International Economic Disintegration

HOW far the present enquiry is to be extended depends on the other question of how far it is deemed necessary and fruitful, now or later, to follow up the process of international economic disintegration to its more remote but none the less important causes. No problem in any sphere of science can, of course, be traced to its ultimate causes, even to conceive of which is beyond human understanding; what science can do is to go on widening the range of our comprehension of causality. It is a truism to say that the phenomena which we call economic are ultimately determined by forces lying outside the sphere of economics and rooted in those aspects of the human mind determined primarily by education, tradition, religion, psycho-physical influences, the natural and the social milieu, and by the structure of the society and of the state. Whether it is desirable to bring this “sociological” frame-work of economic phenomena to the surface will depend on whether we are entitled to regard it as a more or less constant factor or whether a profound change has occurred in the sociological frame-work. If the latter is the case, then we can hardly afford to confine the study of an economic phenomenon of major importance to its immediate aspects without unearthing its deeper sociological significance and causation. Such a procedure would be unrealistic and superficial. All this has been made clear on several occasions in the course of the present book, especially in the introductory part. There is no need to stress again the fact that the period in which we have the privilege to live is precisely one of a revolutionary upheaval of the sociological foundation of economic phenomena, perhaps one of the most revolutionary which has ever occurred in human history. Let us repeat in this final part that this is the situation which is staring us in the face and which is challenging our capacity for scientific penetration.

To study the sociological “background problems” and to deal with international economic disintegration as a problem of the social and political structure can be considered as a last stage in an ever closer understanding of the disturbing phenomena and as the consummation of the present enquiry, in the course of which so many problems of a sociological character have been raised which now demand a final answer. The whole research programme presents itself as consisting of different layers to be uncovered one after another, until we reach the underlying sociological one.

In order to make this clearer it may be well to imagine somebody telling us that all the acts, motives, sentiments and ideas which are primarily responsible for the present disorder of world economy are nothing more than the outcome of stupid theories and ill-guided emotions and that nothing more than a sufficiently persuasive intellectual enlightenment on the disadvantages of economic nationalism is needed or, at least, that nothing more than this can possibly be done. We do not know whether such a person exists to-day, but we may safely assume that his point of view would be generally regarded as highly unsatisfactory. For it is obvious that such an attitude would leave unanswered the question of how to explain the present prevalence of destructive stupidities and ideologies, which after all do not just “happen” without any deeper reasons. They grow out of the soil of society as it exists to-day with all its incongruities and instabilities, and they reflect the mind of modern man as it is being shaped by that society and its spiritual climate.

Capitalism, liberalism, individual initiative and responsibility, competition and adaptability are to-day at a heavy discount; they are old-established rulers against whom a mass rebellion has broken out, and this is, as it has been demonstrated again and again, the deeper reason for the transformation of our economic system in general and for the rise of economic nationalism in particular. It is all very well to go on explaining that competition and resilience should be restored in order to make the economic system workable; that a strong, impartial and enlightened government should break the dominance of organized pressure groups and safeguard the fair rules of competition; that the respect of property, contracts and liberties should be re-established; and that with all this a new basis of international economic relations is to be built up. But we have seen too many manifestoes of this kind failing lamentably, not to be led to question whether a real change in the economic sphere can be expected without a change in the pathological condition of society and state themselves. Any step in this direction, however, must be preceded by a satisfactory analysis and diagnosis of that pathological state of our present society. To call it pathological is already an anticipation of the result of such an analysis. In other words: what has happened to our occidental society and the mind of modern man to result in the fact that, unwillingly or deliberately, people are turning their backs on economic reason and ruining that economic system which reason and experience prove to be more able to ensure economic well-being than any previous one, which has made room for countless additional millions of human beings—all this combined with the maximum of political, civic and spiritual liberties?

Much progress has been made during recent years toward a better understanding and more proper interpretation of the present state of society and of the degenerative processes which it has gone through during the last one hundred years.1 Thanks to these endeavours some essential points have become gradually clearer, and it is exactly on these essential points that opinions have become more and more convergent.

One of the most promising means of grasping the profound transformation of our society during the last one hundred years and of understanding its present crisis is to consider it as a process of dissolution of the structure of society brought about by the formation of masses (“Vermassung,” “emmassement”). Thus the present crisis of our society appears as a crisis of mass civilization. That a process of the kind suggested by this term has gone on incessantly since the beginning of the capitalist age and that this process is to be considered the prime agent of social dissolution and deformation, is an idea so current in all or most of the modern writing on the subject that it can be regarded as a generally accepted and universally understood proposition.

Indeed, without a grasp of the process of the formation of masses with all its implications no real understanding of the situation in which the world finds itself to-day seems possible. That is not to say, however, that the proposition is already entirely clear and fully explored or that it is no longer open to criticism in detail. On the contrary, perhaps nobody who has read some of the literature in question can escape the impression that the treatment of the problem has as yet hardly passed that pioneering stage in which writers gifted with the talent of imaginative vision see in a flash the broad connexions and implications and thereby state the problems which patient research has to explore and the hypotheses which it has to verify. It is exactly because this pioneering stage has now been passed through, that the time has come for careful research based on a generally accepted range of fundamental conceptions.

A synthetic picture of the different interpretations given so far has to be attempted with a view to stating the points of agreement and disagreement. The various definitions of what is meant by “masses” in the sociological sense must be sifted and classified in order to arrive at the most useful one. Next comes the task of explaining the dissolving and disintegrating effect of the formation of masses on the structure of society and on the mental balance of individuals, a task which involves an explanation of what is meant by the structure of society. This task also involves a careful analysis of two of the most striking and alarming phenomena concomitant with the degeneration of society into a mass civilization: (1) the remarkable loss of social integration brought about by the gradual atomization of society, the individualization, the diminished differentiation in the social status and the increasing standardization and uniformity that are destroying the vertical coherence of society, the emancipation from natural bonds and communities, the uprooted character of modern urban existence with its extreme changeability and anonymity (“nomadization”) and the progressive displacement of spontaneous order and coherence by organization and regimentation; (2) the equally remarkable loss of vital satisfaction brought about by the devitalizing influence of those conditions of work and life imposed by the urban-industrial existence and environment, which seem somehow incongruous with human nature. These two main defects of modern capitalist mass society lead to the most serious strains and dissatisfactions which are perhaps not only the ultimate causes of the present mass rebellion against our economic and social system, but also the origin of the frantic efforts to clutch anything in sight which promises to appease the hunger for a minimum of social integration and vital satisfaction essential for the equilibrium both of the individual and of society. It is more than likely that what these, who crave for social integration and vital satisfaction, are clutching will be the crushing hand of the totalitarian state. Finally it has to be made clear how all this has gone together with a process of a gradual depletion of moral and spiritual reserves which have been accumulated in former centuries and on which occidental civilization has been thoughtlessly living during the last hundred years.

After it has been explained what the process of the formation of masses means and how it is dissolving society, the genesis and causation of this process offers itself as the next subject of analytical research to be attacked from various angles. How did it happen and how far was it inevitable that it should happen? What were the wrong turns taken by the development of the last hundred years and how far can this development be unmade to-day? What are the strategic factors in the whole situation? It is difficult to imagine to-day any problems more important than these and therefore any research, be it of the most tentative kind, more urgent than that devoted to them.

A first point to be mentioned in this respect is naturally the enormous increase of population of European stock during the last centuries. It is to be regarded as one of the main driving forces behind the formation of modern mass society, though it is unfortunately still rare to find this point of view sufficiently stressed whether in the literature on the population problem or in the sociological works on modern civilization.2 It would seem that this unprecedented increase of population exerted a strain which no society could have withstood without losing its structure and degenerating into a mass society.

The population increase was such a necessary (though by no means sufficient) condition of the genesis of modern mass society that it seems justifiable to use it as the starting point for any real analysis, which then should be supplemented by a study of the other contributing factors. Here is the place where the responsibility to be attributed to certain trends in general and in economic policy, to proletarianization3 and the big factory, and to many technological, educational and purely intellectual forces has to be examined.

This is also the place to emphasize that the formation of masses has by no means been a process affecting the whole of society, but rather one relating primarily to dominant groups, large sections of the population remaining untouched for a very long time and even to-day constituting in many countries a solid block from which a policy of unmaking mass society may make a promising start. It would be a very interesting and gratifying subject of fact-finding research guided by sociological principles to find out exactly the numerical importance of those sections in comparison with those already engulfed by capitalistic mass society. It is to be presumed that such an enquiry would reveal not only large differences between countries and parts of countries, but also a much greater average extent of the unaffected or little-affected section of the population than is commonly supposed to exist. While such a result would make the task of unmaking our mass society appear less discouraging, the reasons for being pessimistic would be still further diminished by a study of the accumulating intellectual and moral forces working against mass civilization. In every country one can see the more or less articulate expressions of growing dissatisfaction with capitalistic mass society, and the small number of those who are no longer blind to what is happening is slowly increasing and becoming more active every day. This dissatisfaction is apt to take violent, socially dangerous outlets if it is left to the influence of vague instincts and emotions and to exploitation by clever but irresponsible demagogues. To prevent this and to turn the destructive force of mass emotions into constructive energy directed toward a policy of unmaking mass society itself, mankind needs the enlightened guidance of social science, which by rationally analysing what is wrong with our present society gains an insight into the remedies required.

Social science must also make it clear that economic collectivism and nationalism, far from providing any remedy at all for the malaise of capitalism and mass society, are only too apt to make things worse by depriving society still further of its spontaneous forces, of its inherent vitality and adaptability, and of that organic structure which is the opposite of mass society. Totalitarianism and that trend toward collectivism which is paving the way to totalitarianism are, of course, not in the least solutions of the problem of mass society. They are merely the ultimate result in which the destructive and dissolving effects of the process of the formation of masses culminate. In totalitarianism we are only touching rock-bottom of the development started during the nineteenth century after the counterbalancing reserves had been used up; that it poses as revolutionary is no proof to the contrary; it is the nineteenth century at its worst. What will be really new and constructive lies ahead in the future, though its promising germs are already with us. To prepare this real renascence of society will be a slow process, the first condition of which is that we do away with illusory interpretations and with the prevailing prudery by looking these all-important problems in the face instead of leaving them to the demagogues and the dilettanti. That the slackening rate of population increase is, per se and without regard to the national aspects of population, a great help for the future task of unmaking mass society can hardly be denied, notwithstanding the new economic and social problems which it entails.

After the general interpretation of the pathological changes in the structure of occidental society and after the analysis of its origin and causes, there remains to be shown in detail in what numerous ways this process is influencing the factors determining economic policy. There is indeed no aspect of present collectivist and nationalist economic policies which does not, on closer scrutiny, appear as ultimately dependent on forces released by mass society and by the mass rebellion against our traditional economic and social system which, as we saw, is the outcome of mass society. This has already been stressed so often during the course of the present enquiry that it does not seem necessary to illustrate it further here. Let us add, however, that one of the most important causal links between the nationalist-collectivist economic policies of to-day and the pathological changes of society are the changes which have occurred in the structure of the state and in the working of governments. Political Activism (revolutionary radicalism of the extreme left or right) is rivalling with sectional pressure groups in dissolving the authority, the impartiality, and the unity of the state and of the government, while at the same time the state becomes more mechanized and less organic in its structure because of the growing centralization of government at the cost of federal articulation and of local or regional self-government. This is all the more serious and apt to lead to a “crisis of democracy” as the growing interventionism and collectivism becomes plainly incompatible with a democratic-liberal structure of the state. It has been long since recognized that the crisis of democracy is largely due to the growth of interventionism and collectivism, but what we must realize now is the fact that it is also the crisis of democracy—i.e. the dissolution of the state and government in and by modern mass society—which is fostering interventionism and collectivism.

It is hardly possible to say more on this subject within the compass of this survey and at this stage of investigation. All that was required was to leave no doubt on the dominating importance of the problems discussed in this part, to show the ends toward which research should be directed, and to make clear the nature of the problems involved.

____________

4 The literature attempting to give a psycho-sociological interpretation of our times has become so abounding that only a small selective list can be given: Lucien Romier, Explication de notre temps, Paris, 1925; Ortega y Gasset, La Rebelion de la Masasa, Madrid (English and French translations): Walter Lippmann, An Inquiry into the Principles of the Good Society, Boston, 1937; Karl Jaspers, Man in the Modern Age, London, 1933; J. Huizinga, Incertitudes, Essai de diagnostic du mal dont souffre notre temps, Paris, 1939; Louis Rougier, Les mystiques politiques contemporaines et leurs incidences internationales, Paris, 1935; Alexander Rüstow, Zur geistesgeschichtlichen Ortsbestimmung der Gegenwart (manuscript); Alexander Rüstow, Rapport pour le Colloque Lippmann, Paris, 1939, pp. 77-83; Christopher Dawson, Progress and Religion, London, 1935; S. Freud, Das Unbehagen in der Kultur, Vienna, 1930; Benedetto Croce, Orientamenti, 2nd edn., Milan, 1934; Inventaires, La crise sociale et les idéologies nationales, ed. by C. Bouglé and others, Paris, 1936; La foule, “4e semaine internationale de synthèse,” Paris, 1934; A. Vierkandt, “Der labile Charakter der modernen bürgerlich-kapitalistischen Gesellschaft,” Schmollers Jahrbücher, October, 1936; S. de Madariaga, Anarchie oder Hierarchie, Bern, s.d.; W. Drabovitch, Fragilité de la liberté et séduction des dictatures, Paris, 1934; Hermann Rauschning, Die Revolution des Nihilismus, Zürich, 1939 (English translation); K. Heiden, Europäisches Schicksal, Amsterdam, 1937; N. Berdiajew, Das Schicksal des Menschen in unserer Zeit, Luzern; R. S. and H. M. Lynd, Middletown, New York, 1929 (stressing particularly the growing uncertainty of modern economic life); Richard Behrendt, “Economie et politique d’aujourd’hui, Essai sur le problème du capitalisme,” Revue de l’Institut de Sociologie, Brussels, 1934, No. 4; Herbert von Beckerath, “Crisis and Reform of the Western World,” Social Forces, vol. xiv, No. 2, December, 1935; E. Halévy, L’ère des tyrannies, Paris, 1938; W. Röpke, Fascist Economics, February, 1935.

5 It is perhaps natural that sociologists are generally more aware of the sociological implications of the population increase than students of the population problem and economists in general, a situation which well illustrates once again the curiously limited scope in economic science to-day. In the interpretative literature cited earlier in this chapter, special importance is assigned to the population factor in the works of Ortega y Gasset, Romier, Heiden and others. It has been especially put into relief by Marcel Dutheil in his book La population allemande, les variations du phénomène démographique, leur influence sur la civilisation occidentale (Paris, 1937), where he demonstrates for the case of Germany how an enormous and quick increase of population is apt to change completely the cultural atmosphere of the country in the direction of proletarianization, of the predominance of mass instincts and emotions and of the destruction of traditional values. We are given to understand that if people are wondering where the country of Goethe, the Humboldts and even of Nietzsche has gone, they should pay attention to the fact that this country has been swamped by countless millions which came too quickly and in too great numbers to be absorbed culturally. So there was a break in cultural tradition and continuity. A nation may beget its own barbarian invaders. Cf. also W. Röpke, Versuch einer Neufassung des quantitativen Bevölkerungsproblems, Festschrift Oskar Engländer, Brünn, 1936, pp. 195–217, and W. Röpke, Explication économique du monde moderne (in the press) chap. 3.

6 See on this subject especially G. Briefs, The Proletariat, New York, 1937. A discussion of the sociological functions of individual property and independence should also find its place here. Cf. H. Belloc, An Essay on the Restoration of Property, London, 1936; G. K. Chesterton, The Outline of Sanity (Tauchnitz edition); R. S. and H. M. Lynd, Middletown, New York, 1929; L. Romier, Explication de notre temps, Paris, 1925; A. Vierkandt, “Der labile Charakter der modernen bürgerlich-kapitalistischen Gesellschaft,” Schmollers Jahrbücher, October, 1936. Though, without long explanations, the term “proletarianization” is apt to lead to misunderstandings due to too narrow conceptions, it is hardly possible on this occasion to be more explicit. This much may be said, however. A country is to be regarded as highly proletarianized if a concentration of business, enterprise and property has resulted in a large part of the population becoming dependent and urbanized receivers of derived incomes (wages and salaries), who are practically without property and the essential liberty provided by property, and who have become instead regimented members of the industrial-commercial business hierarchy. This result is tantamount to that economic and social formation of masses (“Vermassung”) which is characteristic of those countries to-day. It may clarify matters still more if we add that what is commonly conceived of as Socialism means merely the completion of this process, in the double sense that it grows out of it and that it continues it to the ultimate consequences. Finally, it is characteristic of a proletarianized world that people assume the habit of thinking almost entirely in market values and in derived money and income aggregates.

• 1Cf. my paper “A Value Judgment on Value Judgments” in which I am explaining my attitude in this very important methodological question. It will probably be published in the “American Economic Review.”
• 2The following pages are largely based on a memorandum which the author wrote together with Professor Alexander Rüstow (University of Istanbul) in the summer of 1938.
• 3See also: W. Röpke, Die entscheidenden Probleme des weltwirtschaftlichen Verfalls, Zeitschrift für schweizerische Statistik und Volkswirtschaft, 1938, No. 4.
• 4The purpose of this book is to make a new and more promising approach to the diagnostics of that long-run crisis in international economic relations which is one of the most striking symptoms of the general economic, social, and political crisis of occidental society. I believe that the urgent necessity of such an approach has been enhanced rather than diminished by the outbreak of the war. However, I would betray my own philosophy if I regarded this book as anything more than a mere beginning, an invitation to constructive criticism, and a way of opening or furthering a discussion for which the world seems to be ripe. In submitting this book to criticism, I am not afraid to expose myself as one who believes not only in the scientific legitimacy but even in the utmost scientific necessity of employing a measure of judgments, which is ultimately based on a definite conception of what is wrong with the world, and of what should be done in order to put it right again. Those who are shocked by such an attitude may be reassured that I gave more thought to this methodological problem than I am able to explain on this occasion.
• 5(b) This crisis puts social science in a new situation, which is itself highly critical and which no partial investigation in any field of this science whatever can ignore without running the risk of missing its aim. Nobody conversant with the current development of the social sciences can overlook the fact that the feeling of being on insecure ground is becoming more and more widespread, until even the most tenacious followers of the traditional lines of approach sense the need for reorientation. The growing literature on methodological questions even in countries like England, where it was formerly distinctly unpopular, is a sure token of this scientific situation, as is also the fact that it has been felt necessary to open the present report in such a roundabout way as would have appeared rather strange even five years ago.
• 6As the present historical crisis finds its first, its most painful and its most conspicuous manifestation in the economic sphere, and since the nineteenth century has accustomed us to treat the economic problems as the main ones, it is easy to understand why the crisis is conceived primarily as an economic one and why, therefore, the traditional approaches of economics have been relied upon thus far. Whether or not this traditional conception corresponds to the inner convictions of our scholars and statesmen, it is at least exemplified in the character of by far the greater part of scientific activity in our field. Accordingly, men and means have been mobilized, during the last ten years, on an unprecedented scale. Facts have been piled up sky-high; conferences have been held in endless succession; economic analysis has been brought to an ever greater degree of refinement (and, incidentally, to an ever greater degree of unreality); vast and detailed programmes of research have been elaborated; a complicated machinery of institutionalized science has been set up; and questionnaires have been sent to almost every country and to every section of the population. It would surely be no pessimistic over-statement to say that nobody feels that this hectic activity has brought us any nearer the fundamental diagnosis which alone could serve as the basis for effective therapy.