Friday, 15 March 2013

The Blue Eagle and the Swastika

The Roosevelt Myth - the maddened remonstrance by the America Firster, John T Flynn - opens with an hour-by hour recount of the day of Roosevelt’s  inauguration in 1933. The chapter concludes,
Next morning the New York Times carried only a single front page story that had no connection with the inauguration. It had to do with another of the Messiah’s of tomorrow.
In his The Three New Deals: Reflections on Roosevelt's America, Mussolini's Italy, and Hitler's Germany Wolfgang Schivelbusch takes up the challenge of giving reason to Flynn’s shocking thesis of parallel and resemblance between the two 'messiahs'.
Schivelbusch sets out at some distance from events of fame and infamy. He begins with architecture. He repudiates the commonplace ‘conflation of the monumental – that is backward-looking neoclassical architecture ... and ... totalitarian regimes ... and ... the association of modernist architecture with liberal democracy’. In refutation he points out that during the inter-war Period the liberal democracies erected numerous neoclassical piles –  the US Supreme Court, built over the years 1932-1935, being a spectacular case in point  (not to mention  - we may add – the Stormont parliament, the New South Wales State Library, and the Auckland War Memorial Museum). And it is equally true that ‘modernism’ appeared in Fascist architecture- even Nazi architecture exhibited a functionalism that conformed to modernist precept. It would, then, be closer to the truth to say that civic architecture between the wars manifested no ideological divide – but rather exhibited a common style, which might be simply called “Government International”.
The point of his architectural prologue is clear. Civic architecture is the epitome of Schivelbusch’s key thesis: that a common style and technology is consistent with wholly different ends. Specifically, a common political style and political technology is consistent with different political ends.  Thus, Schivelbusch maintains, however distinct their ends, the New Deal and the Third Reich had much in common in their political style and technology.
What was this supposed shared ‘political technology’? It amounted to an attempt to  brew a one-ness between a charismatic ruler and the ruled - a one-ness that dispensed with intermediating bodies and constraining religions - a one-ness that, however contrived or faked, was not simply an act of the duper duping the duped, but involved an implicit reciprocity between ruler and ruled.
Schivelbusch's method is to articulate some inauspicious parallels between the 'new deals'.
As is well known, the Nazis instituted a boycott of Jewish business almost as soon as they won power.  In Schivelbusch’s telling the New Deal also began with a boycott; or, at least,  something like a boycott. The National Recovery Administration instituted a host of ‘codes’ for the conduct of business,  setting minimum prices and wages, maximum hours, etc. Those businesses that  agreed to conform were issued Blue Eagles posters to display from their premises to the public.  And what of those businesses that declined to conform with these (voluntary) codes? Roosevelt’s chief of staff, Hugh Johnson, announced that with respect to such recalcitrants, ‘The public simply cannot tolerate non-compliance with their plan ... May Almighty God have mercy on anyone who attempts to trifle with that [plan]’.  Schivelbusch sees in this a ‘threat of a boycott’. There was, indeed, a wave of physical intimidation of ‘non-compliers’, reminiscent of confrontations of strikers and strike breakers. But it cannot be said there was any formal boycott.  For all that, there is something sinister in Johnson’s incitement of The People’s Ire at any defiance of ‘their’ plan. And the scene of 250,000 people marching down New York City’s 5th avenue in September 1933 with Blue Eagle flags flying doesn’t quite look the same after Schivelbusch’s comfortless analogy.
A surely more palpable parallel between the New Deal and the Third Reich lies in their common ‘back to the land’ housing programs. The unbelievably named ‘Subsistence Homesteads Division’ of the Department of the Interior launched 34 housing projects that sought to settle urban workers in semi-rural communities, each composed of 1 to 5 acre lots. The first of these was Arthurdale in West Virginia, conveniently close to Washington DC, and patronised by Eleanor Roosevelt, who busied herself in the choosing house types and their interiors. At the same time the Nazi Reich Commission for Settlement Projects was bringing to realisation the older ideal of the ‘Landstaat’   - rural settlement – in parts of Ramersdorf on the outskirts of Munich.
Schivelbusch is surely placing too much burden is placed on this (delectable) coincidence. Schemes for restoring village life were a standard move of anti-industrial ideologists since the late 19th century (See Davison 1978, 251-254 for some curious illustrations). And the number of people housed by these projects was, of course, minute. But to Schivelbusch their significance didn’t lie in the numbers; they were essentially elaborate advertisements for their respective governments.They underline the ‘propaganda state’ aspect of the various New Deals that Schivelbusch considers so of characteristic of these governments.
By ‘propaganda’ Schivelbusch does not refer to the deception that Nazis used arrantly, intensely and routinely as technique of rule. By propaganda he does not mean the lie inflicted by the knower on those who can know no better. Propaganda is not the ‘programming’ of innocents. Schivelbusch wants the reader to allow that the propagandised had some autonomy in their beliefs. The success of propaganda therefore turned on a certain reflexivity between the propagandizers and the propagandized. In keeping with that the Nazis  and the New Deal were genuinely concerned with what the public believed; the Nazis elaborately tracked public opinion, and Roosevelt urged his listeners to write to him convey their views. In Schivelbusch’s account this was not just a ‘success check’ on propaganda; but an input into formulation of propaganda. Propaganda worked insofar as it articulated ‘the as-yet nebulous popular will’.
In his reach for parallels Schivelbusch seeks a correspondence between the Fireside Chat and Nuremberg Rally. Certainly both conformed to that communion of the ruler and ruled that the political technology deployed. Both involved psychological incitement: the rallies very obviously, radio not so obviously, but Schivelbusch reminds us of the strange power of radio in the 1930s. (Witness the bizarre reaction to Orson Wells' War of the Worlds radio drama).
Schivelbusch feels required to answer why the supposed common political technology manifested itself in ‘chats’ in the US but in rallies in Germany. Roosevelt, recall, never permitted the broadcast of his speeches; while  Hitler’s radio broadcasts were overwhelming speeches, and only infrequently direct addresses ‘to the German peope’. Schivelbusch puts this contrast down to ‘technological lag’; Germans were relatively unused to this new medium, and unlike Americans were unable to invest ‘charisma’ in radio. We see here that  Schivelbusch's unity thesis is refracted through the material conditions. We see the same turn in his explanation as to why the most salient public works differed between the two countries:   autobahns in Germany, the Tennessee Valley  Authority in the US.  His answer is that in 1933 Germany had an extensive electricity grid, but few cars; the US, by contrast, had extensive car ownership but many households off the grid. Each country caught up where they had some catching up to do.
There is, then, a functionalism present in Schivelbusch. Indeed, in his analysis, both Nazism and the New Deal at bottom functioned as ‘completing egalitarianisms’ ; each of the two were catching up where the other was ahead. Germany was ahead in the economic dimension of egalitarianism, but behind in its social dimension; and the USA the reverse. Specifically, Germany had the advanced welfare statism of a developed egalitarianism; the US had not. But the US exhibited (or at least observed) the classlessness (‘fraternity’) of a developed egalitarianism, Germany did not. Fascism  offered classlessness to Germany: The New Deal offered social security to the US.
Schivelbusch, then, is implicitly advancing two resemblance theses; one for means, and another for ends. So it not merely that the two buildings shared the same style and technology; they performed the same task. 
 But the proposed unity of ends  cannot be endured. Yes, both had powerful egalitarian aspect: but which successful political movement in the past two  hundred years has not? It matters more that each also served other ends that the other shattered. It is, in other words, completely inadequate to describe the value system of both as solely ‘ egalitarian’. And I would contend (uncontroversially) is the divergences of these value systems that makes the Third Reich so notoriously divergent from the New Deal.
The US, of course, was and remains a society saturated through with liberalism. German history (at least until the post-War period) had a highly ambiguous relation to liberalism, to say the least.  Liberalism seem to wax strongest in  moments of crisis; while in the US liberalism was business as usual.  
To liberalism – the aversion to rulers – we can contrast another value system – the aversion to rules. We can call this ‘anti-nomianism’. In this system the negative and positive poles of egotism and self-annihilation  supply the energy;  and the irrational guides and channels that to its great end;:power without law. Such an inflammable system can hardly persist. But in Germany it was ignited by fin de siecle bedlam, and superheated by the political and economic dislocation following the First World War. 
By contrast, in the United States anti-nomianism makes only  a more fitful appearance; in religious manias; in extreme Abolitionism; in the mass  bohemianism of ‘the 60s’.
The conflict of the New Deals was evidently a conflict of liberalism and anti-nomianism.  Schivelbusch is uninterested in this pedestrian truth. But, then, it is inconsistent  with his functionalism. Consider:   was not the common technology that interests him - then attempt to synthesise a one-ness between a charismatic ruler and the ruled – part and parcel of anti-nomianism?  It was the liberalism, that is second sight  of the American consciousness, that prevented that ‘technology’ getting into full operation. .                                                                                                                                                                           

Davison, Graeme 1978, The Rise and Fall of Marvellous Melbourne, Melbourne University Press.

Sunday, 3 March 2013

The Austrian Interpretation of History

The Clash of Economic Ideas: The Great Policy Debates and Experiments of the Last Hundred Years
Lawrence H. White, George Mason University, Cambridge University Press, 2012
Most attempts to narrate what happened to economics in the 20th are hollow: they tend to be dominated Keynesian revolution, with its Friedmanite after-shock, and oblivious to anything else.
Larry White – the author of Free Banking in Britain - the now retells the story of economics over the last century by casting Hayek, rather than Keynes, as the pre-eminent protagonist.  Correspondingly, he (almost) always places Austrian economists, rather English ones, on stage – even if not always centre-stage. And the action pivots, not on the moderate English efforts to manage the market economy, but on the more drastic attempts to deform or destroy the price mechanism in other parts of the world: collectivization in the Soviet Union, the US National Recovery Administration of 1933-1935, post-War planning in India. The overall-all narrative line is, accordingly, not one of Keynes overthrowing some (mythical) laissez faire dogma, but of recurrent Austrian exposes of the collectivist tendency that occupied the commanding heights of policy.
This undertaking is worthwhile, and attractively executed. For all of White’s evident Austrian commitment, he steadily displays to his adversaries a Hayekian courtesy. He is widely read, and the book’s references constitute a stimulating reading list. And he writes well: each chapter opens with an engaging incident that beckons the reader to read on. Perhaps the most succulent is the picture of Rex Tugwell– Roosevelt’s Brain Truster –waiting in 1934 in a marble-clad ante-room in Rome for an audience with Benito Mussolini, the ruler of what Tugwell had just described as ‘the cleanest, neatest, most efficiently operating piece of social machinery I have ever seen’.
Above, all else it is valuable corrective of stick man mythologisations of 20thc economics by, say, Paul Krugman.
The Clash of Economic Ideas should not, however, be mistaken a comprehensive account of the development of economic doctrine. The revolutions  in imperfect competition and game theory never appear; and neither does the triumph of J.B. Clark’s ‘fund’ conception of capital over the Austrian alternative, one the ‘clashes of ideas’ that was left undecided in 19th c but very much determined (against the ‘Austrians’) in the 20th . (John Bates Clark, note, gets a single reference in Clash; Ludwig von Mises 34).
But these omissions only reflect the book’s intentions. My uncertainties concern his vision  of how ideas affect one another, and events.
The Clash of Economic Ideas manifests a characteristically Hayekian belief in the existence ‘good bloodlines’ in thought, and bad. Tellingly, the book opens with a depiction of the youthful Keynes reading Marshall, and a youthful Hayek reading Menger. Hayek is evidently off to a good start, and Keynes not.  Later we learn that Lenin read Marx.  But, we may ask, who did Marx read? Ricardo. And Ricardo? Adam Smith. I am aware that the arrant Austrian will gladly infer that Smith leads to Lenin; but a sensible Austrian would have pause to consider the ambiguity that often lies in the legacy of influential economists. Bentham is another example: the author of both Defence of Usury  and in Defence of a Maximum [price of bread]. A font of laissez-faire or constructivism? White says constructivism, and I sympathize: but perhaps it is best to say both, or neither.
A more significant example of ambiguity is provided by the case of JS Mill. White adopts a position that was frequently endorsed by Hayek:  that Mill fatefully flicked the switch points of the tracks of social thought so that the utilitarianism of 1830 rolled towards the socialism of 1890. This is plausible. But the position needs to be reconciled with the fact that Mill was also the author On Liberty;  a tract that assimilated into the Enlightenment’s liberalism the Romantic age’s esteem for the individual, and in doing so valuably pressed the self-assertion and individuality that (surely) undergirds any authentic freedom. Mill’s problem, I would say, is that he over did it: he so championed the individual that he had little sympathy for free society, and ended up invoking the state to pay-back those mindless herds that so offended him.  Pressing ideas can often end in paradox, as Greek rationalism long ago discovered.  
My greater reservation lies in White’s subscription to the‘power of ideas’. The book is dedicated to this proposition, and is made-up with purported illustrations. Let me select one: White’s account of Tugwell’s impact in the National Recovery Administration. He quotes Tugwell to analyse him disseminator thereof underconsumptionism. White then traces this position to the lectures Tugwell received from Wesley Mitchell, who in turn absorbed it from Hobson. But  who needs Mitchell or Hobson to be underconsumptionst?  Was not every ‘heretic’ (save Marx!) an underconsumptionist? Were not native underconsumptionists making noise throughout 1920s America? And the NRA was not about stimulating consumption; it was about curbing competition in product (and labour) arkets. As Tugwell cheerfully announced in 1935 ,‘competition is being outlawed’ (Tugwell 1935, 201 ). Yet within three years of this the New Deal was vigorously reviving the ‘trust busting’ that the NRA had gently condescended in print, and rudely subverted in action. Can this hectic sliding across the policy plane have anything to do with ideas? Does it not have everything to do with a polity, bereft of intellectual direction , desperately grabbing for expedients?
Perhaps my point is this: there are ‘ideas’ and there is ‘thought’. An ‘idea’ can be novel, useful, and true;  and yet not be the issue of thought. Tugwell was undeniably full of ideas  (mostly old, harmful, and false): but despite his chair at Columbia, he could hardly be described as an economic thinker. 
Contrary to the learned case of this valuable book, the world of action makes its own way, regardless of the insights and fallacies of economic thinkers.

Tugwell, Rexford G, 1935, The Battle for Democracy.
White, Lawrence H. 1984, Free banking in Britain : theory, experience, and debate, 1800-1845  Cambridge: Cambridge University Press