Classical Liberalism and the Austrian School

 

5	The Conflict of Classes: Liberal vs. Marxist Theories

Few ideas are as closely associated with Marxism as the concepts of class and class conflict. It is, for instance, impossible to imagine what a Marxist philosophy of history or theory of revolution would be in the their absence. Yet, as with much else in Marxism, these concepts remain ambiguous and contradictory.1 An example: while Marxist doctrine supposedly grounds classes in the process of production, The Communist Manifesto asserts in its famous opening lines:

The history of all hitherto existing society is the history of class struggles. Freeman and slave, patrician and plebeian, lord and serf, guild-master and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another . . .2

On examination, however, these opposed pairs turn out to be, either wholly or in part, not economic, but legal, categories.3

Neither Marx nor Engels ever resolved the contradictions and ambiguities in their theory in this area. The last chapter of the third and final volume of Marx’s Capital, published posthumously in 1894, is titled, “Classes.”4 Here he states: “The first question to be answered is this: What constitutes a class?” “At first glance” it would seem to be “the identity of revenue and sources of revenue.” That Marx finds inadequate, since “from this standpoint, physicians and officials, e.g., would also constitute two classes.” Distinct classes would also be yielded by

the infinite fragmentation of interest [sic] and rank into which the division of social labour splits labourers as well as capitalists and landlords—the latter, e.g., into owners of vineyards, farm owners, owners of forests, mine owners and owners of fisheries.

At this point, there is a note by Engels: “Here the manuscript breaks off.” This was not on account of Marx’s sudden demise, however. The chapter dates from a first draft composed by Marx between 1863 and 1867, that is, sixteen to twenty years before his death.5 Engels’s explanation is that “Marx used to leave such concluding summaries until the final editing, just before going to press, when the latest historical developments furnished him with unfailing regularity with proofs of the most laudable timeliness for his theoretical propositions.”6 This explanation would be more convincing if in the intervening years before his death Marx had elsewhere provided a clear definition of classes consistent with the other parts of his theory. In fact, the terms “class” and “classes” as they appear throughout the works of Marx and Engels are totally muddled.7

Marx, in Sorokin’s view, was well aware of this central defect in his theory, and his abruptly terminated chapter in the last volume of Capital was a failed attempt to remedy it. The enduring confusion among Marxists regarding the meaning of class, Sorokin held, may also be traceable to Marx’s own intellectual confusion. Cf. Mises 1957: 113: “Marx obfuscated the problem by confusing the notions of caste and class.”

Nonetheless, it remains the case that Marxism is so closely identified with the ideas of classes and of conflicts among them that an important chapter in the history of political thought has been virtually forgotten.

Few economists are as often and as highly celebrated for their knowledge of modern intellectual history as Albert O. Hirschman. Yet Hirschman is obviously at a total loss when confronted with a clear statement of the liberal doctrine of class conflict, in Vilfredo Pareto’s Cours d’économie politique (1896–97). Here Pareto speaks of the struggle to appropriate the wealth produced by others as “the great fact that dominates the whole history of humanity.” To Hirschman’s ear this “sounds at first curiously—perhaps consciously—like the Communist Manifesto.” But Pareto quickly “distances himself from Marxism” by using the term “spoliation,” and by ascribing spoliation, or plunder, to the dominant class’s control of the state machine. (Hirschman 1991: 55) Evidently, Hirschman has not the slightest inkling that Pareto was presenting, in the customary terminology, a generations-old liberal analysis that goes back at least to the first decades of the nineteenth century.

Not only was the notion of class conflict a commonplace for decades before Marx began to write, but a quite different theory of class conflict had been worked out which itself played a major role in the genealogy of Marx’s ideas.

Marxism’s Debt to the Liberal Doctrine

Adolphe Blanqui was the protégé of J.-B. Say and succeeded him in the chair of political economy at the Conservatoire des Arts et Métiers. In what is probably the first history of economic thought, published in 1837, Blanqui wrote:

In all the revolutions, there have been but two parties confronting each other; that of the people who wish to live by their own labor, and that of those who would live by the labor of others. . . . Patricians and plebeians, slaves and freemen, guelphs and ghibellines, red roses and white roses, cavaliers and roundheads, liberals and serviles [in Spain], are only varieties of the same species. (Blanqui 1837: x, emphasis in original)8

Blanqui quickly makes clear what he understands to have been at issue in these social conflicts:

So, in one country, the fruit of labor is taken from the workman by taxes, under pretence of the welfare of the state; in another, by privileges, declaring labor a royal concession, and making one pay dearly for the right to devote himself to it. The same abuse is reproduced under forms more indirect, but not less oppressive, when, by means of custom-duties, the state shares with the privileged industries the benefits of the taxes imposed on non-privileged classes. (Blanqui1 837: x–xi).

Blanqui was by no means the originator of this liberal analysis of the conflict of classes; rather, he drew on a perspective that was widespread in liberal circles in the first decades of the nineteenth century (see below). Marx and Engels were well aware of the existence of this earlier notion. In a letter written in 1852 to his follower, Joseph Weydemeyer, the first exponent of Marxism in the United States,9 Marx asserts:

no credit is due to me for discovering the existence of classes in modern society or the struggle between them. Long before me bourgeois historians had described the historical development of this class struggle and bourgeois economists the economic anatomy of the classes.10

The two most prominent “bourgeois historians” whom he names are the Frenchmen, François Guizot and Augustin Thierry;11 two years later, Marx referred to Thierry as “the father of the ‘class struggle’ in French historiography.”12

This “bourgeois” genealogy of the Marxist theory of class conflict was freely conceded by Marx’s early followers. Towards the end of his life, Engels suggested that so little did individuals count in history as compared to the great underlying social forces, that even in the absence of Marx himself, “the materialist conception of history” would have been discovered by others; his evidence is that “Thierry, Mignet, Guizot, and all the English historians up to 1850” were striving towards it.13 Franz Mehring, Plekhanov, and other Marxist writers in the period of the Second International emphasized the roots of the Marxist class conflict doctrine in the liberal historiography of the French Restoration.14 Lenin also credited “the bourgeoisie,” not Marx, with having originated the theory of the class struggle.15 Strangely, even this lengthy, one could say, star-studded chapter in the history of socialist ideas is terra incognita to the eminent historian of economic thought, Professor Albert O. Hirschman.16

Sources of Industrialisme

Of the French historians mentioned by the Marxist writers, only Augustin Thierry in his younger days had delved deeply into the subject and had, in fact, participated in shaping a consistent, radical-liberal analysis of classes and class conflict. The purpose of this essay is to sketch the background and content of this remarkable analysis, discuss some points that arise in connection with it, and direct attention to some variations that appeared later and elsewhere. The possibility that it might prove considerably superior to Marxism as an instrument for interpreting social and political history will also be considered.

Liberal class conflict theory emerged in a polished form in France, in the period of the Bourbon Restoration, following the defeat and final exile of Napoleon. From 1817 to 1819, two young liberals, Charles Comte and Charles Dunoyer, edited the journal Le Censeur Européen; beginning with the second volume (issue), another young liberal, Augustin Thierry, collaborated closely with them. The Censeur Européen developed and disseminated a radical version of liberalism, one that continued to influence liberal thought up to the time of Herbert Spencer and beyond. It can be viewed as a core-constituent—and thus one of the historically defining elements—of authentic liberalism (see “Liberalism, True and False, in the present work). In this sense, a consideration of the world-view of the Censeur group is of great importance in helping to give shape and content to the protean concept of liberalism. Moreover, through Henri de Saint-Simon and his followers and other channels, it had an impact on socialist thought as well. Comte and Dunoyer called their doctrine Industrialisme, Industrialism.17

There were several major sources of Industrialism. One was Antoine Destutt de Tracy, the last and most famous of the Idéologue school of French liberals, whose friend, Thomas Jefferson, arranged for the translation and publication of his Treatise on Political Economy in the United States before it appeared in France.18 Destutt de Tracy’s definition of society (1970: 6) was crucial:

Society is purely and solely a continual series of exchanges. It is never anything else, in any epoch of its duration, from its commencement the most unformed to its greatest perfection. And this is the greatest eulogy we can give to it, for exchange is an admirable transaction, in which the two contracting parties always both gain; consequently, society is an uninterrupted succession of advantages, unceasingly renewed for all its members.

Destutt de Tracy’s position was that “commerce is society itself. . . . It is an attribute of man. . . . It is the source of all human good . . .”19 Commerce was a “panacea,” in the words of a student of his thought, “the world’s civilizing, rationalizing, and pacifying force.”20

Charles Comte, Dunoyer, and Augustin Thierry and his brother Amédée were frequent guests at Destutt de Tracy’s salon in the rue d’Anjou, a center of liberal social life in Paris. Here they mingled with Stendhal, Benjamin Constant, Lafayette, and others.21

Constant’s work, De l’esprit de conquête et de l’usurpation [“On the Spirit of Conquest and of Usurpation”], which appeared in 1813, is another source of Industrialist thought. Dunoyer credits Constant with being the first to distinguish sharply between modern and ancient civilization, thus opening up the question of the distinctive aim of the modern age and the form of organization appropriate to that aim.22 From the reactionary author Montlosier was derived the view of the importance of conquest in the predominance of the nobility over the commoners. The liberal reaction against the militarism and despotism of the Napoleonic period also played a part.23

The Role of Jean-Baptiste Say

There is little doubt, however, that the chief intellectual influence on Industrialism was J.-B. Say’s Traité de l’économie politique, the second edition of which appeared in 1814 and the third in 1817.24 Comte and Dunoyer probably became personally acquainted with Say during the Hundred Days of Napoleon’s brief return to France, in the spring of 1815. Together with Thierry, they were participants at Say’s salon.25 (Comte later became Say’s son-in-law.) The third edition of Say’s Traité was accorded a two-part review of over 120 pages in the Censeur Européen.26 Say held that wealth is comprised of what has value, and value is based on utility:

[The different ways of producing] all consist in taking a product in one state and putting it into another in which it has more utility and value . . . in one way or another, from the moment that one creates or augments the utility of things, one augments their value, one is exercising an industry, one is producing wealth.27

All those members of society who contribute to the creation of values are deemed productive, but Say awards pride of place to the entrepreneur. He was one of the first to realize the boundless possibilities of a free economy, led by creative entrepreneurs. As one commentator summarizes his message:

The productive power of industry is limited only by ignorance and by the bad administration of states. Spread enlightenment and improve governments, or, rather, prevent them from doing harm; there will be no limit that can be assigned to the multiplication of wealth.28

There exist, however, categories of persons who simply consume wealth rather than produce it. These unproductive classes include especially the army, the government, and the state-supported clergy29—what could be called the “reactionary” classes, associated with the Old Regime.

But Say was quite aware that anti-productive and anti-social activity was also possible, indeed, altogether common, when otherwise productive elements employed state power to capture privileges:

But personal interest is no longer a safe criterion if individual interests are not left to counteract and control each other. If one individual, or one class, can call in the aid of authority to ward off the effects of competition, it acquires a privilege and at the cost of the whole community; it can then make sure of profits not altogether due to the productive services rendered, but composed in part of an actual tax upon consumers for its private profit; which tax it commonly shares with the authority that thus unjustly lends its support. The legislative body has great difficulty in resisting the importunate demands for this kind of privileges; the applicants are the producers that are to benefit thereby, who can represent, with much plausibility, that their own gains are a gain to the industrious classes, and to the nation at large, their workmen and themselves being members of the industrious classes, and of the nation.30

Thus, while there is a harmony of interest among producers (between employers and workers, for instance), a natural conflict of interests obtains between producers and non-producers, including those members of the producing classes when they choose to exploit government-granted privilege. As one scholar has put it, the cry of Say and of his disciples could be, “Producers of the world, unite!”31

The Social Philosophy of the Censeur Européen

The essential achievement of Comte, Dunoyer, and Thierry in the Censeur Européen was to have taken the ideas of Say and other earlier liberals and forged them into a fighting creed.32

Industrialism casts itself as a general theory of society. Taking as its starting point acting man, who strives to satisfy his needs and desires, it posits that the purpose of society is the creation of “utility” in the widest sense: of the goods and services useful to man in the satisfaction of his needs and desires. In acting to meet these, man has three means available: he may take advantage of what nature offers spontaneously (this occurs only in rather primitive circumstances); he may plunder the wealth that others have produced; or he may labor to produce wealth.33

In any given society, a sharp distinction can be drawn between those who live by plunder and those who live by production. The first are characterized in various ways by Comte and Dunoyer, including “the idle,” “the devouring,” and “the hornets”; the second, are termed, among other things, “the industrious” and “the bees.” To attempt to live without producing is to live “as savages.”34 The producers are “the civilized men.”35

Cultural evolution has been such that whole societies may be designated as primarily plundering and idle, or productive and industrious. Thus, Industrialism is not merely an analysis of social dynamics, but also a theory of historical development. Indeed, much of Industrialist theory is embedded in its account of historical evolution.

The “Industrialist Manifesto”

The history of all hitherto existing society is the history of struggles between the plundering and the producing classes. Following Constant, plunder through warfare is said to have been the method favored by the ancient Greeks and Romans. With the decline of the Roman Empire in the West, Germanic barbarians established themselves, through conquest, as the lords of the land: feudalism developed, especially in France after the Frankish invasion and in England after the Norman Conquest. It was essentially a system for the spoliation of domestic peasants by the warrior elite of “noblemen.”36 Under feudalism, there was

a kind of superordination that subjected the laboring men to the idle and devouring men, and which gave to the latter the means of existing without producing anything, or of living nobly.37

Throughout the Middle Ages, the nobility exploited not only its own peasants but especially the merchants who passed through their territories. The nobles’ castles were nothing but thieves’ dens.38 With the rise of the towns in the eleventh century, one may even speak of “two nations” sharing the soil of France: the plundering feudal elite and the productive commoners of the towns.

To the rapacious nobility there eventually succeeded the equally rapacious kings, whose “thefts with violence, alterations of the coinage, bankruptcies, confiscations, hindrances to industry” are the common stuff of the history of France.39 “When the lords were the stronger, they viewed as belonging to them everything they could lay hold of. As soon as the kings were on top, they thought and acted in the same way.”40 With the growth of the wealth produced by the commoners, or Third Estate, additional riches were available for expropriation by the parasitic classes. Comte is particularly severe on royal manipulation of money and legal tender laws, and quotes a seventeenth century writer on how “discountings [les escomptes] enriched the men of money and finance at the expense of the public.”41

In modern times, the main types of the idle classes have been the professional soldiers, monks, the nobles, bourgeois who were ennobled, and governments.42

“Peace and Freedom”

A pro-peace position was central to the Industrialist point of view; in fact, the motto on the title page of each issue of the Censeur Européen was: Paix et Liberté—Peace and Freedom.

The Industrialist attack on militarism and standing armies was relentless and savage. Dunoyer states that the “production” of the standing armies of Europe has consisted in “massacres, rapes, pillagings, conflagrations, vices and crimes, the depravation, ruin, and enslavement of the peoples; they have been the shame and scourge of civilization.” Particularly anathematized were wars engendered by mercantilism, or “the spirit of monopoly . . . the pretension of each to be industrious to the exclusion of all others, exclusively to provision others with the products of its industry.” In the course of a jeremiad against the imperialist policy of the English, Dunoyer states, significantly:

The result of this pretension was that the spirit of industry became a principle more hostile, more of an enemy of civilization, than the spirit of rapine itself.

Monasticism, in the Industrialist view, encouraged idleness and apathy (but see my criticism below). In modern times, the nobles, no longer able to live by directly robbing the industrious, began to fill government positions, and lived by a new form of tribute, “under the name of taxes.”43 Members of the bourgeoisie who achieved noble status no longer tended to their own businesses and, in the end, had no means of subsistence but the public treasury. Finally, governments “have very rarely furnished society with the equivalent of the values they received from it for governing.”44

The Industrialist writers anticipated that as society approaches perfection they would witness the ultimate triumph of their cause. Comte looked forward to “the extinction of the idle and devouring class” and the emergence of a social order in which “the fortune of each would be nearly in direct ratio to his merit, that is, to his utility, and almost without exception, none would be destitute except the vicious and useless.”

State Functionaries as Exploiters

The class of contemporary exploiters that the Industrialist writers examined most closely was the government bureaucrats. As Comte put it:

What must never be lost sight of is that a public functionary, in his capacity as functionary, produces absolutely nothing; that, on the contrary, he exists only on the products of the industrious class; and that he can consume nothing that has not been taken from the producers.45

True to the Industrialist concentration on the “economic” element, Dunoyer examined “the influence exercised on the government by the salaries attached to the performance of public functions.”46 In the United States—always the model Industrialist country (they were writing in the early nineteenth century)—official salaries, even for the president, are low. Typically, American officials receive an “indemnity” for their work, but nothing that could be called a “salary.”47 In France, on the other hand, it is not the fact that the exercise of power has been made into “a lucrative profession” that shocks public opinion, but its being monopolized by a single social class.48

Public expenditures, however, bear almost an inverse relationship to the proper functioning of government. In the United States, where government costs some 40 million francs a year, property is more secure than in England, where it costs more than 3 billion.49 The characteristics of public employment are the reverse of those of private business. For instance,

ambition, so fertile in happy results in ordinary labor, is here a principle of ruin; and the more a public functionary wishes to progress in the profession he has taken up, the more he tends, as is natural, to raise and increase his profits, the more he becomes a burden to the society that pays him.50

As increasing numbers of individuals aspire to government jobs, two tendencies emerge: government power expands and the burden of taxation and government expenditures grows. In order to satisfy the new hordes of office-seekers, the government extends its scope in all directions. It begins to concern itself with the people’s education, health, intellectual life, and morals, sees to the adequacy of the food supply, and regulates industry, until “soon there will be no means of escape from its action for any activity, any thought, any portion” of the people’s existence.51 Functionaries have become “a class that is enemy to the wellbeing of all the others.”52

Since the exploitation of government jobs has ceased to be the private preserve of the aristocracy it has become the object of everyone in society.53 In France there are perhaps “ten times as many aspirants to power than the most gigantic administration could possible accommodate. . . . Here one would easily find the personnel to govern twenty kingdoms.”54

With the emphasis on state functionaries, a new and surprising interpretation of the Great Revolution is presented by the Industrialist writers. The Declaration of the Rights of Man and of the Citizen of 1791 proclaimed admission to government jobs as a natural and civil right: “one can say that the French Revolution was only a war the aim of which was to decide by whom the [government] positions would be occupied, or, rather, to decide if the nation was to be exploited by men of the noble caste or by men coming from the industrious class.”55

Similarities with Marxism

The focus of the Censeur liberals on the ravenous exploitation of the productive classes by the growing class of state functionaries opens another point of contact with Marxism. As has been sometimes noted,56 Marxism contains two rather different views of the state: most conspicuously, it views the state as the instrument of domination by exploiting classes that are defined by their position within the process of social production, e.g., the capitalists. Sometimes, however, Marx characterized the state itself as the independently exploiting agent. Thus, in The Eighteenth Brumaire of Louis Bonaparte, he writes, quite in the Industrialist spirit:

This executive power, with its enormous bureaucracy and military organization, with its ingenious state machinery, embracing wide strata, with a host of officials numbering half a million, besides an army of another half million, this appalling parasitic body, which enmeshes the body of French society like a net and chokes all its pores, sprang up in the days of the absolute monarchy.

All regimes assisted in the growth of this mammoth parasite, according to Marx. He adds:

Every common interest was . . . snatched from the activity of society’s members themselves and made an object of government activity, from a bridge, a schoolhouse, and the communal property of a village community, to the railways, the national wealth, and the national university of France. . . . The parties that contended in turn for domination [in revolutions] regarded the possession of this huge state edifice as the principal spoils of the victor . . .57

In a later work, The Civil War in France, Marx writes of “the State parasite feeding upon, and clogging, the free movement of society.”58

Thus, the conception of the “parasite-state” is clearly enunciated by Marx. It is incorrect, however, to maintain that Marx originated this conception,59 since, as we have seen, several decades before Marx the Censeur Européen group had already singled it out as the major example of in modern society of the plundering and “devouring” spirit.

Interestingly, another similarity between Industrialism and Marxism is in the doctrine of ideology (in the Marxist sense). According to the Industrialist view, there are ideas and values that serve the interests of the productive and of the exploiting classes, respectively. Comte mentions the typically feudal judgment, that those who sweat for their wealth are viewed as ignoble while those who “gain it by shedding the blood of their fellows” are glorious; such an essentially barbaric idea, he asserts, had to be hidden and veiled by placing it in the context of classical antiquity.60

Comte even indicates what the existence of what could be called “false consciousness,” that is, the harboring by members of one class of ideas contrary to their interests and useful to the interests of an opposing class. He states:

The war waged by the slaves against their masters has something base to our eyes.

These are men who fight so that the product of their industry should not be the spoils of those who enslaved them; it is an ignoble war. The war waged by Pompey against Caesar charms us; its object is to discover who will be the party who will tyrannize the world; it takes place between men equally incapable of subsisting by their own efforts; it is a noble war. If we trace our opinions to their source, we will find that the majority have been produced by our enemies.61

The Early Thierry and Industrialism

In the period of his association with the Censeur Européen, Augustin Thierry62 shared the Industrialist philosophy of Comte and Dunoyer, with perhaps even more radical emphases. His review-essay on Destutt de Tracy’s Commentaire sur l’Esprit des Lois de Montesquieu is particularly important in this connection. Thierry seconds Destutt de Tracy’s firm adherence to laissez-faire:

Government should be good for the liberty of the governed, and that is when it governs to the least possible degree. It should be good for the wealth of the nation, and that is when it acts as little as possible upon the labor that produces it and when it consumes as little as possible. It should be good for the public security, and that is when it protects as much as possible, provided that the protection does not cost more than it brings in. . . . It is in losing their powers of action that governments improve. Each time that the governed gain space, there is progress.63

As against Montesquieu, Thierry sides with Destutt de Tracy: “commerce consists in exchange; it is society itself”; and “taxation is always an evil.”64

Thierry demolishes a perenniel slur on the participants in a market economy when he quotes with approval from Destutt de Tracy’s Commentaire:

As for the alleged greediness that commerce, rightly understood, inspires in those who make it their social estate: it is a vague reproach, which should be classed with the most insipid and meaningless rantings. Greediness consists in ravishing the goods of another through violence or cunning, as in the two noble professions of conqueror and courtier. But the merchant, like all other industrious men, seeks his benefit only in his talent, in virtue of freely arrived at agreements, and appealing to faith and the laws.65

The functions of government are to ensure security, “whether there is a danger from outside or whether the mad and idle threaten to disturb the order and peace necessary for labor.” In a simile freighted with meaning in the rhetoric of Industrialism, Thierry asserts that any government that exceeds these limits ceases to be a government properly speaking:

its actions can be classed with the action exerted upon the inhabitants of a land when it is invaded by soldiers; it degenerates into domination, and that occurs regardless of the number of men involved, of the arrangement in which they order themselves, or what titles they take . . .66

Sharing the horror of militarism of the other Industrialist authors, Thierry quotes Destutt de Tracy with approval on “the absurd and ruinous wars which have been too often waged to maintain the empire and exclusive monopoly over some faraway colonies.” This is not true commerce, he declares, but “the mania for domination.”67

Thierry goes on to sketch a radical-liberal program of very great scope indeed. First of all, the spirit of the free communes of the Middle Ages, which battled the plundering nobility, must be revived; that spirit will inspire men “to oppose the league of civilization to the league of dominators and the idle.” The intellectual movement will be allied to a great social movement:

An invisible and ever-active power, labor, spurred on by industry, will precipitate at the same time all of the populations of Europe into this general movement. The productive force of the nations will break all its fetters. . . . Industry will disarm power, by causing the desertion of its satellites, who will find more profit in free and honest labor than in the profession of slaves guarding slaves. Industry will deprive power of its pretexts and excuses by recalling those the police keep in check to the enjoyments and virtues of labor. Industry will deprive power of its income, by offering at less cost the services which power makes people pay for. To the degree that power will lose its actual force and apparent utility, liberty will gain and free men will draw closer together (emphasis supplied).68

Appropriately enough, in view of the remarkable sentence italicized in the above passage, Thierry unequivocally enunciates the cosmopolitanism of a liberalism tending to sheer libertarian anarchism. States are merely “incoherent agglomerations that divide the European population . . . dominions formed and increased by conquests or by diplomatic donations.” Eventually, the bonds linking men to states will be shed. Then

the passage from one society to another will scarcely be felt. Federations will replace states; the loose but indissoluble chains of interest will replace the despotism of men and of laws; the tendency towards government, the first passion of the human race, will cede to the free community. The era of empire is over, the era of association begins.69

Thierry highlights the role of historical writing in aiding in the great struggle. “We are the sons of these serfs, of these tributaries, of these bourgeois that the conquerors devoured at will; we owe them all that we are.” History, which should have transmitted memories of this tradition to us, “has been in the pay of the enemies of our fathers. . . . Slaves emancipated only yesterday, our memory has for a long time recalled to us only the families and acts of our masters.”70 As if presaging his own work on the chartered towns of the Middle Ages, he adds:

If a skillful and liberal pen were finally to undertake our history, that is, the history of towns and associations . . . all of us would see in it the meaning of a social order, what gives it birth and what destroys it.71

Critique of Industrialism

As for a critique Industrialism, a few problems may be indicated here.

First, it is likely that by sidestepping the issue of rights—property, Comte claims, is better called a “fact,” or even a “thing,” than a right—the Industrialist writers set the stage for difficulties arising later on in their theory.

Second, by concentrating on production rather than on exchange of rightful property, they create false targets of attack. Thus, “monks”—they really mean the religious orders altogether—are deemed “idlers,” placed in the same category as feudal lords and brigands, and, quite deliberately, no distinction is made among paupers between those who live on voluntary charity and those who live from state aid.72 It would seem that the Industrialists did not understand the implications of their own insistence on the existence of “immaterial” as well as “material” values.

Finally, in regard to the state: again, by speaking blithely of production rather than voluntary exchange, the Industrialists appear to be trying to avoid the tricky issue of the “production” of a good—security—that is forced upon “the consumer.”

Guizot and Mignet

Although François Guizot has often been placed in the same category as Thierry as a historian of class conflict, especially by Marxists, his views were crucially different. Guizot had no connection with the Censeur group, being a supporter instead of the juste milieu (roughly, golden mean) views of the Doctrinaire, Royer-Collard. As a leader of the Doctrinaires (of whom it has been said that no school of thought ever deserved the name less), Guizot lacked any guiding theory, such as Industrialism, to apply in his historical works. Always an eclectic, he wrote for a while in the 1820s in the then popular idiom of classes and class conflict. But he never held that one of the competing classes would or should triumph. On the contrary, the struggle, according to Guizot, was already in his own day eventuating in a grand synthesis, whereby aristocracy and Third Estate would combine in the “French Nation.”73

As a thinker—and, of course, in his political role—Guizot was essentially oriented towards the state. A major purpose of his account of French history was to show that “the bourgeoisie and the power of the Crown were not only allies but forces pressing towards each other.”74 He thoroughly endorsed the historical collaboration of Crown and the Third Estate, which reached a kind of apotheosis in the July Monarchy of Louis Philippe (1830–48), particularly under Guizot’s own ministry.

Over the years, Guizot’s influence on Thierry grew, and it was all in the direction of highlighting the historical contribution of all “classes” to the creation of la Grande Nation, especially the assistance accorded the Third Estate by the Monarchy in its rise to recognition and preeminence.

This tendency in Thierry’s work culminates in his Essai sur l’Histoire de la Formation et des Progrès du Tiers État (see my critique below), which appeared as the introduction to a collection of documents whose publication was inspired by Guizot.

François Mignet, a friend of Thierry and fellow historian, is also often mentioned as another of the liberal precursors of Marxist class conflict theory. But although Mignet did, of course, write of the struggles of the aristocracy and the Third Estate during the Revolution, an immense gulf separated him from the original class conflict analysis of the Industrialists. A sort of reductio ad absurdum of the glorification of the bourgeoisie in and of itself, irrespective of its connection with production, was reached by Mignet when in 1836 he wrote of the French Revolutionary armies (emphasis supplied):

All the old aristocratic armies of Europe had succumbed to these bourgeois, at first disdained and then feared, who, forced to take up the sword and having made use of it as before of the word, as previously of thought, had become heroic soldiers, great captains, and had added to the formidable power of their ideas the prestige of military glory and the authority of their conquests.75

Mignet also chided Charles Comte for his deprecation of the “Great Men” of history. Comte’s views here were part of the attempted Industrialist “transvaluation of all values,” whereby, for example, a small manufacturer or a shepherd was to be more highly valued than destructive conquerors like Caesar or Pompey. But Mignet was of a more Hegelian, not to say more pedestrian, turn of mind. According to him, Comte

forgot that the greatest advances of humanity have had as their representatives and defenders the greatest captains . . . that Napoleon’s sword had, for fifteen years, led to the principle of modern equality penetrating all of Europe. He likewise disputed the difficult art of governing the peoples . . .76

Friend and collaborator of Adolphe Thiers, who was virtually the personification of the corrupt bourgeois state in nineteenth century France, and like Thiers a glorifier of Napoleon, Mignet simply inhabited a different intellectual world from Say, Comte, Dunoyer, and the young Thierry.

Thierry’s Defection

Eventually, Thierry exchanged his sophisticated Industrialist analysis of class conflict for a considerably coarser one. At some point, he came to believe that the Industrialist view “falsified” history by subjecting it to too rigid a theoretical scheme.77

The type of general and purely political considerations to which I had confined myself up until then seemed to me for the first time too arid and limited. I felt a strong inclination to descend from the abstract to the concrete, to envisage the national life in all its facets and to take my point of departure in solving the problem of the antagonism of the different classes of men in the bosom of the same society the study of the primitive races in their original diversity.78

The “tinge of politics was effaced,” Thierry explains, as he devoted himself more to “science.”79 In fact, he did not cease altogether to write as the historian of the oppressed and downtrodden, as the chronicler, first, of the sufferings of the defeated “races” like the Saxons at the time of the Norman Conquest, then of the rise to power and pride of the despised Third Estate in France.

But Thierry’s treatment of class conflict in his more famous works is defective and, ultimately, fatally flawed. When he deals with the history of France in the medieval and early modern period, for instance, the industrious, creative element of society is identified tout court with the “Third Estate,” the exploiting idlers and parasites with the feudal nobility and its descendants alone. Thus, critical distinctions existing within the Third Estate, or bourgeoisie, of the sort that Say had already exposed, are omitted. The earlier analytical dividing line between those who act on the market, through exchange, and those who use force above all through the state disappears. In this way Thierry sinned against his own methodological principle: “The great precept that must be given to historians is to distinguish instead of confounding” (cited in Stadler 1955: 283).

The Final Stage

In Thierry’s last major work, Essay on the History of the Formation and Progress of the Third Estate, virtually nothing is left of the original Industrialist doctrine. Instead, we are presented with what amounts to a case study in complacent and self-satisfied Whiggish historiography. It turns out that the events and figures of some 700 years of French history have all conspired to bring about the triumph of what is now Thierry’s ideal, the modern, centralized French state, based on equality before the law, to be sure, but rich in power and historical glory, as well.

Over and over again, the French kings are praised for having worked to elevate the Third Estate, largely by providing bureaucratic jobs for its members, and, in the traditional manner, for have “created” France. Richelieu is eulogized both for his foreign and domestic policies, equally admirable, and for “multiplying for the commons, besides offices, places of honor in the State.”80 Colbert, the architect of French predatory mercantilism, is glorified as a commoner who planned “the industrial regeneration of France,” and is applauded for his distribution of its tax-funded largesse to writers, scholars, and “all classes of men.”81 One could go on.

How to explain this radical shift of perspective? The chief reason is to be sought in Thierry’s experience of the socialist agitation of 1848 including the violence of the June Days, and the specter of social revolution haunted him to the end of his life. He was anxious that the socialist troublemakers should not be able to draw sustenance from his work on the role of classes in French history. In the Preface to the Essay, Thierry implies that now, in 1853, there is no further need for the concept of classes: “the national mass” is “today one and homogeneous.” Only “the prejudices spread by systems that tend to divide” the homogeneous nation into “mutually hostile classes” could suggest otherwise.82 The present-day antagonism between bourgeoisie and workers, which some wish to trace back for centuries, is “destructive of all public order.” Thus, ironically, one of the thinkers who was a major inspiration for the socialist concept of class conflict ended by categorically denying any class conflict in the modern world, and he did so in part out of fear of the dangers posed now that it had been reshaped by the socialists.83 He put this in the form of the statement that there could no longer be a history of the Third Estate—now the Third Estate was in reality, as the Abbé Siéyes had announced it programmatically in 1788, “everything.”84

The Liberals and the July Monarchy

The July Monarchy of Louis Philippe, which came to power in 1830, was notorious for its corruption on behalf of the bourgeoisie, especially in the form of massive and blatant jobbery (see, e.g., Cormenin de la Haye 1846). This was the regime of which Alexis de Tocqueville wrote:

[The middle class] entrenched itself in every vacant government job, prodigiously augmented the number of such jobs, and accustomed itself to live almost as much upon the Treasury as upon its own industry.85

Many of the liberals were major beneficiaries of the new regime, rewarded for the support they had given, and continued to give, to Louis Philippe. Dunoyer was made prefect in Moulins and Stendhal consul at Trieste, while Daunou was reappointed as director of the National Archives.86 Others of the liberal party under the Restoration did as well or better. Guizot, of course, was one of the chief figures of the new order. With Mignet, Thiers, Villemain, he “shared the highest offices of the state, the most brilliant favors of the regime.”87 Thierry himself, however, now blind and in poverty, was reduced to pleading for assistance, until Guizot awarded him a small pension.88

Thus, any analysis of the reasons behind the conservative drift of many French liberals after 1830—and of their abandonment of the dangerous idea of class conflict in their own time—would have to take account not only of the growing threat of socialism, but also of the new links to power and wealth that the “liberal” regime of Louis Philippe afforded them.

Other Liberal Class Conflict Theories

The Industrialist doctrine of class conflict was by no means the first or only treatment of this question in the history of liberal theory. A theoretically purer approach is perhaps to be found in a parallel American tradition of political thought. In the United States, some of the Jeffersonians and Jacksonians also grappled with the question of class, in the politically relevant sense, and came to conclusions reminiscent of the Industrialist school. John Taylor of Caroline, William Leggett, and John C. Calhoun were keen observers and critics of the social groups—the classes—which they saw as utilizing political power in order to exploit the rest of society, the producers.

John Taylor was outraged by the betrayal of the principles of the Revolution by a new aristocracy based on “separate legal interests,” the bankers privileged to issue paper money as legal tender and the beneficiaries of “public improvements” and protective tariffs. American society has been divided into the privileged and the unprivileged by this “substantial revival of the feudal system.”89

Two decades later, in the 1830s, the northern radical, William Leggett, denounced the same exploiting classes. A thoroughgoing Jeffersonian and disciple of Adam Smith and J.-B. Say, Leggett held that the principles of political economy are the same as those of the American Republic: Laissez-faire, Do not govern too much. This system of equal rights was being overthrown by a new aristocracy, among whom Leggett particularly singled out the state-connected bankers for attack.

Have we not, too, our privileged orders? our scrip nobility? aristocrats, clothed with special immunities, who control, indirectly, but certainly, the power of the state, monopolise the most copious source of pecuniary profit, and wring the very crust from the hard hand of toil? Have we not, in short, like the wretched serfs of Europe, our lordly master? . . . If any man doubts how these questions should be answered, let him walk through Wall-street.90

The American aristocracy naturally favored a strong government, including control of banking. Leggett, in contrast, demanded “the absolute separation of government from the banking and credit system.”91

John C. Calhoun, in his Disquisition on Government, focused attention on the taxing powers of the state, “the necessary result” of which

is to divide the community into two great classes: one consisting of those who, in reality, pay the taxes and, of course, bear exclusively the burthen of supporting the government; and the other, of those who are the recipients of their proceeds through disbursements, and who are, in fact, supported by the government; or, in fewer words, to divide it into tax-payers and tax-consumers. But the effect of this is to place them in antagonistic relations in reference to the fiscal action of the government and the entire course of policy therewith connected.92

Liberal class conflict rhetoric was often applied in the later nineteenth century; in England, it as a recurrent theme in the agitation for repeal of the Corn Laws, used by Cobden, Bright, and others. It underlies the attack by William Graham Sumner on the “plutocrats,” capitalists who use the state rather than the market to enrich themselves.

Bringing the State Back In

Today a revival appears to be underway of the concept of the state as the creator of classes and class conflict. A group of scholars including Theda Skocpol has produced an anthology with the significant title, Bringing the State Back In.93 In an introductory chapter, Skocpol speaks of “an intellectual sea change” taking place, by which the “societycentered ways of explaining politics and governmental activities” popular in the 1950s and 60s are being reversed, and government itself is looked upon as “an independent actor.”

We must recognize, she argues, the capacity of the state to act independently of the various groupings of “civil society” more systematically than is allowed by the Marxist notion of “relative autonomy.” In particular, in regard to relations with other states, a state may often act in ways that cannot be explained by its concern for private interests, even for collective private interests. Skocpol notes that while state actions are often justified by reference to their appropriateness for the long-run interests of society or the benefits that accrue to various social groups (which would tend to shift the center of attention once more to society), “autonomous state actions will regularly take forms that attempt to reinforce the authority, political longevity, and social control of the state organizations whose incumbents generated the relevant policies or policy ideas.” Citing Suzanne Berger, Skocpol stresses that the view that social “interests” determine politics is one-sided and shallow, if for no other reason than because

“the timing and characteristics of state intervention” affect “not only organizational tactics and strategies,” but “the content and definition of interest itself.” . . . Some scholars have directly stressed that state initiatives create corporatist forms . . . the formation, let alone the political capacities, of such purely socioeconomic phenomena as interest groups and classes depends in significant measure on the structures and activities of the very states the social actors, in turn, seek to influence.94

Class Conflict in Marxist Regimes

From a scientific point of view, the liberal theory—which locates the source of class conflict in the exercise of state power—has another pronounced advantage over the conventional Marxist analysis: liberal theory is able to shed light on the structure and functioning of Marxist societies themselves. “The theory of the Communists,” as Marx wrote, may be summed up in the single sentence: Abolition of private property.”95 Yet, Communist societies, which have essentially abolished private property, are hardly on the road to the abolition of classes. This has led to some deep soul-searching among Marxist theoreticians and justified complaints regarding the inadequacy of a purely “economic” analysis of class conflict to account for the empirical reality of the socialist countries.96 Yet the liberal theory of class conflict is ideally suited to deal with such problems in a context where access to wealth, prestige, and influence is determined by control of the state apparatus.

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97Cf., a contemporary Marxist theoretician, Charles Bettelheim 1985 22, who concedes that Marx “did not arrive at a unique and coherent conception of classes and of class conflict.”

98Karl Marx and Friedrich Engels, Selected Works in Three Volumes (Moscow: Progress Publishers, 1983), 1, 108–09.

99According to Pitirim Sorokin (1947), Marx never presented a consistent conception of social class; the groups mentioned at the beginning of the Manifesto, for instance, include “castes, feudal orders, oppressors and oppressed of all kinds, hierarchies of the medieval corporation.” Marx, in Sorokin’s view, was well aware of this central defect in his theory, and his abruptly terminated chapter in the last volume of Capital was a failed attempt to remedy it. The enduring confusion among Marxists regarding the meaning of class, Sorokin held, may also be traceable to Marx’s own intellectual confusion. Cf. Mises 1957: 113: “Marx obfuscated the problem by confusing the notions of caste and class.”

100Karl Marx, Capital: A Critique of Political Economy, 3, The Process of Capitalist Production as a Whole, Friedrich Engels (ed.) (New York: International Publishers, 1967), 885–86.

101Ibid. Friedrich Engels, “Preface,” 3.

102Ibid. 7.

103Horst Stuke 1976. Stuke lists (70–71) some fifty different, mutually contradictory uses of the terms in the founding works of Marxism.

104Cf., Nolte 1983: 599 n. 79, where he observes that Engels attacked what he called Blanqui’s “miserable history of economics” in a newspaper article shortly before he composed The Principles of Communism, which Marx drew upon in composing the Manifesto.

105Marx to J. Weydemeyer, March 5, 1852, Karl Marx and Friedrich Engels, Selected Correspondence (Moscow: Progress Publishers, 1965), 67–70.

106Ibid. 69. Marx here states that his own contributions are restricted to having shown that classes are not a permanent feature of human society, and that the class struggle will lead to the dictatorship of the proletariat and thence to a classless society. Charles Bettelheim 1985: 69 agrees with Marx on this point: “Lacking these elements [“polarization, historical tendency, final result”] we are faced with a conception already long defended by numerous historians who recognize the existence of class struggles and their action upon the course of history.”

107The third is the much less significant English writer, John Wade. Later in the letter, Marx refers to the economists Ricardo, Malthus, Mill, Say, et al., who revealed how the “economic bases of different classes are bound to give rise to a necessary and ever-growing antagonism among them.” It is worth noting that in the same letter, Marx ridicules the view of “the fatuous [Karl] Heinzen,” that “the existence of classes [is connected with] the existence of political privileges and monopolies . . .” (emphasis in original).

108Marx to Engels, July 27, 1854. Selected Correspondence, 87.

109Engels to H. Starkenburg, January 25, 1894. Karl Marx and Friedrich Engels, Selected Correspondence, 468.

110In his classic biography of Marx, Franz Mehring 1962, 75 traces this conception to Marx’s period in Paris in 1843–44, when he immersed himself in the historiography of the French Revolution: “The study of the French Revolution led him on to the historical literature of the ‘Third Estate,’ a literature which originated under the Bourbon restoration and was developed by men of great historical talent who followed the historical existence of their class back into the eleventh century and presented French history as an uninterrupted series of class struggles. Marx owed his knowledge of the historical nature of classes and their struggles to these historians . . . Marx always denied having originated the theory of the class struggle.” David McLellan telescopes the process described by Mehring when he states 1973: 95: “It was his [Marx’s] reading of the history of the French Revolution in the summer of 1843 that showed him the role of class struggle in social development.” Neither Guizot nor Thierry concentrated their analysis on the Revolution; in any case, it is much more likely that it was their emphasis on class struggle as a constant, spanning centuries of medieval and modern history that impressed Marx.

111Cf. Lenin 1943: 30: “The theory of the class struggle was not created by Marx, but by the bourgeoisie before Marx and is, generally speaking, acceptable to the bourgeoisie.” (Italics in original.) The second part of Lenin’s statement, however, is problematical.

112Needless to say, Professor Hirschman is equally blithely ignorant that the use of the concept of “spoliation” was as common among the Italian as among the French laissez-faire liberals. Here are a few examples: Francesco Ferrara, “Introduzione” [1851], Federico Bastiat, Armonie Economiche (Turin: Unione Tipografico, 1945), 53 paraphrasing Bastiat: “Socialism and protectionism were nothing but two cheeks of the same face: Thiers and Proudhon, Odier and Blanc [conservatives and socialists] had a single source and a single common intention. The spirit of spoliation [spogliazione] produced both of them. . .” The noted economist and close friend of Pareto, Maffeo Pantaleoni, wrote, in “Il secolo ventesimo secondo un individualista” [1900], in idem, Scritti varii di economia (Milan/Palermo/Naples: Remo Sandron, 1909), 2: “The public powers, which historically have already been most effective instruments of spoliation in the hands of the nobilty, first, and then of the bourgeoisie, will now become the means of procuring bread and circuses for the people.” A. de Viti de Marco, Due Commemorazioni: Angelo Messedaglia, Maffeo Pantaleoni (Rome: Attilio Sampaolesi, 1927), 49, wrote that Pantaleoni was enraged by the collectivist and interventionist features of the post-World War I Italian political scene, including “the demagoguery of taxation [la demogogia tributaria], organized by the alliance of all the parasitic groups for the speedier spoliation of the well-to-do and the savers and the free [i.e., non-unionized] workers—that is of the producers . . .” (emphasis in original). In 1889, the Italian free-trade journal, L’Economista, was clearly operating with the same conceptual framework when it declared its support for a movement that would place on its banner the slogan: “‘defense of the taxpayer and consumer’—in this motto is contained a whole program.” Emilio Fanzina, “La ‘buona stampa’ liberista e le premesse ideologisce del liberismo di sinistra agli inizi del periodo crispino (1887–1890), Critica Storica, new series, 11, No. 2 (June 1974), 84.

113Professor Leonard P. Liggio has the great merit of having recognized the significance of the Industrialist writers and has pioneered the modern study of their thought; see his highly important article 1977, (the scope of which is considerably wider than is suggested by the title), and the relevant works cited in the endnotes, as well as idem 1990; also Dunoyer 1880; Harpaz, 1959; Halévy 1965; Allix 1910.

114What appealed to Jefferson was Destutt de Tracy’s condemnation of government squandering of social wealth through public debt, taxation, banking monopolies, and public spending, which paralleled his own anti-Hamiltonian views; cf. Kennedy 1978: 228.

115Ibid.180. This leads Kennedy, for some reason, to refer to Destutt de Tracy’s position as a form of “economic determinism.”

116Ibid.183.

117Ibid. 270–72. At a later point, Kennedy refers to Augustin Thierry and Dunoyer as among Destutt de Tracy’s “old friends”; ibid. 290. See also Cheryl B. Welch, Liberty and Utility: The French Idéologues and the Transformation of Liberalism (New York: Columbia University Press, 1984), 157–58. Augustin Thierry, in his review of Destutt de Tracy’s Commentaire sur L’Esprit des Lois de Montesquieu, states: “the principles of the Commentaire are also ours.” Censeur Européan, 7 (1818), 220.

118Dunoyer 1880, 175–76; Ephraïm Harpaz, “‘Le Censeur Européen,’“197.

119Allix, “J-B. Say et les origines de l’industrialisme,” 305.

120Ibid. Michael James, “Pierre-Louis Roederer, Jean-Baptiste Say, and the Concept of Industry,” History of Political Economy, 9, No. 4 (Winter 1977), 455–75, argues for Say’s indebtedness to the Idéologue Roederer for some important concepts, but grants that it was Say who directly and powerfully influenced the Censeur Européen group.

121Harpaz, “Le Censeur Européen,” 204–05.

122Censeur Européen, I (1817), 159–227, II (1817), 169–221.

123Jean-Baptiste Say, Cathéchisme d’Économie Politique, ou Instruction Familière (Paris: Crapelet, 1815), 14. Note the stress on utility, typical of continental thinkers, in contrast to the labor theory of value of the British.

124Allix, “J.-B. Say et les origines de l’industrialisme,” 309. Cf. Harpaz., 356: “The immense progress of modern material civilization is sketched, or at the very least suggested, in the twelve volumes of the Censeur Européen.”

125Allix, “J.-B. Say et les origines de l’industrialisme, 341–44.

126Jean-Baptiste Say, A Treatise on Political Economy, or the Production, Distribution, and Consumption of Wealth, tr. from the 4th ed., C. R. Prinsep ([1880] New York: Augustus M. Kelley, 1964), 147. It has been persuasively argued that Say was an important source for the modern theory of “rent-seeking”; Patricia J. Euzent and Thomas L. Martin, “Classical Roots of the Emerging Theory of Rent Seeking: the Contribution of Jean-Baptiste Say,” History of Political Economy, 16, No. 2 (Summer 1984): 255–62. As they point out, Say was quite familiar with why “those engaged in any particular branch of trade are so anxious to have themselves made the subject of regulation . . .” Cf., Treatise, 176–77.

127Allix, “J.-B. Say et les origines de l’industrialisme,” 312.

128As Dunoyer 1880: 179 put it: “If it is doubtful that these writers had perceived the political consequences of their observations relative to industry, these observations cast a new light upon politics that was singularly favorable to its progress. Their writings fell into the hands of several men who were making this science their special study, and effected a revolution in their ideas. Such was notably the effect these writings produced in the authors of the Censeur.”

129Charles Comte, “Considérations sur l’état moral de la nation française et sur les causes de l’instabilité de ses institutions,” Censeur européen, I, 1–2, 9. The similarity to Franz Oppenheimer’s analysis is clear. See his The State, John Gitterman (tr.), C. Hamilton (intr.) New York: Free Life, 1975.

130Charles Comte, “Considérations sur l’état moral,” 11.

131Ibid. 19.

132Ibid. 9.

133Charles Comte, “De l’organisation sociale considérée dans ses rapports avec les moyens de subsistance des peuples,” Censeur Européen, 2 (1817), 22.

134Charles Comte, “Considérations sur l’état moral,” 14. Thierry’s famous work on the Norman Conquest is already foreshadowed in this early essay of Comte’s, in his attack on William the Conqueror. ibid. 19–20.

135Ibid. 20–21.

136Ibid. 21.

137Ibid. 22.

138Charles Dunoyer, “Du système de l’équilibre des puissances européenes,” Censeur Européen, 1, 119–26.

139Charles Comte, “De l’organisation sociale,” 33.

140Charles Dunoyer, “Du système de l’équilibre,” 123. Dunoyer goes on to state (124): “If, in precisely rendering this service [protection of liberty and property to the members of society], it makes them pay more than it is worth, more than the price at which they could obtain it for themselves, everything it takes in addition is something truly subtracted from them, and, in this respect, it acts according to the spirit of rapine.” It will be noted that Dunoyer is faced with a problem here, in so far as he assents to monopoly government with taxing powers. The same is true regarding his assertion (125) that the government, in providing security, “should not have obliged them [the citizens] to pay more than it should naturally cost.” This is a chink in the Industrialist logic that the free-market anarchist Gustave de Molinari soon exposed.

141“De l’organisation sociale,” 29–30.

142“De l’influence qu’exercent sur le gouvernement les salaires attachés à l’exercice des fonctions publiques,” Censeur européen, XI, 75–118.

143Ibid. 77.

144Ibid. 78.

145Ibid. 80.

146Ibid. 81–82.

147Ibid. 86.

148Ibid. 88.

149Ibid. 89.

150Ibid. 103.

151“De l’organisation sociale,”pp. 34–35. This was also the interpretation of the 1789 Revolution adopted by Gustave de Molinari. See the essay on “The Centrality of French Liberalism,” in the present volume. Some years after Dunoyer wrote, Molinari personally witnessed the frenzied hunt for government jobs when he accompanied Frédéric Bastiat to the Hôtel de Ville on the day following the proclamation of the Second Republic, in February, 1848. Bastiat wished to make sure that the new government would approve publication of the journal he planned to publish. At the Hôtel de Ville, Molinari recalled, they encountered “the mob of conquerors hurrying to gather the fruits of the victory. Those who saw [Bastiat] bravely plunge into the densest part of the turbulent mob and make an incredible effort to reach the Holy of Holies, where the new distributors of government jobs were standing, probably thought that he was going to solicit some important position, since one had to be looking to become an ambassador or at least a commissioner to dare to venture, that day, into the midst of the immense revolutionary saturnalia. But Bastiat did not go to ask for the favor of living at the expense of his fellow citizens. He went simply to request authorization to enlighten them. Despite his superhuman efforts, Bastiat did not succeed in completely piercing the thick wall of the supplicants, and [his new periodical] La République Française appeared without authorization.” Cited in Georges de Nouvion, Frédéric Bastiat: sa vie, ses oeuvres, ses doctrines, Paris: Guillaumin, 1905.

152Richard N. Hunt, The Political Ideas of Marx and Engels: I, Marxism and Totalitarian Democracy, 1818–1850 (Pittsburgh: University of Pittsburgh Press, 1974), 124–31; David Conway, A Farewell to Marx: An Outline and Appraisal of his Theories (Harmondsworth: Penguin, 1987), 162–64.

153“The Eighteenth Brumaire of Louis Bonaparte,” in Marx and Engels, Selected Works, 170–71.

154“The Civil War in France,” in ibid. 293.

155Hunt, The Political Ideas of Marx and Engels, 124.

156Comte, “De l’organisation sociale,” 29–30.

157Ibid. 36–37n.

158On Thierry, see Augustin-Thierry 1922; Carroll 1951; Smithson 1973; and Gossman 1976.

159Augustin Thierry, “Commentaire sure L’Esprit des Lois de Montesquieu,” Censeur européen, 7 (1818), 228, 230.

160Ibid. 205–06.

161Ibid. 217.

162Ibid. 244.

163Ibid. 218.

164Ibid. 256–57.

165Ibid. 257–58.

166Ibid. 251–52.

167Ibid. 255.

168Charles Comte, “De la multiplication des pauvres, des gens à places, et des gens à pensions,” Censeur Européen, 7, 1n.

169Shirley M. Gruner, Economic Materialism and Social Moralism, The Hague/Paris: Mouton, 1973, 108–10, aptly summarizes Guizot’s standpoint: He “liked to be popular and therefore liked to be considered up-to-date in his ideas. Nor does he wish to appear ‘unscientific.’ Therefore he never denies anything outright but seeks to modify a little here and there so that finally nothing is left of it. There is no head-on opposition. . .This is in fact the whole problem of Guizot—his indecisive decisiveness so that not only in history but in politics the basically constitutional conservative appears at times to long for the trappings of a radical liberal.” Gruner shrewdly adds that “it has also been in the interest of certain groups, for instance the Communists of 1848 [including presumably Marx and Engels], to suggest that there was not much difference between Guizot and the other ‘bourgeois’ liberals.”

170Gerhard (1960), 305.

171François Mignet, “Le comte Sieyès: Notice,” Notices et portraits historiques et littéraires, I (Paris: Charpentier, 1854), 88.

172François Mignet, “Charles Comte: Notice,” ibid. II, 102.

173“After much time and labor lost in thus obtaining artificial results, I perceived that I was falsifying history by imposing identical formulas on totally different periods.” Augustin Thierry, Dix Ans d’Études Historiques (Paris: Furne, 1851 [1834]), 3. He adds that, after his first essays on English history, in the Censeur Européen, he began to feel the need to leave to each epoch its originality: “I changed style and manner; my former rigidity became more supple . . .” ibid. 6–7. Of his earlier radical-liberal views, he says: “I aspired enthusiastically towards a future of which I had no very clear idea . . .” [vers un avenir, je ne savais trop lequel . . .] ibid. 7.

174Ibid. 8.

175Ibid. 12.

176Thierry, Essai sur l’Histoire de la Formation et des Progrès du Tiers État (1894 [1853]) Paris: Calmann Lévy), 172.

177Ibid. 195.

178Ibid. 1–2.

179Marx discusses Thierry’s Essai in the letter to Engels cited in note 211. Interestingly, he commends Thierry for describing “well, if not as a connected whole: (1) How from the first, or at least after the rise of the towns, the French bourgeoisie gains too much influence by constituting itself the Parliament, the bureaucracy, etc., and not as in England through commerce and industry. This is certainly still characteristic even of present-day France.” Selected Corr. 88.

180Augustin Thierry, “Preface,” Essai sur l’Histoire de la Formation det des Progrès du Tiers État.

181Alexis de Toqueville, Recollections, Alexander Teixeira de Matos (tr.) J.P. Mayer (ed.), New York: Meridian, 1959. 2–3.

182Allix, 318–19.

183A. Augustin-Thierry, Augustin Thierry, 1795–1856 (Paris: Librairie Plon, 1922) 114.

184Ibid. 112f.

185Eugene Tenbroeck Mudge, The Social Philosophy of John Taylor of Caroline: A Study in Jeffersonian Democracy (New York: AMS Press, 1968 [1939]), 151–204, passim.

186William Leggett, Democratick Editorials: Essays in Jacksonian Political Economy, Lawrence H. White (ed.) (Indianapolis: Liberty Press, 1984), 250–51. See also Lawrence H. White, “William Leggett: Jacksonian Editorialist as Classical Liberal Political Economist,” History of Political Economy, 18, No. 2 (Summer 1986), 307–24.

187William Leggett, Democratick Editorials, 142.

188John C. Calhoun, A Disquisition on Government and Selections from the Discourse, C. Gordon Post (ed.) Indianapolis: Bobbs-Merrill, 1953, 17–19.

189Theda Skocpol, Bringing the State Back In (1985), Cambridge, Eng.: Cambridge University Press. The title derives from an earlier essay by Skocpol.

190A scholar who stressed the role of the state in creating corporatist forms and hence “class interest” (although he preferred the term “caste” to “class”) was Ludwig von Mises; see his Theory and History: An Interpretation of Social and Economic Evolution (New Haven: Yale University Press, 1957), 113–15. Mises, who examined this topic thirty years ago, is not mentioned by Skocpol. See also Murray N. Rothbard, Power and Market: Government and the Economy (Menlo Park: Institute for Humane Studies, 1970), 12–13, where Rothbard writes: “It has become fashionable to assert that ‘Conservatives’ like John C. Calhoun ‘anticipated’ the Marxian doctrine of class exploitation. But the Marxian doctrine holds, erroneously, that there are ‘classes’ on the free market whose interests clash and conflict. Calhoun’s insight was almost the reverse. Calhoun saw that it was the intervention of the State that in itself created the ‘classes’ and the conflict.” Rothbard also prefers the term “caste”: “castes are State-made groups, each with its own set of established privileges and tasks.” ibid. 198, note 5.

191“Manifesto of the Communist Party,” in Karl Marx and Friedrich Engels, Selected Works, 47.

192George Konrad and Ivan Szelényi, The Intellectuals on the Road to Class Power, Andrew Arato and Richard E. Allen (trs.) (New York/London: Harcourt Brace Jovanovich, 1979) xiv-xvi, 39–44, and passim.

• 1Ludwig von Mises
• 2Raico’s profound and extensive knowledge of intellectual, political, and economic history are evident in each of the following essays and, in fact, virtually on each page of this book. His readers will also appreciate the warm passion he brings to the study of his subject, as well as his dry wit. Drawing from original sources in German, French, and Italian, as well as English, Professor Raico provides us with original scholarship on the history of liberalism from a decidedly liberal, though not exclusively Anglo-Saxon perspective. What is more, he definitely has the talent to rouse his readers to emulate the deeds of earlier generations. It was through Raico’s book Die Partei der Freiheit (The Party of Freedom) that I and many other Germans first heard of Eugen Richter, the champion of true liberalism in fin de siècle Germany. Forgotten by virtually everyone except for his social-democratic detractors, Richter has made a comeback in the past ten years and some of his major writings are again in print. Today his words and deeds inspire a new generation of intellectuals and politicians. Thank you for that lesson, Professor Raico! If Germany returns to the tradition of true liberalism, we shall have in Berlin a Raico Straße leading to the Richter Platz.
• 3Erich Streissler 1990a.: 60 has even maintained that it is in this area that Menger’s achievement is to be found, and not in co-initiating the marginalist revolution.
• 4Eugen von Böhm-Bawerk, for instance, stated (1891: 380–81): “We must not weary of studying the microcosm if we wish rightly to understand the macrocosm of a developed economic order . . . we must seek an understanding of the phenomena of great things in the study of the world of small things.” F.A. Hayek, who probably did more than anyone else to identify Austrianism with methodological individualism, wrote (1973: 8): “The consistent use of the intelligible conduct of individuals as the building stones from which to construct models of complex market structures is of course the essence of the method that Menger himself described as ‘atomistic’ (or occasionally, in manuscript notes, as ‘compositive’) and that later came to be known as methodological individualism.”
• 5Elster makes the important point (1985: 5; emphasis in original): “It is not only our confidence in the explanation, but our understanding of it that is enhanced when we go from macro to micro, from longer to shorter time-lags. To explain is to provide a mechanism, to open up the black box and show the nuts and bolts, the cogs and wheels, the desires and beliefs that generate the aggregate outcomes.”
• 6The Austrian method also involves a universalism that has strong affinities with liberalism, in contrast to certain forms of conservatism. As Mises stated (1969: 38): “As against the declarations of Schmoller and his followers, [the Austrians] maintained that there is a body of economic theorems that are valid for all human action irrespective of time and place, the national and racial characteristics of the actors, and their religious, philosophical, and ethical ideologies.”
• 7On the general philosophical background of the Austrian School, see especially Gordon 1993, also Smith 1994c. Pearson 1997: 31 attempts to minimize the differences between the German Historical School and the early marginalists (including the Austrians), maintaining that both were allegedly reacting against the Classical School (of mainly British political economy), rather than one another. His analysis fails to inspire confidence, however, since it is based on his assumption that the marginalists “displace[d] interest away from ‘value,’ that transcendent quality that had never quite lost the imprint of natural law, and toward ‘price,’ a frankly social phenomenon . . .”
• 8See Gellner 1968: 256 n. 4, where M. Ginsberg is cited: “those who refuse to accept methodological individualism . . . are well aware . . . of the dangers of concentrated power. But they deny that the only choice open to us is between a spontaneous competitive order on the one hand, and a system of all-pervading control on the other.” See also Gellner’s own comment on the same page: “[Methodological] individualists who attempt to save us, in the name of logic and liberty, from misconstruing our situation, are not wholly free at all times from suspicion that a little propaganda for laissez-faire is being hitched on to those very general issues.”
• 9In his account of the Great Depression (1963), as well as other works, Rothbard applies theory to help explain quite concrete historical events, often interpreting those events in the light of the “class” (or, “caste,” in the stricter, Misesian-Rothbardian terminology) interests involved. See also the comment by Garrison and Kirzner (1989: 121) that, among other scientific merits, “Hayek’s business cycle theory provided a basis for interpreting much of 19th-and 20th-century economic history.”
• 10Cf. White 1984: 4: “The subjective approach to economic phenomena builds economic analysis upon the insight that every individual chooses and acts purposively. . . . This approach has been the hallmark of the Austrian School from its inception in the 1870s to the present day, although different members have defended their method in different ways.” Cf. also Vaughn 1990: 382: “The human being that is the subject of Menger’s study . . . cannot be summarized by a static and fully defined preference function. . . . He is an active creator both of himself and of his world. And creation is a process rather than a state of affairs.”
• 11In contrast to Pareto, in the Austrian view, consumers are viewed, not as fixed loci of consumption functions, but as sources of incessant change, who also play an entrepreneurial role (Mises 1949: 253–54). As for Pareto, despite the positivism and apparent “anti-individualism” of his methodology, he was all his life a fervent economic liberal; see Finer 1968 and the essay on “Ludwig von Mises’s Liberalism on Fascism, Democracy, and Imperialism,” in the present volume.
• 12Cf. Kirzner’s remarks 1976b: 59: “It is easy to see how foreign the notion of the ‘automatic maintenance of capital’ [the Clark-Knight concept] must have appeared to Mises. An approach that concentrates analytical attention—as Austrian economics does—on the purposive and deliberate decisions of individual human beings when accounting for all social economic phenomena must treat the notion of capital as a spontaneously growing plant as not merely factually incorrect but simply absurd.”
• 13Cf. the statement of the self-described Austrian “fellow traveler,” Leland Yeager 1995: 219: “economics deals with human choices and actions, not with mechanistically dependable relations. The economy is no machine whose ‘structure’ can be ascertained and manipulated with warranted confidence.” There are no constants in economics comparable to those in the natural sciences, and “no amount of cleverness with econometrics can make the nonexistent exist after all.” See also Yeager 1997, where, after a judicious evaluation of Austrian economics, the author suggests some reasons for the relative neglect of the Austrian school by the mainstream of the profession.
• 14See especially the works attempting to develop Misesian ideas on this topic by Israel M. Kirzner, beginning with Kirzner 1973; and the exposition by Rothbard 1997, 2: 245–53. Jaffé 1976 argues that decisive differences between the Austrian and neoclassical approaches that existed from the start have been overlooked because of the tendency to “homogenize” Menger, Jevons, and Walras as co-founders of “the marginalist revolution.”
• 15For an informative discussion of other contrasts between Austrianism and neoclassicism, see Huerta de Soto 1998.
• 16Herbert Matis remarks (1974: 257) of the early Austrian school that “this new intellectual approach in economics was subjective, relative, and psychological, since it started from the human being and not from abstract concepts; it signified, therefore, to that degree a departure from classical liberalism.” The confusions evident here are not untypical of the superficial treatment of liberalism by many writers on its history.
• 17Cf., for instance, Edward G. Dolan’s critique 1976b: 6, 11 of “mainstream economics”: “it necessarily omits an important component of reality—the concept of purposive action,” while Austrianism “insists on laying bare the true causal relationships at work in the social world and is not content to simply establish empirical regularities among dubious statistical aggregates.” Austrianism offers “a microeconomic approach to macroeconomic problems.”
• 18See also the trenchant analysis in two essays on the subject by Rothbard 1997, 2: 180–84 and 217–25.
• 19Cf. the perceptive and important comment by Lawrence Birken (1988: 256): “Only with the emergence of marginalism was individual taste decidedly emancipated from the idea of universal need. With occasional exceptions, pre-marginalist thought had ignored or downplayed the significance of the idiosyncratic consumer, thus precluding the recognition of consumer preference as a mark of individuality. Early economic thought, functioning as a kind of secular morality which sought to uphold the idea of the ‘normal,’ conceived of need or utility in universal terms. . . . Only with the advent of marginalism do we see the emergence of a genuinely individualistic desire.” Birken’s analysis, however, would appear to apply much more to the Austrian than the neoclassical variant of marginalism.
• 20Hayek himself lent some support to Hutchison’s distinction between Mises and “Hayek II” in his foreword to a reprint of Mises’s Socialism (Mises 1981: xxiii-xxiv), when he criticized Mises’s claim that “all social cooperation [is] an emanation of rationally recognized utility,” as both “factually mistaken” and an expression of Mises’s “extreme rationalism.” But the general thrust of this passage is to downplay his disagreement with Mises. Hayek states, for instance, that Mises “largely emancipated himself from that rationalist-constructivist starting point,” and that “Mises as much as anybody has helped us to understand something which we have not designed.”
• 21Mises never claimed that the specific motivations of human action, in the psychological sense, were relevant to economics; rather it was a question of preferences as demonstrated in action.
• 22It should be noted that Friedman expressed these views in a popular address. Still, it is difficult to see how his argument could be made substantially more rigorous or coherent. Friedman declares, for example, that we must “beware of intolerance [such as Mises supposedly displayed] if we’re going to be really effective in persuading people,” yet concedes, very graciously, that “there is no doubt in my mind that Ludwig von Mises has done more to spread the fundamental ideas of free markets than any other individual” (1991: 18). Friedman’s brief account of Ayn Rand’s allegedly a priori philosophy is simply uninformed and incorrect.
• 23To those familiar with Mises’s achievements (see Rothbard 1988; Hoppe 1993; Reisman 1998; Zlabinger 1994; Ebeling 1981), the attempt of Hutchison and others to minimize them is more ludicrous than troubling, e.g., Erich Streissler’s assertion, regarding Mises (1990b: 109; see also 1988: 200) that, “not without truth, though certainly with little charity, [he] might be called the arch-lobbyist for entrepreneurial concerns in interwar Austria.”
• 24On the question of apriorism, it is worth noting that Hayek (1955: 221 n.1) wrote of John Locke that he regarded “the moral sciences” (ethics, political theory, etc.) “as a priori sciences comparable with mathematics and of equal certainty with it.” The context makes it clear that Hayek is here passing a favorable judgment on Locke. It is doubtful whether either Hayek or Hutchison would have wished to classify Locke as “a false individualist.”
• 25For an incisive critique of Popperian falsificationism, see Gordon 1993: 34–41.
• 26See also de Jasay 1991b. Gerard Radnitzky 1995: 49–84, especially 50, 64, 83, has criticized Popper’s oft-repeated praise of Marx as a “humanist,” as well as his political philosophy in general. He holds Popper’s concessions to “a not thought-through social democracy” to have been a “survival strategy,” which permitted him to find a wide readership for his views. This Radnitzky contrasts to Mises, who simply refused to compromise with the statist spirit of the times. Radnitzky’s view paints Popper as a hypocrite and an opportunist, which does not seem right.
• 27Popper’s knowledge of the history of liberal thought was astonishingly deficient. He held, for instance, 1992: 10 that Hayek originated the notion that complete socialism entailed political enslavement (and that Mises derived it from Hayek). But this idea was a commonplace among late-nineteenth century liberals, as evidenced by Herbert Spencer’s essay, “The Coming Slavery,” Yves Guyot’s La tyrannie socialiste, Eugen Richter’s Pictures of a Social-Democratic Future, and other works.
• 28On the influence of Capitalism and the Historians, see Taylor 1997: 162–64. In a learned study, Jeremy Shearmur (1996) has argued that, despite Popper’s evident social-democratic attitudes, the implications of his ideas are more closely related to classical liberalism than Popper himself understood. Whatever the validity or scope of that claim, there is the anterior and more fundamental question—whether Popper’s ideas on politics, based as they are on grossly incorrect historical and economic notions, are even important enough to warrant extended examination in the first place. Popper’s superficiality in dealing with political issues is nowhere more obvious than in his 1956 tour d’ horizon of the world scene, “The History of Our Time: An Optimist’s View” (1962: 364–76). Here he declares that “our own social world is the best that has ever been”—neglecting, among other things, the Chinese, around one-fifth of the human race and then living under the Maoist terror regime. He not only implies, for no good reason, that the disappearance of “class differences” is desirable, but announces, absurdly, that in the United States (and elsewhere) “we have, in fact, something approaching classless societies.” Similarly, in a tribute to Hayek (Popper 1997: 321, from a talk given in 1992), Popper recalls that often in conversations with Hayek, he criticized Mises’s conduct of the fight against “what was then called . . . protectionism, or state-protectionism” (sic—presumably, Popper is referring to what everyone else calls interventionism), because “in a complex society, anything approaching a free market could only exist if it enjoyed the protection of laws, and therefore of the state. Thus the term ‘free market’ should always be placed in inverted commas, since it was always bound, or limited, by a legal framework and made possible only by this framework.” On Popper’s “logic,” then, terms like “freedom of the press” and “religious freedom” should also always be placed in inverted commas, for the same reason.
• 29On some differences between Mises and Hayek in connection with the famous debate, see Keizer 1994.
• 30For a statement of this position, see März 1991: 101–05, where the author, in what purports to be a scholarly work, adopts the Marxist polemical tactic of characterizing Mises as having launched “the theoretical and ideological counter-offensive of the Austrian bourgeoisie” in his critique of socialist planning.
• 31Karen Vaughn 1994 maintains that the use by socialist writers of neoclassical theory to derive market socialist responses to the Austrian assault sensitized both Mises and Hayek to the distinctively Austrian components of their argument.
• 32Cf. Dasgupta 1985: 80: in contrast to classical economics, “consumption, not accumulation, appears in marginalist economics as the mainspring of economic activity. The new system, so to say, substitutes ‘consumers’ sovereignty’ for ‘capitalists’ sovereignty.’”
• 33It should be noted that by including the state in the same category as such social formations as language and markets, Menger is obscuring the crucial liberal distinction between state and civil society, coercion and voluntarism.
• 34Emil Kauder 1965: 61 points out that Menger opposed religious bigotry, anti-Semitism, militarism, dueling, and the glorification of war, and “was very critical of the feudal pillars of the Habsburg monarchy—clergy, army, and nobility.” A number of these are traditions or institutions which, it could well be argued, had developed “spontaneously.”
• 35In his last work on politics, Considerations on the Government of Poland, Rousseau, who is still viewed by many as a serious political thinker, continued his idolization of Lycurgus, while spelling out the totalitarian implications of his childish infatuation: “He showed them [the Spartans] their country unceasingly, in their laws, their games, their homes, their loves, their feasts. He did not allow them a moment to be by themselves alone. And from this continual constraint, ennobled by its object, was born that ardent love of country . . .” See Crocker 1973: 335.
• 36Wieser maintained 1923: 91–92 that, before Menger, all the schools of economic thought “pursued the interests of one of the great economic parties . . . [and] sought evidence for their partisan interest.” Very oddly, he even employs the Marxist terminology of “bourgeois” and “proletarian” economists, going so far as to assert that the “proletarian,” i.e. socialist, economists, will be able to learn from Menger’s economic theory, without “in any way giving up their fundamental standpoint”; rather, they will be able to “strengthen their standpoint.”
• 37It was left for Erich Streissler among non-socialists to impute a class interest to the Austrian economists (1988: 200–01): “after the end of the monarchy the members of the School belonged to the old ruling class dispossessed of power and mostly expropriated through the hyperinflation which had abolished their rentier capital. No wonder they were particularly critical of the state.”
• 38Fetter 1923: 602 noted that the negative implications of the subjective theory for Marxian economics appears more clearly in Wieser’s and Böhm-Bawerk’s works, but maintained that “this application had, however, been recognized from the very beginnings of the subjective school.” While he cites no particular evidence, he may have had in mind, for instance, Menger’s critique of Rodbertus’s claim that capitalists and landowners expropriate the product of labor and thus “live without working.” To this Menger 1981: 168 n. 30 countered that they live “upon the services of their land and capital which have value, just as do labor services, both to individuals and to society.”
• 39Streissler 1990a: 64 makes the peculiar statement that: “Perhaps Bukharin is not that far off the mark after all when he thinks it [Austrian economics] is the economics of the rentier.” However, Günther Chaloupek, an author sympathetic to Marxism, is considerably closer to the mark when he states 1986: 221, in discussing Bukharin’s critique of Austrianism: “But: if the marginal utility school drew attention to demand, this was certainly not in the first instance a symptom of the beginning of age of the rentier, but rather a reflex of the increased standard of living of the masses as well in the train of capitalist expansion.”
• 40Joan Robinson, on the other hand, argued 1962: 52, emphasis in original, that while “the whole point of utility was to justify laisserzfaire,” the theory had inherently egalitarian and redistributionist implications.
• 41That the approach to the history of economic thought centering on the British tradition from Smith to Mill must be abandoned is argued by Murray N. Rothbard (1976a). Rothbard persuasively claims 1976a: 53 that a more informed interpretation would see “Smith and Ricardo, not as founding the science of economics, but as shunting economics onto a tragically wrong track, which it took the Austrians and other marginalists to make right.” Citing works by Marjorie Grice-Hutchinson and Raymond de Roover, Rothbard emphasizes the importance of medieval and early modern thinkers, particularly the Spanish Late Scholastics. These themes also pervade Rothbard’s history of economic thought 1995c, where the Late Scholastics are treated in 1: 97–133. See also Jesús Huerta de Soto 1999.
• 42Oscar Morgenstern 1927: 673–74, however, had a sharply different interpretation of Wieser’s last work, Gesetz der Macht, and incongruously characterized Wieser as a “convinced pacifist.”
• 43Streissler 1986: 100 points out that Wieser’s constant references to “the socialist state of the future” influenced his student Joseph Schumpeter in the latter’s assessment of the probable course of historical development.
• 44Even as regards Wieser’s economic theory, Mises 1978b: 36 concluded that he “could not be called a member of the Austrian School, but was rather a member of the Lausanne School . . .” This viewpoint is cogently set forth in Hoppe and Salerno 1999.
• 45Cf. Streissler’s insightful remark 1987: 24: “Through Menger his school became a vessel of economic liberalism, at a time when in other countries it stood under an unlucky star. This school took over a then ‘lost cause,’ and nursed liberalism at the time of its deepest ebb—especially in the period between the wars.”
• 46Kauder 1965: 64 asserts of Menger: “He was not a consistent defender of free competition, and he was not a socialist, although his brother, the famous socialist Anton Menger, had some influence on him.”
• 47Paul Silverman, however, 1990: 85, 90–91 criticizes Kauder on the nature of the Austrian background of Menger’s work (as well as on Menger’s alleged methodological dependence on Aristotle). Silverman points up the importance in Austrian history of a school of liberal cameralists, including the key figure of Joseph von Sonnenfels, who posited “a system of preestablished social harmony which the state was to watch over and protect.” Josef von Kudler, whose work on economics was the standard textbook in Austrian universities in the decades before the appearance of Menger’s Principles, likewise displayed “a staunchly liberal outlook.” In Silverman’s view, the impact of the “Austrian tradition” on Menger was not in the direction of conservatism, spurring the search for a Metternichian stability; instead, it may mainly have worked to convey the notion of objective, rational ends for man in society. This set a limit to Menger’s subjectivism, leading him, for instance, to differentiate real from imagined needs.
• 48Böhm 1990: 232 n. 2 suggests that Mises’s extreme liberal viewpoint was out of step with the general position of the founders of Austrianism, who tended towards “a kind of ‘enlightened conservatism’ (in the European sense), or ‘paternalistic conservatism’—allegations of laissez faire repeated ad nauseam notwithstanding.”
• 49At the University of Vienna, Hans Mayer, who was all that was left of the Austrian school after the Anschluss with Nazi Germany, also held that Mises’s radical liberal conclusions were not inherent in the school’s teachings (Craver 1986: 10–11). This is easily understandable, given Mayer’s position as a functionary of the new National Socialist regime. The tradition of attempting to disassociate Mises’s “personal,” “Manchester-liberal” world-view from “the objective findings of the Austrian school” was carried on by Weber 1949: 644.
• 50Hans-Hermann Hoppe puts the matter very well. When Mises arrived in the United States in 1940, he was already “an international scientific celebrity,” and his influential works, The Theory of Money and Credit and Socialism had been available in English for years. “But while every third-class European Marxist or ‘Marxian’ of the time found a respectable academic position without any difficulty, in the land of capitalism the American universities and intellectuals plainly and shamelessly turned a cold shoulder to Mises, the great theoretician of liberalism and capitalism.” Mises finally obtained a position at New York University, but only as permanent guest professor, and the university did not pay his salary, which was covered from private sources. Hoppe 1993: 27–28, 30, 34 n. 24. Hayek’s situation was analogous. While he did become a professor on the Committee on Social Thought, he was deemed unsuitable, not “scientific” enough (i.e., not sufficiently positivist) by the economics department of George Stigler and Milton Friedman, and his salary was likewise paid from outside sources.
• 51Cf. Steele 1992: “The fact that there were capable liberal thinkers in Europe after World War II is mainly due to the influence of Die Gemeinwirtschaft [Mises’s Socialism] during the inter-war years. There might not have been any West German ‘economic miracle’ without the existence of a handful of active people converted from socialism by Mises.” See also Roll 1945: 176: “Hayek and his Viennese colleagues have been the leaders of an astonishing movement of revival [of individualism and liberalism] which in the early thirties began to appear also in England. . .There in nothing quite comparable to this movement in the United States.”
• 52See in particular Joseph T. Salerno’s perceptive introduction to Hayek’s Prices and Production and Other Works, “Hayek on the Business Cycle,” Mises Daily, October 8, 2008.
• 53On Hayek’s position, see Shearmur 1997. The German “neo-liberal” Alexander Rüstow was one of many who could not differentiate the position of Hayek from that of “his master Mises,” viewing both as “the last surviving examples” of the “old liberalism,” fit to be placed in a museum; see Kathrin Meier-Rust 1993: 69–70. Meier-Rust herself (91) discusses the sharp differences between the German “neo-” and “Ordo-liberal,” and the “classical laissez-faire champions” like Hayek.
• 54See also Streissler 1987: 10: “pronounced liberals, at least in the eighteenth and nineteenth centuries, were rather averse to a redistributive function [of the state]. On the other hand, Friedrich von Hayek, for instance, is no longer of this opinion. He believes only that the pursuit of Sozialpolitik should not be attempted with the help of the market but through transfers independent of the market.”
• 55Hayek also later remarked that another error in The Road to Serfdom was his neglect of the significance of the experience of Soviet Communism, adding, rather oddly, that this was a fault “which is perhaps pardonable when it is remembered that when I wrote Russia was our wartime ally.” This is a curious inversion of the strange criticism leveled at The Road to Serfdom by Erich Roll, in the American Economic Review (1945: 180): “Hayek might have stopped to reflect upon the very different development during the last few pre-war years in Germany and in the Soviet Union, and he might have had the grace, at the least, to acknowledge the very different manner in which the war itself has been conducted by the enemy and by our ally: we have yet to be shown that Maidanek is an inevitable corollary of a collective economy” (1945: 180). Evidently, Professor Roll and his equally ignorant editors at the American Economic Review had somehow never heard of the Ukrainian terror famine, the mass executions, or the system of forced labor camps known today as the Gulag, all conducted by our noble wartime ally, the model terror state of the twentieth century.
• 56Cf., e.g., Mises, 1949:149: “State or government is the social apparatus of compulsion and coercion. It has the monopoly of violent action. . . . The state is essentially an institution for the preservation of peaceful interhuman relations. However, for the preservation of peace it must be prepared to crush the onslaughts of peace-breakers.”
• 57Hans-Hermann Hoppe 1994: 67 has ventured to assert that “Hayek’s view regarding the role of market and state cannot systematically be distinguished from that of a modern social democrat.” But see the attack on Hayek for his rejection of the concept of social justice by a social democratic writer, in Plant 1994.
• 58Late in his life, Hayek 1994: 68, 72–73 referred to his “curious relationship” to Mises, from whom “I probably learnt more than from any other man.” Here Hayek made the confusing claim that “Mises remained in the end himself a rationalist-utilitarian, and with a rationalist-utilitarianism, the rejection of socialism is irreconcilable. . . . If we remain strict rationalists, utilitarians, that implies that we can arrange everything according to our pleasure.” At an earlier stage, Hayek’s judgment of Mises had been much more positive. In 1952, Hayek wrote 1952: 729–30 of Mises that “since the early twenties [he] has been building a new edifice of liberal thought more consistently, more systematically, and more successfully than anyone else . . . his work resemble[s] that of the great social philosophers of the eighteenth century much more than the labors of a contemporary expert . . . he alone has given us a conclusive treatment of all economic and social thought,” Hayek asserted, adding, “whether or not one concurs with him in every detail.”
• 59A comprehensive examination of what Hayek criticized as Mises’s “extreme rationalism” (foreword to Mises, 1981: xxiii) is presented, with a critique of Hayek’s position, in Salerno 1990.
• 60Menger adds in a footnote 1935c: 93 n.: “I certainly attack the so-called ‘ethical’ tendency in political economy in a number of places in my Investigations, while strictly distinguishing it from the ‘social-political’ [social reform] tendency in economic research.” Streissler, incidentally, cites Menger’s clash with Schmoller, but omits his praise of Schmoller’s crusade for Sozialpolitik (Menger 1994: 24 n. 8).
• 61By 1891 Menger (1935b: 244–45) also had some harsh criticisms of the policies of the social reformers: “The self-interest that the advocates of Sozialpolitik so utterly despise has not disappeared from the world. Rather, it has degenerated into a collectivist, national and class egoism, which strives not for the increase of the total product (of the object to be divided up!) but for as great a portion of the total product as possible for each individual social class.”
• 62On Thierry, see Augustin-Thierry 1922; Carroll 1951; Smithson 1973; and Gossman 1976.
• 63Augustin Thierry, “Commentaire sure L’Esprit des Lois de Montesquieu,” Censeur européen, 7 (1818), 228, 230.
• 64Ibid. 205–06.
• 65Ibid. 217.
• 66Ibid. 244.
• 67Ibid. 218.
• 68Ibid. 256–57.
• 69Ibid. 257–58.
• 70Ibid. 251–52.
• 71Ibid. 255.
• 72Charles Comte, “De la multiplication des pauvres, des gens à places, et des gens à pensions,” Censeur Européen, 7, 1n.
• 73Shirley M. Gruner, Economic Materialism and Social Moralism, The Hague/Paris: Mouton, 1973, 108–10, aptly summarizes Guizot’s standpoint: He “liked to be popular and therefore liked to be considered up-to-date in his ideas. Nor does he wish to appear ‘unscientific.’ Therefore he never denies anything outright but seeks to modify a little here and there so that finally nothing is left of it. There is no head-on opposition. . .This is in fact the whole problem of Guizot—his indecisive decisiveness so that not only in history but in politics the basically constitutional conservative appears at times to long for the trappings of a radical liberal.” Gruner shrewdly adds that “it has also been in the interest of certain groups, for instance the Communists of 1848 [including presumably Marx and Engels], to suggest that there was not much difference between Guizot and the other ‘bourgeois’ liberals.”
• 74Gerhard (1960), 305.
• 75François Mignet, “Le comte Sieyès: Notice,” Notices et portraits historiques et littéraires, I (Paris: Charpentier, 1854), 88.
• 76François Mignet, “Charles Comte: Notice,” ibid. II, 102.
• 77“After much time and labor lost in thus obtaining artificial results, I perceived that I was falsifying history by imposing identical formulas on totally different periods.” Augustin Thierry, Dix Ans d’Études Historiques (Paris: Furne, 1851 [1834]), 3. He adds that, after his first essays on English history, in the Censeur Européen, he began to feel the need to leave to each epoch its originality: “I changed style and manner; my former rigidity became more supple . . .” ibid. 6–7. Of his earlier radical-liberal views, he says: “I aspired enthusiastically towards a future of which I had no very clear idea . . .” [vers un avenir, je ne savais trop lequel . . .] ibid. 7.
• 78Ibid. 8.
• 79Ibid. 12.
• 80Thierry, Essai sur l’Histoire de la Formation et des Progrès du Tiers État (1894 [1853]) Paris: Calmann Lévy), 172.
• 81Ibid. 195.
• 82Ibid. 1–2.
• 83Marx discusses Thierry’s Essai in the letter to Engels cited in note 211. Interestingly, he commends Thierry for describing “well, if not as a connected whole: (1) How from the first, or at least after the rise of the towns, the French bourgeoisie gains too much influence by constituting itself the Parliament, the bureaucracy, etc., and not as in England through commerce and industry. This is certainly still characteristic even of present-day France.” Selected Corr. 88.
• 84Augustin Thierry, “Preface,” Essai sur l’Histoire de la Formation det des Progrès du Tiers État.
• 85Alexis de Toqueville, Recollections, Alexander Teixeira de Matos (tr.) J.P. Mayer (ed.), New York: Meridian, 1959. 2–3.
• 86Allix, 318–19.
• 87A. Augustin-Thierry, Augustin Thierry, 1795–1856 (Paris: Librairie Plon, 1922) 114.
• 88Ibid. 112f.
• 89Eugene Tenbroeck Mudge, The Social Philosophy of John Taylor of Caroline: A Study in Jeffersonian Democracy (New York: AMS Press, 1968 [1939]), 151–204, passim.
• 90William Leggett, Democratick Editorials: Essays in Jacksonian Political Economy, Lawrence H. White (ed.) (Indianapolis: Liberty Press, 1984), 250–51. See also Lawrence H. White, “William Leggett: Jacksonian Editorialist as Classical Liberal Political Economist,” History of Political Economy, 18, No. 2 (Summer 1986), 307–24.
• 91William Leggett, Democratick Editorials, 142.
• 92John C. Calhoun, A Disquisition on Government and Selections from the Discourse, C. Gordon Post (ed.) Indianapolis: Bobbs-Merrill, 1953, 17–19.
• 93Theda Skocpol, Bringing the State Back In (1985), Cambridge, Eng.: Cambridge University Press. The title derives from an earlier essay by Skocpol.
• 94A scholar who stressed the role of the state in creating corporatist forms and hence “class interest” (although he preferred the term “caste” to “class”) was Ludwig von Mises; see his Theory and History: An Interpretation of Social and Economic Evolution (New Haven: Yale University Press, 1957), 113–15. Mises, who examined this topic thirty years ago, is not mentioned by Skocpol. See also Murray N. Rothbard, Power and Market: Government and the Economy (Menlo Park: Institute for Humane Studies, 1970), 12–13, where Rothbard writes: “It has become fashionable to assert that ‘Conservatives’ like John C. Calhoun ‘anticipated’ the Marxian doctrine of class exploitation. But the Marxian doctrine holds, erroneously, that there are ‘classes’ on the free market whose interests clash and conflict. Calhoun’s insight was almost the reverse. Calhoun saw that it was the intervention of the State that in itself created the ‘classes’ and the conflict.” Rothbard also prefers the term “caste”: “castes are State-made groups, each with its own set of established privileges and tasks.” ibid. 198, note 5.
• 95“Manifesto of the Communist Party,” in Karl Marx and Friedrich Engels, Selected Works, 47.
• 96George Konrad and Ivan Szelényi, The Intellectuals on the Road to Class Power, Andrew Arato and Richard E. Allen (trs.) (New York/London: Harcourt Brace Jovanovich, 1979) xiv-xvi, 39–44, and passim.
• 97Ludwig von Mises, Theory and History (New Haven: Yale University Press, 1957), p. 294.
• 98R. Raico, Die Partei der Freiheit (Stuttgart: Lucius & Lucius, 1999). The book is available online at http://docs.mises.de/Raico/die_partei_der_freiheit_raico.pdf
• 99Methodological individualism has been a keystone of Austrian economics from the start (Christainsen 1994). In his Investigations, Menger wrote:
• 100Methodological individualism was endorsed by the other leaders of Austrianism to the point where Fritz Machlup (1981: 9) could list it as the first of “the most typical requirements for a true adherent of the Austrian school.”
• 101It is certainly possible for someone to adopt methodological individualism and not endorse liberalism (Böhm 1985: 252–53). Jon Elster, for instance, is able to insist on the necessity of methodological individualism in the social sciences, while continuing to view himself as a kind of Marxist (1985: 4–8). Yet it is significant that Elster dismisses certain claims of Marx on the grounds of their incompatibility with methodological individualism. In general, it seems clear that the Austrian approach in methodology tends to preclude certain holistic ideologies that are also inconsistent with liberalism, such as classical Marxism and some varieties of racism and hyper-nationalism. To this extent, then, it is not simply methodological individualism.
• 102It is certainly possible for someone to adopt methodological individualism and not endorse liberalism (Böhm 1985: 252–53). Jon Elster, for instance, is able to insist on the necessity of methodological individualism in the social sciences, while continuing to view himself as a kind of Marxist (1985: 4–8). Yet it is significant that Elster dismisses certain claims of Marx on the grounds of their incompatibility with methodological individualism. In general, it seems clear that the Austrian approach in methodology tends to preclude certain holistic ideologies that are also inconsistent with liberalism, such as classical Marxism and some varieties of racism and hyper-nationalism. To this extent, then, it is not simply methodological individualism.
• 103Political factors played a role in the debate over Austrian methodology from the start. The very fact that “nation” and “state” understood as holistic entities were not primaries in his system set Menger apart from important currents of economic thought in the German-speaking world of his time. Indeed, it was on the basis of Menger’s methodology that Gustav Schmoller, leader of the German Historical School, instantly politicized the whole debate at the very start of the famous Methodenstreit (dispute over methods) (Bostaph 1978 and 1994). Reviewing the Investigations, Schmoller (1883:241) charged Menger with the cardinal sin of adhering to Manchestertum (laissez-faire), since his abstract and “atomistic” method might better be called “the Manchesteristindividualist” method.
• 104Furthermore, according to Hayek, the supposed discovery of such laws has resulted in the construction of philosophies of history on which major socialist projects have been erected—Marxism, of course, but particularly Saint-Simonianism, the system he dissects in his book. The followers of the early “utopian” socialist, Henri de Saint-Simon, were practitioners par excellence of scientism, the illegitimate application to the study of society of the methods of the natural sciences. And it is scientism—the negation of methodological individualism—that “through its popularizers has done more to create the present trend towards socialism than all the conflicts between economic interests . . .” (1955: 100–01). Opponents of liberalism, in criticizing Hayek for his methodological individualism, have also assumed that it was closely connected to his political philosophy.
• 105This Marxist complaint is misguided, however. The abstracting approach of Austrianism pertains—necessarily—to its theory. Some Austrians, it may be conceded, have neglected to apply their theory to the understanding of concrete, “real-life” issues. That this failing is not intrinsic to Austrian economics, however, was demonstrated—to cite only one example—by the outstanding Austrian economist, Murray N. Rothbard, who devoted much of his extremely productive career not only to “pure economics,” but also to highly important questions of political economy, both on a theoretical level and in specific historical contexts (see, e.g., Rothbard 1963, 1970, 1995a, 1995b, 2002).
• 106the thought design, the economic calculation or economic plan of the individual, always stands in the foreground of theoretical interest. . . . The significance of the Austrian school in the history of ideas perhaps finds its most pregnant expression in the statement that here man as an actor stands at the center of economic events. (1978: 47, 51; emphasis in original)
• 107This standpoint may be contrasted to that of neoclassical theory, of which Lachmann went so far as to declare: “Fundamentally, we cannot really speak of economic activity here. As in nature, people react to the current external conditions of their economic existence: they do not act.” In support of this rather severe judgment, Lachmann cited the statement of Vilfredo Pareto: “The individual can disappear, provided that he leaves us this photograph of his tastes.” Incensed by such a depreciation of individual acting man, Lachmann assailed the “arid formalism” of neoclassical economics, which treats “the manifestations of the human mind in household and market as purely formal entities, on par with material resources” (1978: 51, 56, 181; emphasis in Lachmann).
• 108This standpoint may be contrasted to that of neoclassical theory, of which Lachmann went so far as to declare: “Fundamentally, we cannot really speak of economic activity here. As in nature, people react to the current external conditions of their economic existence: they do not act.” In support of this rather severe judgment, Lachmann cited the statement of Vilfredo Pareto: “The individual can disappear, provided that he leaves us this photograph of his tastes.” Incensed by such a depreciation of individual acting man, Lachmann assailed the “arid formalism” of neoclassical economics, which treats “the manifestations of the human mind in household and market as purely formal entities, on par with material resources” (1978: 51, 56, 181; emphasis in Lachmann).
• 109Israel Kirzner, too, has noted the uniqueness of the Austrian outlook. Both the earlier Ricardian and the current neoclassical economics exhibit a “mechanical quality,” whereby “human aspirations, human errors, and human discoveries are downplayed, ignored, or simply assumed away.” Austrian economics, on the other hand, highlights the alertness, inventiveness, fallibility, and resourceful creativity of all the participants in the market process, especially in the case of the entrepreneur and the entrepreneurial function. This is a distinctive Austrian outlook which Kirzner traces back to Menger, whose originality consisted in his “vision of an economy created and shaped by human action” (Kirzner 1994, 1: xiv, xxiv). For neoclassical economic theory, on the other hand, as one practitioner has ruefully admitted, entrepreneurs and entrepreneurship simply do not exist (Rosen 1997: 148–49).
• 110Israel Kirzner, too, has noted the uniqueness of the Austrian outlook. Both the earlier Ricardian and the current neoclassical economics exhibit a “mechanical quality,” whereby “human aspirations, human errors, and human discoveries are downplayed, ignored, or simply assumed away.” Austrian economics, on the other hand, highlights the alertness, inventiveness, fallibility, and resourceful creativity of all the participants in the market process, especially in the case of the entrepreneur and the entrepreneurial function. This is a distinctive Austrian outlook which Kirzner traces back to Menger, whose originality consisted in his “vision of an economy created and shaped by human action” (Kirzner 1994, 1: xiv, xxiv). For neoclassical economic theory, on the other hand, as one practitioner has ruefully admitted, entrepreneurs and entrepreneurship simply do not exist (Rosen 1997: 148–49).
• 111Israel Kirzner, too, has noted the uniqueness of the Austrian outlook. Both the earlier Ricardian and the current neoclassical economics exhibit a “mechanical quality,” whereby “human aspirations, human errors, and human discoveries are downplayed, ignored, or simply assumed away.” Austrian economics, on the other hand, highlights the alertness, inventiveness, fallibility, and resourceful creativity of all the participants in the market process, especially in the case of the entrepreneur and the entrepreneurial function. This is a distinctive Austrian outlook which Kirzner traces back to Menger, whose originality consisted in his “vision of an economy created and shaped by human action” (Kirzner 1994, 1: xiv, xxiv). For neoclassical economic theory, on the other hand, as one practitioner has ruefully admitted, entrepreneurs and entrepreneurship simply do not exist (Rosen 1997: 148–49).
• 112In this whole area there is a strong link to an important element of classical liberalism, as exemplified, for instance, in the early Wilhelm von Humboldt, Benjamin Constant, and Herbert Spencer. In combating authoritarian ideologies, liberal thinkers focused on the individual human being per se (i.e., irrespective of class, race, etc.) as the fountainhead of creative response to an ever-changing world. From this they derived the basic liberal demand for as wide a latitude as possible for individual freedom of choice and action.
• 113On the level of policy, Austrianism’s individualist and subjectivist methodology tends, indirectly at least, to sway decisions in a liberal direction. Austrian economists are skeptical of the macroeconomic models devised by “mainstream economists,” with their assumption that various global magnitudes act upon one another. There appear to be affinities between a macroeconomic approach and anti-liberal policies. Hayek, for example, wrote, of the heightened interest in macroeconomic statistics associated with the Keynesian revolution:
• 114It was largely a growing demand for greater deliberate control of the economic process (which required more knowledge of the specific effects to be expected from particular measures) that led to the endeavor to use the obtainable statistical information as the foundation of such predictions. (1973: 12)
• 115Besides having implications for policy, the Austrian concern with the diversity of human beings and their situations is strongly congruent with liberalism’s view of the nature of man. The epigraph which John Stuart Mill placed at the beginning of his On Liberty, from Humboldt’s Limits of State Action, epitomizes this liberal outlook: “The grand, leading principle towards which every argument unfolded in these pages directly converges is the absolute and essential importance of human development in its richest diversity” (quoted in Mill 1977: 213).
• 116“False” as well as “True” Individualism has been very much present among modern Austrian views on the philosophy and method of economics . . . it is important that [the Austrians’] methodology, or epistemology, should be clearly, logically, and explicitly compatible with their political principles. As well as its ethics, politics, and economics, freedom has its epistemology, which must surely be one of its most fundamental aspects and requirements. (1981: 224).
• 117. . . his fundamental idea was that we knew things about “human action” (the title of his famous book) because we are human beings. As a result, he argued, we have absolutely certain knowledge of the motivations of human actions [sic] and he maintained that we can derive substantive conclusions from that basic knowledge. Facts, statistical or other evidence cannot, he argued, be used to test those conclusions. . . . That philosophy converts an asserted body of substantive conclusions into a religion. . . . Suppose two people who share von Mises’s praxeological view come to contradictory conclusions about anything. How can they reconcile their difference? The only way they can do so is by a purely logical argument. One has to say to the other, “You made a mistake in reasoning.” And the other has to say, “No, you made a mistake in reasoning.” Suppose neither believes he has made a mistake in reasoning. There’s only one thing left to do: fight. (1991: 18)
• 118How such an argument could emanate from such a distinguished source is simply baffling. Among other problems with it: Friedman’s theory would predict the occurrence of incessant bloody brawling among mathematicians and logicians, the non-occurrence of which falsifies that theory in Friedman’s own positivist terms. Friedman’s position also entails that no religious person who felt certain about his religious beliefs could have any principled reason to respect the conflicting religious beliefs of others, which is absurd. Finally, Friedman’s “explanation” of Mises’s alleged personal “intolerance” fails to account for the personal “tolerance” of other practitioners of apriorism in economics.
• 119As for Hutchison, he really offers no argument at all for his strange attack on Mises. Instead, there is the endorsement, without argument, of Hayek’s very dubious distinction between “false,” French individualism, and “true,” British individualism, and of the confusing account of intellectual history Hayek builds on this imagined dichotomy. (See the essay on “Liberalism: True and False,” in the present volume.) Hutchison also makes the unsupported and no means obviously true assumption that “freedom” (presumably meaning liberal theory) must have a single epistemological (as well as ethical) foundation. Clearly, Hutchison’s candidate for the “epistemology of freedom” is the theory of knowledge of Karl Popper.
• 120As for Hutchison, he really offers no argument at all for his strange attack on Mises. Instead, there is the endorsement, without argument, of Hayek’s very dubious distinction between “false,” French individualism, and “true,” British individualism, and of the confusing account of intellectual history Hayek builds on this imagined dichotomy. (See the essay on “Liberalism: True and False,” in the present volume.) Hutchison also makes the unsupported and no means obviously true assumption that “freedom” (presumably meaning liberal theory) must have a single epistemological (as well as ethical) foundation. Clearly, Hutchison’s candidate for the “epistemology of freedom” is the theory of knowledge of Karl Popper.
• 121To what extent Hayek accepted Popper’s methodological views remains unclear. In his Nobel lecture, in 1974, Hayek continued to argue that a fundamental difference exists between the subject matter of the natural and social sciences. Since the complexity of the phenomena studied in the latter usually renders empirical testing impossible, most attempts to apply the characteristic methods of the natural sciences in the social sciences are ruled out (Christainsen 1994: 14). Hutchison himself (1994: 233, n. 7) labels the claim that Hayek became a “falsificationist” as “exaggerated and misleading.” One wonders, though, what a Popperian is supposed to be if not a falsificationist.
• 122In his most famous work on social philosophy, The Open Society and Its Enemies, he asserts—argues for would be putting it much too strongly—that the state has an obligation not only to provide the usual welfare services, but beyond that to guarantee a livelihood to everyone willing to work, and, topping it all, to protect everyone from “inequitable arrangements” arising out of differential “economic power.” Even in 1974, Popper was advocating that the state should take over a controlling share of all “public companies” (Shearmur 1996: 51–52, 36).
• 123Most damaging to any claim that Popper represents authentic liberalism is the fact that he accepted the traditional mythology of industrial capitalism as a system of oppression of the working class, only gradually made tolerable by social reforms effected in part through socialist agitation. In The Open Society and Its Enemies, Popper wrote that Marx’s protests against capitalist oppression “will secure him forever a place among the liberators of mankind.” He contrasted Marx’s “invincible humanitarianism and sense of justice” with the “cynical” defense of “shameless exploitation” of workers by “hypocritical apologists,” i.e., the laissez-faire liberals of the time (1950: 310–12; see also 675 n. 13). As late as 1973, he declared that, although he had decisive disagreements with Marx, he respected him highly “as a fighter for a better world” (1984: 167).
• 124That Popper uncritically embraced the most negative interpretation of the industrial revolution is not surprising, considering that his source for the condition of workers in that period was Marx’s Capital (Shearmur 1996: 52). But it is remarkable that Popper never reconsidered that interpretation, given that it was his friend Hayek himself among liberal theorists who led the fight to bring more historically correct views on this subject to the general public (Hayek 1954). One wonders why Popper, the fearless critical thinker, didn’t just read Capitalism and the Historians and a few of the works cited in that collection.
• 125The sustained theoretical attack on the possibility of rational economic planning under socialism initiated by Mises in the early 1920s and then led by him and Hayek doubtless played a major role, and rightly so, in associating the school with the liberal doctrine. In the decades that followed, the common opinion among economists, that Mises and Hayek had been bested by their socialist adversaries, tended to confirm the sense that the Austrian position in general was antiquated and obsolete. However, recent scholarship (Lavoie 1985; Boettke 1990; Steele 1992)—as well as certain well-known world events—has served to overturn the older verdict. Indeed, the revolution in thinking has prompted one scholar to remark that “it is really scandalous to observe how decades of ridicule poured upon Mises’s ‘impossibility thesis’ [on rational planning under socialism] suddenly give way to an appreciation of his views as if they had been part of conventional wisdom all along” (Böhm, 1990: 231).
• 126The sustained theoretical attack on the possibility of rational economic planning under socialism initiated by Mises in the early 1920s and then led by him and Hayek doubtless played a major role, and rightly so, in associating the school with the liberal doctrine. In the decades that followed, the common opinion among economists, that Mises and Hayek had been bested by their socialist adversaries, tended to confirm the sense that the Austrian position in general was antiquated and obsolete. However, recent scholarship (Lavoie 1985; Boettke 1990; Steele 1992)—as well as certain well-known world events—has served to overturn the older verdict. Indeed, the revolution in thinking has prompted one scholar to remark that “it is really scandalous to observe how decades of ridicule poured upon Mises’s ‘impossibility thesis’ [on rational planning under socialism] suddenly give way to an appreciation of his views as if they had been part of conventional wisdom all along” (Böhm, 1990: 231).
• 127The sustained theoretical attack on the possibility of rational economic planning under socialism initiated by Mises in the early 1920s and then led by him and Hayek doubtless played a major role, and rightly so, in associating the school with the liberal doctrine. In the decades that followed, the common opinion among economists, that Mises and Hayek had been bested by their socialist adversaries, tended to confirm the sense that the Austrian position in general was antiquated and obsolete. However, recent scholarship (Lavoie 1985; Boettke 1990; Steele 1992)—as well as certain well-known world events—has served to overturn the older verdict. Indeed, the revolution in thinking has prompted one scholar to remark that “it is really scandalous to observe how decades of ridicule poured upon Mises’s ‘impossibility thesis’ [on rational planning under socialism] suddenly give way to an appreciation of his views as if they had been part of conventional wisdom all along” (Böhm, 1990: 231).
• 128a system driven entirely and independently by the choices and valuations of consumers—with these valuations transmitted “upwards” through the system to “goods of higher order,” determining how these scarce higher-order goods are allocated among industries and how they are valued and remunerated as part of a single consumer-driven process. (Kirzner 1990: 99)
• 129In his Investigations, Menger broaches the issue in Chapter 2, Book 3, devoted to “The Theoretical Understanding of Those Social Phenomena Which Are Not a Product of Agreement or of Positive Legislation, but Are Unintended Results of Historical Development.” He poses the question: “How can it be that institutions which serve the common welfare and are extremely significant for its development come into being without a common will directed toward establishing them?” Menger points out that “Law, language, the state, money, markets, all these social structures are to no small extent the unintended result of social development,” and goes on to provide a brilliant and famous explanation, based on methodological individualism, of the origin of money (1985: 146, 152–55; see also Menger 1981: 256–85).
• 130But never, and this is the essential point in the matter under review, may science dispense with testing for their suitability those institutions which have come about “organically.” It must, when careful investigation so requires, change and better them according to the measure of scientific insight and practical experience at hand. No era may renounce this “calling.” (1985: 234).
• 131The lawgiver is the engineer who invents the machine; the prince is merely the mechanic who sets it up and operates it. . . . Whoever ventures on the enterprise of instituting a people must be ready, as it were, to change human nature. . . . A sublime reason, which soars above the heads of the common people, produces those rules which the lawgiver puts into the mouth of the immortals. . . .The lawgiver’s great soul is the true miracle which must vindicate his mission. (1968: 84–87)
• 132Their “intellectual distress” was instantly alleviated, however, when they happened to discover Menger’s Principles. It should be stressed that Wieser gives no hint of bad faith. He states that both he and Böhm-Bawerk became convinced that socialism, in consistently applying the classical concept of value as stemming from labor, was fallacious (Wieser 1923: 88).
• 133Like Wieser, Fetter is quick to point out that no bad faith was involved in propagating the subjective theory. Yet he asserts, as against Hayek, that even a “casual examination of the works of Jevons, Menger, Clark, and of their most influential colleagues reveals from first to last evidences of this undercurrent of interest in the political bearings of the value theory.” The story, however, ends happily from Fetter’s point of view. The subjective-value theory left Marxism in the dust: “it would be difficult to find in the whole history of economic thought a more complete victory of one idea over another” (1923: 600–02, 605; on Fetter, see Herbener 1999).
• 134Like Wieser, Fetter is quick to point out that no bad faith was involved in propagating the subjective theory. Yet he asserts, as against Hayek, that even a “casual examination of the works of Jevons, Menger, Clark, and of their most influential colleagues reveals from first to last evidences of this undercurrent of interest in the political bearings of the value theory.” The story, however, ends happily from Fetter’s point of view. The subjective-value theory left Marxism in the dust: “it would be difficult to find in the whole history of economic thought a more complete victory of one idea over another” (1923: 600–02, 605; on Fetter, see Herbener 1999).
• 135From the opposing camp, a long line of socialist critics, from the 1890s on, pilloried marginalism as a mere rationalization for the exploitative capitalist system. The Italian socialist Achille Loria assailed the marginal approach for precluding “the possibility of a deep analysis of social relations” and eliminating “any theoretical threat against the established economic system” (Barucci 1972: 529). Karl Kautsky, the Pope of German Marxism before the First World War, took note of the Austrian challenge in the form of Böhm-Bawerk’s work, declaring: “Böhm-Bawerk’s and Marx’s theories of value are mutually exclusive. . . . That means, therefore: either-or” (cited in Chaloupek 1986: 198–99). Nikolai Bukharin (1927), who attended Böhm-Bawerk’s lectures, labeled Austrianism “the economic theory of the rentier class.” Decades later, Ronald L. Meek claimed, citing Menger and Jevons, that “the founders [of marginalism] were very well aware of the dangerous uses which were currently being made of these doctrines [of classical economics] in certain quarters” (1972: 503).
• 136From the opposing camp, a long line of socialist critics, from the 1890s on, pilloried marginalism as a mere rationalization for the exploitative capitalist system. The Italian socialist Achille Loria assailed the marginal approach for precluding “the possibility of a deep analysis of social relations” and eliminating “any theoretical threat against the established economic system” (Barucci 1972: 529). Karl Kautsky, the Pope of German Marxism before the First World War, took note of the Austrian challenge in the form of Böhm-Bawerk’s work, declaring: “Böhm-Bawerk’s and Marx’s theories of value are mutually exclusive. . . . That means, therefore: either-or” (cited in Chaloupek 1986: 198–99). Nikolai Bukharin (1927), who attended Böhm-Bawerk’s lectures, labeled Austrianism “the economic theory of the rentier class.” Decades later, Ronald L. Meek claimed, citing Menger and Jevons, that “the founders [of marginalism] were very well aware of the dangerous uses which were currently being made of these doctrines [of classical economics] in certain quarters” (1972: 503).
• 137The history of economic thought in the first half or three-quarters of the nineteenth century was and still is often portrayed in very Anglo-centric terms, as though the theories which achieved for so long in Britain such an extraordinary dominance and authority. . .enjoyed a similar hold and authority elsewhere in Europe. This was not the case.
• 138Of the founders—Menger, Böhm-Bawerk, and Wieser—it is Wieser’s views that seem to be the least problematical (Mayer 1929; Streissler 1986: 86–91). Though not a socialist, Wieser firmly believed that the private property, market economy was rife with flaws that cried out for interventionist remedies. Robert B. Ekelund, Jr., has noted that, for Wieser, both consumers and workers were typically tyrannized by the possessors of great concentrations of wealth, and that in Wieser’s view it was the duty of government to reduce the power of these property owners and provide for the “victims of acquisitive capitalism.” Detecting power operating everywhere in market exchanges, Wieser even favored protective tariffs for less developed nations in order to counteract the economic and political domination of the wealthier countries. He tried to deploy marginal utility theory to justify not only progressive taxation, as Hayek noted, but also state subsidies for “projects productive of high total utility” (Ekelund 1992). There seems little reason to dissent from Streissler’s characterization of Wieser as “a statist, who believed in the wisdom of the state machinery guided by a wise bureaucracy (coming from his own caste)” (1987: 14–15).
• 139Of the founders—Menger, Böhm-Bawerk, and Wieser—it is Wieser’s views that seem to be the least problematical (Mayer 1929; Streissler 1986: 86–91). Though not a socialist, Wieser firmly believed that the private property, market economy was rife with flaws that cried out for interventionist remedies. Robert B. Ekelund, Jr., has noted that, for Wieser, both consumers and workers were typically tyrannized by the possessors of great concentrations of wealth, and that in Wieser’s view it was the duty of government to reduce the power of these property owners and provide for the “victims of acquisitive capitalism.” Detecting power operating everywhere in market exchanges, Wieser even favored protective tariffs for less developed nations in order to counteract the economic and political domination of the wealthier countries. He tried to deploy marginal utility theory to justify not only progressive taxation, as Hayek noted, but also state subsidies for “projects productive of high total utility” (Ekelund 1992). There seems little reason to dissent from Streissler’s characterization of Wieser as “a statist, who believed in the wisdom of the state machinery guided by a wise bureaucracy (coming from his own caste)” (1987: 14–15).
• 140Wieser’s last book, The Law of Force, intended as his magnum opus, has been open to widely varying interpretations (Streissler 1986: 86–91; Morgenstern 1927: 673–74; and especially Samuels in Wieser 1983: xiii–xxxvi). In any case, as a confusing hodgepodge in which all of history is explained and the whole future of mankind sketched through an obsessive application of the concepts of “power” and “leadership,” this work is fundamentally outside the tradition of the Austrian school. Menger’s political orientation, on the other hand, has been the most studied and remains the most disputed.
• 141Mises (1969: 18) conveyed the impression that Menger was more or less a classical liberal, asserting that he “heartily disapproved of the interventionist policies that the Austrian Government—like almost all governments of the epoch—had adopted.” Streissler has also argued for a virtually laissez-faire Menger, seeing him as the source of the school’s commitment to the free market. Emil Kauder, on the other hand, saw Menger as a sympathizer with Sozialpolitik (social reform) and a critic of laissez-faire (1965: 62–64).
• 142Mises (1969: 18) conveyed the impression that Menger was more or less a classical liberal, asserting that he “heartily disapproved of the interventionist policies that the Austrian Government—like almost all governments of the epoch—had adopted.” Streissler has also argued for a virtually laissez-faire Menger, seeing him as the source of the school’s commitment to the free market. Emil Kauder, on the other hand, saw Menger as a sympathizer with Sozialpolitik (social reform) and a critic of laissez-faire (1965: 62–64).
• 143But, according to Kauder, the underlying intellectual tradition in Austria was one of state paternalism, to the point where even the expression of the concept of a spontaneous economic order had been actively suppressed. The founders thus “tried to compromise between British [i.e., Smithian] and Austrian tradition.” In the end, Böhm-Bawerk held that social stability was more important than progress, preaching a “social quietism akin to the ideals of the Austrian past” (Kauder 1958: 421–22). To make matters worse, Stephan Böhm points out that “Böhm-Bawerk’s outstanding achievement as Minister of Finance was the introduction of the progressive income tax on the total income of individuals.” (1985: 256; see also Weber 1949: 667)
• 144But, according to Kauder, the underlying intellectual tradition in Austria was one of state paternalism, to the point where even the expression of the concept of a spontaneous economic order had been actively suppressed. The founders thus “tried to compromise between British [i.e., Smithian] and Austrian tradition.” In the end, Böhm-Bawerk held that social stability was more important than progress, preaching a “social quietism akin to the ideals of the Austrian past” (Kauder 1958: 421–22). To make matters worse, Stephan Böhm points out that “Böhm-Bawerk’s outstanding achievement as Minister of Finance was the introduction of the progressive income tax on the total income of individuals.” (1985: 256; see also Weber 1949: 667)
• 145His purpose, Weiss declared, was “to establish that a number of notable representatives [of the Austrian doctrine], among them its founders, did not draw from it the conclusions for economic policy that [Mises] believes he must draw.” Mises’s brief response to Weiss’s critique: “I am not so pious towards authority [autoritätsgläubig] and quotation-minded [zitatenfreudig], and I base my argumentation on logic and not on exegesis.” The interesting implication is that the political consequences of Austrian economics are to be gathered not from the particular views of its major early proponents, subject to the climate of opinion of their times, but from the inner logic of the system itself (Mises and Spiethoff 1933: 51–53, 131, 118).
• 146Beginning with Ludwig von Mises and F.A. Hayek, the links between liberalism and the Austrian School become intense and pervasive, since these two scholars were themselves at once the outstanding Austrian economists and the most distinguished liberal thinkers of the twentieth century. The American academic world, however, deemed none of this sufficient for them to be accorded the kind of positions to which they were clearly entitled. They, and in particular Mises, were also responsible to a greater degree than is generally appreciated for the upsurge of the free-market philosophy in the second half of the century.
• 147Beginning with Ludwig von Mises and F.A. Hayek, the links between liberalism and the Austrian School become intense and pervasive, since these two scholars were themselves at once the outstanding Austrian economists and the most distinguished liberal thinkers of the twentieth century. The American academic world, however, deemed none of this sufficient for them to be accorded the kind of positions to which they were clearly entitled. They, and in particular Mises, were also responsible to a greater degree than is generally appreciated for the upsurge of the free-market philosophy in the second half of the century.
• 148What follows refers to Hayek’s political attitudes, not to his contributions to economic science. These were highly significant and valuable in the earlier part of his career, as he together with Mises built the theoretical foundations of the modern Austrian school.
• 149This remained Hayek’s standpoint throughout his long and richly productive scholarly life. It is regrettable, but typical, that a great many confused commentators continue to characterize him as a advocate of laissez-faire. In fact, he always avoided using the term to describe his own views, quite unlike Mises, who gloried in it. Provocatively—and quite misleadingly—Hayek states that the supposed laissez-faire conclusions of classical economics “of course, would have been invalidated by the demonstration that, in any single case, State action was useful” (1933: 134). Here Hayek seems to have lost sight of a principle that otherwise loomed large in his thinking: that with such issues of social policy it could never be a question of “any single case,” but rather of general rules and their overall effect.
• 150Hayek habitually displayed a penchant for a considerable degree of Sozialpolitik. In a radio debate in Chicago, following the publication of The Road to Serfdom, he not only stated that, “I have always said that I am in favor of a minimum income for every person in the country,” but, pressed by two aggressive if uninformed leftist opponents, even made the astonishing assertion: “That the monetary system must be under central control has never, to my mind, been denied by any sensible person” (1994b: 114, 116). Some twenty years later, in the preface to a reprint of his book, Hayek admitted that at the time he wrote The Road to Serfdom, “I had not wholly freed myself from all the current interventionist superstitions and in consequence made various concessions which I now think unwarranted” (1994a: xxiv). It may be that, besides his youthful inclination towards a mild Fabianism and his deep admiration for Friederich von Wieser, Hayek was influenced in this direction by the arrant statism that dominated intellectual life in Britain when he lived there in the 1930s and 40s, often involving starry-eyed admiration for the noble experiment underway in Soviet Russia. In any case, his divergence from the more consistent—or more “dogmatic”—variety of liberalism espoused by Mises endured to the end of his career.
• 151Hayek habitually displayed a penchant for a considerable degree of Sozialpolitik. In a radio debate in Chicago, following the publication of The Road to Serfdom, he not only stated that, “I have always said that I am in favor of a minimum income for every person in the country,” but, pressed by two aggressive if uninformed leftist opponents, even made the astonishing assertion: “That the monetary system must be under central control has never, to my mind, been denied by any sensible person” (1994b: 114, 116). Some twenty years later, in the preface to a reprint of his book, Hayek admitted that at the time he wrote The Road to Serfdom, “I had not wholly freed myself from all the current interventionist superstitions and in consequence made various concessions which I now think unwarranted” (1994a: xxiv). It may be that, besides his youthful inclination towards a mild Fabianism and his deep admiration for Friederich von Wieser, Hayek was influenced in this direction by the arrant statism that dominated intellectual life in Britain when he lived there in the 1930s and 40s, often involving starry-eyed admiration for the noble experiment underway in Soviet Russia. In any case, his divergence from the more consistent—or more “dogmatic”—variety of liberalism espoused by Mises endured to the end of his career.
• 152The state, Hayek insisted, is not solely “a coercive apparatus,” but also “a service agency,” and as such “it may assist without harm in the achievement of desirable aims which perhaps could not be achieved otherwise.” This opening to an extensive welfare state in cases where it “involves no coercion except for the raising of the means by taxation” (sic) (Hayek, 1978: 144), has been criticized by Anthony de Jasay. De Jasay cogently remarks that Hayek put his proposal “a touch naïvely,” and adds:
• 153Here is a clear call, or what anyone might be excused for taking as one, to re-create something like the “Swedish model” under the liberal banner. Horrified as Hayek would be by the imputation of such a proposal, his exposition is fully consistent with it, and must be classed as “loosely liberal” for that reason. (1991a: 15–16; see also 1996)
• 154Tributes to the faculty of human reason are strewn throughout his works, e.g., reason is “the mark that distinguishes man from animals and has brought about everything that is specifically human”; and, “Man has only one tool to fight error: reason” (Mises 1949: 91, 187; see also especially Salerno 1990). This stands in stark contrast to Hayek’s disparagement of reason in his later works (especially Hayek, 1988).
• 155History looks backward into the past, but . . . it does not teach indolent quietism; it rouses men to emulate the deeds of earlier generations. . . . Faithfulness to tradition means to the historian observance of the fundamental rule of human action, namely, ceaseless striving to improve conditions. It does not mean preservation of unsuitable old institutions and clinging to doctrines long since discredited by more tenable theories. (1957: 294, 296)
• 156If anything reconciles me to Schmoller’s activity in the field of our science, odious in so many respects, then it is the circumstance that he is fighting with an unmistakable devotion on the side of honorable men against social evils and for the fate of the weak and the poor. This is a struggle in which, as different as the direction of my researches may be, my sympathies lie entirely on the side of such efforts. I may devote my meager power to the investigation of the laws in accordance with which the economic life of men is shaped; but nothing is further from the trend of my thinking than service in the interest of capitalism. No accusation of Schmoller’s is more contrary to the truth, no reproach more frivolous, than that I am a supporter of the Manchester party . . . (Menger 1935c: 93)
• 157On the other hand, Menger was surely aware that terms like Sozialpolitik and Kathedersozialismus denoted support for a quite activist state in economic affairs. If Menger was “a classical liberal of the purest water,” as Streissler claims, why did he write so favorably of Sozialpolitik and Kathedersozialismus—to the point of conceding Schmoller’s great services in furthering the cause of “social reform” in the midst of a diatribe against him? Why did he attack Manchesterism so vehemently? Unless the explanation is to be found in political opportunism, these statements represent a great mystery, given Streissler’s interpretation.
• 158In the period of his association with the Censeur Européen, Augustin Thierry shared the Industrialist philosophy of Comte and Dunoyer, with perhaps even more radical emphases. His review-essay on Destutt de Tracy’s Commentaire sur l’Esprit des Lois de Montesquieu is particularly important in this connection. Thierry seconds Destutt de Tracy’s firm adherence to laissez-faire:
• 159Government should be good for the liberty of the governed, and that is when it governs to the least possible degree. It should be good for the wealth of the nation, and that is when it acts as little as possible upon the labor that produces it and when it consumes as little as possible. It should be good for the public security, and that is when it protects as much as possible, provided that the protection does not cost more than it brings in. . . . It is in losing their powers of action that governments improve. Each time that the governed gain space, there is progress.
• 160As against Montesquieu, Thierry sides with Destutt de Tracy: “commerce consists in exchange; it is society itself”; and “taxation is always an evil.”
• 161As for the alleged greediness that commerce, rightly understood, inspires in those who make it their social estate: it is a vague reproach, which should be classed with the most insipid and meaningless rantings. Greediness consists in ravishing the goods of another through violence or cunning, as in the two noble professions of conqueror and courtier. But the merchant, like all other industrious men, seeks his benefit only in his talent, in virtue of freely arrived at agreements, and appealing to faith and the laws.
• 162its actions can be classed with the action exerted upon the inhabitants of a land when it is invaded by soldiers; it degenerates into domination, and that occurs regardless of the number of men involved, of the arrangement in which they order themselves, or what titles they take . . .
• 163Sharing the horror of militarism of the other Industrialist authors, Thierry quotes Destutt de Tracy with approval on “the absurd and ruinous wars which have been too often waged to maintain the empire and exclusive monopoly over some faraway colonies.” This is not true commerce, he declares, but “the mania for domination.”
• 164An invisible and ever-active power, labor, spurred on by industry, will precipitate at the same time all of the populations of Europe into this general movement. The productive force of the nations will break all its fetters. . . . Industry will disarm power, by causing the desertion of its satellites, who will find more profit in free and honest labor than in the profession of slaves guarding slaves. Industry will deprive power of its pretexts and excuses by recalling those the police keep in check to the enjoyments and virtues of labor. Industry will deprive power of its income, by offering at less cost the services which power makes people pay for. To the degree that power will lose its actual force and apparent utility, liberty will gain and free men will draw closer together (emphasis supplied).
• 165the passage from one society to another will scarcely be felt. Federations will replace states; the loose but indissoluble chains of interest will replace the despotism of men and of laws; the tendency towards government, the first passion of the human race, will cede to the free community. The era of empire is over, the era of association begins.
• 166Thierry highlights the role of historical writing in aiding in the great struggle. “We are the sons of these serfs, of these tributaries, of these bourgeois that the conquerors devoured at will; we owe them all that we are.” History, which should have transmitted memories of this tradition to us, “has been in the pay of the enemies of our fathers. . . . Slaves emancipated only yesterday, our memory has for a long time recalled to us only the families and acts of our masters.” As if presaging his own work on the chartered towns of the Middle Ages, he adds:
• 167If a skillful and liberal pen were finally to undertake our history, that is, the history of towns and associations . . . all of us would see in it the meaning of a social order, what gives it birth and what destroys it.
• 168Second, by concentrating on production rather than on exchange of rightful property, they create false targets of attack. Thus, “monks”—they really mean the religious orders altogether—are deemed “idlers,” placed in the same category as feudal lords and brigands, and, quite deliberately, no distinction is made among paupers between those who live on voluntary charity and those who live from state aid. It would seem that the Industrialists did not understand the implications of their own insistence on the existence of “immaterial” as well as “material” values.
• 169Although François Guizot has often been placed in the same category as Thierry as a historian of class conflict, especially by Marxists, his views were crucially different. Guizot had no connection with the Censeur group, being a supporter instead of the juste milieu (roughly, golden mean) views of the Doctrinaire, Royer-Collard. As a leader of the Doctrinaires (of whom it has been said that no school of thought ever deserved the name less), Guizot lacked any guiding theory, such as Industrialism, to apply in his historical works. Always an eclectic, he wrote for a while in the 1820s in the then popular idiom of classes and class conflict. But he never held that one of the competing classes would or should triumph. On the contrary, the struggle, according to Guizot, was already in his own day eventuating in a grand synthesis, whereby aristocracy and Third Estate would combine in the “French Nation.”
• 170As a thinker—and, of course, in his political role—Guizot was essentially oriented towards the state. A major purpose of his account of French history was to show that “the bourgeoisie and the power of the Crown were not only allies but forces pressing towards each other.” He thoroughly endorsed the historical collaboration of Crown and the Third Estate, which reached a kind of apotheosis in the July Monarchy of Louis Philippe (1830–48), particularly under Guizot’s own ministry.
• 171All the old aristocratic armies of Europe had succumbed to these bourgeois, at first disdained and then feared, who, forced to take up the sword and having made use of it as before of the word, as previously of thought, had become heroic soldiers, great captains, and had added to the formidable power of their ideas the prestige of military glory and the authority of their conquests.
• 172forgot that the greatest advances of humanity have had as their representatives and defenders the greatest captains . . . that Napoleon’s sword had, for fifteen years, led to the principle of modern equality penetrating all of Europe. He likewise disputed the difficult art of governing the peoples . . .
• 173Eventually, Thierry exchanged his sophisticated Industrialist analysis of class conflict for a considerably coarser one. At some point, he came to believe that the Industrialist view “falsified” history by subjecting it to too rigid a theoretical scheme.
• 174The type of general and purely political considerations to which I had confined myself up until then seemed to me for the first time too arid and limited. I felt a strong inclination to descend from the abstract to the concrete, to envisage the national life in all its facets and to take my point of departure in solving the problem of the antagonism of the different classes of men in the bosom of the same society the study of the primitive races in their original diversity.
• 175The “tinge of politics was effaced,” Thierry explains, as he devoted himself more to “science.” In fact, he did not cease altogether to write as the historian of the oppressed and downtrodden, as the chronicler, first, of the sufferings of the defeated “races” like the Saxons at the time of the Norman Conquest, then of the rise to power and pride of the despised Third Estate in France.
• 176Over and over again, the French kings are praised for having worked to elevate the Third Estate, largely by providing bureaucratic jobs for its members, and, in the traditional manner, for have “created” France. Richelieu is eulogized both for his foreign and domestic policies, equally admirable, and for “multiplying for the commons, besides offices, places of honor in the State.” Colbert, the architect of French predatory mercantilism, is glorified as a commoner who planned “the industrial regeneration of France,” and is applauded for his distribution of its tax-funded largesse to writers, scholars, and “all classes of men.” One could go on.
• 177Over and over again, the French kings are praised for having worked to elevate the Third Estate, largely by providing bureaucratic jobs for its members, and, in the traditional manner, for have “created” France. Richelieu is eulogized both for his foreign and domestic policies, equally admirable, and for “multiplying for the commons, besides offices, places of honor in the State.” Colbert, the architect of French predatory mercantilism, is glorified as a commoner who planned “the industrial regeneration of France,” and is applauded for his distribution of its tax-funded largesse to writers, scholars, and “all classes of men.” One could go on.
• 178How to explain this radical shift of perspective? The chief reason is to be sought in Thierry’s experience of the socialist agitation of 1848 including the violence of the June Days, and the specter of social revolution haunted him to the end of his life. He was anxious that the socialist troublemakers should not be able to draw sustenance from his work on the role of classes in French history. In the Preface to the Essay, Thierry implies that now, in 1853, there is no further need for the concept of classes: “the national mass” is “today one and homogeneous.” Only “the prejudices spread by systems that tend to divide” the homogeneous nation into “mutually hostile classes” could suggest otherwise. The present-day antagonism between bourgeoisie and workers, which some wish to trace back for centuries, is “destructive of all public order.” Thus, ironically, one of the thinkers who was a major inspiration for the socialist concept of class conflict ended by categorically denying any class conflict in the modern world, and he did so in part out of fear of the dangers posed now that it had been reshaped by the socialists. He put this in the form of the statement that there could no longer be a history of the Third Estate—now the Third Estate was in reality, as the Abbé Siéyes had announced it programmatically in 1788, “everything.”
• 179How to explain this radical shift of perspective? The chief reason is to be sought in Thierry’s experience of the socialist agitation of 1848 including the violence of the June Days, and the specter of social revolution haunted him to the end of his life. He was anxious that the socialist troublemakers should not be able to draw sustenance from his work on the role of classes in French history. In the Preface to the Essay, Thierry implies that now, in 1853, there is no further need for the concept of classes: “the national mass” is “today one and homogeneous.” Only “the prejudices spread by systems that tend to divide” the homogeneous nation into “mutually hostile classes” could suggest otherwise. The present-day antagonism between bourgeoisie and workers, which some wish to trace back for centuries, is “destructive of all public order.” Thus, ironically, one of the thinkers who was a major inspiration for the socialist concept of class conflict ended by categorically denying any class conflict in the modern world, and he did so in part out of fear of the dangers posed now that it had been reshaped by the socialists. He put this in the form of the statement that there could no longer be a history of the Third Estate—now the Third Estate was in reality, as the Abbé Siéyes had announced it programmatically in 1788, “everything.”
• 180How to explain this radical shift of perspective? The chief reason is to be sought in Thierry’s experience of the socialist agitation of 1848 including the violence of the June Days, and the specter of social revolution haunted him to the end of his life. He was anxious that the socialist troublemakers should not be able to draw sustenance from his work on the role of classes in French history. In the Preface to the Essay, Thierry implies that now, in 1853, there is no further need for the concept of classes: “the national mass” is “today one and homogeneous.” Only “the prejudices spread by systems that tend to divide” the homogeneous nation into “mutually hostile classes” could suggest otherwise. The present-day antagonism between bourgeoisie and workers, which some wish to trace back for centuries, is “destructive of all public order.” Thus, ironically, one of the thinkers who was a major inspiration for the socialist concept of class conflict ended by categorically denying any class conflict in the modern world, and he did so in part out of fear of the dangers posed now that it had been reshaped by the socialists. He put this in the form of the statement that there could no longer be a history of the Third Estate—now the Third Estate was in reality, as the Abbé Siéyes had announced it programmatically in 1788, “everything.”
• 181[The middle class] entrenched itself in every vacant government job, prodigiously augmented the number of such jobs, and accustomed itself to live almost as much upon the Treasury as upon its own industry.
• 182Many of the liberals were major beneficiaries of the new regime, rewarded for the support they had given, and continued to give, to Louis Philippe. Dunoyer was made prefect in Moulins and Stendhal consul at Trieste, while Daunou was reappointed as director of the National Archives. Others of the liberal party under the Restoration did as well or better. Guizot, of course, was one of the chief figures of the new order. With Mignet, Thiers, Villemain, he “shared the highest offices of the state, the most brilliant favors of the regime.” Thierry himself, however, now blind and in poverty, was reduced to pleading for assistance, until Guizot awarded him a small pension.
• 183Many of the liberals were major beneficiaries of the new regime, rewarded for the support they had given, and continued to give, to Louis Philippe. Dunoyer was made prefect in Moulins and Stendhal consul at Trieste, while Daunou was reappointed as director of the National Archives. Others of the liberal party under the Restoration did as well or better. Guizot, of course, was one of the chief figures of the new order. With Mignet, Thiers, Villemain, he “shared the highest offices of the state, the most brilliant favors of the regime.” Thierry himself, however, now blind and in poverty, was reduced to pleading for assistance, until Guizot awarded him a small pension.
• 184Many of the liberals were major beneficiaries of the new regime, rewarded for the support they had given, and continued to give, to Louis Philippe. Dunoyer was made prefect in Moulins and Stendhal consul at Trieste, while Daunou was reappointed as director of the National Archives. Others of the liberal party under the Restoration did as well or better. Guizot, of course, was one of the chief figures of the new order. With Mignet, Thiers, Villemain, he “shared the highest offices of the state, the most brilliant favors of the regime.” Thierry himself, however, now blind and in poverty, was reduced to pleading for assistance, until Guizot awarded him a small pension.
• 185John Taylor was outraged by the betrayal of the principles of the Revolution by a new aristocracy based on “separate legal interests,” the bankers privileged to issue paper money as legal tender and the beneficiaries of “public improvements” and protective tariffs. American society has been divided into the privileged and the unprivileged by this “substantial revival of the feudal system.”
• 186Have we not, too, our privileged orders? our scrip nobility? aristocrats, clothed with special immunities, who control, indirectly, but certainly, the power of the state, monopolise the most copious source of pecuniary profit, and wring the very crust from the hard hand of toil? Have we not, in short, like the wretched serfs of Europe, our lordly master? . . . If any man doubts how these questions should be answered, let him walk through Wall-street.
• 187The American aristocracy naturally favored a strong government, including control of banking. Leggett, in contrast, demanded “the absolute separation of government from the banking and credit system.”
• 188is to divide the community into two great classes: one consisting of those who, in reality, pay the taxes and, of course, bear exclusively the burthen of supporting the government; and the other, of those who are the recipients of their proceeds through disbursements, and who are, in fact, supported by the government; or, in fewer words, to divide it into tax-payers and tax-consumers. But the effect of this is to place them in antagonistic relations in reference to the fiscal action of the government and the entire course of policy therewith connected.
• 189Today a revival appears to be underway of the concept of the state as the creator of classes and class conflict. A group of scholars including Theda Skocpol has produced an anthology with the significant title, Bringing the State Back In. In an introductory chapter, Skocpol speaks of “an intellectual sea change” taking place, by which the “societycentered ways of explaining politics and governmental activities” popular in the 1950s and 60s are being reversed, and government itself is looked upon as “an independent actor.”
• 190“the timing and characteristics of state intervention” affect “not only organizational tactics and strategies,” but “the content and definition of interest itself.” . . . Some scholars have directly stressed that state initiatives create corporatist forms . . . the formation, let alone the political capacities, of such purely socioeconomic phenomena as interest groups and classes depends in significant measure on the structures and activities of the very states the social actors, in turn, seek to influence.
• 191From a scientific point of view, the liberal theory—which locates the source of class conflict in the exercise of state power—has another pronounced advantage over the conventional Marxist analysis: liberal theory is able to shed light on the structure and functioning of Marxist societies themselves. “The theory of the Communists,” as Marx wrote, may be summed up in the single sentence: Abolition of private property.” Yet, Communist societies, which have essentially abolished private property, are hardly on the road to the abolition of classes. This has led to some deep soul-searching among Marxist theoreticians and justified complaints regarding the inadequacy of a purely “economic” analysis of class conflict to account for the empirical reality of the socialist countries. Yet the liberal theory of class conflict is ideally suited to deal with such problems in a context where access to wealth, prestige, and influence is determined by control of the state apparatus.
• 192From a scientific point of view, the liberal theory—which locates the source of class conflict in the exercise of state power—has another pronounced advantage over the conventional Marxist analysis: liberal theory is able to shed light on the structure and functioning of Marxist societies themselves. “The theory of the Communists,” as Marx wrote, may be summed up in the single sentence: Abolition of private property.” Yet, Communist societies, which have essentially abolished private property, are hardly on the road to the abolition of classes. This has led to some deep soul-searching among Marxist theoreticians and justified complaints regarding the inadequacy of a purely “economic” analysis of class conflict to account for the empirical reality of the socialist countries. Yet the liberal theory of class conflict is ideally suited to deal with such problems in a context where access to wealth, prestige, and influence is determined by control of the state apparatus.