved in old documents, books, and inscriptions and can be studied by scholars. Several of these "dead" languages - Sanskrit, Hebrew,

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Greek, and Latin-influence contemporary thought through the philosophical and poetical value of the ideas expressed in their literature. Others are merely objects of philological research.

The process that resulted in the extinction of a language was in many cases merely linguistic growth and transformation of the spoken word. A long succession of slight changes altered the phonetic forms, the vocabulary, and the syntax so thoroughly that later generations could no longer read the documents bequeathed by their ancestors. The vernacular developed into a new distinct language. The old tongue could only be understood by those with special training. The death of the old language and the birth of the new one were the outcome of a slow, peaceful evolution.

But in many cases linguistic change was the outcome of political and military events. People speaking a foreign language acquired political and economic hegemony either by military conquest or by the superiority of their civilization. Those speaking the native tongue were relegated to a subordinate position. On account of their social and political disabilities it did not matter very much what they had to say and how they said it. Important business was transacted exclusively in the language of their masters. Rulers, courts, church, and schools employed only this language; it was the language of the laws and the literature. The old native tongue was used only by the uneducated populace. Whenever one of these underlings wanted to rise to a better position, he had first to learn the language of

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the masters. The vernacular was reserved to the dullest and the least ambitious; it fell into contempt and finally into oblivion. A foreign language superseded the native idiom.

The political and military events that actuated this linguistic process were in many cases characterized by tyrannical cruelty and pitiless persecution of all opponents. Such methods met with the approval of some philosophers and moralists of precapitalistic ages, as they have sometimes won the praise of contemporary "idealists" when the socialists resort to them. But to the spurious rationalistic dogmatism of the orthodox liberal doctrinaires" they appear shocking. The historical writings of the latter lacked that lofty relativism which induced self-styled "realistic" historians to explain and to justify all that had happened in the past and to vindicate surviving oppressive institutions. (As one critic reproachfully observed, in the utilitarians "old institutions awake no thrill; they are simply embodiments of prejudice.")[1] It does not need any further explanation why the descendants of the victims of those persecutions and oppressions judged in a different way the experience of their ancestors, still less why they were intent upon abolishing those effects of past despotism which still hurt them. In some cases, not content with eliminating still existing oppression, they planned to undo also such changes as did not harm them any longer, however detrimental and malignant the

[1]. Leslie Stephens, The English Utilitarians (London, 1900), 3, 70 (on J. Stuart Mill).

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process that had brought them about had been in a distant past. It is precisely this that the attempts to undo linguistic changes aim at.

The best example is provided by Ireland. Miens had invaded and conquered the country, expropriated the landowners, destroyed its civilization, organized a despotic regime, and tried to convert the people by force of arms to a religious creed which they despised. The establishment of an alien church did not succeed in making the Irish abandon Roman Catholicism. But the English language superseded the native Gaelic idiom. When later the Irish succeeded step by step in curbing their foreign oppressors and finally acquiring political independence, most of them were no longer linguistically different from the English. They spoke English and their eminent writers wrote English books some of which are among the outstanding works of modern world literature.

This state of affairs hurts the feelings of many Irish. They want to induce their fellow citizens to return to the idiom their ancestors spoke in ages gone by. There is little open opposition to these pursuits. Few people have the courage to fight a popular movement openly, and radical nationalism is today, next to socialism, the most popular ideology. Nobody wants to risk being branded an enemy of his nation. But powerful forces are silently resisting the linguistic reform. People cling to the tongue they speak no matter whether those who want to suppress it are foreign despots or domestic zealots. The modern Irish are fully aware of the advantages they derive from the fact that English is the

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foremost language of contemporary civilization, which everyone has to learn in order to read many important books or to play a role in international trade, in world affairs, and in great ideological movements. Precisely because the Irish are a civilized nation whose authors write not for a limited audience but for all educated people, the chances of a substitution of Gaelic for English are slim. No nostalgic sentimentality can alter these circumstances.

It must be mentioned that the linguistic pursuits of Irish nationalism were prompted by one of the most widely adopted political doctrines of the nineteenth century. The principle of nationality as accepted by all the people s of Europe postulates that every linguistic group must form an independent state and that this state must embrace all people speaking the same language.[2] From the point of view of this principle an English-speaking Ireland should belong to the United Kingdom of Great Britain and Ireland, and the mere existence of an independent Irish Free State appears irregular. The prestige which the principle of nationality enjoyed in Europe was so enormous that various peoples who desired to form a state of their own the independence of which was at variance with it tried to change their language in order to justify their aspirations in this light. This explains the attitude of the Irish nationalists, but it does not affect what has been said about the implications of their linguistic plans.

A language is not simply a collection of phonetic

[2]. Mises, Omnipotent Government (New Haven, Yale University Press, 1944), pp. 84-9.

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signs. It is an instrument of thinking and acting. Its vocabulary and grammar are adjusted to the mentality of the individuals whom it serves. A living language - spoken, written, and read by living men - changes continually in conformity with changes occurring in the minds of those who use it. A language fallen into desuetude is dead because it no longer changes. It mirrors the mentality of people long since passed away. It is useless to the people of another age no matter whether these people are biologically the scions of those who once used it or merely believe themselves to be their descendants. The trouble is not with the terms signifying tangible things. Such terms could be supplemented by neologisms. It is the abstract terms that provide insoluble problems. The precipitate of a people?s ideological controversies, of their ideas concerning issues of pure knowledge and religion, legal institutions, political organization, and economic activities, these terms reflect all the vicissitudes of their history. In learning their meaning the rising generation are initiated into the mental environment in which they have to live and to work. This meaning of the various words is in continual flux in response to changes in ideas and conditions.

Those who want to revive a dead language must in fact create out of its phonetic elements a new language whose vocabulary and syntax are adjusted to the conditions of the present age, entirely different from those of the old age. The tongue of their ancestors is of no use to the modern Irish. The laws of present-day Ireland could not be written in the old vocabulary; Shaw, Joyce, and Yeats could not have employed it in their

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plays, novels, and poems. One cannot wipe out history and return to the past.

Different from the attempts to revive dead idioms are the plans to elevate local dialects to the position of a language of literature and other manifestations of thinking and acting. When communication between the various parts of a nation's territory was infrequent on account of the paucity of the interlocal division of labor and the primitiveness of transportation facilities, there was a tendency toward a disintegration of linguistic unity. Different dialects developed out of the tongue spoken by the people who had settled in an area. Sometimes these dialects evolved into a distinct literary language, as was the case with the Dutch language. In other cases only one of the dialects became a literary language, while the others remained idioms employed in daily life but not used in the schools, the courts, in books, and in the conversation of educated people. Such was the outcome in Germany, for instance, where the writings of Luther and the Protestant theologians gave the idiom of the "Saxon Chancellery" a preponderant position and reduced all other dialects to subordinate rank.

Under the impact of historicism movements sprang up which aim at undoing this process by elevating dialects into literary languages. The most remarkable of these tendencies is Felibrige, the design to restore to the Provencal tongue the eminence it once enjoyed as Langue d'Oc. The Felibrists, led by the distinguished poet Mistral, were judicious enough not to plan a complete substitution of their idiom for French. But even

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the prospects of their more moderate ambition, to create a new Provencal poesy, seem to be inauspicious. One cannot imagine any of the modern French masterpieces composed in Provencal.

Local dialects of various languages have been employed in novels and plays depicting the life of the uneducated. There is often an inherent insincerity in such writings. The author condescendingly puts himself on a level with people whose mentality he never shared or has since outgrown. He behaves like an adult who condescends to write books for children. No present-day work of literature can withdraw itself from the impact of the ideologies of our age. Once having gone through the schools of these ideologies, an author cannot successfully masquerade as a simple common man and adopt his speech and his world view.

History is an irreversible process.

7. Undoing Economic History

The history of mankind is the record of a progressive intensification of the division of labor. Animals live in perfect autarky of each individual or of each quasi family. What made cooperation between men possible is the fact that work performed under the division of tasks is more productive than the isolated efforts of autarkic individuals and that man's reason is capable of conceiving this truth. But for these two facts men would have remained forever solitary food-seekers, forced by an inevitable law of nature to fight one another without pity and pardon. No social bonds, no feelings of sympathy,

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benevolence, and friendship, no civilization would have developed in a world in which everybody had to see in all other men rivals in the biological competition for a strictly limited supply of food.

One of the greatest achievements of eighteenth-century social philosophy is the disclosure of the role which the principle of higher productivity resulting from division of labor has played in history. It was against these teachings of Smith and Ricardo that the most passionate attacks of historicism were directed.

The operation of the principle of division of labor and its corollary, cooperation, tends ultimately toward a world-embracing system of production. Insofar as the geographical distribution of natural resources does not limit the tendencies toward specialization and integration in the processing trades, the unhampered market aims at the evolution of plants operating in a comparatively narrow field of specialized production but serving the whole population of the earth. From the point of view of people who prefer more and better merchandise to a smaller and poorer supply the ideal system would consist in the highest possible concentration of the production of each specialty. The same principle that brought about the emergence of such specialists as blacksmiths, carpenters, tailors, bakers and also physicians, teachers, artists and writers would finally result in the emergence of one factory supplying the whole oecumene with some particular article. Although the geographical factor mentioned above counteracts the full operation of this tendency, international division of labor came into existence and will move forward until

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it reaches the limits drawn by geography, geology, and climate.

Every step on the road toward intensification of the division of labor hurts in the short run the personal interests of some people. The expansion of the more efficient plant hurts the interests of less efficient competitors whom it forces to go out of business. Technological innovation hurts the interests of workers who can no longer make a living by clinging to the discarded inferior methods. The vested short-run interests of small business and of inefficient workers are adversely affected by any improvement. This is not a new phenomenon. Neither is it a new phenomenon that those prejudiced by economic improvement ask for privileges that will protect them against the competition of the more efficient. The history of mankind is a long record of obstacles placed in the way of the more efficient for the benefit of the less efficient.

It is customary to explain the obstinate efforts to stop economic improvement by referring to the "interests." The explanation is very unsatisfactory. Leaving aside the fact that an innovation hurts merely the short-run interests of some people, we must emphasize that it hurts only the interests of a small minority while favoring those of the immense majority. The bread factory certainly hurts the small bakers. But it hurts them solely because it improves the conditions of all people consuming bread. The importation of foreign sugar and watches hurts the interests of a small minority of Americans. But it is a boon for all those who want to eat sugar and to buy watches. The problem is precisely

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this: Why is an innovation unpopular although it favors the interests of the great majority of the people?

A privilege accorded to a special branch of business is in the short run advantageous to those who at the instant happen to be in this branch. But it hurts all other people to the same extent. If everybody is privileged to the same degree, he loses as much in his capacity as a consumer as he wins in his capacity as a producer. Moreover, everybody is hurt by the fact that productivity in all branches of domestic production drops on account of these privileges.[1] To the extent that American legislation is successful in its endeavors to curb big business, all are hurt because the products are produced at higher costs in plants which would have been wiped out in the absence of this policy. If the United States had gone as far as Austria did in its fight against big business, the average American would not be much better off than the average Austrian.

It is not the interests that motivate the struggle against the further intensification of the division of labor, but spurious ideas about alleged interests. As in any other regard, historicism in dealing with these problems too sees only the short-run disadvantages that result for some people and ignores the long-run advantages for all of the people. It recommends measures without mentioning the price that must be paid for them. What fun shoemaking was in the days of Hans Sachs and the Meistersinger! No need to analyze critically such romantic dreams. But how many people went barefoot in those days? What a disgrace the big chemical

[1]. See above, pp. 32 f.

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concerns are! But would it have been possible for pharmacists in their primitive laboratories to turn out the drugs that kill the bacilli?

Those who want to set the clock of history back ought to tell people what their policy would cost. Splitting up big business is all right if you are prepared to put up with the consequences. If the present American methods of taxing incomes and estates had been adopted fifty years ago, most of those new things which no American would like to do without today would not have been developed at all or, if they had, would have been inaccessible to the greater part of the nation. What such authors as Professors Sombart and Tawney say about the blissful conditions of the Middle Ages is mere fantasy. The effort "to achieve a continuous and unlimited increase in material wealth," says Professor Tawney, brings ?ruin to the soul and confusion to society."[2] No need to stress the fact that some people may feel that a soul so sensitive it is ruined by the awareness that more infants survive the first year of their lives and fewer people die from starvation today than in the Middle Ages is worth being ruined What brings confusion to society is not wealth but the efforts of historicists such as Professor Tawney to discredit economic appetites." After all it was nature, not the capitalists, that implanted appetites in man and impels him to satisfy them. In the collectivist institutions of the Middle Ages, such as church, township, village community, clan, family, and guild, says Sombart, the individual "was kept

[2]. R. H. Tawney, Religion and the Rise of Capitalism (New York, Penguin Books, n.d.), pp. 38 and 234.

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warm and sheltered like the fruit in its rind."[3] Is this a faithful description of a time when the population was harassed again and again by famines, plagues, wars, the persecution of heretics, and other disasters?

It is certainly possible to stop the further progress of capitalism or even to return to conditions in which small business and more primitive methods of production prevail. A police apparatus organized after the pattern of the Soviet constabulary can achieve many things. The question is only whether the nations that have built modern civilization will be ready to pay the price.


[3]. W. Sombart, Der proletarische Sozialismus (10th ed. Jena, 1924), 1, 31.

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