The breakdown of the feudal order had given rise to the new revolutionary concept of equality, according to which a "nation within the nation" could no longer be tolerated. Jewish restrictions and privileges had to be abolished together with all other special rights and liberties. This growth of equality, however, depended largely upon the growth of an independent state machine which, either as an enlightened despotism or as a constitutional government above all classes and parties, could, in splendid isolation, function, rule, and represent the interests of the nation as a whole. Therefore, beginning with the late seventeenth century, an unprecedented need arose for state credit and a new expansion of the state's sphere of economic and business interest, while no group among the European populations was prepared to grant credit to the state or take an active part in the development of state business.--Hannah Arendt, The Origins of Totalitarianism, Part 1 (Antisemitism), Chapter 2 ("The Jews, the Nation-State, and the Birth of Antisemitism"), paragraph 1 ("The Equivocalities of Emancipation and the Jewish State Banker")
The passage caught my attention because Arendt's position reminded me (recall) of a feature of ordoliberalism. The ORDOs thought it normatively desirable to conceptualize the state as an 'independent state machine' above the parties. This naturally feeds into conceptualizing (recall also this post on Walter Lipmmann) the state as a kind of umpire who sets and enforces the rules and, where necessary, keeps score. The problem with this conceptualization is that it turns real politics explicitly into a problem because political agents will naturally pursue interests that may end up tilting the state machine into one direction or another. And it is no surprise the ORDOs spent considerable intellectual energy devicing different means to tackle the problem.
One thing that Arendt makes explicit about the possibility of an 'independent state machinery' is that it requires independent revenue. As her larger argument makes clear during the broad centuries between the fall of feudalism and the introduction of the bureaucratically administered income tax,* the independent state machinery was financed primarily by credit. Presumably once the income tax is instituted, which often involves strengthening democratic representation and oversight, and thereby elevates the significance democratic politics, the possibility of keeping politics at arm's length starts to evaporate.
Obviously, the previous paragraph obscures that the maintenance of the independent state machine now becomes coextensive with maintaining good credit. And, so this means that the politics free state machinery automatically serves the class of creditors which become coextensive with the "interests of the nation as a whole." This only works if the state machinery is run by children of the creditor class (so on a quasi caste system) or has extraordinary esprit de corps. And, to simplify, this means there is a bias against inflation and an incentive to secure property rights. In addition, among the public goods that are produced by the independent state machinery are the rule of law (or formal equality).
It is, of course, an open question whether reality ever approached this near enough. Later in part 1 -- I treat Part 1 as a kind of distinct monograph --, Arendt discusses the collapse of this fiction. I quote passages a few pages apart.
It is characteristic of the period that a miscarriage of justice could arouse such political passions and inspire such an endless succession of trials and retrials, not to speak of duels and fisticuffs. The doctrine of equality before the law was still so firmly implanted in the conscience of the civilized world that a single miscarriage of justice could provoke public indignation from Moscow to New York....
[S]uspicion of the republic itself, of Parliament, and the state machine....Down to our times the term Anti-Dreyfusard can still serve as a recognized name for all that is antirepublican, antidemocratic, and antisemitic. A few years ago it still comprised everything, from the monarchism of the Action Francaise to the National Bolshevism of Doriot and the social Fascism of Deat. It was not, however, to these Fascist groups, numerically unimportant as they were, that the Third Republic owed its collapse. On the contrary, the plain, if paradoxical, truth is that their influence was never so slight as at the moment when the collapse actually took place. What made France fall was the fact that she had no more true Dreyfusards, no one who believed that democracy and freedom, equality and justice could any longer be defended or realized under the republic.
I deleted passages pertaining to antisemitism. On my reading of her that is the mechanism by which the collapse is focalized and accelerated, but itself not itself a root cause. Of course, it becomes central to what follows on the ruins of this collapse (recall here and here).
So, once the income tax and democracy start to predominate, the stability, even survival, of the state state machinery rests not just one the good opinion of the public, but in a particular belief that belief that the republic makes possible, or at least facilitates the plausible hope, that "democracy and freedom, equality and justice" can be realized could under "the republic." And, in larger context, Arendt has no doubt there are two key features that make this collapse likely: first unpunished, endemic graft and corruption among the ruling classes. Second, widespread, potentially competing explanatory frameworks that emphasize the selfishness of agents such that talking or acting on public spirit is understood as either ideology or delusion.
I will stop here. Some other time, I'll explore if Arendt has solutions on offer to prevent the dissolution of faith in democratic life. That the victory of fascism does not require the numerical strength of fascism is (recall) a 'paradoxical' point also made by Karl Polanyi (and echoed by his brother Michael). If Arendt is right, the previous paragraph should frighten us.
*See a fascinating list here. The timing of these events suggests a tight connection between mass warfare and the introduction of the tax.
+No
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