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The Pattern of Normal Politics, 1870-1914: An Outtake from “Slouching Towards Utopia?: An Economic History of the Long 20th Century, 1870-2016”

Summary:
Left-wing avowedly socialist—parties in pre-World War I Europe wanted, for the present, only weak tea. The Socialist Party of Germany’s Erfurt and Gotha programs seek things like: universal male and female suffrage; the secret ballot, proportional representation and an end to gerrymandering; annual government budgets; elected local administrators and judges; the right to bear arms; free public schools and colleges; free legal assistance; abolition of the death penalty; free medical care including midwifery; public burial insurance; progressive income and property taxes; a progressive inheritance tax; a 36-hour minimum weekend; an occupational safety and health administration; equal status for domestic and agricultural workers; and a national takeover of unemployment and disability

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Il Quarto Stato

Left-wing avowedly socialist—parties in pre-World War I Europe wanted, for the present, only weak tea. The Socialist Party of Germany’s Erfurt and Gotha programs seek things like: universal male and female suffrage; the secret ballot, proportional representation and an end to gerrymandering; annual government budgets; elected local administrators and judges; the right to bear arms; free public schools and colleges; free legal assistance; abolition of the death penalty; free medical care including midwifery; public burial insurance; progressive income and property taxes; a progressive inheritance tax; a 36-hour minimum weekend; an occupational safety and health administration; equal status for domestic and agricultural workers; and a national takeover of unemployment and disability insurance “with decisive participation by the workers in its administration”. Rather white bread, no? Even their declared intention that:

the German Social Democratic Party… fights… every manner of exploitation and oppression, whether directed against a class, party, sex, or race...

would raise few eyebrows today, in western Europe at least.

But there was also:

  • “By every lawful means to bring about a free state and a socialistic society, to effect the destruction of the iron law of wages by doing away with the system of wage labor…”
  • “The transformation of the capitalist private ownership of the means of production—land and soil, pits and mines, raw materials, tools, machines, means of transportation—into social property and the transformation of the production of goods into socialist production carried on by and for society…”
  • “This… emancipation… [is] of the entire human race…. But it can only be the work of the working class, because all other classes… have as their common goal the preservation of the foundations of contemporary society…”

There was a tension here.

How was it to be resolved? Karl Marx had been as clear on this point as he could ever be. A revolution was coming, followed by a political transition period: “the revolutionary dictatorship of the proletariat”:

  • It would be “revolutionary” in that the economic order would be transformed.
  • It would be a “dictatorship” in that procedural and bureaucratic blockages to action would be eliminated.
  • It would be “of the proletariat” because other classes would be working to block the needed transformation, if they had a voice—hence they should not have one.

But how was a political party that ran for parliamentary elections on a platform of lunch-pail, procedural fairness, and social-insurance measures to make the transition from fighting for annual government budgets and worker participation in the administration of disability insurance to leading a revolution?

Marx’s long-time comrade Friedrich Engels resolved the tension:

The “reformists” would put forward their demands for incremental improvements. The movement would fight for them and lose. Through struggle and defeat, the working class would learn “the true conditions for working-class emancipation”: revolution, the overthrow of capitalism and the wages system, and the construction of a democratic socialist economy based on the public ownership of the means of production.

But what if the working class movement struggled, and won?

Or, even, what if it won enough or was bought off by enough to make the most organized segments of the grassroots relatively satisfied?

What then?

This is what happened. This drove Engels insane:

One is indeed driven to despair by these English workers with their sense of imaginary national superiority, with their essentially bourgeois ideas and viewpoints, with their ‘practical' narrow-mindedness, with the parliamentary corruption which has seriously infected the leaders…

The left wing had a rhetorical line to speak to those who had a small amount of property—a farm, a shop, a workshop—and feared that socialism would take it away. Their line was that large-scale industrial capitalism was already taking it away, and they should get with the program. This was not satisfactory. Middle classes—black-coated workers and small shopkeepers—viewed socialists as their enemies. And so majorities among an electorate which still excluded much of the poor and working classes remained out of reach. But concessions were won. Politicians like militarist-authoritarian German Imperial Chancellor Otto von Bismarck would speak like this in the Reichstag of the German Empire as he pushed through social insurance measures against right and centrist opposition:

[Does the] empire... [have] a responsibility... to protect the worker from accidents and need when he is injured or becomes old... or does it not? I maintain that it does have this duty.... It would be madness for a corporate body or a collectivity to take charge of those objectives that the individual can accomplish; those goals that the community can fulfill with justice and profit should be relinquished to the community. There are objectives that only the state in its totality can fulfill....

If one argues against my position that this is socialism, then I do not fear that at all.

The question is, where do the justifiable limits of state socialism lie? Without such a boundary we could not manage our affairs. Each law for poor relief is socialism. There are states that distance themselves so far from socialism that poor laws do not exist at all. I remind you of France... [and] the French view that every French citizen has the right to starve and that the state has no responsibility to hinder him in the exercise of his right...

And Bismarck would taunt the socialists:

The Social Democratic leaders... I understand; dissatisfied workers are just what they need.... They must naturally oppose any attempt of the government... to remedy this situation, if they do not wish to lose control over the masses they mislead. Therefore, I place no value on the objections that come from the leaders of the Social Democrats; I would place a very high value on the objections that come from the workers in general. Our workers, thank God, are not all Social Democrats and are not to such a degree unresponsive to the efforts of the confederated governments to help them...

And demand from the right and the center action that would, as he saw it, draw the venom from the socialists' fang:

A primary reason for the success that the leaders of the real Social Democracy have had with their never clearly defined future goals lies in the fact that the state does not promote enough state socialism; it allows a vacuum to form in a place where it should be active, and this is filled by others, by agitators who poke their nose into the state’s business.... The oppressed and suffering among us... cannot [be] comfort[ed]... with promises that perhaps are not even payable in the next century; we must provide something that has value from tomorrow or the next day...

Sometimes socialists thought that the clouds were about to break, and the Son of Man descend through the Heavens, seated on the Mercy Seat and surrounded by the New Jerusalem. In 1890 Marx’s coauthor Friedrich Engels crowed that the English working class had finally broken its long slumber, which had been:

a result… of the failure of the Chartist movement of 1836-50 and… of the colossal industrial upswing of 1848-80…

Engels was wrong. As the pre-World War I years continued, the western European left-wing became less “revolutionary” and more “reformist”. The center held—up until 1914. And Engels’s successors in the western European socialist movement—the Kautskys, the Bernsteins, and so forth—watched and thought. As time passed they recognized the limited appeal of chiliastic visions to those who thought that system was working, somewhat, for them. They became social democrats: the true socialism became the bonds of solidarity and community they made along the journey.

Meanwhile, on the conservative side of the hill, the right wing sought to preserve as much as it could of old orders of inequality and as much as possible of hierarchy in changing times. By and large, they reformed so that they could preserve; they pushed things to change so that they could stay the same.

Part of this was that they were not confident in any resort to violence.

The French Revolution and Napoleon had shown that nations could win wars only with the people in arms: mass, conscript, popular armies. Foreign policy required, therefore, an army very different from a professional army that would serve as an internal security force shoot peasants and workers on the command of a conservative government. Who would such an army fight for? It was not clear. Thus they became reluctant but essential democrats. Thus “countermajoritarian institutions” needed to be seen as strong enough to keep noble and plutocrat wealth and authority secure, but not so strong as to prevent compromise and allow right-wingers to attempt to preserve old authoritarian orders in total.

Right-wingers adapted themselves in another way, finding new reasons why a hierarchical chain of inequality was a good thing for a society. The most prominent of these came from the waves spreading through society from the rock tossed into the pond by Charles Darwin. Never mind that the equation of the currently rich and powerful with some kind of genetic elite either back before World War I or today is highly, highly dubious. It was a useful doctrine: leveling—socialism—and even smaller steps that reduced the natural inequalities of wealth and power became, as John Maynard Keynes snarked:

not merely inexpedient, but impious, as calculated to retard the onward movement of the mighty process by which we ourselves had risen like Aphrodite out of the primeval slime of Ocean…

As American steel master Andrew Carnegie put it, each step away from right-wing laissez-faire in the direction of socialistic ideals would be destructive:

The price which society pays for the law of competition… is also great…. But… we cannot evade it; no substitutes for it have been found; and while the law may be sometimes hard for the individual, it is best for the race, because it insures the survival of the fittest in every department…

And, caught in the middle, centrist politicians called for evolution away from conservative modes and orders and estates: they souhgt the same concrete steps that left-wing politicians called for, but less so and in much more partial form.

But they also found themselves protecting property—and hierarchy.

The touchstone was “fairness”: it was not fair that those who did not work hard and did not play by the rules got lots of good things. And those who did not play by the rules could be on either end of the wealth-and-power spectrum: parasitic aristocrats and cruel plutocrats, or those poor who wanted something for nothing or got above their station.

Centrists found themselves exalting the market. to some degree But the fact that market societies value only property rights, and that market societies disrupted people’s Polanyian rights to community stability, to appropriate incomes, and to insulation from creative destruction and depressions meant that they walked a tightrope. The hope was that economic growth would be fast enough and equitably distributed enough that people would take the changes that came as net plusses.

And this was a place where centrists could make their stand against those to the left whose practical proposals were simply faster-and-more versions of centrist policy programs. Focus voters’ attention on the disruptive utopian aspirations of the left instead, and electoral coalitions could be preserved.

The center held—up until 1914.

But, meanwhile, the waves spreading through society from the rock tossed into the pond by Charles Darwin became the seeds of catastrophe. Belief that a struggle for wealth and power within nations as a progressive Darwinian process carried with it the implication that a struggle for wealth and power between nations would be a progressive Darwinian process as well. Author Arthur Conan Doyle had his detective character, Sherlock Holmes, say as he watched the approach of World War I:

There's an east wind coming all the same... cold and bitter, Watson, and a good many of us may wither before its blast. But... a cleaner, better, stronger land will lie in the sunshine when the storm has cleared…

A right-wing landed and bureaucratic upper class that had, by and large, lost its social role. A belief by politicians anxious to paper over class divisions with national unity. And a growing social-darwinist current that struggle—even or especially military struggle by peoples-in-arms over not what language a province would be administered in but who would live there—were storing up trouble as 1914 approached. In 1919 John Maynard Keynes was to write, bitterly, that he, his peers, and his elders had regarded:

the projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise… [as] little more than the amusements of his daily newspaper…


#economichistory #highighted #history #politicaleconomy #slouchingtowardsutopia #2020-04-04
Bradford DeLong
J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

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