Digressions&Impressions

Polanyi (Karl), Adam Smith, The Great Transformation, and Credit.

The presence or absence of markets or money does not necessarily affect the economic system of a primitive society-this refutes the nineteenth-century myth that money was an invention the appearance of which inevitably transformed a society by creating markets, forcing the pace of the division of labor, and releasing man's natural propensity to barter, truck, and exchange. Orthodox economic history, in effect, was based on an immensely exaggerated view of the significance of markets as such. A "certain isolation;' or, perhaps, a "tendency to seclusion" is the only economic trait that can be correctly inferred from their absence; in respect to the internal organization of an economy, their presence or absence need make no difference.
   The reasons are simple. Markets are not institutions functioning mainly within an economy, but without. They are meeting place of long-distance trade. Local markets proper are of little consequence. Moreover, neither long-distance nor local markets are essentially competitive, and consequently there is, in either case, but little pressure to create territorial trade, a so-called internal or national market. Every one of these assertions strikes at some axiomatically held assumption of the classical economists, yet they follow closely from the facts as they appear in the light of modern research.
   The logic of the case is, indeed, almost the opposite of that underlying the classical doctrine. The orthodox teaching started from the individual's propensity to barter; deduced from it the necessity of local markets, as well as of division of labor; and inferred, finally, the necessity of trade, eventually of foreign trade, including even long distance trade. In the light of our present knowledge we should almost reverse the sequence of the argument: the true starting point is long distance trade, a result of the geographical location of goods, and of the "division of labor" given by location. Long-distance trade often engenders markets, an institution which involves acts of barter, and, if money is used, of buying and selling, thus, eventually, but by no means necessarily, offering to some individuals an occasion to indulge in their propensity for bargaining and haggling.--Karl Polanyi (1944) The Great Transformation, p. 61-62

Polanyi's official target here is the "nineteenth century myth," treated as "orthodox economic history," of the "classical economists" in which money causes the creation of markets and so facilitates the division of labor. This nineteenth century myth, in turn, adopts a theory of human nature theory, which includes the "propensity to barter, truck, and exchange," a reference to Smith's account of the origin of the division of labor.  And this propensity can (finally) express itself in the developing markets (and division of labor). 

The chapter I am quoting has been enormously influential in economic sociology, generating, somewhat ironically as Jens Beckert argues, a huge scholarly literature on embeddedness, and a certain kind of soft-marxist and republican political economy now fashionable again. I cannot tell you how often I read purported refutations of Adam Smith, classical economics, or liberalism more generally that echo Polanyi. I find this amusing because the story Polanyi tells after the "true starting point" is pretty much David Hume's account of the rise of commercial society in "Of Commerce" (except that Hume is more focused on the causes of productivity and adopts a kind of labor theory of value) and (recall) Smith's own account of Europe in Book III of Wealth of Nations (which, admittedly, Smith calls "retrograde" and does not rely on a labor theory of value.) But my interest today is not in defending the Enlightened Scots.

Polanyi's theory of the great transformation treats the development of markets as an imposition of the mercantile national and nationalizing state on towns and country that resisted this.* And this imposition inverted a kind of natural or at least better order of things: "Instead of economy being embedded in social relations, social relations are embedded in the economic system." (60)

And where markets did originally (before the great transformation) arise, they are hemmed in by local  restrictions, such that "Local markets are, essentially, neighborhood markets, and, though important to the life of the community, they nowhere show any sign of reducing the prevailing economic system to their pattern." (66) In other words, prior to the great transformation, markets are tamed by political life and serve community needs. And this story has an enormous pull on communitarians, social democrats, christian democrats and others partially nostalgic for a lost world. (Marxists tend to play a double game here: promoting the disaffection of the nostalgics, but accepting capitalism's destruction as needed for a better future.)

Now, when liberals confront the Polanyi style story, in response they sometimes note that the taming of markets also involves repeated acts of violence, but generally they tend to trot out the sudden upward curve of growing prosperity (wealth and consumption) since the industrial revolution. And the more insidious liberals may even justify colonialism and imperialism because those born late (including the descendents of surviving natives) benefit greatest from the creative destruction that follows from the spread of markets embedded in this curve.+ So, rather than addressing the roots of nostalgia generated by the present status quote, these liberals offer a consequentialist account about the status quo in terms of the good-making features of submitting to forces beyond most community's control (a great financial power, perhaps, excepted). Despite my (skeptical) liberal sympathies, it is obvious that the liberal response won't persuade. (That point is compatible with the further fact that most nostalgic folk are unwilling, in practice, to give up the comforts of modern life.)  

Polanyi had kind of anticipated the response. For, Polanyi pre-market societies are characterized by a different fundamental motive than market societies: the "transformation implies a change in the motive of action on the part of the members of society; for the motive of subsistence that of gain must be substituted." (43-44) And while Polanyi does not say this explicitly, a society based on  gain is in no sense properly reciprocal. (Here Polanyi cheats a bit because he relies on the reader to view gain as zero-sum not mutual.)

In the few words remaining in the Digression, I can't settle the debate. But in returning to Polanyi, I noticed a curious absence in Polanyi's argument. He completely misses that the primitive economies of medieval europe were suffused with debt; as a leading authority puts it, "it was an important part of medieval life."** People had to make "many deals on credit to allow consumption." (Christine Desan Making Money, 214) Now, Graeber has much of interest to say, also to philosophers, about the role of virtual money in such credit/debt patterns (and perhaps being the original form of money). But here I just want to note an important effect, that a society characterized by mutual credit/debt relations was enmeshed in open ended mutual acrimony and litigation (Desan 218ff.).

So, the social relations that embed pre-market society, if there is such a thing, is one of open ended mutual score-keeping (of mutual loans) and mutual promises of repayment that themselves are potentially precarious, and potential open-ended conflict about trying to call in outstanding debts. And while, if Desan is to believed, it is true that matters were worse in medieval England - because of the English policy of making low denomination coinage scarce --, medieval England is the source of the beginning of the great transformation (recall this post on Adam Smith's account on the origin of capitalism) and so highly relevant to evaluating Polanyi's argument (Desan also names him as one of her targets early in her book). 

That is to say, one way to understand the great transformation is that it liberated ordinary people from being routinely in each other's debt, that is, a suffocating embrace of unsteady and stifling mutual obligations that could be called in at the worst possible moments. And in particular, because these credit obligations predictably generated lots of mutual conflicts, they created an opportunity for authorities to settle conflict. This may have helped develop the rule of law in the very long run, but it is pretty obvious in the interest of the powerful to have the not so powerful be in regular conflict with each other and need their mediating/legal services to settle conflict among ordinary people. This form of social embeddedness undoubtedly helped ensure the long-term stability of this mode of governance.   

 

 

 

On Kautsky and the Origin of the United States of Europe

Therefore there is today only one way: The union of the States of European civilisation in a confederation with a universal trade policy, a federal Parliament, a federal Government and a federal arm – the establishment of the United States of Europe.

This attained, something enormous would have been achieved. These United States would possess such overwhelming power that, without any war, they could compel all other nations, so far as these did not willingly do so, to join them, to disband their armies and give up their fleets. But with this would also disappear every necessity for the new United States themselves to be armed. They could then not merely give up all further armaments – the standing army, the warships for attack – the abandonment of which we to-day demand, but also every means of defence; even the citizen army itself would he longer be necessary.

Thereby would the era of eternal peace be securely founded, and unlimited economic means be set free – some 20 milliards it year in round figures for the whole world,

What rapid movement could this enormous sum by itself not give to social change, how painlessly might that change be thereby accomplished

But how is the constitution of the United States of Europe to be brought about?

....

Nevertheless the attempt to peacefully unite the States of Europe in a federal Commonwealth is by no means inconceivable. Its prospects are bound up with the prospects of the Revolution.

The Revolution in favour of peace may spring from two separate causes: one being the revolt against the intolerable burdens which have been imposed on the peoples by armaments; with the result that the peoples of Europe will have no other alternative than to drive to the devil all Governments which are imposing upon them new taxes simply in order to be able to continue indefinitely the development of armaments.

That it should come to this will be all the more likely in proportion as the armaments-folly takes on a more powerful form. But, really, it is so near that any Government which is most threatened by a revolution, which feels itself most threatened thereby, which, without prospects of escape, finds itself, as English people say, between the devil and the deep sea, would rather go down in the surging sea of war than give itself over to the devil of Revolution.

It would then forget, however, that it would not escape the devil by throwing itself into the sea; but that he would at once have it there completely. If the first possible cause of Revolution is the revolt against armaments, the second would be war itself.

The Revolution would follow upon war with unerring certainty; not as the product of a Social-Democratic plan, but from the foredoomed logic of the thing. Present-day statesmen count upon that outcome of war.

But whether the Revolution comes from armaments or from war, it will present an international phenomenon, and its first care will be to put an end for ever to the horrors of war. The Revolution will not, like our bourgeois pacifists, simperingly content itself with such petty palliative means as arbitration courts and armaments reduction, which at every moment may tweak down, but will strive to establish such conditions as will make a war thenceforth impossible. That it can only attain through the establishment of the United States of Europe. Governments which would, or could, set themselves in opposition would no longer exist.

Moreover, if the Revolution does not spring from the reaction against the burden of armaments, or against the horrors of war, but from some other ground, and it at the beginning it is not international but limited to a single State, it cannot in existing circumstances long remain so. It must spread over into other States, and it is inevitable that these then will combine. Together it is inevitable that these then will combine together in a close confederation which will exclude any possibility of war between themselves. The proletarian International will them have arrived at the reality of existence as a State. The United States of Europe and their final expansion into the United States of the Civilised World – that, and not the single nation is the stately foundation of the coming Socialist Society. What the cantons are for the Switzerland of today the present nations will be of the Socialist Commonwealth on the States of the future.--Karl Kautsky (1911), War and Peace

Earlier in the week, I noted that Kautsky's conception of the united states of Europe echoes, in some respects, Kant's Perpetual Peace. However, unlike Kant, who envisions multiple growing, regional defensive voluntary federations, Kautsky assumes that a United States of Europe's power is so overwhelming that, were it joined together, it can de facto enforce peace on the world and spend the peace dividend on prosperity. Despite the existence of mighty European empires and navies, it is to be doubted, with the benefit of hindsight, that this was an accurate understanding of the then existing balance of power (giving the growing industrial might of the USA and Japan, etc.).  

Kautsky thinks there are three routes to European peace: (i) a tax-revolt by citizens against the costs of armaments; (ii) a war so destructive that a socialist-cosmopolitan revolution would follow; (iii) a peace-time worker's revolution in a state that would be copied by others, and so usher in a cosmopolitan socialist federation.

As an aside, what's fascinating about this is the openness of the future in Kautsky's writings. At the time of this writing Kautsky is kind of the embodiment of orthodox marxism rejecting the accommodationist Bernstein (and others). While Kautsky does not seem to doubt the possibility of socialist revolution, he is not prophesying it either. He seems, in fact, more confident that once a revolution has been successful it will spread then that a revolution will be successful. 

More important, for Liberals interested in the retreat of liberal ideology after 1870 -- something lamented by then after the catastrophic first world war and at the height of the depression -- Kautsky offers a salutary reminder why this was so: imperialism was both profitable to many of liberalism's natural supporters and created the conditions for successful war-mongering among states. The Kantian (but not Smithian!) premise, that in a commercial society folk would be pacific gets fatally undermined.* It is to Kautsky's credit (this is the main message of the first two sections of the quoted essay) that he is willing to contemplate alliances with the weak, peace-wing of the bourgeoisie to forestall war. 

Chris Brooke, in comments on my previous post, noted that prior to decolonization most proposals for a federation of European States were, in effect, attempts at consolidating empire be it (to quote Lenin from 1915) "reactionary" -- with capitalism not overthrown -- or, as Kautsky hopes, "socialist." And, indeed, when the EU was founded, it still included non-trivial colonial empires (some of which a constitutive part of the EU). That the EU has survived shrinkage is conveniently forgotten by ardent federalists and Brexiteers alike.

That (iv) two catastrophic wars, hyperinflation, genocide, loss of empire and global hegemony, and, not least important, fear of soviet invasion did bring European political and financial elites voluntarily together around a European project was not foreseen by Marxists (although clearly Lenin does not rule out the possibility of a non-socialist Europe). [I am not ignoring the role of the US's efforts to nudge them into this!] It strikes me there are two, related important lessons here.

First, none of the Marxists believed in the strategic adaptability of European capitalism.+ All the Marxists believe in the inner contradictions of capitalism (with its rise of monopoly and surplus abroad) that create the conditions of war and revolution. They were not altogether wrong about this, but failed to foresee that in defeat, and when faced with possible revolution, European capitalism was more pragmatic than anybody ever imagined.+ In part, and here I echo Foucault, this is because Marxists have systematically underestimated (and ignored) the liberal art of government, which has a richer history than allowed.+ 

Second, one reason European capitalism could be pragmatic is because of the existence of a social democratic version of European federation. That this social democratic version has (inter alia) its roots in Kautsky, when he was still taken to be an orthodox marxist, is I think an important part of the story (something that had eluded me before). As is well known (I hope), Kautsky eventually preferred even imperfect democracy over dictatorship. And here he stands in for a world-historical possibility. For, when after WWII, European (liberal and christian democratic) elites moved to build European federation, social democrats, who had turned their back on the dictatorship of the proletariat and the permanent war-footing of Soviet experiment, were waiting for them. That is to say, they had followed Kautsky journey to the building blocks of a federated state, inspired by Kant and Adam Smith, Mazzini, (and going back to Rousseau, Spinoza, and More, with a joint trade policy and parliament. 

How Utopian is a United States of Europe (on Rosa Luxemburg's criticism of Kautsky)

Plausible as the idea of the United States of Europe as a peace arrangement may seem to some at first glance, it has on closer examination not the least thing in common with the method of thought and the standpoint of social democracy.

As adherents of the materialist conception of history, we have always adopted the standpoint that the modern States as political structures are not artificial products of a creative phantasy, like, for instance, the Duchy of Warsaw of Napoleonic memory, but historical products of economic development. But what economic foundation lies at the bottom of the idea of a European State Federation? Europe, it is true, is a geographical and, within certain limits, an historical cultural conception. But the idea of Europe as an economic unit contradicts capitalist development in two ways. First of all there exist within Europe among the capitalist States – and will so long as these exist – the most violent struggles of competition and antagonisms, and secondly the European States can no longer get along economically without the non-European countries. As suppliers of foodstuffs, raw materials and wares, also as consumers of the same, the other parts of the world are linked in a thousand ways with Europe. At the present stage of development of the world market and of world economy, the conception of Europe as an isolated economic unit is a sterile concoction of the brain. Europe no more forms a special unit within world economy than does Asia or America.

And if the idea of a European union in the economic sense has long been outstripped, this is no less the case in the political sense.

The times when the centre of gravity of political development and the crystallising agent of capitalist contradictions lay on the European continent, are long gone by. To-day Europe is only a link in the tangled chain of international connections and contradictions. And what is of decisive significance – European antagonisms themselves no longer play their role on the European continent but in all parts of the world and on all the seas.

Only were one suddenly to lose sight of all these happenings and manoeuvres, and to transfer oneself back to the blissful times of the European concert of powers, could one say, for instance, that for forty years we have had uninterrupted peace. This conception, which considers only events on the European continent, does not notice that the very reason why we have had no war in Europe for decades is the fact that international antagonisms have grown infinitely beyond the narrow confines of the European continent, and that European problems and interests are now fought out on the world seas and in the by-corners of Europe.

Hence the “United States of Europe” is an idea which runs directly counter both economically and politically to the course of development, and which takes absolutely no account of the events of the last quarter of a century.

That an idea so little in accord with the tendency of development can fundamentally offer no progressive solution in spite of all radical disguises is confirmed also by the fate of the slogan of the “United States of Europe.” Every time that bourgeois politicians have championed the idea of Europeanism, of the union of European States, it has been with an open or concealed point directed against the “yellow peril,” the “dark continent,” against the “inferior races,” in short, it has always been an imperialist abortion.

And now if we, as Social Democrats, were to try to fill this old skin with fresh and apparently revolutionary wine, then it must be said that the advantages would not be on our side but on that of the bourgeoisie. Things have their own objective logic. And the solution of the European union within the capitalist social order can objectively, in the economic sense, mean only a tariff war with America, and in the political sense only a colonial race war. The Chinese campaign of the united European regiments, with the World Field Marshal Waldersee at the head, and the gospel of the Hun as our standard – that is the actual and not the fantastic, the only possible expression of the “European State Federation” in the present social order.--Rosa Luxembourg (1911) Peace Utopias, translator unknown.+  [HT Dana Mills (2020) Rosa Luxemburg, p. 103]

One neat thing I learned from Dana Mills' entertaining, intellectual biography of Rosa Luxemburg is the existence of a 1911 debate between Luxemburg and Kautsky over the possibility of a federated Europe. Kautsky's piece, in particular, pleased me because it corrects my intuition that the idea of a federated Europe is primarily liberal, even neo-liberal, in character inspired by Kant and Adam Smith, Mazzini, (and going back to Rousseau, Spinoza, and More). But before I turn to Kautsky's positive argument, it is useful to look at Luxemburg's reservations. These are especially useful because Luxemburg's criticism of the European project is not offered from a narrow nationalist perspective (she is, as Mills describes, a critic of the very idea of national self-determination), but from a cosmopolitan one (with due attention to imperialism and colonialism).

Moreover, Luxemburg acknowledges that some (geographical and historical) conditions for European federation already exist.  What she rejects is a federation that understands itself as an "isolated economic unit." In an imperial age and a globalizing economy such a self-conception is indeed fantasy. It cannot simply de-couple from the world. 

 I doubt Kautsky really imagines an autarkic Europe. Kautsky seems to me far closer to Kant than Luxemburg allows. He proposes a "confederation with a universal trade policy, a federal Parliament, a federal Government and a federal arm." Since Luxemburg seems to be attacking a straw-man I leave that aside.

The other, more interesting and perhaps still pertinent argument is that she argues that in virtue of the antagonisms generated by capitalism, peaceful cohabitation is impossible within the would-be-federation and with the outside world, where the Federation either continues to dominate colonial subjects or gets trapped in zero-sum trade wars with other would be imperial, capitalist powers. 

Now it is pretty clear that Luxemburg thinks capitalism just is what Smithians (recall) prefer to call the mercantile version of capitalism with its (zero-sum) spirit of war distinct from a more pacific, liberal capitalism. And even if Luxemburg were to grant that there is a compelling liberal critique of such mercantile capitalism -- while, perhaps, sarcastically noting that a lot of nineteenth century liberals cheered on colonial and civilizational imperialism --, she may also claim (and I will be quoting from the recent criticism by Olúfẹ́mi O. Táíwò and Liam Kofi Bright of Walzer in Dissent magazine) that "theorists" of "capitalism are not interested in the characteristics capitalism could have had in some conceivable world," but on "the features it does, in fact, have."

As Luxemburg correctly notes, then existing European peace was in some sense illusory. There had been non-stop small wars, and after each war some great power engaged in "military reorganisation" of a sort that made a Great War more likely. And with the benefit of hindsight, we can argue that she was quite prophetic in noting that the European state-system was hurtling toward military conflagration.**

At the same, the question is what alternative future is possible/feasible.* Kautsky's proposal is, in part, designed to change and shift the incentive structure of European politics. On his view, to simplify (again I return to his piece some time), the cause of war is (I) a competitive great power arms race. And he thinks that peace can be secured when the arms race is thwarted/reversed and (II) a peace dividend can be used to secure economic prosperity for all.

So, from Luxemburg's perspective Kautsky denies that war is inevitable given bourgeois society. And this entails Luxemburg must discount the very possibility of a liberal, pacific form of capitalism; indeed in the first half her essay,+ belittles any evidence of the pacific tendency within bourgeois society and its capacity to redirect capitalism to liberal, pacific ends. She thinks that capitalism is essentially antagonistic ("For the international antagonisms of the capitalist states are but the complement of class antagonisms, and the world political anarchy but the reverse side of the anarchic system of production of capitalism.")

Luxemburg is alert to the fact that European world dominance cannot be taken for granted anymore (even a century ago). But she does not foresee the possibility that European bourgeois society could engage in systematic, pacification strategies of domestic conflicts and, with the existence of non-European hegemons, embrace the potentialities of federation. To what degree the underlying capitalist antagonisms remain untamed, and can never be tamed short of socialist revolution, is the question for theorists of the European Union to tackle...(to be continued).

 

 

14 February 1979: Foucault's Polemics with 'the Left' (XVII)

When you talk about contemporary neoliberalism, whether German or any other kind, you generally get three types of response.

The first is that from the economic point of view neo-liberalism is no more than the reactivation of old, secondhand economic theories.
The second is that from the sociological point of view it is just a way of establishing strictly market relations in society.
And finally, the third response is that from a political point of view neo-liberalism is no more than a cover for a generalized administrative intervention by the state which is all the more profound for being insidious and hidden beneath the appearances of a neo-liberalism.
You can see that these three types of response ultimately make neoliberalism out to be nothing at all, or anyway, nothing but always the same thing, and always the same thing but worse. That is to say: it is just Adam Smith revived; second, it is the market society that was decoded and denounced in Book I of Capital; and third, it is the generalization of state power, that is to say, it is Solzhenitsyn on a world scale.

Adam Smith, Marx, Solzhenitsyn, laissez-faire; society of the market and spectacle, the world of the concentration camp and the Gulag: broadly speaking these are the three analytical and critical frameworks with which this problem of neo-liberalism is usually approached, and which therefore enable it to be turned into practically nothing at all, repeating the same type of critique for two hundred, one hundred, or ten years. Now what I would like to show you is precisely that neo-liberalism is really something else.--Michel Foucault, 14 February 1979,  translated by Graham Burchell, Lecture 6, The Birth of Biopolitics. 129-130.

In lecture five, Foucault had identified Marcuse's criticism of capitalism with Sombart's. Foucault is disparaging about the line of argument ("confused"), and, more striking yet, had claimed that the Nazis had appropriated it; and "indeed in opposition to this destruction of society by the [capitalist]* economy and state that the Nazis proposed to do what they wished to do." (114) The claim is rather damning toward Marcuse because in his own voice, Foucault describes Sombart's voyage (not unfairly) from "quasi-Marxism to quasi-Nazism." (113) So, one way to understand Foucault's criticism of Marcuse, is not just that his criticism is old-fashioned, but the criticism is of a dangerous sort: in its diagnosis it contributes to the very problem it wishes to analyze.

So, lurking here (recall this post drawing on ideas by Niko Kolodny) are ideas about responsible speech and a polemic -- calling somebody a fellow traveler of Nazism counts as polemic -- about how to criticize and engage with liberalism and neoliberalism. That is to say, in addition to the complex positive argument of Birth of Biopolitics, which I have argued is itself a contribution to the liberal art of government, there is lurking a polemic against a bad style of criticizing liberalism in virtue of this criticism contributing to a species of totalitarian thought. And so, the lectures ask us to consider it as an exemplary form of responsible speech.

At the start of lecture six, in the passage quoted above, he addresses what we might call the general culture of anti-liberalism in certain circles. I actually think Foucault reveals some of his irritation because while his sense is clear he literally contradicts himself (e.g, X is nothing and simultaneously X is bad). The three kinds of criticism he rejects all end up flattening liberalism,  and turn 'neoliberalism' merely into a word of disapproval. 

As an aside, it is a bit sad that these lectures were only published in 2004 (in French) and in translation in 2008. For, the problem he identifies is extremely visible, as I documented, in David Harvey's very influential (2005) A brief History of Neoliberalism. I am not suggesting Harvey would have felt obliged to take on board Foucault's reservations, but given the celebrity of Foucault he or his reviewers might have responded to them.  Having said that, and this returns me to the fifth and sixth lectures, the enduringness of the anti-liberal tropes in a certain part of the 'Left' suggests it would have made little difference. Because we don't get Foucault's thoughts on why the tropes endure I leave it at that here.

With the critique of Marcuse in the background, we can discern that Foucault is making four critical claims about the three kinds purported critical analyses of liberalism. First, they are false. Liberalism "is really something else."* They fail to grasp liberalism in its historical specificity and its evolution. The whole Birth of Biopolitics is meant to support this claim. Second, the criticisms are intellectually lazy because merely repetition. And again, the lectures show what would be required to begin to engage with the details of liberalism. (As regular readers know, I am trying to keep track critically of this feature of the lectures in these digressions.) Third, the standard criticisms of liberalisms contribute to a culture that makes Nazism if not possible, at least appear more legitimate. Here, Foucault comes extremely close to accepting (recall this post on the road to serfdom thesis as an ideal type) the ORDO interpretation of history. And it is, I think, among the best evidence for recent interpretations of Foucault as a kind of fellow-traveler of neoliberalism. Fourth, the standard criticisms are analytically useless (because they flatten what needs to be explored in detail).

It is pretty clear that in addition to Marcuse, Foucault has his sights on the style of criticism of liberalism made popular (recall) by Karl Polanyi (recall also this post, in particular, on the Mises-Polanyi debate). Strikingly, Karl Polanyi is never mentioned in the lectures, while his brother is. This Foucault-ian criticism of Polanyi has recently been articulated in impressive fashion by Melinda Cooper in (2017) Family Values, itself an impressive contribution to the critical study of neoliberalism. She is a lot more critical than Foucault is (recall here; and with modest criticism here). The not naming, other than Marcuse, of targets -- undoubtedly lots of bien-pensant French intellectuals are included -- makes this feature of the lectures a bit frustrating to the later historian.+

One final point on the third criticism. In the fourth lecture, Foucault had (recall) already offered a searing criticism of Marxism as lacking an art of government. What he adds here, is that in its modern guise, it inspires an insipid and dangerous criticism of liberalism in which neoliberalism is just a cover, a masquerade, for a kind of totalitarian form of oppression (cf. Harvey). Rather than being informative this makes it impossible to make important distinctions.** And, if I understand Foucault correctly, the failure to make such distinctions contributes to making a Nazi culture possible. We might say that Ernst Thälmann's tendency to treat the Social Democrats as the real enemy is illustrative of the dangers of such a failure in thought. I am pretty sure -- and this is speculative -- that this is why Foucault doesn't even mention Pinochet (then fresh in memory). And treats the dangers of liberalism's flirtation with benevolent despots (recall for example lecture 3) in terms of the (more distant) physiocrats. 

The question is whether Foucault's point generalizes. As noted above, and as he rightly notes ORDO-liberal thought embraces, as an ideal type, a road to serfdom thesis in which lots of social phenomena are symptoms of, and simultaneously with "internal necessity" (111) contribute to, the rise of Nazism. If Foucault thinks the criticism generalizes, then this, too, is one of his targets. (I think this only gets addressed in the final lecture(s)--stay tuned!) And what is at stake here, is the general utility of the manner in which Weberian ideal types are deployed in (German) social science of the twentieth century.++

7 February 1979: Foucault on Neo-Liberal Innovation (XIV)

The problem was: given a state that does not exist, if I can put it like that, and given the task of giving existence to a state, how can you legitimize this state in advance as it were? How can you make it acceptable on the basis of an economic freedom which will both ensure its limitation and enable it to exist at the same time? This was the problem, the question that I tried to outline last week and which constitutes, if you like, the historically and politically first objective of neo-liberalism. I would now like to try to examine the answer more closely. How can economic freedom be the state’s foundation and limitation at the same time, its guarantee and security? Clearly, this calls for the re-elaboration of some of the basic elements of liberal doctrine—not so much in the economic theory of liberalism as in liberalism as an art of government or, if you like, as a doctrine of government. (102)

Nothing proves that the market economy is intrinsically defective since everything attributed to it as a defect and as the effect of its defectiveness should really be attributed to the state. So, let’s do the opposite and demand even more from the market economy than was demanded from it in the eighteenth century. In the eighteenth century the market was called upon to say to the state: Beyond such and such a limit, regarding such and such a question, and starting at the borders of such and such a domain, you will no longer intervene. This is not enough, the ordoliberals say. Since it turns out that the state is the bearer of intrinsic defects, and there is no proof that the market economy has these defects, let’s ask the market economy itself to be the principle, not of the state’s limitation, but of its internal regulation from start to finish of its existence and action. In other words, instead of accepting a free market defined by the state and kept as it were under state supervision—which was, in a way, the initial formula of liberalism: let us establish a space of economic freedom and let us circumscribe it by a state that will supervise it—the ordoliberals say we should completely turn the formula around and adopt the free market as organizing and regulating principle of the state, from the start of its existence up to the last form of its interventions. In other words: a state under the supervision of the market rather than a market supervised by the state.--116

Just as for Husserl a formal structure is only given to intuition under certain conditions, in the same way competition as an essential economic logic will only appear and produce its effects under certain conditions which have to be carefully and artificially constructed. This means that pure competition is not a primitive given. It can only be the result of lengthy efforts and, in truth, pure competition is never attained. Pure competition must and can only be an objective, an objective thus presupposing an indefinitely active policy. Competition is therefore an historical objective of governmental art and not a natural given that must be respected. In this kind of analysis we find, of course, both the influence of Husserl and, in a somewhat Weberian way, the possibility of connecting up history with the economy. The ordoliberals go on to say that the task of economic theory is the analysis of competition as a formal mechanism and the identification of its optimum effects. But what actually takes place in the societies we know cannot be analyzed on the basis of this theory of competition. We can only analyze it by taking the real historical systems within which these formal economic processes function and are formed and conditioned. Consequently, we need an historical analysis of the systems that intersect, as it were, as a horizontal intersects a vertical, the formal analysis of economic processes. Economics analyzes the formal processes and history will analyze the systems in which the operation of these formal processes is either possible or impossible.

The third consequence they draw from this is that the relation between an economy of competition and a state can no longer be one of
the reciprocal delimitation of different domains. There will not be the  market game, which must be left free, and then the domain in which the state begins to intervene, since the market, or rather pure competition, which is the essence of the market, can only appear if it is produced, and if it is produced by an active governmentality. There will thus be a sort of complete superimposition of market mechanisms, indexed to competition, and governmental policy. Government must accompany the market economy from start to finish. The market economy does not take something away from government. Rather, it indicates, it constitutes the  general index in which one must place the rule for defining all governmental action. One must govern for the market, rather than because of the market. Michel Foucault, 7 February 1979,  translated by Graham Burchell, Lecture 5, The Birth of Biopolitics. 120-121

Foucault's fifth lecture is full of spectacular gems: a history of twentieth century German philosophy in the wake of Max Weber (who displaces Marx) with Freiburg and Frankfurt as two orbiting poles (and Heidegger as unspoken shadow, black hole) and so the joint history of philosophy and political economy; the indebtedness of Marcuse to Sombart; the political significance of the road to serfdom thesis, etc. Here I want to focus on one strain in the lecture (and which frames it and connects it to the other lectures): a key innovation in the liberal art of government by German neo-liberalism (or ORDOs). 

And this innovation is part of a natural history of liberalism that Foucault is telling. And, in fact, the German neo-liberals are a third or even fourth stage in this natural history. To simplify today, Foucault recognizes that there is a shift, schematically, from (i) the Lockean picture in which states promote growing populations and economies by focusing on non-zero-sum policies and are to become self-limiting to (ii) markets that must be left free (late nineteenth century laissez faire) to (iii) free markets most be constructed and policed by the state.* On (iii), Foucault had noted the week before (recall here; here), and repeats in lecture 5, that in virtue of preserving basic rights and generating economic goods, including the interests of the "weak and the poor," the ORDOs created a form of output legitimacy that could legitimate the state as such. 

Now, before I get to my main point, I want to note that much discussion inspired by Foucault takes up what we may call the Husserlian and neo-Kantian theme about the necessity to construct markets and market regulations under neoliberalism. And, the best critics of neoliberalism will, quite rightly, call attention to the amount of policing and violence needed to do such constructing. (I am thinking of Melinda Cooper on American family policy.) Unlike their American counterparts who love police and prisons, the German ORDOs prefer a juridical and regularized form of constructing (recall this post on Mestmäcker).** And I do not wish to downplay the significance problems with a purportedly emancipatory theory of freedom that (to echo Rousseau) forces, lethally forces, people to be free. But for the ORDOs much of the work that needs to be done has the character of antitrust law, preventing corporations from colluding and, not insignificantly thereby, lacking, freedom to lord over their employees. (The point of antitrust is not consumer welfare but a blockage against concentrated power.)

But the more important point Foucault makes, en passant, is that in the very critical acumen of the ORDO critique (of the Marxists, Keynesians, and Nazis) there is a paradox hiding in plain sight. I quote again, "it turns out that the state is the bearer of intrinsic defects, and there is no proof that the market economy has these defects, let’s ask the market economy itself to be the principle, not of the state’s limitation, but of its internal regulation from start to finish of its existence and action." Remember, this is part of neoliberal critique of the critics of liberalism. And, especially, if one is willing to grant this critique of the standard criticism of liberalism, one is stuck with the following problem: if the market economy becomes the principle of its own internal regulation, and the model for the state, the state is still required as a kind of formal and efficient cause to help construct the market (and be its independent umpire or 'supervisor'). 

Now, this is not a problem if market and state both approach the ideal limit. So, in optimal circumstances there is no paradox. But as Foucault notes, the ORDOs recognize that "what actually takes place in the societies we know cannot be analyzed on the basis of this theory of competition." Scientifically, this has the salutary effect of attempting to integrate political economy with history ("we can only analyze it by taking the real historical systems within which these formal economic processes function and are formed and conditioned.") The ORDOs can't help it that the Swedish nobel committee preferred a different conception of science. 

But politically, it puts neo-liberalism in a catch-22. The very state that needs to be modeled on the market, and, in turn, construct the market and govern for it, will be captured by many interests. And, while the ORDOs can smile wryly and wisely at their left-wing and youthful critics, who will treat 'true democracy' as a magic wand for any problem, it reinforces the cul-de-sac they are in. The state, whose legitimacy depends on proper functioning markets which protects basic rights, protects the vulnerable, and limits the accrual of power, must itself be modeled on the market, but which it can only shape and police properly, if it is in some sense already proper functioning, and so on.+ A regress looms once one recognizes that the government most constitute the free-market and, in turn, modeled on the market. But like a great entertainer ('good serial'), Foucault postpones discussion of this catch-22. 

 

 

On Foucault on Erhard, 31 January 1979: On Representation, Output Legitimacy, and Guaranteeing Freedom (XII)

Now, in April 1948, a Scientific Council formed alongside the German economic administration in what was called the Bi-Zone, that is to say, the Anglo-American zone, presented a report which laid down the following principle: “The Council is of the view that the function of the direction of the economic process should be assured as widely as possible by the price mechanism.” It turned out that this resolution or principle was accepted unanimously. And the Council voted by a simple majority for drawing the following consequence from this principle: We call for the immediate deregulation of prices in order [to bring prices in line with] world prices. So, broadly speaking, there is the principle of no price controls and the demand for immediate deregulation. We are in the realm of decisions, or of demands anyway, a realm of proposals that, in its elementary simplicity, calls to mind what the physiocrats called for or what Turgot decided in 1774. This took place on 18 April 1948. Ten days later, the 28th, at the meeting of the Council at Frankfurt, Ludwig Erhard—who was not in charge of the Scientific Council, for it had come together around him, but of the economic administration of the Anglo-American zone, or at any rate of the German part of the economic administration of the zone—gave a speech in which he took up the conclusions of this report. That is to say, he laid down the principle of no price controls and called for gradual deregulation, but he accompanied this principle, and the conclusion he drew from it, with a number of important considerations. He says: “We must free the economy from state controls.” “We must avoid,” he says, “both anarchy and the termite state,” because “only a state that establishes both the freedom and responsibility of the citizens can legitimately speak in the name of the people.” You can see that this economic liberalism, this principle of respect for the market economy that was formulated by the Scientific Council, is inscribed within something much more general, and this is a principle according to which interventions by the state should generally be limited. The borders and limits of state control should be precisely fixed and relations between individuals and the state determined. Ludwig Erhard’s speech clearly differentiates these liberal choices, which he was about to propose to the Frankfurt meeting, from some other economic experiments that managed to be undertaken at this time despite the dirigiste, interventionist, and Keynesian ambiance in Europe....What was at stake, and the text itself says this, was the legitimacy of the state.
   What does Ludwig Erhard mean when he says that we must free the economy from state controls while avoiding anarchy and the termite state, because “only a state that establishes both the freedom and responsibility of the citizens can legitimately speak in the name of the people”? Actually, it is fairly ambiguous, in the sense that I think it can and should be understood at two levels. On the one hand, at a trivial level, if you like, it is simply a matter of saying that a state which abuses its power in the economic realm, and more generally in the realm of political life, violates basic rights, impairs essential freedoms, and thereby forfeits its own rights. A state cannot exercise its power legitimately if it violates the freedom of individuals; it forfeits its rights. The text does not say that it forfeits all its rights. It does not say, for example, that it is stripped of its rights of sovereignty. It says that it forfeits its rights of representativity. That is to say, a state which violates the basic freedoms, the essential rights of citizens, is no longer representative of its citizens. We can see what the precise tactical objective of this kind of statement is in reality: it amounts to saying that the National Socialist state, which violated all these rights, was not, could not be seen retrospectively as not having exercised its sovereignty legitimately. That is to say, roughly, that the orders, laws, and regulations imposed on German citizens are not invalidated and, as a result, the Germans cannot be held responsible for what was done in the legislative or regulatory framework of Nazism. However, on the other hand, it was and is retrospectively stripped of its rights of representativity. That is to say, what it did cannot be considered as having been done in the name of the German people. The whole, extremely difficult problem of the legitimacy and legal status to be given to the measures taken [under] Nazism are present in this statement.
   But there is [also] a broader, more general, and at the same time more sophisticated meaning to Ludwig Erhard’s statement that only a state that recognizes economic freedom and thus makes way for the freedom and responsibility of individuals can speak in the name of the people. Basically, Erhard is saying that in the current state of affairs—that is to say, in 1948, before the German state had been reconstituted, before the two German states had been constituted—it is clearly not possible to lay claim to historical rights for a not yet reconstituted Germany and for a still to be reconstituted German state, when these rights are debarred by history itself. It is not possible to claim juridical legitimacy inasmuch as no apparatus, no consensus, and no collective will can manifest itself in a situation in which Germany is on the one hand divided, and on the other occupied. So, there are no historical rights, there is no juridical legitimacy, on which to found a new German state.
    But—and this is what Ludwig Erhard’s text says implicitly—let’s suppose an institutional framework whose nature or origin is not important: an institutional framework x. Let us suppose that the function of this institutional framework x is not, of course, to exercise sovereignty, since, precisely, there is nothing in the current situation that can found a juridical power of coercion, but is simply to guarantee freedom. So, its function is not to constrain, but simply to create a space of freedom, to guarantee a freedom, and precisely to guarantee it in the economic domain. Let us now suppose that in this institution x—whose function is not the sovereign exercise of the power to constrain, but simply to establish a space of freedom—any number of individuals freely agree to play this game of economic freedom guaranteed by the institutional framework. What will happen? What would be implied by the free exercise of this freedom by individuals who are not constrained to exercise it but who have simply been given the possibility of exercising it? Well, it would imply adherence to this framework; it would imply that consent has been given to any decision which may be taken to guarantee this economic freedom or to secure that which makes this economic freedom possible. In other words, the institution of economic freedom will have to function, or at any rate will be able to function as a siphon, as it were, as a point of attraction for the formation of a political sovereignty. Of course, I am adding to Ludwig Erhard’s apparently banal words a whole series of implicit meanings which will only take on their value and effect later. I am adding a whole historical weight that is not yet present, but I will try to explain how and why this meaning, which is at once theoretical, political, and programmatic, really was in the minds of those who wrote this discourse, if not in the mind of the one who actually delivered it. Michel Foucault, 31 January 1979,  translated by Graham Burchell, Lecture 4, The Birth of Biopolitics. 80-3

The long, extraordinary passage is introduced by Foucault as an example of "German neo-liberalism" which is the more "important" kind of contemporary liberal governmentality (79). The other kind is the American type. In the interest of space, I defer exploring why Foucault claims, although it is vital to understanding his intentions related to the fact that for him "he state is nothing else but the mobile effect of a regime of
multiple governmentalities." (77)

The "elementary simplicity" that drove Turgot's decision-making led, via famine and state bankruptcy, to the French revolution. By contrast, Erhard's decisions led to the Wirtschaftswunder.Foucault strongly implies that the contrasting fortunes between otherwise similar policies can be explained not just in terms of contrasting historical and economic contexts, but also in terms of the (for lack of a better word) political conceptualizations that accompany them. 

Before I get to the content of Foucault's analysis, I note that he repeatedly treats Erhard's words as "apparently banal" (87).  It's also in the French. Now, 'banale' is a term Foucault throws around quite a bit in the lectures. So, I don't want to claim that the pairing with Arendt's Eichmann is deliberate. Even so I think the use of 'banale' is quite deliberate. For, Foucault is explicit that whatever Erhard's intentions, the significance of his words came later and are added by Foucault ("I am adding a whole historical weight that is not yet present"). Erhard is treated as a functionary, who is delivering words that echo the Ordo doctrines (and it is, despite the mention of the Austrian school just before in the lecture, quite clear to Foucault that the Freiburg Ordo theorists who "wrote" it). 

Foucault makes an uncharacteristic mistake both in setting himself above the historical agents he is characterizing and in treating Erhard as a mere instrument. Under Nazism, Erhard showed more independence of mind as can be readily ascertained by reading his (1943/4) War Finances and Debt Consolidation (Kriegsfinanzierung und Schuldenkonsolidierung), which dangerously anticipated German defeat and also sheds light on some of his commitments.

I mention this, in part, because when Erhard undertook his economic reforms he was almost certainly exceeding his legal authority to do so. And so we must recognize that the very effect he was trying to achieve, re-establish, perhaps establish for the first time, "juridical legitimacy" (82) in Germany, required an act of statecraft, of a gambling will, if one so wishes, that can only be legitimated in some sense by its effects. That is to say, this is no mere functionary, who merely repeats liberal piety of the past. As he puts it at the start of the 1948 speech Foucault quotes, "I am not preaching a return to the liberalist economic patterns of historic tradition." (27)

Okay, with that in place, let's turn to Foucault's interpretation. For Foucault Erhard claims that the state maintains its legitimacy and representative character when it guarantees the basic rights of its citizens. And, indeed, Foucault is surely right that in addition to rejecting marxist planning, and Keynesian interventionism, Nazism is the more fundamental target here. It is worth emphasizing, however, that Erhard also explicitly rejects "anarchy." This is a defense of the role of the state in guaranteeing basic rights. I don't think Foucault misses this, for he is clear that German liberalism presupposes such a state role.

The nature of representation that Foucault recognizes is in  a strange way one of output legitimacy. For, the legitimacy of the new German state will be ground in both the effective protection of rights. And, in virtue of such legitimacy the state can represent, speak and authorize on behalf of, its citizens. This is not the usual notion of representation, so Foucault is right to emphasize it.The 'consent' involved is extremely indirect.  We may say that only later, once basic rights are secured, did output legitimacy shift toward a focus one economic performance. 

This is not to deny that Erhard himself presents these basic "human rights" primarily in terms of freedom of choosing one's occupation and consumptions:

Any system which does not leave completely intact an individual's free choice of occupation and of consumption contravenes human rights and harms the very social classes for whose protection these spurious measures were conceived. Who, for example, would deny today that the present controlled economy- rejected though it may be by all concerned - has brought most suffering to the weak and the poor or that this class of the community entertains the profoundest hate of all for a system which has oppressed and humiliated them.  (28)

Crucially, and Foucault oddly misses this, Erhard relies on a kind of soft, proto-difference principle that the political order must, as a necessary condition, at least also promote the interests of the "weak and the poor." That is to say, the test of legitimacy, the gaining of the representative character, is really two-fold: it's both the protection of human rights (relatively narrowly understood) and the promotion of the interests even dignity of the "weak and the poor." And this concern, with a kind of bottom up fairness is very much on display in the earlier 1943/44 discussion, which is also framed in terms of the rough perceptions of fairness of those subject to economy policy. That is to say, more than actual fairness, what matters is the political acceptance of the vulnerable and least powerful. He captures this point in 1947 in terms of the "spirit of democracy." 

Now, I happen to think that this social economy (soziale Marktwirtschaft) brings Erhard (who was a Christian-Democrat) rather close to Smith, despite the distance to versions of late nineteenth century liberalism. I don't mean to deny that Erhard's position evades complex questions about how to measure and gouge such perceptions. What's crucial for my present purposes is that in virtue of missing this second feature, Foucault reduces the German form of governmentality to a defense and state construction of the market. And while I understand why for his larger narrative this might make sense, and that in this reductionist interpretation, Foucault echos the most misguided defenders of liberalism, it is important to see that the defense of the market is presented in a larger moral-political order that is worth revitalizing.

 

On Analytic Marxism's Displacement of Dialectics

In each sense of 'analytical', to be analytical is to be opposed to a form of thinking traditionally thought integral to Marxism: analytical thinking, in the broad sense of 'analytical', is opposed to so-called 'dialectical' thinking, and analytical thinking, in the narrow sense of 'analytical', is opposed to what might be called 'holistic' thinking. The fateful operation that created analytical Marxism was the rejection of the claim that Marxism possesses valuable intellectual methods of its own. Rejection of that claim enabled an appropriation of a rich mainstream methodology that Marxism, to!its detriment, had shunned....I said (see section 1 above) that analytical Marxists do not think that Marxism possesses a distinctive and valuable method. Others believe that it has such a method, which they call 'dialectical'. But we believe that, although the word 'dialectical' has not always been used without clear meaning, it has never been used with clear meaning to denote a method rival to the analytical one.[1] There is no such thing as a dialectical form of reasoning that can challenge analytical reasoning. Belief in dialectic as a rival to analysis thrives only in an atmosphere of unclear thought. G.A. Cohen "Introduction to the 2000 edition" (2000 [1978]) Karl Marx's Theory of History: A Defence, xvii-xxiii.

Cohen takes non-trivial pride in having helped  found the method of analytic marxism (see p. xvii & xxiii).  This is explicitly opposed to, and intended to displace, what is known as dialectics. Dialectics is dismissed for being unclear . In the quoted passage, and later in the introduction, he suggests dialectics is only taken seriously in a context pervaded by unclarity such that resistance to analytic marxism (by those wedded to dialectic) exhibits "irrational obscurantism." (xxiv) Presumably, the footnote [1] is supposed to illustrate the lack of clarity. It reads,  "I do not think that the following, to take a recent example, describes such a method: 'This is precisely the first meaning we can give to the idea of dialectic: a logic or form of explanation specifically adapted to the determinant intervention of class struggle in the very fabric of history.' (Etienne Balibar, The Philosophy of Marx p. 97.) If you read a sentence like that quickly, it can sound pretty good. The remedy is to read it more slowly." (p. xxiii) 

As regular readers know, I am a bit allergic to the habit, cultivated by my analytic peers, to quote exemplary sentences (generally by continental philosophers) out of context, add some snark (here disguised as sincere advice), and say, see. Perhaps, Balibar's work on Marx is as shallow as Cohen suggests.  But the choice for Balibar (an academic best known by me for his work on Spinoza) is revealing because it is neither Marx nor an accomplished revolutionary practitioner of dialectics, say, Rosa Luxemburg, who calls the "dialectical materialist method of historical analysis" one of two "principles" of the "essence" of Marxism ("Foreword to the Anthology The Polish Question and the Socialist Movement.")

Let's stipulate that clarity is an important intellectual virtue even within Marxism. And if you are already socialized in a certain intellectual habitus, it is perfectly legitimate to take it for granted (even for polemical purposes). But, speaking strictly as a bourgeois intellectual, it is an odd choice for a Marxist to rest one's case on. Let me explain.

For Carnap, whose socialist commitments were not disguised, clarity is, in fact, a property or by-product of formal systems.* Carnapian clarity is really a second-order property of an otherwise esoteric, expert practice.  But if one is interested in revolutionary or even emancipatory politics,  it is not obvious that such clarity is the ruling virtue (as opposed to virtues that motivate action, or enable the proletariat to fulfill their revolutionary potential).  I don't mean to deny that for Carnap, presumably, anybody can be trained to become such an expert. And there is an attractive feature of communism -- emphasized, say, by Ernest Mandel in The Economic Formation of the Economic Thought of Karl Marx 1843 to Capital -- that under communism everybody will be intellectually literate. But that's supposed to be the end-point of the revolution not the (prefigurative) means. 

Be that as it may, the introduction I quoted from is a later addition. In Karl Marx's Theory of History: A Defence, Cohen does not (as far as I can tell) engage with the question at all.** I have been unable to find any place where Cohen does the intellectual work to show with some care what's wrong with dialectics. Throughout the book he cites his own (1974) "Marx's Dialectic of Labor;" this paper explicitly sets aside anything that non analytic Marxists might mean by dialectic and only focuses on "the descriptive residue" of the concept.

Earlier yet, in 1969, Cohen did a lovely review essay, worth re-reading for many reasons, "Critical Theory: The Philosophy of Marcuse," of Marcuse in New Left Review . This is a more general critique of (what Perry Anderson has called) Western Marxism to move from to "the aspirations of people" (and being a spokesman for them) to a focus on "culture" (and ideology). In this piece, Cohen suggests there is an authentic Marxist spirit from which Marcuse has deviated. An example of this more authentic Marxism (by Cohen's lights in 1969) is Karl Korsch.+ 

As it happens, Korsch is a lucid writer. And in his (1923) Marxism in Philosophy he offers a useful diagnosis of the motives of those who reject dialectics and a hint of what it might be:

Setting aside any philosophical considerations, it is therefore clear that without this coincidence of consciousness and reality, a critique of political economy could never have become the major component of a theory of social revolution. The converse follows. Those Marxist theoreticians for whom Marxism was no longer essentially a theory of social revolution could see no need for this dialectical conception of the coincidence of reality and consciousness: it was bound to appear to them as theoretically false and unscientific.-- [Emphases in original.] Translated by Fred Halliday.

In context, it is clear that the coincidence of consciousness and reality -- hereafter: the coincidence thesis -- is a constitutive feature of dialectics, but does not exhaust it. That consciousness and reality coincide is a position associated in different ways and with different political sensibilities with Platonism, Spinozism, and Hegel. It is easy to make fun of, but it is not unintelligible or, if you try working through it, nor obscure. (It is a bit tricky to learn to embrace the coincidence between epistemic and ontic perspectives if you have been taught this is a blunder.) Somewhat amusingly in Spinoza the epistemological and metaphysical achievement (recall this post on Tarski) of such coincidence is itself associated with full clarity. Korsch doesn't claim that Marxist dialectic is itself clear, but he thinks it is clear that the coincidence thesis is necessary for the way in which a critique of political economy could become a part of a theory of social revolution. And this, in turn, is a key feature to generate (the right sort of) revolution. 

Let me take stock. I have not here tried to articulate a full theory of dialectics. (That's for another time and perhaps not my role in life.) I have also not discussed the merits of analytic marxism. More narrowly, while Cohen is an early mover in analytic marxism, he is fairly late in the history of analytic philosophy. And so this makes one wonder if anybody in the analytic tradition did the serious work of showing by way of argument what's wrong with dialectics. This question is especially urgent because there are many indications that marxism is receiving renewed consideration within analytic philosophy or at least by our students.

To find such an attempt, we must look, I assume to Vienna (in the 1920s-30s) or New York (in the late 1930s), or perhaps Lodz (in the 1930s). As it happens, Cohen echoes in uncanny fashion -- the lesser,  lazy polemics*** of -- Ernest Nagel's treatment of dialectics; Nagel presents (recall) dialectics like the early moderns treat the terms of scholastic philosophy: as fundamentally unintelligible. And so, we seem to be stuck in an eternal return of name-calling. However, Nagel was intimately familiar with Sidney Hook's (1939) "Dialectic in Social and Historical Inquiry," (published in JPhil) which presents itself as doing such thankless work, and, perhaps, the only such effort in the analytic tradition (now broadly conceived).++ I shall turn to it soon in order to establish whether Nagel's (and so by extension) Cohen's polemics rest on intellectual granite or quicksand.

 

 

On Vestal Virgins, Marxism and Final Causes (via Ernest Nagel, Huxley, and Bacon)

The third type of philosophy of science will require only brief exposition. It is professed, among others, by a number of scientists in this country and England, whose object is to show the social implications of theoretical research and thereby to rob modem theories of their air of mystery. They explain, frequently with admirable lucidity, the new sources of power opened up by science, the economies in human effort which it is capable of effecting, and the close interdependence of science and the technological arts. The dominant emphasis is thus placed upon scientific theories as engineers' "blue-prints for action," rather than as disclosures of some final reality.
There might be little to object to this approach to science if those who take it would not confuse their thesis by other claims: that scientific research ought always to be conducted with the social good in view, or that all significant research is in fact deter­mined by the organization and practical needs of society. There is, however, no evidence for the proposition that a warm social conscience is the best guide for the conduct of research; there is no ground for assuming that everyone knows what is socially desirable, that what is not of immediate social value will never prove to be so, or that devotion to socially valuable results neces­sarily contributes to the fullest development of systematic knowl­edge. There is overwhelming evidence to show that the content and direction of theoretical research is in the main controlled by technical problems internal to the sciences, and that changes in the social economy do not in general constitute the sufficient con­ditions for the specific content of theoretical inquiries.
A number of writers in this group make the further claim that the methods as well as the conclusions of science conform to the triad of "dialectical principles" sacred to many followers of Hegel and Marx. For example, Levy has argued that the occurrence of a distinct type of wave produced by a ship after it reaches a critical velocity illustrates the law of abrupt change of quality with sufficient increase of quantity; and Haldane has borne witness to the inestimable value of all three laws in his own biological researches. Space is lacking to examine these and other claims for the virtues of the dialectic laws. It must suffice to recall Einstein's remark that philosophers are fortunate indeed in beingg always able to establish the agreement of the latest findings of science with their own metaphysical principles. The principles of dialectic can be guaranteed never the fail, because their terms have no fixed content; they can be stretched to cover any facts whatsoever, after the facts have been independently established.
Were it not for the mysterious profundity claimed for them, and did they not serve to check inquiry by the glib finality with which they resolve all problems, the laws of dialectic could be left unreproached as a curious verbal game. As instruments for disentangling the web of theoretical constructions, however, they are as barren as the purest of vestal virgins.--Ernest Nagel (1941) "Recent Philosophies of Science," Kenyon Review (Vol 8), reprinted in Sovereign Reason (1954) 45-46.

I have quoted all of section 3, from a brief, critical "survey" of then prominent four philosophies of science by Ernest Nagel. Near the end of the paper, Nagel himself is forthright that he favors the fourth approach, which "does not aim at a compact system bt at painstaking analyses of the details of scientific procedure (46); but he associates it with names like "Mach, Poincare, Duhem, Campbell...Pierce....Russell, Wittgenstein, Tarkski...Carnap...James, Dewey, Cohen, Neurath, and Woodger;" (46) This approach frequently "goes under the somewhat unprecise and misleading of of "operationalism." (39) The two other approaches are associated with Whitehead (which gets a respectful critical treatment) and Eddington (which does not: his "philosophy of science consists of "outrageous puns."" (45)) 

The third type involves what we may call Marxist philosophy of science and Nagel's two exemplars are Haldane and Levy (surprisingly Bernal is not mentioned). I assume J.B.S. Haldane is somewhat familiar to readers of this blog. (And his work is due a rediscory given his interest in infectious diseases and pandemics.) I am pretty confident that most of my readers are less familiar with Levy. The index to Sovereign reason suggests this is a H. Levy. And with help of Google, I am pretty confident this is the author of (1938) A Philosophy for a Modern Man because it is also mentioned by Robert S. Cohen in "Marxism and Scientific Philosophy" a longer and more scholarly (and fascinating) review article in Metaphysical Review (1951).

The four features of Marxist philosophy of science that Nagel rejects are: (i) the normative claim that science ought to be guided by social aims; (ii) the empirical claim that it is always guided by social aims. In addition, (iii) the historicist thesis that science is determined by social economic context. And, finally, (iv) dialectical principles and its laws.

As an aside, (iii) was not just associated with Marxist philosophy of science. Institutional economists who were progressives (but not necessarily socialists or marxists) also accepted a version of (iii). As I have demonstrated, George Stigler, the Chicago economist, who was well read in philosophy of science (including Nagel) polemically rejects a version of (iii) in the 1950s-1960s; Stigler called it the “environmental theory" and he associated it with the historian of economics (and sociologist of knowledge) W. Stark and Wesley Mitchell, one of the leading institutionalists of the previous generation (who had died in 1948) and one of Milton Friedman’s mentors at NBER. 

Some other time I want to reflect a bit, from a sociological perspective, on the significance of the polemical rejection of dialectics by (would be) analytic philosophers, including those self-proclaimed analytic marxists more friendly to Marxism. Unlike his treatment of (i-iii), and his criticisms of the other approaches to philosophy of science, Nagel clearly does not think it is worth his effort to try to argue against dialectic and its laws. His only criticism that does not reduce to name calling ("no fixed content';" "mysterious profundity;" glib" etc.)* is that its practitioners engage in retrospectifve confirmation ("after the facts have been independently established"), which may be true but it is not a criticism of it qua philosophy of science. (As Nagel frankly admits it his own favored approach is not interested in "canons" of discovery. (47))

Here I want to close with an observation on Nagel's assertion that the laws of dialectic are as barren as the purest of vestal virgins. As it happens (friend of the blog, recall), David Haig discusses some of the history of this phrase in the history and philosophy of science in chapter 1 of his (2020) From Darwin to Derrida, a book I have had occasion to mention before. For, it is often the case that final causes are likened to barren virgins and, thereby, to be rejected. As Haig shows a version of the phrase goes back to Bacon's (1623) De Dignitate et augmentis Scientiarum, where Bacon is referring to the virgins consecrated to God (as vestal virgins were). Although it is likely, as Haig, suggests that the modern association of Bacon with the phrase "vestal virgins" is due to William Whewell, the founder of philosophy of science. (Whewell himself thought of final causes as constitutive and regulative to speculations.) It is with Huxley, while reviewing Darwin (1859), that the association of final causes as "barren virgins" to be left aside is put in place. (Haig and I both agree this was not exactly how Darwin thought about it.) 

We can assume that Nagel, who was widely read, was reasonably familiar with the association of the rejection of final causes as barren virgins since Huxley.[UPDATE: SEE FOOTNOTE]** Circumstantial evidence for the widespread familiarity of this point can be found in an essay in 1927 by C.D. Broad on "The Philosophy of Francis Bacon," where Broad warns his readers not to assume that in Bacon the phrase signals rejection of final causes. (I can't prove Nagel read this paper, but he was familiar with Broad's writings on the mind as a teleological system.) In the philosophy of biology, Nagel wrote quote a bit on teleological explanation. Much of it is naturally read as redescribing teleological concepts in terms of efficient causation or underlying laws. But near the end of his career he granted that "teleological concepts and teleological explanations" are not obscure (301) 

So, to sum up, Nagel treats the dialectics of those inspired by Hegel and Marx as fundamentally obscure. Writing in 1941, he thereby foreshadows the more common criticisms by analytic philosophers of folk who much later came to be known as continental philosophers.+ But the trope he activates to do so is one then commonly associated with the rejection of final causes.

But at no point were final causes thought obscure or unintelligible (even Spinoza did not go that far); rather from Huxley's polemics onward they were taken as local final causes to be thought unfruitful in scientific or experimental research. Because (recall) Huxley himself was an agnostic about fundamental matters, Huxley could acknowledge that general final causes were intelligible and perhaps appropriate in the domain of fundamental metaphysics. 

Nagel treats dialectics a bit like the early moderns treat the terms of scholastic philosophy: as fundamentally unintelligible. He simultaneously treats dialectics in the way Huxley treats local final causes: as intelligible albei unfruitful in (the philosophy of) science. But Nagel is so focused on his polemics that he forgets it can't be both.

 

 

 

On The Origin of Capitalism: Meiksins Wood, The Ordos, and Walter Lippmann on Productivity of Property

In fact, capitalism, in some ways more than any other social form, needs politically organized and legally defined stability, regularity, and predictability in its social arrangements. Yet these are conditions of capital's existence and self-reproduction that it cannot provide for itself and that its own inherently anarchic laws of motion constantly subvert. To stabilize its constitutive social relations - between capital and labour or capital and other capitals - capitalism is especially reliant on legally defined and politically authorized regularities. Business transactions at every level require consistency and reliable enforcement, in contractual relations, monetary standards, exchanges of property. The coercions that sustain these regularities must exist apart from capital's own powers of appropriation if it is to preserve its capacity for self-expansion. (178-179)

England's particular process of feudal centralization produced a legal and political order more unified than was the European norm. So...England had long had a unitary national parliament; ...England had a more nationally unified legal system, especially its 'common law' adjudicated by royal courts, which had become the preferred and dominant legal system very early in the development of the English state.....Instead, state formation took the form of a cooperative project, a kind of division of labour between political and economic power, between the monarchical state and the aristocratic ruling class, between a central political power that enjoyed a virtual monopoly of coercive force much earlier than others in Europe and an economic power based on private property in land more concentrated than elsewhere in Europe. (172)

Here, then, was the separation between the moment of coercion and the moment of appropriation, allocated between two distinct but complementary 'spheres', that uniquely characterizes capitalist exploitation. English landlords increasingly depended on purely 'economic' forms of exploitation, while the state maintained order and enforced the whole system of property. Instead of enhancing their own coercive powers to squeeze more out of peasants, landlords relied on the coercive power of the state to sustain the whole system of property, while they exercised their purely economic power, their concentrated landholdings, to increase the productivity of labour, in conditions where appropriators and producers were both becoming increasingly market-dependent. Ellen Meiksins Wood [1999/2017] The Origin of Capitalism: A Longer view,  172-3

Yesterday, I noted that according to Meiksins Wood and Adam Smith, the origin of agricultural capitalism can be found in a change in the character of land-leases (which became fixed-term, but lengthy) such that tenants and landlords submitted, mediated by the estimations of surveyors, to the discipline of the market-place which internalized a practice of unceasing improvement. As Smith noted this system was made possible, in part, by a change in legal practice in which the state provided legal remedies to  tenants.

This last point also fits a key strain in Meiksins Wood's argument: that agricultural capitalism is made possible by the state's capacity and willingness to maintain "order" and enforce "the whole system of property." In particular, on her view it also meant a willingness to give preference to a notion of property right that itself both encouraged improvement and, in part, is ground in or justified by such improvement. While she claims the account of property precedes Locke, she treats Locke (and by ignoring Grotius) as its greatest spokesman of a view she calls the "productivity of property" (111).

While her view skips the intrinsic defense of property rights (beloved by libertarians), that is, what Locke has to say about natural rights, I am not unsympathetic (recall) to her more instrumentalist and consequentialist reading of Locke's account of property (as an interpretation of Locke). This latter, more instrumentalist account is also (recall) visible in Toland's argument for Jewish naturalization and emancipation. Meiksins Wood is not inclined to see the productivity of property approach as emancipatory. Rather, she sees it rooted in the original sin of enclosure and the violation even "extinction of the customary rights of English commoners" (159) on which "many people depended for their livelihood" (108). 

My  interest today is not to debate the merits of the charge. Rather, I assume the 'productivity of property' is a doctrine that has entered and become entrenched in aspects of legal practice and statecraft; we see it, for example, in the practice of eminent domain (even though Locke has historically been associated with the natural law inspired criticism of eminent domain). This 'productivity of property' two important characteristics the first familiar, the second less so to liberal thought. First, as Meiksins Wood notes, the productivity of property presupposes independent state capacity to create a stable system of property rights that can shape expectations. And she is right to note that capitalism itself may create the institutional conditions -- rent-seeking, state capture, etc. -- that also create the incentives under which the impartial rule of law is undermined. One need not be a marxist to recognize she is onto something; the past two sentences describe the central obsession of the Ordoliberals (ORDOS), who worried that without both independent judiciary and independent civil service with esprit des corps, democracy provided a fast-track to the mechanisms by which the productivity of property was undermined. 

This is all familiar enough. But there is also a second feature, which she notes in the following paragraph:

We need to be reminded that the definition of property was in Locke's day not just a philosophical issue but a very immediate practical one. As we have seen, a new, capitalist definition of property was in the process of establishing itself, challenging traditional forms not just in theory but also in practice. The idea of overlapping use rights to the same piece of land was giving way in England to exclusive ownership. From the sixteenth to the eighteenth century, there were constant disputes over common and customary rights. Increasingly, the principle of improvement for profitable exchange was taking precedence over other principles and other claims to property, whether those claims were based on custom or on some fundamental right of subsistence. Enhancing productivity itself became a reason for excluding other rights. (114-115)

Now, Meiksins Wood's rhetorical point is to give a reader a sense of the unfairness or suffering that accompanies the exclusion of other rights. But lurking in it is the seminal point that to embrace the 'productivity of property' also means embracing unseizing conflict over property rights. That is, it is not just accepting the friction that accompanies a change in legal regime (from, say, common and customary rights to the productivity of property). But once the productivity of property is hegemonic even more legal friction is to be expected.*

To the best of my knowledge, writing in the midst of the Great Depressions (1937), Walter Lippmann (no Marxist) was the first to really grasp this point (although surely elements of it are in Marx); entrenched technological change would help drive open ended possible improvements in productivity, and, thus, constant relative changes in productivity of different factors of and property in production, but technological change would also drive a constant reconceptualization of what counts as property (and commodity), as witnessed by recent debates inspired by changes in artificial intelligence, financial innovation, and the status of genetic code of (say) plants and animals.

The elements of the second features give rise to the need for what (echoing Lippmann) one might call the 'spirit of adaptation' in government and law. The legal and political system can't merely stand back, but must "adapt itself successfully to the intensely dynamic character of the new technology.” (Lippmann's The Great Society: 16) Drawing in part on Adam Smith, Lippmann notes that this dynamic character of technology and property involves showing “how law and public policy may best be adapted to this mode of production which specializes men's work, and thereby establishes an increasingly elaborate interdependence among individuals and their communities throughout the world.” (174)

That is to say, Meiksins Wood is right that the productivity of property generates innumerable sites and constantly new forms of legal conflict. The rise of capitalism puts great, perhaps too great, demands on state capacity. It must provide a legal and tax framework that can generate reliable expectations, and simultaneously the governing elites must be willing, despite great temptations to profit from or steer it to partial ends, to adapt that framework in light of the friction generated by the practices shaped by it in open ended fashion. And it must do so while pursuing other political goals (connected to defense, public health, public goods, etc.)

Meiksins Wood closes her book with the observation that "as capitalism spreads more widely and penetrates more deeply into every aspect of social life and the natural environment, its contradictions are increasingly escaping all our efforts to control them." (198)  As should be clear, I agree that the contradictions are real; they are features not bugs. This suggests, in fact, that the marxists are right in thinking that political and economic crises are intrinsic to capitalism, despite their shape and content being often wholly new or genuinely uncertain. Writing in the pandemic, with living memory of the financial meltdown of 2007-9, this fits the lived experience of adult life under capitalism. But despite repeated and entirely justified collapses of confidence in the liberal project (broadly defined), it has also shown enormous resilience under adversity. And this resilience is also ground in lived experience. What's needed is a firmer grasp and critical evaluation of the spirit of adaptation that is itself shaped by the forces unleashed by the productivity of property, and that shapes these in turn. 

On the Origin of Capitalism; On Ellen Meiksins Wood, and Adam Smith

it was unfixed, variable rents responsive to market imperatives that in England stimulated the development of commodity production, the improvement of productivity, and self-sustaining economic development. In France, precisely because peasants typically enjoyed possession of land at fixed and nominal rents, no such stimulus existed. It was, in other words, not the opportunities afforded by the market but rather its imperatives that drove petty commodity producers to accumulate....The same process created a highly productive agriculture capable of sustaining a large population not engaged in agricultural production, but also an increasing propertyless mass that would constitute both a large wage-labour force and a domestic market for cheap consumer goods - a type of market with no historical precedent. This is the background to the formation of English industrial capitalism.--Ellen Meiksins Wood (1999 [2017] The Origin of Capitalism: A Longer view, 102-103

Meiksins Wood  (whose book I warmly recommend) relies on a distinction between commerce and capitalism. Commerce is historically ubiquitous; whereas capitalism originated once,  relatively recently in human history (in the English countryside). The former is characterized by voluntary exchanges in which people buy low and sell dear and occurs primarily in (what we may call) arbitrage opportunities. While societies in which commerce exists are durable, their growth potential is limited. The latter occurs from necessity, that is survival, in which in order to survive people engage in ever cheaper and more efficient production of their factor. Growth in capitalism is, in principle, open-ended bounded at some limit by Earth's resources (and internal instability). Crucially, in a capitalist system everybody, or all factors, experiences structural domination by the market: "compulsion lies at the heart of the new economic dynamic." (138)

Meiksins Wood explores the question of the origin of capitalism in order to (use her terminology) denaturalize it (cf. p. 74). In particular, she attacks the idea, which she repeatedly associates with Adam Smith and the phrase associated with him, 'truck, barter, and exchange' (11, 21, 28 75, 193), that there is an "economic man" whose shackles (e.g., feudalism, slavery, trade-protection, etc.) simply need to be undone in order for capitalism to emerge naturally. The idea behind this thought can be found in a famous passage in the Wealth of Nations (hereafter WN): "all systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord."

For Meiksins Wood, capitalism emerges, as it happens (but this is less important) under a certain version of feudalism, in which, and this is important, term-limit leases are introduced in agriculture and the price of these leases are determined by an estimation by surveyors of the value of that land after improvement (a key word) in light of prevailing, or at the least the abstract perception of prevailing, market conditions. I quote two representative passages: "As for the tenants, they were increasingly subject not only to direct pressures from landlords but also to market imperatives that compelled them to enhance their productivity." (100) And "We can watch the development of a new mentality by observing the landlord's surveyor as he computes the rental value of land on the basis of some more or less abstract principle of market value, and measures it explicitly against the actual rents being paid by customary tenants."  (101) These new kind of leases create the "rupture" (8) that generates the "laws of motion" associated with capitalism "that uniquely compel people to enter the market, to reinvest surpluses and to produce 'efficiently' by improving labour productivity - the laws of competition, profit maximization, and capital accumulation." (16) 

Some other time, perhaps, I'd like to discuss her fascinating treatment of Thomas More and, especially, Locke. And the role of the state in facilitating the growth of capitalism. For now I want to note that one need not be Marxist to appreciate her effort. Determining the historical origin and naire of capitalism is fascinating  and undoubtedly sheds some light on the possibilities, if any, of articulating alternatives or changes to it. This is so, even if one were to reject the commerce vs capitalism distinction. So, for example, if one has a liberal mindset, the relevant distinction is within capitalism: one between mercantilism and commerce (or liberalism). And the liberal is willing to grant that mercantilism is historically prior (albeit not, perhaps, conceptually). 

Above, I suggested that it is not unfair (to Meiksins Wood and Smith) to see Adam Smith as the proper target of Meiksins Wood's analysis. Even so, while reading her book I had the recurring thought that Smith had anticipated her in a key respect. This is not strange because as many authors have noted that despite the pin factory example, Smith seems almost ignorant of the industrial revolution (if he notices it at all), and focuses quite a bit of attention on land rents. For, in fact, Smith calls attention to the very leases singled out by Meiksins Wood, and he concludes his discussion of them: "Those laws and customs so favourable to the yeomanry, have perhaps contributed more to the present grandeur of England than all their boasted regulations of commerce taken together." (Wealth of Nations, 3.2.14, p. 392)

The three features Smith singles out are [i] "When such farmers have a lease for a term of years, they may sometimes find it for their interest to  lay out part of their capital in the further improvement of the farm; because they may sometimes expect to recover it, with a large profit, before the expiration of the lease." & [ii] since the time of Henry VII, the protection of the tenants'  value in improved land by "the action of ejectment" which allowed legal remedy of recovery against premature. (WN 392; in the next paragraph, Smith  notes that some such law was introduced in Scotland already in 1449) 

Before I get to the third feature, I want to stress this is not a side comment, in Smith's analysis. I offer two kinds of evidence. First, when Smith formally analyzes 'rents of land' in (WN 1.11) he describes variable, fixed-term leases of agricultural capitalism described by Meiksins Woods as the exemplary kind: landlords "In adjusting the terms of the lease, the landlord endeavours to leave him [the tennant] no greater share of the produce than what is sufficient to keep up the stock from which he furnishes the seed, pays the labour, and purchases and maintains the cattle and other instruments of husbandry, together with the ordinary profits of farming stock in the neighbourhood. This is evidently the smallest share with which the tenant can content himself without being a loser, and the landlord seldom means to leave him any more." (WN 1.11.1, 160). Throughout the chapter, Smith makes clear that these leases drive productivity and that they represent a conflictual model (and, but I explore this some other time, in some ways even violate our sense of fairness and justice).

Second, Smith praises the Physiocrats (or "Oecenemists"), when in their plans to eliminate French famine and to have French agriculture catch up with English standards, they emulate British practices:  "it has been in consequence of their representations, accordingly, that the agriculture of France has been delivered from several of the oppressions which it  before laboured under. The term during which such a lease can be granted, as will be valid against every future purchaser or proprietor of the land, has been prolonged from nine to twenty-seven years. The antient provincial restraints upon the transportation of corn from one province of the kingdom to another, have been entirely taken away, and the liberty of exporting it to all foreign countries, has been established as the common law of the kingdom in all ordinary cases. (WN 4.9.38, 678);

So, Smith both knows that the paradigmatic cases of rent, which are crucial to the analytic core of his system, are themselves historically conditioned by institutional factors and not eternal pre-existing forms of exchange.* And it is this paradigmatic case that drives commercial development as he sees it. So, why has this not been emphasized (even missed by friends and critics of Smith). This gets me to the third point.

In explaining the downfall of feudalism and monastic estates, Smith emphasizes [iii] that foreign commerce developed vain, new tastes in landlords, who, in order, to increase revenue from their holdings set in motion the kinds of leases which form the backbone of what Meiksins Wood calls agricultural capitalism.  In fact, scholars love to quote the passage, which emphasizes the political effects, of the rise of agricultural capitalism:

The expensive vanity of the landlord made him willing to accept of this condition; and hence the origin of long leases...The tenants having in this manner become independent, and the retainers being dismissed, the great proprietors were no longer capable of interrupting the regular execution of justice, or of disturbing the peace of the country. Having sold their birth-right, not like Esau for a mess of pottage in time of hunger and necessity, but in the wantonness of plenty, for trinkets and baubles, fitter to be the play-things of children than the serious pursuits of men, they became as insignificant as any substantial burgher or tradesman in a city. A regular government was established in the country as well as in the city, nobody having sufficient power to disturb its operations in the one, any more than in the other. (WN 3.4.13-15, p. 421; elsewhere Smith makes the same claim about the demise of feudal, monastic landholding: "But this increase of rent could be got only by granting leases to their tenants, who thereby became in a great measure independent of them.")

Scholars and critics have loved to focus on the moral psychology and providential morality tale, even theodicy, immanent in [iii], which Smith himself attributes to Hume. But there is no doubt that Smith has the very same explanation [i-iii] of the origin of commerce as a social stage in the four stages of development as Meiksins Wood. (Well not entirely the same because she downplays the significance of the existence of foreign trade.) It is in what she calls the slow development of agricultural capitalism made possible by a certain kind of variable but secure lease that Smith sees the great source of England's wealth. These leases represent  the (improving) reproductive potential of the tenant and the discipline of the market-place. 

So, while I think it is correct to say that Smith also propagated the rhetorical seeds of the naturalized version of the origin of capitalism, he is crystal clear about the origin and significance of agricultural capitalism. None of the above is meant to deny that Meiksins Wood and Smith offer different interpretations of the wider moral significance of agricultural capitalism (Smith thinks it generates a new kind of interdependent independence; Meiksins Wood a new kind of structural domination), but about these matters some other time more.