The final part of this post looks at J. G. Fichte's redefined concepts of property, labour, the nature of our rights to them, and their culmination in the theory of the "closed commercial state". To pick up from the end of part II, for Fichte it was only through lawful
intersubjective agreements that human beings could acquire the
right to property. As mentioned, Fichte's definition of
property differs fundamentally from that of most natural law theorists,
and does so precisely by being oriented not toward an object one would (like to) possess, but toward other human beings
with potentially competing claims over that object. In an unregulated
state of nature, everyone exercises their freedom without restraint.
Fichte describes the consequences (CCS, pp. 91-2: I have altered a few things in Adler's translation):
This not only "saves us from a multitude of useless subtleties" surrounding the question of what it means, ontologically, to "possess" something when one is not using it, or perhaps when one never has or never will use it; it also has a number of positive consequences, both philosophical and practical. These are particularly evident when dealing with relationships with land, already examined (from a colonial perspective) in part I of this post. The existence of commons, or common ownership, is easy to account for on Fichte's model, since it is not necessary for territory to be enclosed or occupied, or even abstractly regarded as "belonging" to someone absolutely, in order for them to practice certain activities on it or use it in certain ways. Such rights were commonplace in medieval Europe, and though steadily eroded through the enclosure of commons (above all in England), they survived in a few areas. One such is the New Forest in Hampshire: my father recalls that the deeds for his grandparents' property in the New Forest still mentioned the traditional rights of "turbary and pannage" - rights of commoners to cut turf and graze pigs on fallen forest acorns. Pannage, or "common of mast", both feeds pigs cheaply and naturally and has benefits for the soil and other livestock (such as cattle and ponies, for whom the acorns are poisonous in quantity).
The right to collect firewood, or estovers, was of course one of the most widespread such rights, guaranteed ever since the Charter of the Forest, signed in 1217, two years after its companion document, the Magna Carta. Bodies of water adjoining a number of plots of land are still treated, quite logically, according to the various uses that can be made of them in the system of riparian rights (from Lat. ripa = bank).
Just as significant as tolerance of the commons was Fichte's explicit lack of prejudice in favour of certain uses of land, above all intensive European styles of agriculture - again, a "major divergence from earlier property theories...like those of Grotius or Locke" (Nakhimovsky, p. 147). Clearing forests for cultivation might seem like the most rational use of territory to a Western settler, but to an indigenous hunter, who "knows them and all the conveniences they afford", it was a curtailment of property rights no less severe than full-scale enclosure: "One cannot displace or level the trees in his woods without rendering useless all the knowledge he has acquired (thus robbing him of it), without impeding his path as he pursues game (thus making it more difficult or impossible for him to acquire his sustenance), that is, without disturbing the freedom of his efficacy" (Fichte, Foundations, p. 106).
The implications for New World contexts in particular surely do not need spelling out. The death of entire ways of life based around the buffalo among the Plains Indians, and annexation of their territory, resulted from applying a hierarchy of rational, ultimately capitalist, uses for land that was already foreshadowed by Locke; it also consummated an idea of land as absolute property that was utterly alien to many native Americans. For Tecumseh of the Shawnee people in 1810, the idea of a land purchase was nonsensical - the only way forward was "for all the Redmen to unite in claiming a common and equal right in the land, as it was at first and should be yet; for it was never divided, but belongs to all for the use of each. That no part has a right to sell, even to each other, much less to strangers - those who want all and will not do with less. The White people have no right to take the land from the Indians... There cannot be two occupations [settlements] in the same place... It is not so in hunting or travelling, for there the same ground will serve many" (cit. in T. C. MacLuhan, Touch the Earth: A Self-Portrait of Indian Existence (New York: Pocket Books, 1972), p. 85).
Yet the Native American example also highlights what happens when property is traded and contracts are drawn up outside the framework of a state, and in a situation of power inequality between the two parties: contracts are broken. The surviving statements of chiefs such as Tecumseh bring a litany of complaints against the untrustworthiness of the white man, his propensity to make agreements and then cast them aside. On the other side of the globe, the same complaints were uttered by Indian princes against the British, and the commonality should not surprise us: this is simply how colonialism works. Brute-force conquest was neither a necessary nor the most effective path to domination of the West's racial others. The semblance of legitimacy at which they aimed relied instead on exchanges, purchases, "mutually beneficial" arrangements - which could always be altered after the fact to suit the interests of the more powerful party. (Sometimes they needed to be altered if another competitor turned up and upset the terms of the contract, something which Fichte already foresaw as a theoretical possibility: "Outside of a state, I will certainly preserve, through my contract with my closest neighbour, a property right against him, just as he would likewise have a property right against me. But if some third person were to come along, he would not be bound by our negotiations" (CCS, p. 92).)
However, the most uniquely insightful corollary of Fichte's theory of property did not seek to rectify the injustices of European conceptions of it with respect to indigenous peoples, but rather as those injustices affected the labouring classes of European society itself. We can begin with the least problematic category of such labourers, independent subsistence farmers, for whom the implications of Fichte's "activity" theory and the conventional "object" theory of property are more or less congruent. The farmer has the right to (work) his own land, and in return for being content with it and no more than it, expects everyone else to respect his right to live therefrom. As soon as we move to a more developed or varied form of economy characterized by a division of labour, however, things become less clear. What of those labourers who do not own land? "What...is the exclusive property of the one who is not a farmer, of the manufacturer or merchant? What did they accept in return for ceding to the farmer the exclusive right to the property of the land?" (CCS, p. 133). For if they have nothing comparable, notes Fichte, then the reciprocal structure of agreement or mutual renunciation that must characterize intersubjective property rights cannot be maintained. (Note that historical prior ownership of land is not acknowledged in Fichte's system, whose Idealist nature lies precisely in the attempt to theorize political-economic relations a priori from a standpoint of pure justice: or as he puts it, one must at least "suppose...that the entire duty of the government doesn't exhaust itself in guarding over everyone's private hoard...and in keeping those who have nothing from gaining anything" (CCS, p. 108).)
Here, then, the state must step in. It is in its interest - in the interests of the population as a whole - that traders and artisans contribute to the wealth of the community; it should not willfully disadvantage them, or else they might emigrate, and employ their skills abroad. If the state can guarantee the farmer his exclusive right to work his land now and in perpetuity, then it ought to guarantee someone in another branch of the economy the same right to present and future subsistence flowing from their labour. "What can the state...give to him? Clearly, only the guarantee that he will always be able to find work or sell his goods, and that in return for these he will receive his due share of the goods of the land. It is with this assurance that the state first binds him to itself" (ibid.).
How can it provide such a guarantee? Clearly, the mutual exchange of goods and services provided by the various branches of the economy will be facilitated by a currency. If the relative value of agricultural produce, trade and manufactures can be stated in monetary terms, then the manufacturer knows how many pins or clocks he must make in order to earn enough money to eat - for the immediate future. That this is not a guarantee in any more permanent sense is immediately apparent when one considers the consequences when more citizens decide to become pin manufacturers or horologists. Again, there is nothing in a free economy to prevent them doing so. But if they do, the supply of pins and watches may outstrip demand, prices will fall, and the same work will bring in less money - perhaps no longer enough money to eat.
Within the economy of a single state (or city), there is a simple, essentially precapitalist (or pre-liberal capitalist) solution to this: create guilds. Guilds of merchants (as in the City of London) or of manufacturers received exclusive privileges to practice their trade, passed on trade secrets, checked the quality of goods, imposed long apprenticeships on those wanting to learn a craft, and by these and other means ensured that the number of those engaged in their branch of the economy could not suddenly expand. The guild system, which remained strong in Germany well into the 19th century, must have been part of the background to Fichte's reasoning when he continued from the passage quoted above: "The state cannot guarantee these things [the continuation of work for merchants and manufacturers] if it does not close off the number of those who may conduct the same branch of labour... Only through this closure does a branch of labour become the property of the class of its practitioners...and it is only in return for being granted this as their property that they could renounce the property of the land-cultivating class" (ibid.).
Yet this is still not enough to serve as the sought-for "guarantee" - and it is at this point that we finally arrive at the necessity for the "closed commercial state", toward which Fichte's whole argument has been pointing. An adequately planned national economy - and Fichte's sketch of ideal economic relations in part I of his treatise is one of the first modern visions of the planned economy - can in theory adjust both prices and access to work in the various branches of labour in order to ensure the balance and satisfaction of both consumption and employment. To what extent this can be managed in practice without friction, miscalculation or compulsion can remain moot; the point is that, to the extent that it is possible, it is only so within the limited bounds of a single state, which can oversee (and enforce) all the various contractual obligations within its territory. As soon as foreign producers or consumers are involved, as in free international trade, the situation becomes unmanageably complex and unstable (CCS, p. 107):
The material causes of such instability are not hard to imagine, or indeed to reconstruct from history. Trade and supply chains may be disrupted by war, for instance (one thinks of the impact on English textiles of the American Civil War, breaking the supply of raw cotton), or a foreign state may decided to substitute a particular import, investing in its domestic growth or manufacture and no longer requiring trade with one's own state in order to supply it.
However, Fichte was particularly concerned with a more "ideal" and less concrete cause of instability: the use of specie, or gold and silver coins, in international trade. For from the perspective of economic justice, money ought to be used only to mediate and represent the contracts existing between those engaged in different occupations: with the ten coins I have earned from producing pins, I can buy x amount of coffee beans, or y copies of the local newspaper. The newspaperman can then buy a quantity of pins from me in return. If the amount of money in circulation does not fluctuate, then this quantity can be fair and proportionate: the total amount of currency corresponds to the total material wealth of the country, and the ten coins spent on newspapers represent a small but certain proportion of that. Yet if those coins are silver coins, recognized and circulating abroad (where they can be exchanged for coffee beans), then it is less evident what the total sum of wealth is to which their sum total would correspond, and thus what they represent a proportion of. It is also beyond the power of the state to influence either how much of this silver currency exists in general (the discovery of silver mines, such as those of Potosi in Bolivia in the 16th century, is a not-to-be-underestimated factor of importance in world history), or how much remains within its borders. Private individuals and companies may use it to conduct transactions with foreigners - transactions which (to recur to Fichte's theory of property) constitute or refer to contracts of property rights which, however, stand under the jurisdiction of no single government.
The unstable relationship the use of specie creates between national wealth and foreign trade is one I have already explained in an earlier post, in analyzing the mechanism of the gold standard that came (despite Fichte's opposition) to underpin international trade during the Pax Britannica of the nineteenth century. However, the key factor that magnifies this instability, leading to the competitive and even militarized "jealousy of trade" described earlier in part II of this post, is the relationship between governments (not merely the wealth of their citizens) and the flows of international trade - a relationship established as soon as those governments collect taxes in gold and silver. As Fichte explains, it is only logical that they should do so, "since they pay residents and foreigners alike only in this currency, as if they have no closer relation to the former than to the latter" (CCS, p. 147):
It is the indirect yet intimate relationship between the interests of governments and their (commercially active) citizens which characterizes the politics of liberalism - and of colonialism. Free individuals bring in wealth on their own account, through private enterprise, which just happens to benefit the government too, through taxes. Fichte goes on to explore what happens if the national wealth of one state expands, as will often be the case, to the detriment of another: if it achieves a surplus in the balance of trade, attracting more money from the other state through advantageous exporting than it spends on imports. In classical theory (as explained in part II of my Polanyi post), this money would then be spent on luxury imports and released into circulation again, restoring the balance of trade. Yet the proportion of the surplus taken in taxes can be used for quite a different purpose, hinted at by Fichte: "the government of such a [rich] nation, following the maxim to take as much as it can, will take the profit from foreign trade and use it to hire foreign forces toward its own ends" (CCS, p. 149) - it will invest in (military) means to increase its power of coercion over its commercially weaker neighbour. That neighbour, meanwhile, will have smaller tax revenues to fund its own army and industry, and will be forced to look around for expedients in order to prevent an ever-increasing deficit. With less and less money circulating within its borders, it is increasingly unable to guarantee those contracts with its own citizens that preserve their hope of a livelihood. Fichte paints the consequences in vivid, but also perfectly realistic terms - for what he describes here actually happened in territories across the world exposed to colonial power during the 17th-19th centuries, from Ireland to Africa and India (CCS, pp. 150-51):
From a modern liberal perspective, colonialism can be interpreted as one (morally reprehensible, but accidental) means by which capitalism operated in history; it was scarcely a necessary consequence of international free trade. Yet from Fichte's perspective it was just that. The vice-like double pressure of military and economic power ensured that advantage in trade could, and would, be converted into colonial domination. Indeed, in a later text, the (in)famous Addresses to the German Nation (1806), Fichte even suggests that the central political process of modern European history, the formation of the modern state, was catalyzed by colonial competition, or what he calls "the rape of other continents - the event which more than any other has determined the course of recent world history, the destinies of peoples and the greater portion of their ideas and sentiments" (Fichte, Addresses to the German Nation, ed. and trans. Gregory Moore (Cambridge University Press, 2008), p. 167). (One would struggle to find another European historian or political analyst between Fichte's own time and the last few decades of postcolonial theory who would have been prepared to put the colonizing process center-stage in world history as plainly, and negatively, as that.) As globally active competitors to the Spanish Habsburg empire emerged - the English in the 16th century, then the Dutch in the early 17th, then the French in the later 17th - the European political landscape evolved from one dominated by dynastic and religious considerations, in which the dream of uniting Christian Europe had still not been renounced, to one in which "jealousy of trade" and the balance of power between permanently independent, sovereign states was decisive. That situation was acknowledged in the 1648 Peace of Westphalia, the basis for the modern European state system; but only after German territory had been utterly ravaged and divided by the Thirty Years' War, prolonged by France and Sweden in order to weaken Spain. Fichte and other German thinkers had good reason to resent the influence of the great European colonial powers not just abroad, but also at home.
Fichte's remedy for these evils was that the state must close itself off commercially, as it had already done juridically - for the administration of justice could not be consistent while each state was vulnerable to the commercial depradations of foreign powers. The system of specie, of universal commodity money, should be abandoned, since it rested not on principles of material economic justice - the rational division of economic activity and proportionate sharing of the wealth it produced - but on opinion. No one can be sure what a silver coin is really worth (and indeed it was worth differing amounts in different places depending on scarcity - the price of silver in China being usually higher, for instance), because no single authority controls it and can proclaim its value. Rather, as Fichte's translator Adler explains, "it matters not so much what we think the value of gold and silver to be as what others think this to be. We must believe that others will continue to value it and accept it in exchange for their goods, and thus that these will in turn believe the same of others, and so forth. In this way, indeed, money involves a structure of infinite reflection; an order where value is constituted through an ultimately groundless infinite regress and refraction of opinion" (CCS, "Interpretive Essay", p. 43). The speculative character of international money-markets does not require derivatives and other complex financial instruments in order to manifest itself: it is already manifest in the very idea of an internationally valid money or "floating" means of exchange circulating beyond a country's borders - whether that be gold or petrocurrency.
In place of gold and silver, Fichte suggested a new, national currency, which would openly be instituted and used as a sign of wealth, rather than itself a commodity. Furthermore, it would, like the conventional signs of a national language, only be "understood" or accepted within the boundaries of one country; it would not circulate at all outside those boundaries, and neither gold and silver nor any other currency would be accepted for tax purposes (or ultimately any transaction) within them. (Rather mysteriously, Fichte says that this would not be a paper currency, but made of another, undisclosed substance - CCS, pp. 174-5; the secrecy was apparently practical, to prevent hoarding or forgery attempts in case the Prussian government really acted on Fichte's proposals!) In order to protect this currency from deflation, devaluation or other undesirable consequences attendant on its exchange for either specie or other national currencies on international money-markets, it would simply not be exchangeable for these - and would not need to be, for it would be the only currency needed by its citizens, and would be useless to everyone else. A truly conventional or symbolic currency, acting only as a representation of wealth to be exchanged, and backed (and stabilized) in that function by a single state authority with the power to enforce the legal contracts to which it corresponded, would inevitably and naturally correspond to a closed commercial state. Indeed, its introduction would (as Fichte explores in part III of his treatise) be the practical means by which the state would begin to close itself off commercially from the rest of the world.
To many readers (if this blog has many readers), this "solution" will sound like a disaster - like an early 19th-century version of Brexit; like North Korea, like East Germany - like every kind of misguided nationalism and socialist utopianism mixed together into one ideologically calamitous muddle of an economic policy. Perhaps it worked for Edo Japan, fine; but what possible application could it have in a technologically developed, multicultural modern state? (And where are we going to get our coffee from?!) In fact, Fichte's proposal is not one of absolute economic - or geographic, or cultural - isolationism: for geographically limited produce such as wine (or coffee) he was prepared to allow a system of government-arranged barter or bilateral trade agreements (wine for grain e.g.); citizens would be allowed some opportunities to travel; while for "the scholar and the higher artist" travel and exchange would be both necessary and encouraged, as the spread of their endeavours was ultimately "for the benefit of humanity and the state" (CCS, p. 193). International cooperation on matters of scientific or technological (or in our age in particular, environmental) common interest was not in any way excluded from Fichte's model: indeed he hoped it would be encouraged, through not being disrupted further by jealous protectiveness and competition. Rather his intention was simply to prevent the economic interactions of private citizens and companies with those abroad from undermining the state's ability to guarantee justice for all within its boundaries.
Fichte's "closed commercial state" does require superficial restrictions on individual freedom, it is true - but what his critics (such as Isaiah Berlin, who included Fichte as one of his "six enemies of human liberty") generally miss is that those restrictions issue logically from a deeper philosophical concern for such freedom; it was simply one balanced (as Berlin's own was not) by an equally deep concern for justice and equality. Why should certain members of a society be free to acquire ostentatious luxuries from abroad, while others live in fear of losing their job and their livelihood? Having been born into a poor weaver's family, Fichte was very aware of class differences and the different economic opportunities that came with them. "That frivolity which is more concerned with the enjoyment of the present moment than with the security of the future", or the freedom to speculate and gain "accidental profits" (CCS, p. 198), seemed less valuable forms of liberty to him than the right "to live on the earth as easily, as freely...in as truly human a way, as nature will permit. Man...should labour without fear, with pleasure and joy, and have time left over to raise his spirit and eye to the heavens, which he has been formed to behold" (CCS, p. 110). Unlike liberal thinkers, Fichte did not think it beyond the political philosopher's task to define what the "essential state of prosperity" consists in: "the most truly human pleasures with the least difficult and time-consuming labour. This should be the state of prosperity of the nation as a whole and not only of a few individuals" (ibid.).
The realization of such values does not need to look as extreme as one might think from reading Bertrand Russell, who called Fichte's philosophy one of "nationalistic totalitarianism" (A History of Western Philosophy, p. 745). German resistance to British-backed ideas of free trade did play a role in the creation of German nationalism, to be sure - but in the comparatively mild form of Friedrich List's "economic nationalist" doctrine, whose immediate practical consequence was a piece of bureaucracy: the German customs union (Zollverein) of 1833. As List perceived, the lack of German political unity, which had detrimental effects on trade across German territories due to the multiplicity of customs barriers, could be compensated by a partial economic unification, consolidating the German states into a single customs area. This also served to protect German industry against the strength of British competition: an application of List's own theory of protectionism, or the "infant industry argument", in which the "closed commercial state" would only be a limited phase in the development of a nation's industry to the point where it was strong enough to compete on international markets. That argument is now seen as quite legitimate by a number of economists, including Ha-Joon Chang: it was, after all, only what Britain and the US did before they became powerful enough to do without it.
That is not the only hidden continuity between German Romantic economics and British history, however. As is noted by Nakhimovsky (pp. 171-3) many of Fichte's priorities were in fact shared by British thinkers who guided post-WWII British social and economic policy, such as J. M. Keynes and William Beveridge. Beveridge is of course best known as the intellectual father of the welfare state, the author of the 1942 Beveridge Report whose proposals (including the establishment of the National Health Service) were implemented by the Attlee government of 1945. Yet his 1944 report Full Employment in a Free Society stressed that the state had to go beyond insuring the material welfare of those in need (through National Insurance, social security and universal healthcare). Once Britain had secured "Freedom from War" through victory and the building of a lasting peace, it would need to add to this not only "Freedom from Want", but also "Freedom from Idleness" - so "that each man and woman, so long as he or she is able to work and serve and earn, shall have the opportunity of doing so" (p. 3). The crippling rates of unemployment during the inter-war period - which peaked at 22% in 1932 - should never be allowed to return.
For Beveridge, "income security by itself would not produce a good society... Employment security is needed as well" (p. 4) - something which, he pointed out, had been one of his assumptions in framing the 1942 proposals for social security in the first place. This was true for "spiritual" and not just material reasons: the long-term unemployed were inevitably "dishearted, demoralised, made to feel useless" as a result of their situation, while even just the "fear of unemployment...made every man seem the enemy of his fellows in a scramble for jobs and led to...hatred of foreigners, hatred of Jews, and enmity between the sexes" (p. 6). Demand for labour was of course created by spending, and so a consistent demand for labour, such as would be necessary to ensure full employment, would need consistency in spending. Among the four factors Beveridge identified as enabling this, the two most important were a planned economy (though it need not be fully state-controlled, as in Fichte's proposals or Soviet communism), and a balanced flow of trade with foreign countries. The latter, Beveridge acknowledged, could only be absolutely guaranteed by the "bilateral" or barter system (proposed, as we have seen, by Fichte), according to which "goods and services supplied as exports by country A to country B must be paid for by the export of equivalent goods and services from country B to country A... Under strict bilateralism the accounts of each pair of countries must balance" (pp. 36-7). Multilateral trade, if it were to be permitted, could only be undertaken with other countries aiming at similar economic goals to Britain's: for unless they were also concerned to preserve stability and full employment, then fluctuations in spending and the supply of labour could threaten the entire system.
Presciently, Beveridge warned that the success of the new system of international trade established that very year at the Bretton Woods Conference would not "depend on...technical details...such as the size of an international monetary fund...[but] on the economic policies of the different countries" (p. 37). They must all "pursu[e] at home a policy of full employment"; they must aim to "balance...accounts with the rest of the world", rather than allow lasting surpluses or deficits; and they must "displ[ay] reasonable continuity and stability in commercial policy" (ibid.). In a longer historical perspective, we can see these tenets as protecting against the aggressive trade policies of an earlier era - the era of high colonialism, unrestricted liberal capitalism and "jealousy of trade". In the shorter term, however, they were already being subtly undermined. When Keynes tried to institutionalize the second of these policies at Bretton Woods in the form of the International Clearing Union, his proposals were shot down by the US delegation under Harry Dexter White. Instead of Keynes's ICU, which would have provided incentives for richer countries to reduce their trade surplus, the institution that emerged to regulate exchange rates in the post-war economy was the International Monetary Fund, or IMF.
The
problems with the IMF have been highlighted repeatedly in debates over
the injustices of neoliberal globalization. Yet on Fichte's account of
economic justice, none of these problems should really be surprising -
for none of the "contracts", debt agreements and free trade treaties
facilitated by the IMF, the World Bank and other international financial
organizations fall under the jurisdiction of any one state, and thus
the most powerful party to these contracts, which remains, as at the
IMF's foundation, the United States, can always decide to treat them as
it did its contracts with the Native Americans. Ever since White got the
better of Keynes in 1944, international finance has been arranged in
the interests of its - diplomatically and militarily - most powerful
player. We will perhaps see in the immediate future what happens when
the US itself tries to rewrite the rules; but when a less powerful,
formerly colonized country tries the same, or refuses the "help" offered
by the IMF, things get ugly - as in the case of Burkina Faso. Renamed
as such by its Marxist revolutionary president Thomas Sankara
in 1983, it refused IMF loans and set out to be self-sufficient in food
production - a task it achieved within four years. Radical
nationalization, land redistribution, reforestation, fighting AIDS,
women's liberation and numerous other initiatives were realized in the
same brief space. Then Sankara was assassinated, in 1987. His successor Blaise Compaoré
returned Burkina Faso to the international fold, and dependence on IMF
and World Bank loans. As of 2015 it was one of the least developed
countries in Africa, ranking 45th out of 48 on the Human Development Index.
Just like slavery, then, colonialism has not gone away - it has just assumed new forms. Fichte's analysis of its connections with liberal trade remain relevant, even if his economic analysis lacks the depth and complexity of Marxist theory (the roles of technology or capital investment and interest are untouched in Fichte's treatise). One only needs to update a few things to see the parallels: how the position of those who own land in Fichte's analysis (and whose rights thus cannot be disturbed by shifts in trade and industry) is duplicated by those owning property and capital reserves today, earning steady streams of interest on accumulated wealth without any of the "free activity" Fichte so prized; how those dispossessed of land or property or capital are increasingly denied the dignity of stable work as well, becoming what Marx and Engels called the "reserve army of labour" essential to capitalist expansion - an army which (like real armies) Fichte wished to abolish. Michael Rosen rightly sees Fichte as the "ancestor of the hostility to the international market that we find in modern anti-globalization activists" - though his conclusion on The Closed Commercial State, that in theorizing economics "Fichte was simply out of his depth", is I hope somewhat qualified by the evidence I have offered here.
Rather than as hopelessly idealistic, in fact, we should see Fichte's analysis as in important senses realistic - though a realism (somewhat paradoxically) enshrined in the ethical attitudes of German Idealism discussed above. As we saw, in the eighteenth century it was St. Pierre's idea that a European Union could banish war and competition that looked unrealistic; and in a deeper sense, it still is. Fichte's insight was that guarantees of economic stability and justice can only be given both legitimately and effectively by individual, sovereign, democratic states, which are the only trustworthy guarantors of Recht, or "rights" taking the form of law. In every other form of contractual arrangement, the most powerful party (in the EU at present, Germany; in the world, the USA) will enforce its advantage, and will not stop at immiserating other countries' populations and deposing or assassinating their leaders in order to do so.
To return to the starting-point of this post, the vexed issue of Britain's place in or out of Europe, one must acknowledge that in one important respect, the Brexiteers are right. The logical end-point of the EU project is a European super-state. Anything less is both unstable and unjust. Hont points to the problem of "making state and market congruous", one "tackled [in Europe] by the remarkable creation of the European Union. The severity of the congruity dilemma, however, is demonstrated by the fierce debate over whether the European common market should develop into a common European state. The globalization debate of today is essentially about the same congruity problem, but on a world scale" (Jealousy of Trade, p. 155). Either we scale up democratic regulation, or we roll back free trade: the third way, the status quo, is (to quote George Monbiot in a recent comment piece on President Trump's scotching of the G7) a corrupt and hypocritical "stitch-up". There is no point inveighing against "populism", when the economic demands underlying both Brexit and the election of Donald Trump correspond to an ethical principle we are forced to recognize as soon as we face it squarely: that people have a right to work, as much as (if not more than) they have a right to consume.The current international order denies increasing numbers that primary right.
The problem with Brexit and Trump is thus not principle, but the timing, origin, and manner of its translation into practice. If both disruptions to the status quo have succeeded and drawn global attention (thus far) it is because they emerge from powerful nations, and from communities that feel identified with the ethnic core of those nations. States of the global South who have really suffered from neoliberal globalization cannot make such effective protests against it. In immediate practical terms, too, withdrawing Britain from the EU is likely to be highly detrimental to both consumers and producers. Yet immediate consequences should not stop us discussing the bigger picture, even when the two perspectives diverge - a consideration I feel returning over and over again when contemplating current affairs. In the short term, for instance, it is clearly a bad thing if the economy does not grow: lack of growth leads to recession, and recession is not just bad for business but increases poverty and suffering among the most vulnerable in society. Not even the most ardent socialist wants that. But in the long term, the economy cannot continue to grow ad infinitum without depleting the planet's resources, and distorting social and individual psychology by making us dependent on an ever greater range of commodified goods. None of us, I hope, want that either. We are perfectly ready to castigate our politicians tomorrow for mismanaging the economy as measured by the latest GDP statistics; yet if we think about the economy over the perspective of a lifetime, we ought to realize that GDP statistics, and the unstoppable one-sided growth they promote, are a chimera.
So it is with Brexit. Voting against it was voting to stop an imminent act of national self-harm; but voting for it was also acquiescing to the continuation of a system that causes longer-term harm, through the violence of its immanent contradictions. Whether the resolution of those contradictions should be the (Westphalian) nation-state or a European super-state is a question I will bypass for now. What is evident is that, in addition to being environmentally unsustainable, a system of unrestricted intercontinental free trade is also ethically and democratically deficient. That is a realization we could, potentially, act on; bemoaning the stupidity of voters or the deviousness of their leaders is not. The point, which as I see it was the point of Kant and Fichte's meditations two centuries ago, is that principles need translating into regulations, ethics into law, justified sentiments into reasoned action. Otherwise those sentiments of injustice and resentment driving the current crisis (but also embodying the possibility of its resolution) will explode the hypocrisy of the liberal-democratic consensus - and in politics too, explosions are dangerous.
"A crowd of men live together within the same sphere of influence. Each one stirs and moves about within this sphere, freely pursuing his nourishment and pleasure. One of them crosses the path of the other, tears down what the other had built, and either destroys or uses for himself what the other was counting on. The other, from his side, does the same; and so each acts toward each. One should not speak here of morality, fairness, and the like... Nor however does the concept of Right let itself be applied in the circumstances we have just described. Obviously, the soil that has been trod upon, the tree that was robbed of its fruit, will not enter into a conflict over rights with the man who did these deeds. But even if another man were to do so, what reason could he offer why everyone else should not tread on the same soil, or take fruit from the same tree, as he himself?What is important here, in the second paragraph particularly, is that the "something" to which one has a right is not so much a "thing" as an action: "it harms me when you do this". Fichte soon makes this explicit - the object of the contract is not a thing considered as an absolute possession, something which one can dispose of in any way one likes, but an activity involving a thing (CCS, pp. 92-3):
In this state of existence, no one is free, since all are free without limitation. No one can carry out anything in a purposeful fashion and count for a moment on it lasting. The only remedy for this conflict of free forces is for the individuals to negotiate contracts among themselves. One of them must say to the other: it harms me when you do this. And the other must answer him: it harms me, on the other hand, when you do this. The first must declare: then I'll desist from the things that are harmful to you on the condition that you desist from the things that are harmful to me. And the second, from his side, must make the same declaration, and from now on both must keep their word. For the very first time now each has something that is proper to him, that is his own, belonging to him alone, and in no way to anyone else; a right, and an exclusive right.
Property, rights to something in particular, prior rights, and exclusive rights arise solely from the contract that was described. Originally all have the same right to everything, which means that no one's right takes precedence over the right of anyone else. Something only becomes my property when, in accordance with my desire to keep it for myself, everyone else renounces their claim to it. This act of renunciation by the others, and this alone, is the basis of my right."
"I have described the right to property as an exclusive right to acts, not to things. So it is... Free activity is the seat of the conflict of forces. Hence, it is free activity that is the true object concerning which the conflicting parties negotiate contracts. In no way are things the object of the contract. The ownership of the object of a free act first issues and is derived from the exclusive right to a free act."
This not only "saves us from a multitude of useless subtleties" surrounding the question of what it means, ontologically, to "possess" something when one is not using it, or perhaps when one never has or never will use it; it also has a number of positive consequences, both philosophical and practical. These are particularly evident when dealing with relationships with land, already examined (from a colonial perspective) in part I of this post. The existence of commons, or common ownership, is easy to account for on Fichte's model, since it is not necessary for territory to be enclosed or occupied, or even abstractly regarded as "belonging" to someone absolutely, in order for them to practice certain activities on it or use it in certain ways. Such rights were commonplace in medieval Europe, and though steadily eroded through the enclosure of commons (above all in England), they survived in a few areas. One such is the New Forest in Hampshire: my father recalls that the deeds for his grandparents' property in the New Forest still mentioned the traditional rights of "turbary and pannage" - rights of commoners to cut turf and graze pigs on fallen forest acorns. Pannage, or "common of mast", both feeds pigs cheaply and naturally and has benefits for the soil and other livestock (such as cattle and ponies, for whom the acorns are poisonous in quantity).
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| Knocking down acorns to feed swine (14th c.) |
The right to collect firewood, or estovers, was of course one of the most widespread such rights, guaranteed ever since the Charter of the Forest, signed in 1217, two years after its companion document, the Magna Carta. Bodies of water adjoining a number of plots of land are still treated, quite logically, according to the various uses that can be made of them in the system of riparian rights (from Lat. ripa = bank).
Just as significant as tolerance of the commons was Fichte's explicit lack of prejudice in favour of certain uses of land, above all intensive European styles of agriculture - again, a "major divergence from earlier property theories...like those of Grotius or Locke" (Nakhimovsky, p. 147). Clearing forests for cultivation might seem like the most rational use of territory to a Western settler, but to an indigenous hunter, who "knows them and all the conveniences they afford", it was a curtailment of property rights no less severe than full-scale enclosure: "One cannot displace or level the trees in his woods without rendering useless all the knowledge he has acquired (thus robbing him of it), without impeding his path as he pursues game (thus making it more difficult or impossible for him to acquire his sustenance), that is, without disturbing the freedom of his efficacy" (Fichte, Foundations, p. 106).
The implications for New World contexts in particular surely do not need spelling out. The death of entire ways of life based around the buffalo among the Plains Indians, and annexation of their territory, resulted from applying a hierarchy of rational, ultimately capitalist, uses for land that was already foreshadowed by Locke; it also consummated an idea of land as absolute property that was utterly alien to many native Americans. For Tecumseh of the Shawnee people in 1810, the idea of a land purchase was nonsensical - the only way forward was "for all the Redmen to unite in claiming a common and equal right in the land, as it was at first and should be yet; for it was never divided, but belongs to all for the use of each. That no part has a right to sell, even to each other, much less to strangers - those who want all and will not do with less. The White people have no right to take the land from the Indians... There cannot be two occupations [settlements] in the same place... It is not so in hunting or travelling, for there the same ground will serve many" (cit. in T. C. MacLuhan, Touch the Earth: A Self-Portrait of Indian Existence (New York: Pocket Books, 1972), p. 85).
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| Chief Tecumseh of the Shawnee, early 19th c. |
Yet the Native American example also highlights what happens when property is traded and contracts are drawn up outside the framework of a state, and in a situation of power inequality between the two parties: contracts are broken. The surviving statements of chiefs such as Tecumseh bring a litany of complaints against the untrustworthiness of the white man, his propensity to make agreements and then cast them aside. On the other side of the globe, the same complaints were uttered by Indian princes against the British, and the commonality should not surprise us: this is simply how colonialism works. Brute-force conquest was neither a necessary nor the most effective path to domination of the West's racial others. The semblance of legitimacy at which they aimed relied instead on exchanges, purchases, "mutually beneficial" arrangements - which could always be altered after the fact to suit the interests of the more powerful party. (Sometimes they needed to be altered if another competitor turned up and upset the terms of the contract, something which Fichte already foresaw as a theoretical possibility: "Outside of a state, I will certainly preserve, through my contract with my closest neighbour, a property right against him, just as he would likewise have a property right against me. But if some third person were to come along, he would not be bound by our negotiations" (CCS, p. 92).)
However, the most uniquely insightful corollary of Fichte's theory of property did not seek to rectify the injustices of European conceptions of it with respect to indigenous peoples, but rather as those injustices affected the labouring classes of European society itself. We can begin with the least problematic category of such labourers, independent subsistence farmers, for whom the implications of Fichte's "activity" theory and the conventional "object" theory of property are more or less congruent. The farmer has the right to (work) his own land, and in return for being content with it and no more than it, expects everyone else to respect his right to live therefrom. As soon as we move to a more developed or varied form of economy characterized by a division of labour, however, things become less clear. What of those labourers who do not own land? "What...is the exclusive property of the one who is not a farmer, of the manufacturer or merchant? What did they accept in return for ceding to the farmer the exclusive right to the property of the land?" (CCS, p. 133). For if they have nothing comparable, notes Fichte, then the reciprocal structure of agreement or mutual renunciation that must characterize intersubjective property rights cannot be maintained. (Note that historical prior ownership of land is not acknowledged in Fichte's system, whose Idealist nature lies precisely in the attempt to theorize political-economic relations a priori from a standpoint of pure justice: or as he puts it, one must at least "suppose...that the entire duty of the government doesn't exhaust itself in guarding over everyone's private hoard...and in keeping those who have nothing from gaining anything" (CCS, p. 108).)
Here, then, the state must step in. It is in its interest - in the interests of the population as a whole - that traders and artisans contribute to the wealth of the community; it should not willfully disadvantage them, or else they might emigrate, and employ their skills abroad. If the state can guarantee the farmer his exclusive right to work his land now and in perpetuity, then it ought to guarantee someone in another branch of the economy the same right to present and future subsistence flowing from their labour. "What can the state...give to him? Clearly, only the guarantee that he will always be able to find work or sell his goods, and that in return for these he will receive his due share of the goods of the land. It is with this assurance that the state first binds him to itself" (ibid.).
How can it provide such a guarantee? Clearly, the mutual exchange of goods and services provided by the various branches of the economy will be facilitated by a currency. If the relative value of agricultural produce, trade and manufactures can be stated in monetary terms, then the manufacturer knows how many pins or clocks he must make in order to earn enough money to eat - for the immediate future. That this is not a guarantee in any more permanent sense is immediately apparent when one considers the consequences when more citizens decide to become pin manufacturers or horologists. Again, there is nothing in a free economy to prevent them doing so. But if they do, the supply of pins and watches may outstrip demand, prices will fall, and the same work will bring in less money - perhaps no longer enough money to eat.
Within the economy of a single state (or city), there is a simple, essentially precapitalist (or pre-liberal capitalist) solution to this: create guilds. Guilds of merchants (as in the City of London) or of manufacturers received exclusive privileges to practice their trade, passed on trade secrets, checked the quality of goods, imposed long apprenticeships on those wanting to learn a craft, and by these and other means ensured that the number of those engaged in their branch of the economy could not suddenly expand. The guild system, which remained strong in Germany well into the 19th century, must have been part of the background to Fichte's reasoning when he continued from the passage quoted above: "The state cannot guarantee these things [the continuation of work for merchants and manufacturers] if it does not close off the number of those who may conduct the same branch of labour... Only through this closure does a branch of labour become the property of the class of its practitioners...and it is only in return for being granted this as their property that they could renounce the property of the land-cultivating class" (ibid.).
Yet this is still not enough to serve as the sought-for "guarantee" - and it is at this point that we finally arrive at the necessity for the "closed commercial state", toward which Fichte's whole argument has been pointing. An adequately planned national economy - and Fichte's sketch of ideal economic relations in part I of his treatise is one of the first modern visions of the planned economy - can in theory adjust both prices and access to work in the various branches of labour in order to ensure the balance and satisfaction of both consumption and employment. To what extent this can be managed in practice without friction, miscalculation or compulsion can remain moot; the point is that, to the extent that it is possible, it is only so within the limited bounds of a single state, which can oversee (and enforce) all the various contractual obligations within its territory. As soon as foreign producers or consumers are involved, as in free international trade, the situation becomes unmanageably complex and unstable (CCS, p. 107):
There is absolutely no place for commerce between subjects [of the state] and foreigners in the system of trade set forth. The government should be able to count on a certain quantity of goods entering into trade, in order that it may always guarantee its subject the continuing enjoyment of his accustomed needs. How can the government count with assurance on the foreigner's contribution to this quantity, when he does not stand under its command?... The government should guarantee to its subject the sale of his produce or manufactured goods, and the fitting price at which they are sold. How can the government do this if its subject should sell to foreign countries whose relation to the goods of the government's subject the government is able neither to oversee nor to regulate?
The material causes of such instability are not hard to imagine, or indeed to reconstruct from history. Trade and supply chains may be disrupted by war, for instance (one thinks of the impact on English textiles of the American Civil War, breaking the supply of raw cotton), or a foreign state may decided to substitute a particular import, investing in its domestic growth or manufacture and no longer requiring trade with one's own state in order to supply it.
However, Fichte was particularly concerned with a more "ideal" and less concrete cause of instability: the use of specie, or gold and silver coins, in international trade. For from the perspective of economic justice, money ought to be used only to mediate and represent the contracts existing between those engaged in different occupations: with the ten coins I have earned from producing pins, I can buy x amount of coffee beans, or y copies of the local newspaper. The newspaperman can then buy a quantity of pins from me in return. If the amount of money in circulation does not fluctuate, then this quantity can be fair and proportionate: the total amount of currency corresponds to the total material wealth of the country, and the ten coins spent on newspapers represent a small but certain proportion of that. Yet if those coins are silver coins, recognized and circulating abroad (where they can be exchanged for coffee beans), then it is less evident what the total sum of wealth is to which their sum total would correspond, and thus what they represent a proportion of. It is also beyond the power of the state to influence either how much of this silver currency exists in general (the discovery of silver mines, such as those of Potosi in Bolivia in the 16th century, is a not-to-be-underestimated factor of importance in world history), or how much remains within its borders. Private individuals and companies may use it to conduct transactions with foreigners - transactions which (to recur to Fichte's theory of property) constitute or refer to contracts of property rights which, however, stand under the jurisdiction of no single government.
The unstable relationship the use of specie creates between national wealth and foreign trade is one I have already explained in an earlier post, in analyzing the mechanism of the gold standard that came (despite Fichte's opposition) to underpin international trade during the Pax Britannica of the nineteenth century. However, the key factor that magnifies this instability, leading to the competitive and even militarized "jealousy of trade" described earlier in part II of this post, is the relationship between governments (not merely the wealth of their citizens) and the flows of international trade - a relationship established as soon as those governments collect taxes in gold and silver. As Fichte explains, it is only logical that they should do so, "since they pay residents and foreigners alike only in this currency, as if they have no closer relation to the former than to the latter" (CCS, p. 147):
"The more of this world currency that its subjects possess, the more the government can collect from them as taxes; the less, then the less. It therefore will become in the government's interest that all those who pay taxes have quite a lot of money... Thus, the government conceives of these tax-paying citizens as unified into one entity, a single body, whose affluence is its concern, even though the individuals, as they conceive of themselves, remain separate from one another... Now, for the first time, the concept of national wealth...has some sense."
It is the indirect yet intimate relationship between the interests of governments and their (commercially active) citizens which characterizes the politics of liberalism - and of colonialism. Free individuals bring in wealth on their own account, through private enterprise, which just happens to benefit the government too, through taxes. Fichte goes on to explore what happens if the national wealth of one state expands, as will often be the case, to the detriment of another: if it achieves a surplus in the balance of trade, attracting more money from the other state through advantageous exporting than it spends on imports. In classical theory (as explained in part II of my Polanyi post), this money would then be spent on luxury imports and released into circulation again, restoring the balance of trade. Yet the proportion of the surplus taken in taxes can be used for quite a different purpose, hinted at by Fichte: "the government of such a [rich] nation, following the maxim to take as much as it can, will take the profit from foreign trade and use it to hire foreign forces toward its own ends" (CCS, p. 149) - it will invest in (military) means to increase its power of coercion over its commercially weaker neighbour. That neighbour, meanwhile, will have smaller tax revenues to fund its own army and industry, and will be forced to look around for expedients in order to prevent an ever-increasing deficit. With less and less money circulating within its borders, it is increasingly unable to guarantee those contracts with its own citizens that preserve their hope of a livelihood. Fichte paints the consequences in vivid, but also perfectly realistic terms - for what he describes here actually happened in territories across the world exposed to colonial power during the 17th-19th centuries, from Ireland to Africa and India (CCS, pp. 150-51):
"Men will emigrate, seeking refuge under another clime from the poverty they could not escape on patriotic soil. Or the government will turn them into commodities, drawing money from foreign countries in exchange for them. With fewer hands working on the raw produce, this produce can also be sold. This trade will expand, and whatever manufacturers still remain in the country will no longer be able to get hold of the produce they need and will perish from want. What had previously gone to nourish these manufacturers is once again exported for a pure profit. If some of the crop should fail, then, in a country such as this, where everything is sold and nothing is saved for emergencies, a great many men will die. Through a decrease in the number of domestic consumers, ever more goods will be gained for foreign trade. The farmlands will either fall in price or lie deserted in a desolate country. For a time foreigners will speculate on these lands, thus discovering a new branch of trade. - And there is yet one more ware that one should hardly have had to resort to: the state sells itself, its very independence. It now continually collects subsidies, thereby turning itself into the province of another state and the means to whatever end this other state pleases."
From a modern liberal perspective, colonialism can be interpreted as one (morally reprehensible, but accidental) means by which capitalism operated in history; it was scarcely a necessary consequence of international free trade. Yet from Fichte's perspective it was just that. The vice-like double pressure of military and economic power ensured that advantage in trade could, and would, be converted into colonial domination. Indeed, in a later text, the (in)famous Addresses to the German Nation (1806), Fichte even suggests that the central political process of modern European history, the formation of the modern state, was catalyzed by colonial competition, or what he calls "the rape of other continents - the event which more than any other has determined the course of recent world history, the destinies of peoples and the greater portion of their ideas and sentiments" (Fichte, Addresses to the German Nation, ed. and trans. Gregory Moore (Cambridge University Press, 2008), p. 167). (One would struggle to find another European historian or political analyst between Fichte's own time and the last few decades of postcolonial theory who would have been prepared to put the colonizing process center-stage in world history as plainly, and negatively, as that.) As globally active competitors to the Spanish Habsburg empire emerged - the English in the 16th century, then the Dutch in the early 17th, then the French in the later 17th - the European political landscape evolved from one dominated by dynastic and religious considerations, in which the dream of uniting Christian Europe had still not been renounced, to one in which "jealousy of trade" and the balance of power between permanently independent, sovereign states was decisive. That situation was acknowledged in the 1648 Peace of Westphalia, the basis for the modern European state system; but only after German territory had been utterly ravaged and divided by the Thirty Years' War, prolonged by France and Sweden in order to weaken Spain. Fichte and other German thinkers had good reason to resent the influence of the great European colonial powers not just abroad, but also at home.
Fichte's remedy for these evils was that the state must close itself off commercially, as it had already done juridically - for the administration of justice could not be consistent while each state was vulnerable to the commercial depradations of foreign powers. The system of specie, of universal commodity money, should be abandoned, since it rested not on principles of material economic justice - the rational division of economic activity and proportionate sharing of the wealth it produced - but on opinion. No one can be sure what a silver coin is really worth (and indeed it was worth differing amounts in different places depending on scarcity - the price of silver in China being usually higher, for instance), because no single authority controls it and can proclaim its value. Rather, as Fichte's translator Adler explains, "it matters not so much what we think the value of gold and silver to be as what others think this to be. We must believe that others will continue to value it and accept it in exchange for their goods, and thus that these will in turn believe the same of others, and so forth. In this way, indeed, money involves a structure of infinite reflection; an order where value is constituted through an ultimately groundless infinite regress and refraction of opinion" (CCS, "Interpretive Essay", p. 43). The speculative character of international money-markets does not require derivatives and other complex financial instruments in order to manifest itself: it is already manifest in the very idea of an internationally valid money or "floating" means of exchange circulating beyond a country's borders - whether that be gold or petrocurrency.
In place of gold and silver, Fichte suggested a new, national currency, which would openly be instituted and used as a sign of wealth, rather than itself a commodity. Furthermore, it would, like the conventional signs of a national language, only be "understood" or accepted within the boundaries of one country; it would not circulate at all outside those boundaries, and neither gold and silver nor any other currency would be accepted for tax purposes (or ultimately any transaction) within them. (Rather mysteriously, Fichte says that this would not be a paper currency, but made of another, undisclosed substance - CCS, pp. 174-5; the secrecy was apparently practical, to prevent hoarding or forgery attempts in case the Prussian government really acted on Fichte's proposals!) In order to protect this currency from deflation, devaluation or other undesirable consequences attendant on its exchange for either specie or other national currencies on international money-markets, it would simply not be exchangeable for these - and would not need to be, for it would be the only currency needed by its citizens, and would be useless to everyone else. A truly conventional or symbolic currency, acting only as a representation of wealth to be exchanged, and backed (and stabilized) in that function by a single state authority with the power to enforce the legal contracts to which it corresponded, would inevitably and naturally correspond to a closed commercial state. Indeed, its introduction would (as Fichte explores in part III of his treatise) be the practical means by which the state would begin to close itself off commercially from the rest of the world.
To many readers (if this blog has many readers), this "solution" will sound like a disaster - like an early 19th-century version of Brexit; like North Korea, like East Germany - like every kind of misguided nationalism and socialist utopianism mixed together into one ideologically calamitous muddle of an economic policy. Perhaps it worked for Edo Japan, fine; but what possible application could it have in a technologically developed, multicultural modern state? (And where are we going to get our coffee from?!) In fact, Fichte's proposal is not one of absolute economic - or geographic, or cultural - isolationism: for geographically limited produce such as wine (or coffee) he was prepared to allow a system of government-arranged barter or bilateral trade agreements (wine for grain e.g.); citizens would be allowed some opportunities to travel; while for "the scholar and the higher artist" travel and exchange would be both necessary and encouraged, as the spread of their endeavours was ultimately "for the benefit of humanity and the state" (CCS, p. 193). International cooperation on matters of scientific or technological (or in our age in particular, environmental) common interest was not in any way excluded from Fichte's model: indeed he hoped it would be encouraged, through not being disrupted further by jealous protectiveness and competition. Rather his intention was simply to prevent the economic interactions of private citizens and companies with those abroad from undermining the state's ability to guarantee justice for all within its boundaries.
Fichte's "closed commercial state" does require superficial restrictions on individual freedom, it is true - but what his critics (such as Isaiah Berlin, who included Fichte as one of his "six enemies of human liberty") generally miss is that those restrictions issue logically from a deeper philosophical concern for such freedom; it was simply one balanced (as Berlin's own was not) by an equally deep concern for justice and equality. Why should certain members of a society be free to acquire ostentatious luxuries from abroad, while others live in fear of losing their job and their livelihood? Having been born into a poor weaver's family, Fichte was very aware of class differences and the different economic opportunities that came with them. "That frivolity which is more concerned with the enjoyment of the present moment than with the security of the future", or the freedom to speculate and gain "accidental profits" (CCS, p. 198), seemed less valuable forms of liberty to him than the right "to live on the earth as easily, as freely...in as truly human a way, as nature will permit. Man...should labour without fear, with pleasure and joy, and have time left over to raise his spirit and eye to the heavens, which he has been formed to behold" (CCS, p. 110). Unlike liberal thinkers, Fichte did not think it beyond the political philosopher's task to define what the "essential state of prosperity" consists in: "the most truly human pleasures with the least difficult and time-consuming labour. This should be the state of prosperity of the nation as a whole and not only of a few individuals" (ibid.).
The realization of such values does not need to look as extreme as one might think from reading Bertrand Russell, who called Fichte's philosophy one of "nationalistic totalitarianism" (A History of Western Philosophy, p. 745). German resistance to British-backed ideas of free trade did play a role in the creation of German nationalism, to be sure - but in the comparatively mild form of Friedrich List's "economic nationalist" doctrine, whose immediate practical consequence was a piece of bureaucracy: the German customs union (Zollverein) of 1833. As List perceived, the lack of German political unity, which had detrimental effects on trade across German territories due to the multiplicity of customs barriers, could be compensated by a partial economic unification, consolidating the German states into a single customs area. This also served to protect German industry against the strength of British competition: an application of List's own theory of protectionism, or the "infant industry argument", in which the "closed commercial state" would only be a limited phase in the development of a nation's industry to the point where it was strong enough to compete on international markets. That argument is now seen as quite legitimate by a number of economists, including Ha-Joon Chang: it was, after all, only what Britain and the US did before they became powerful enough to do without it.
That is not the only hidden continuity between German Romantic economics and British history, however. As is noted by Nakhimovsky (pp. 171-3) many of Fichte's priorities were in fact shared by British thinkers who guided post-WWII British social and economic policy, such as J. M. Keynes and William Beveridge. Beveridge is of course best known as the intellectual father of the welfare state, the author of the 1942 Beveridge Report whose proposals (including the establishment of the National Health Service) were implemented by the Attlee government of 1945. Yet his 1944 report Full Employment in a Free Society stressed that the state had to go beyond insuring the material welfare of those in need (through National Insurance, social security and universal healthcare). Once Britain had secured "Freedom from War" through victory and the building of a lasting peace, it would need to add to this not only "Freedom from Want", but also "Freedom from Idleness" - so "that each man and woman, so long as he or she is able to work and serve and earn, shall have the opportunity of doing so" (p. 3). The crippling rates of unemployment during the inter-war period - which peaked at 22% in 1932 - should never be allowed to return.
| William Beveridge (1879-1963) |
For Beveridge, "income security by itself would not produce a good society... Employment security is needed as well" (p. 4) - something which, he pointed out, had been one of his assumptions in framing the 1942 proposals for social security in the first place. This was true for "spiritual" and not just material reasons: the long-term unemployed were inevitably "dishearted, demoralised, made to feel useless" as a result of their situation, while even just the "fear of unemployment...made every man seem the enemy of his fellows in a scramble for jobs and led to...hatred of foreigners, hatred of Jews, and enmity between the sexes" (p. 6). Demand for labour was of course created by spending, and so a consistent demand for labour, such as would be necessary to ensure full employment, would need consistency in spending. Among the four factors Beveridge identified as enabling this, the two most important were a planned economy (though it need not be fully state-controlled, as in Fichte's proposals or Soviet communism), and a balanced flow of trade with foreign countries. The latter, Beveridge acknowledged, could only be absolutely guaranteed by the "bilateral" or barter system (proposed, as we have seen, by Fichte), according to which "goods and services supplied as exports by country A to country B must be paid for by the export of equivalent goods and services from country B to country A... Under strict bilateralism the accounts of each pair of countries must balance" (pp. 36-7). Multilateral trade, if it were to be permitted, could only be undertaken with other countries aiming at similar economic goals to Britain's: for unless they were also concerned to preserve stability and full employment, then fluctuations in spending and the supply of labour could threaten the entire system.
Presciently, Beveridge warned that the success of the new system of international trade established that very year at the Bretton Woods Conference would not "depend on...technical details...such as the size of an international monetary fund...[but] on the economic policies of the different countries" (p. 37). They must all "pursu[e] at home a policy of full employment"; they must aim to "balance...accounts with the rest of the world", rather than allow lasting surpluses or deficits; and they must "displ[ay] reasonable continuity and stability in commercial policy" (ibid.). In a longer historical perspective, we can see these tenets as protecting against the aggressive trade policies of an earlier era - the era of high colonialism, unrestricted liberal capitalism and "jealousy of trade". In the shorter term, however, they were already being subtly undermined. When Keynes tried to institutionalize the second of these policies at Bretton Woods in the form of the International Clearing Union, his proposals were shot down by the US delegation under Harry Dexter White. Instead of Keynes's ICU, which would have provided incentives for richer countries to reduce their trade surplus, the institution that emerged to regulate exchange rates in the post-war economy was the International Monetary Fund, or IMF.
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| The Bretton Woods Conference, July 1944 |
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| Thomas Sankara, president of Burkina Faso (1983-7) |
Just like slavery, then, colonialism has not gone away - it has just assumed new forms. Fichte's analysis of its connections with liberal trade remain relevant, even if his economic analysis lacks the depth and complexity of Marxist theory (the roles of technology or capital investment and interest are untouched in Fichte's treatise). One only needs to update a few things to see the parallels: how the position of those who own land in Fichte's analysis (and whose rights thus cannot be disturbed by shifts in trade and industry) is duplicated by those owning property and capital reserves today, earning steady streams of interest on accumulated wealth without any of the "free activity" Fichte so prized; how those dispossessed of land or property or capital are increasingly denied the dignity of stable work as well, becoming what Marx and Engels called the "reserve army of labour" essential to capitalist expansion - an army which (like real armies) Fichte wished to abolish. Michael Rosen rightly sees Fichte as the "ancestor of the hostility to the international market that we find in modern anti-globalization activists" - though his conclusion on The Closed Commercial State, that in theorizing economics "Fichte was simply out of his depth", is I hope somewhat qualified by the evidence I have offered here.
Rather than as hopelessly idealistic, in fact, we should see Fichte's analysis as in important senses realistic - though a realism (somewhat paradoxically) enshrined in the ethical attitudes of German Idealism discussed above. As we saw, in the eighteenth century it was St. Pierre's idea that a European Union could banish war and competition that looked unrealistic; and in a deeper sense, it still is. Fichte's insight was that guarantees of economic stability and justice can only be given both legitimately and effectively by individual, sovereign, democratic states, which are the only trustworthy guarantors of Recht, or "rights" taking the form of law. In every other form of contractual arrangement, the most powerful party (in the EU at present, Germany; in the world, the USA) will enforce its advantage, and will not stop at immiserating other countries' populations and deposing or assassinating their leaders in order to do so.
To return to the starting-point of this post, the vexed issue of Britain's place in or out of Europe, one must acknowledge that in one important respect, the Brexiteers are right. The logical end-point of the EU project is a European super-state. Anything less is both unstable and unjust. Hont points to the problem of "making state and market congruous", one "tackled [in Europe] by the remarkable creation of the European Union. The severity of the congruity dilemma, however, is demonstrated by the fierce debate over whether the European common market should develop into a common European state. The globalization debate of today is essentially about the same congruity problem, but on a world scale" (Jealousy of Trade, p. 155). Either we scale up democratic regulation, or we roll back free trade: the third way, the status quo, is (to quote George Monbiot in a recent comment piece on President Trump's scotching of the G7) a corrupt and hypocritical "stitch-up". There is no point inveighing against "populism", when the economic demands underlying both Brexit and the election of Donald Trump correspond to an ethical principle we are forced to recognize as soon as we face it squarely: that people have a right to work, as much as (if not more than) they have a right to consume.The current international order denies increasing numbers that primary right.
The problem with Brexit and Trump is thus not principle, but the timing, origin, and manner of its translation into practice. If both disruptions to the status quo have succeeded and drawn global attention (thus far) it is because they emerge from powerful nations, and from communities that feel identified with the ethnic core of those nations. States of the global South who have really suffered from neoliberal globalization cannot make such effective protests against it. In immediate practical terms, too, withdrawing Britain from the EU is likely to be highly detrimental to both consumers and producers. Yet immediate consequences should not stop us discussing the bigger picture, even when the two perspectives diverge - a consideration I feel returning over and over again when contemplating current affairs. In the short term, for instance, it is clearly a bad thing if the economy does not grow: lack of growth leads to recession, and recession is not just bad for business but increases poverty and suffering among the most vulnerable in society. Not even the most ardent socialist wants that. But in the long term, the economy cannot continue to grow ad infinitum without depleting the planet's resources, and distorting social and individual psychology by making us dependent on an ever greater range of commodified goods. None of us, I hope, want that either. We are perfectly ready to castigate our politicians tomorrow for mismanaging the economy as measured by the latest GDP statistics; yet if we think about the economy over the perspective of a lifetime, we ought to realize that GDP statistics, and the unstoppable one-sided growth they promote, are a chimera.
So it is with Brexit. Voting against it was voting to stop an imminent act of national self-harm; but voting for it was also acquiescing to the continuation of a system that causes longer-term harm, through the violence of its immanent contradictions. Whether the resolution of those contradictions should be the (Westphalian) nation-state or a European super-state is a question I will bypass for now. What is evident is that, in addition to being environmentally unsustainable, a system of unrestricted intercontinental free trade is also ethically and democratically deficient. That is a realization we could, potentially, act on; bemoaning the stupidity of voters or the deviousness of their leaders is not. The point, which as I see it was the point of Kant and Fichte's meditations two centuries ago, is that principles need translating into regulations, ethics into law, justified sentiments into reasoned action. Otherwise those sentiments of injustice and resentment driving the current crisis (but also embodying the possibility of its resolution) will explode the hypocrisy of the liberal-democratic consensus - and in politics too, explosions are dangerous.
