The crux of Wagner’s Gesamtkunstwerk is the curse Alberich places on the ring at the moment it is stolen from him by the gods:
Since its gold gave me measureless might,
now may its magic bring death to whoever wears it!
… Whoever possesses it shall be consumed with care,
and whoever has it not be gnawed with envy!
Each shall itch to possess it,
but none shall in it find pleasure!
Its owner shall guard it profitlessly,
for through it he shall meet his executioner!
That curse is ultimately fulfilled with Siegfried’s murder in Twilight of the Gods, at the end of which Brünnhilde flings herself on to his funeral pyre, hurls the ring back into the Rhine and sets ‘Valhalla’s vaulting towers’ ablaze in an almost unstageable conflagration.
It is no coincidence that Marx foresaw a similar end for capitalism in the first volume of his Capital – a work comparable with The Ring in scale if not in aesthetic beauty. In chapter 32, Marx gives a memorable sketch of capitalist economic development:
The transformation of the individualized and scattered means of production into socially concentrated means of production, the transformation, therefore, of the dwarf-like property of the many into the giant property of the few and the expropriation of the great mass of the people from the soil, from the means of subsistence and from the instruments of labour … forms the pre-history of capital … Private property which is personally earned … is supplanted by capitalist private property, which rests on the exploitation of alien, but formally free labour.7
The imagery of dwarves and giants is at least suggestive. Moreover, like Wagner, Marx foresees a day of reckoning:
Along with the constant decrease of the number of capitalist magnates, who usurp and monopolize all the advantages of this process of transformation, the mass of misery, oppression, slavery, degradation and exploitation grows; but with this there also grows the revolt of the working class, a class constantly increasing in numbers, and trained, united and organized by the very mechanism of the capitalist mode of production. The monopoly of capital becomes a fetter upon the mode of production … The centralization of the means of production and the socialization of labour reach a point at which they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.8
A later German Marxist, August Bebel, made the parallel explicit when he prophesied ‘the twilight of the gods of the bourgeois world’.
The least original thing about Capital was its prediction that capitalism would go the way of Valhalla. The idea of an approaching cataclysm was, to use another Wagnerian term, one of the great leitmotifs of nineteenth-century culture, and was far from being the sole property of the political Left. On a smaller scale, the topos of dissolution as a consequence of economic modernization recurs throughout nineteenth-century literature. In Theodor Fontane’s nostalgic novel Der Stechlin, published in 1899, the local glass factory at Globsow symbolizes the impending collapse of the old rural order in the Mark of Brandenburg. As the old Junker Dubslav von Stechlin laments:
They … send [the stills which they manufacture] to other factories and right away they start distilling all kinds of dreadful things in these green balloons: hydrochloric acid; sulphuric acid; smoking nitric acid … And each drop burns a hole, whether in linen, or in cloth, or in leather; in everything; everything is burnt and scorched. And when I think that my Globsowers are playing a part, and quite happily supplying the tools for the great general world conflagration [Generalweltanbrennung] – ah, meine Herren, that gives me pain.9
Nor was this association of capitalism with dissolution a German peculiarity. In Dickens’s Dombey and Son, the railways which carve their way through London are sinister agents of destruction and death. In Zola’s L’Argent, the rise and fall of a bank provides a metaphor for the rottenness of Louis Napoleon’s Second Empire. In a not dissimilar vein, Maupassant’s Bel-Ami portrays the corruption of a presentable young man in the Third Republic: here all human relationships are subordinated to the manipulation of the stock exchange.10
Perhaps this outlook is not wholly surprising. As an occupational group, professional writers have always been conspicuously ungrateful for the benefits conferred by economic progress, not the least of which has been a huge expansion in the market for printed words. Fontane, Dickens, Zola and Maupassant were all beneficiaries of that expansion, though Wagner had to rely on the artist’s traditional prop of royal patronage. As for Marx, he depended on handouts from the factory-owning, fox-hunting Engels, bequests from his wife’s wealthy Rhineland relatives or – richest of ironies – his own occasional stock market speculations. In 1864 he confessed to a friend that he had been
speculating –partly in American funds, but more especially in English stocks, which are springing up like mushrooms this year (in furtherance of every imaginable and unimaginable joint stock enterprise), are forced up to quite an unreasonable level and then, for the most part, collapse. In this way, I have made over £400 and, now that the complexity of the political situation affords greater scope, I shall begin all over again. It’s a type of operation that makes small demands on one’s time, and it’s worth while running some risk in order to relieve the enemy of his money.
Like most unsuccessful ‘day-traders’, however, Marx never had enough money in hand to make his longed-for ‘killing on the Stock Exchange’.11
The reality was, of course, that the second half of the nineteenth century witnessed unprecedented economic growth in most of the world, and not even Marx could resist the lure of the mid-Victorian boom. Moreover, when the socialist revolution finally came, it afflicted not the most advanced industrial societies but mainly agrarian ones like Russia and China. Yet the romantic notion, which Marx shared with Carlyle, Wagner and so many others of the Victorian generation, that the world had entered into a kind of Faustian pact – that industrialization would be bought at the price of human degradation and ultimately a ‘general world conflagration’ – outlived the generation of 1848. At once materialist in conception and romantic at heart, an entire library of history has been based on the assumption that there was something fundamentally amiss with the capitalist economy; that the conflict of interest between the propertied few and the impoverished many was irreconcilable; and that some kind of revolutionary crisis would bring about a new socialist order.
Consider just two examples. A central question which historians still address today is the one posed by many radicals following the failure of the 1848 revolutions: why did the bourgeoisie prefer authoritarian, aristocratic regimes to workers’ and artisans’ movements with which they could (in theory) have made common cause? The answer offered by Marx in The Eighteenth Brumaire of Louis Bonaparte was that, so long as their economic aspirations were not obstructed, the middle classes were willing to relinquish their political aspirations and to leave the old regime substantially in charge, in return for protection from an increasingly threatening proletariat. The influence of this model would be hard to exaggerate. Typical of the way historians have continued to work with Marxist concepts (even when not themselves overtly Marxist) has been the link often posited between the ‘Great Depression’ of the 1870s and 1880s and the contemporaneous shift away from liberalism towards protectionism in most European countries, notably Germany.12 The First World War too has frequently been interpreted as a kind of capitalist Generalweltanbrennung, the inevitable consequence of imperialist rivalries. According to the posthumously influential German historian Eckart Kehr, the explanation for Wilhelmine Germany’s commitment to a two-front war lay in the Prussian agrarians’ desire for tariffs, which antagonized Russia; the heavy industrialists’ desire for naval orders, which antagonized Britain; and their combined desire to combat the advance of Social Democracy by a strategy of ‘social imperialism’, which antagonized both.13 Despite much tinkering at
the margins, the influence of this approach is still discernible today.
The greatest advantage of Marx’s model is its simplicity. Armed with dialectical materialism, the historian can grapple with bigger subjects and longer periods than the historicist who struggles, as Ranke exhorted, to understand each epoch in its own terms. It is not without significance that two of the most ambitious works of historical writing of the past half-century have been by Marxists: Immanuel Wallerstein’s Modern World System and Eric Hobsbawm’s four-volume history of the modern world, completed as late as 1994. In the final Age of Extremes, Hobsbawm sought to salvage some consolation for his generation of Communist intellectuals by arguing that capitalism had been rescued from its own collapse in the 1930s and 1940s only by the economic and military might of Stalin’s Soviet Union; and that the collapse of the latter in the 1990s was no more than a temporary setback for the socialist critique of capitalism. State ownership and central planning might have failed in Russia, Hobsbawm conceded, but it ‘could hardly be doubted’ that ‘Marx would live on as a major thinker’; whereas the doctrine of the ‘unrestricted free market’ had been just as discredited by the ‘generally admitted … economic failure’ of Thatcherism. Moreover, demographic and economic pressures on the global environment were already paving the way for an ‘irreversible crisis’. Sustainable development was ‘incompatible with a world economy based on the unlimited pursuit of profit by economic enterprises dedicated, by definition, to this object and competing with each other in a global free market’. The widening gap between rich and poor nations was also ‘accumulating future troubles’, as was the widening gap between rich and poor individuals within developed economies, which would sooner or later necessitate a restoration of state control over the economy: ‘Non-market allocation of resources, or, at least [sic], ruthless limitation of market allocation, was essential to head off the impending ecological crisis…. The fate of humanity … would depend on the restoration of public authorities.’
Nor could Hobsbawm resist concluding in the familiar apocalyptic language of the 1840s:
The historic forces that shaped the century, are continuing to operate. We live in a world captured, uprooted and transformed by the titanic economic and techno-scientific process of the development of capitalism … We know, or at least it is reasonable to suppose, that it cannot go on ad infinitum…. There are signs … that we have reached a point of historic crisis. The forces generated by the techno-scientific economy are now great enough to destroy … the material foundations of human life. The structures of human societies themselves … are on the point of being destroyed … Our world risks both explosion and implosion…. The alternative to a changed society is darkness.14
It is hard not to be reminded of the Beyond the Fringe sketch in which Peter Cooke and his followers vainly brace themselves for the end of the world, week after week.
THE NEW DETERMINISM
Yet the conspicuous failure of Marx’s prophecies to come true need not discredit the fundamental notion that it is money – economics – that makes the world go round. All that is needed is to jettison the biblical assumption of an impending apocalypse, and to recast modern economic history as a tale of capitalist triumph.
In his forthcoming history of the twentieth century, the eminent American economist Bradford DeLong is writing what may prove to be a defining text of the new economic determinism. It is certainly an antidote to the Age of Extremes. DeLong’s twentieth century is fundamentally ‘the story of liberty and prosperity’, in which the extremes of totalitarianism appear as a massive historical wrong-turning between two eras of benign global growth.15 Yet the fundamental assumption – that economic change is the motor of history – is not so different from Hobsbawm’s. According to DeLong:
the history of the twentieth century was overwhelmingly economic history: the economy was the dominant arena of events and change, and economic changes were the driving force behind changes in other areas of life … The pace of economic change was so great as to the shake the rest of history to its foundation. For perhaps the first time, the making and using the necessities of and conveniences of daily life – and how production, consumption and distribution changed – was the driving force behind a single century’s history.16
Even the mid-century dictatorships ‘had their origins in economic discontents and found their expressions in economic ideologies. People killed each other in their millions over how economic life should be organised.’17 DeLong goes so far as to explain even the Second World War in economic terms: ‘It is hard to see World War II in the absence of Adolf Hitler’s insane idée fixe that the Germans needed a better land–labour ratio – more “living space” – if they were to be a strong nation.’18 However, these were erroneous ideologies, the malformed offspring of the catastrophic mismanagement of economic policy during the Great Depression. Only in the final decade of the twentieth century, with the collapse of Communism and the global acceptance of liberalized markets, could history resume the upward trajectory of the pre-1914 period.
DeLong’s claim that the principal political events of modern history can be explained in economic terms has a distinguished pedigree. It will also find widespread public assent, particularly in the United States, where this kind of economic determinism is close to being conventional wisdom. In what follows, I will deal in detail with a number of different versions of this idea; at this stage it will suffice to sketch three typical hypotheses:
Economic growth promotes democratization (and economic crises have the opposite effect). This idea can be traced back to the work of the social scientist Seymour Martin Lipset since the late 1950s,19 and has found widespread endorsement in numerous recent studies by political scientists and economists such as Robert Barro, who detects ‘a strong positive linkage from prosperity to the propensity to experience democracy’.20 In the words of another eminent American economist, Benjamin Friedman, ‘a society is more likely to become more open and tolerant and democratic when its citizens’ standard of living is rising, and to move in the opposite direction when living standards stagnate’.21 The most obvious example which most readers will think of is a negative one: the causal link – which can be found in innumerable textbooks – between the Great Depression, the rise of Hitler and fascism generally and the origins of the Second World War. Here is a classic example of the argument:
The immediate effect of the economic crisis in Europe was to increase domestic political and social tensions, to bring Hitler to power in Germany and to encourage the development of fascist movements elsewhere…. But the economic crisis was also a world crisis … In particular the disastrous results for the Japanese economy of the loss of her silk exports, and the undoubted hardship caused to Japanese peasants and small farmers, contributed to a new expansionist policy on the part of the Japanese army.22
Economic success ensures re-election (and poor economic performance leads to election defeat). According to one school of political science, voters are primarily motivated by their economic experience or prospects in making their choices at elections. In the words of Helmut Norpoth, ‘Economic voting … is hard-wired into the brain of citizens in democracies.’23 This has encouraged many politicians to pin their hopes of re-election on the ‘feelgood factor’: the belief that the popularity of a government is a function of the performance of the economy. A widely held version of this theory explained President Clinton’s survival of the 1999 impeachment process with reference to the sustained rise of the US stock market. The 1992 Clinton campaign watchword – ‘It’s the Economy, Stupid’ – has become a kind of shorthand for this theory.
Economic growth is the key to international power (but too much power can lead to economic decline). In The Rise and Fall of the Great Powers, Paul Kennedy argued that economics provided the key to the history of international relations: ‘all of the major shifts in the world’s military-power balance have followed alterations in the productive balances … where victory has always gone to the
side with the greatest material resources.’24 Given the overwhelming superiority of the victorious coalitions in both world wars, this is at first sight a persuasive hypothesis. Even Kennedy’s rider – that all great powers eventually succumb to ‘overstretch’ because their growing military commitments start to undermine their economic strength – is less easily challenged than is sometimes assumed.25 While it has been tempting to deride his warning about American overstretch in the wake of the collapse of the Soviet Union and the acceleration of American economic growth, Kennedy could legitimately argue that the United States has followed his advice by making deep cuts in defence expenditure since the mid-1980s. Nor did his analysis ever rule out the possibility that the USSR might succumb to overstretch first; on the contrary, a careful reader of The Great Powers when it first appeared would have inferred that it was the Soviets who were closest to decline. In other words, while Marxism may have suffered a setback in 1989, economic determinism did not. All that has happened is that the signs have been reversed: it was the stagnation of the planned economy that doomed the Soviet system, whereas the success of the capitalist economy ensured the triumph of democracy.26 For Gorbachev’s failure, as for Clinton’s success, it was the economy, stupid.
The Cash Nexus: Money and Politics in Modern History, 1700-2000 Page 2