Our Enemies Too Must Have Their Private Demons

Alas, their paradigms and terms of discourse are dieux-dieux. It's why I trashed that Blakely gal from offa here. All have to go. It's a clearance sale, a liquidation!

Not that it hasn't been like Black Friday every goddam day since the Reago-Thatcher Pod-People Takeover. Even in those ritzy stores in the brick-and-mortar malls.

Nonetheless the urge to refute and rebuke and revile my rivals at the next ISCSC conference remains strong and renitent, so here goes...

Leaving our civ's intellectual plane, where this Maslovian need is being poorly served, let's turn to the economic level. I am not insisting on using the combined expression "political economy" today. We oughta, but Western history did not begin with centralized public authority. The abortive Carolingian kingdom does not count and should never have been.

Here we are faced with a series of complex developments. Wouldn't it be nice if we could ignore 'em, but we can't because economic issues have a justly paramount consideration since the 20th century. There is no easy or better way to understand this part of Western history,

Let's try to simplify these anyway! Let's divide them into four facets: (a) energy; (b) materials; (c) organization; and (d) control.

[Engages inappropriate Synthwave work music]

It's clear that no economic goods can be made without the use of energy and materials. The history of the former falls into two main parts each of which is divided into two subparts. The primary division, around 1830, separates an earlier period when production used the energy from living bodies and a later period when production used energy from fossil fuels delivered via engines. The first half is subdivided into an earlier period of manpower (and, let's face it, slavery) and a later period using the energy of draft animals. This subdivision occurred roughly around 1000 AD. The second half (since 1830) is subdivided into a period which used coal in steam engines, and a period which used petroleum in internal combustion engines. This subdivision occurred around 1900 or a little later.

The development of the use of materials is familiar to everyone. We can speak of an age of iron before 1830, an age of steel (1830-1910), and an age of alloys, light metals, and synthetics (since 1910). Understandably these dates are arbitrary and approximate since the different periods started at different dates in different places, diffusing outward from their origin in the core region of Western Civ in NW Europe (where John W. Campbell, Jr. declared that the Genius of Man had touched down).

Now we turn to the developments in economic organization, the Hot Topic of Demonic Rage. Here again there's a sequence of several periods. Six, to be exact. Each one had its own organization to be taken as typical for that economy. In the beginning, in the early Middle Ages, Western Civ had an economic system that was almost entirely agricultural, organized in self-sufficient manors, with almost no commerce or industry. To this manorial-agrarian system there was added (post-1050) a new economic system based on trade in luxury goods of exotic origin for the sake of profits. This might be called commercial capitalism. It had two periods of expansion, one in 1050-1270, the other in 1440-1690. The typical organization of these two periods was the trading company (in the second we might call it the chartered trading company like the Massachusetts Bay Company, the Hudson's Bay Company, or the various East India companies). The next period of econ org was the stage of industrial capitalism, beginning around 1770, and characterized by owner management through the sole proprietorship or the partnership. The third period should be called financial capitalism. It began around 1850, reached its zenith around 1914, and ended about 1932. Its typical econ org was the limited liability corporation and the holding company. It was a period of financial or banker management instead of owner management in the previous period of industrial capitalism. This period of financial capitalism was followed by a period of monopoly capitalism. In this fourth period, typical forms of econ org were cartels and trade associations. This period began to appear around 1890, took control from the bankers around 1932, and was distinguished by managerial domination in contrast with the owner management and financial management of the two immediately preceding periods. It persisted in spite of the dramatic events of World War II and the post-war era which put it in such a different social and historical context as to create a new, sixth, period of econ org that might be called the pluralistic economy.

So how do I put all this in a table? I will just list them with a parenthetical note or two:

Feudalism (from 670) controlled by customary rules and regulations.

Commerce (two-staged - municipal mercantilism and state mercantilism, the second dom by the chartered companies).

Industry controlled by owners.

Finance with LLCs and holding companies controlled by bankers.

Monopoly (org = cartels & trade Associations controlled by managers).

Pluralistic (say from about 1934, run by technocrats with a small "t" but, get this, the typical org = lobbying groups).

I want to note a few things. First, when anyone uses the expression "the force of custom" they ain't lyin'. Habits were engrained in the very neurologies and endocrine glands of the earliest Westerners. Violate a taboo and you could get a case of the vapors. This control was relaxed when commerce grew. Second, these various stages or periods more than overlap; they're additive in the sense that there are many survivals from earlier stages into later ones. As late as 1925 there was a manor still functioning in England, and Cecil Rhodes's chartered company which opened up Rhodesia (the British South Africa Company) was chartered as late as 1889. In the same way owner-managed private firms involved in industry or corporations and holding companies involved in finance could be created during the pluralistic era. I am getting ahead of myself when I characterize small businesses as swinging in the winds of the free market while the megacorporations run the shebang among themselves, albeit with plenty of competitive lobbying.

Next we come down to definitions. All the later periods after feudalism are labeled capitalistic. This terms is hereby defined as an economic system driven by the pursuit of profits in a price system. That's it. The commercial capitalist sought profits from the exchange of goods, the industrial capitalist sought profits from the manufacture of goods, the financial capitalist sought profits from the manipulation of claims on money, and the monopoly capitalist sought profits from the manipulation of the market to make the market price and the amount of goods sold maximized.

It may interest you to know that, as a consequence of these various stages of economic organization, Western Civilization has passed through four major stages of economic expansion marked by the (approximate!) dates 970-1270, 1440-1690, 1770-1929 (when the Bust was so Big that an exact date is inarguable), and since 1950. Three of these stages of expansion were followed by the outbreak of imperialist wars as each stage approached its point of diminishing returns and fought to extend it. These were the Hundred Years' War and the Italian Wars (1338-1445, 1494-1559), the Second Hundred Years' War (1667-1815), and the world wars (1914-1945). The defeat of Napoleon ended the fighting of Hundred Years' War II; the Italian Wars are rather like the Spanish Civil War and the Russo-Ukrainian War in that they are proxy wars in which new weapons and tactics get a tryout. I ought to mention also that Napoleon dragged a whole other civ into the fray. So did Hitler and Mussolini. Namely, this was Russian Civ. The Axis also snagged Japanese Civ on its side. There is ample precedent: Alexander the Great attacked the universal state or "imperium sine fine" known to us as Persia.

On to the subject of economic control. This passed through four stages in our civilization. Of these the first and third were periods of "automatic control" inthe sense that there was no conscious effort to control (or micromanage) the system politically. The second and fourth periods were such periods of conscious control. Manorial custom (650-1150) managed everything first. Next came conscious control in two varieties: municipal mercantilism (1150-1450) in the era of companies, and state mercantilism (1450-1815) in the era of chartered companies. You might say (as I do) that Napoleon was the last great mercantilist. He tried to bankrupt England as one of his tactics but England reformed its finance from a money to a credit econ in time to defeat him and his dress-rehearsal universal state. After this came automatic control in the form of laissez-faire in the competitive market, 1815-1934. There was simply no alternative due to the sheer amount of data that had to be processed by human brains. Nonetheless the attempt was made, and more and more successfully, through planning (both public and private) aided by improvements in communication, transportation, and business machines.

These five types of control have a close connection with the other stages of the West's evolution. I should mention one, the relationship to the weapons available on the military level and the forms of government on the political plane (note the switch from municipal to state mercantilism, for example). These stages of econ control also have a complex relationship with the stages of econ org, an example of which is that of the important stage of industrial capitalism overlapping the transition from state mercantilism to laissez-faire. Geographic expansion of the West has had an effect, too. In the approach to the world wars monopoly capitalism had gone further near the core region than it had in Britain and the US where finance dominated. International finance had quite an impact on Germany however: the industrialists supporting Hitler were reacting to the crisis in financial capitalism, for instance.

I am forgoing the examination of population changes and the changes in social classes (like monopoly capitalism's emphasis on phones, cars, TVs and the rise of cities and suburbs along with the appearance of the bourgeoisie and working class sometimes called the proletariat in Europe) to provide a hasty anatomy of the pluralistic econ and what happened to it.

Before the Great Depression, the economic power of finance was almost unimaginable, and was increased by the active role that these financial titans exercised in politics. In the 1920s the system of Morgan and Rockefeller influenced the events of history to a degree which I can't go into detail here, but it was tremendous. Even so, the slow evolution of business life was edging them out, and the deflationary financial policies on which these bankers insisted were laying the explosive charges in the foundation that brought the whole edifice down, ending their rule in the general social disaster of 1940.

However in the US the demise of financial capitalism was more protracted than in the rest of the West, where it was followed by a more definitely established system of monopoly capitalism. This blurring of stages was caused by a number of factors but three should be mentioned. One was the continued personal influence of many financiers and bankers even after their power had faded; another was the decentralized condition of the US, especially the federal political system; and third was the long-sustained political and legal tradition against monopolies going back at least to the Sherman Antitrust Act of 1890. As a result the US did not achieve a clearly monopolistic economy and was unable to adopt a fully unorthodox financial policy capable of providing full use of resources and full employment. One thing the New Deal accomplished was the balancing of interest blocs by strengthening labor and farming and by curtailing the influence of finance and heavy industry, the latter being closely tied to the former.

The shift of the farm bloc, light industry, commercial interests such as department stores, real estate, professional people, and mass unskilled labor - all sorely wounded by the Depression - resulted in the election of Franklin D. Roosevelt and the New Deal. All this served to create more, better organized and self-conscious interest blocs in American life, especially among farmers and labor. This did not represent any victory for unorthodox finance, the real key to either monopoly capitalism or to a managed pluralistic econ in which defense, farming, labor, heavy industry, light industry, transport and communication groups, finance, fiscal and banking, commerce, real estate, and construction interests planned rationally within and lobbied against each other without. The reason: FDR remained fundamentally orthodox about the nature of money. He was more than willing to unbalance the budget and spend in a depression in an unorthodox manner because he understood enough about purchasing power and the importance of demand, but he did not understand the real causes of the depression or was mired in orthodoxy about the nature of money, which is that it is a claim on wealth, not wealth itself. Therefore all he did was treat the symptoms, spending unorthodoxly to treat the symptoms but did so with money borrowed from the banks in the usual way. This meant that the New Deal ran up the national debt to the credit of the banks and spent money in such a limited way that no significant reemployment of idle resources was possible.

What led to recovery? Federal spending on war, both hot and cold. This set the stage for Civil War II. Who gets control of the public treasury?

Two major claimants slithered out from under the inflation-plagued pluralistic economy. The old vested interest, finance, and another old vested interest allied with a new one, petroleum and defense.

The failure to grasp the nature of money and the function of the monetary system remaining in the postwar period led to an inflationary crisis. Finance offered a remedy: austerian neoliberalism. Oil and defense offer no remedies but work so that there will be no peace dividend. If oil and defense represent anything, it is unwise use and acquisition of resources. This is a debility which they share with the rentier elite that got rich from gutting public infrastructure and outsourcing. I have mixed feelings about the coming stock market implosion. None of it has anything to do with domestic productive capacity. Under the plutocratic rule of compulsively acquisitive speculators who understand only market value instead of real value, the West's working classes are descending into a vortex of insecurity and subjugation. The cheap energy and plastic crap they have relied on for 40+ years are getting more expensive, and the entertainment more lurid and worthless. Rome got 400 years out of bread and circuses, but history has accelerated. Is it because our enemies updated their cyclical theories of history and are using them against us? Will the West surprise them with the sort of uprising Marx hoped for? The West has jumped s-curves before in spite of the pessimism characteristic of declining ages. A fashionable pessimist himself, Spengler overlooked this fact. It was all a single line to him.