Mises Institute President Lew Rockwell once wrote “capitalism is responsible for everything we love.” Not long after reading this I encountered a wonderful piece of poetry (“Auguries of Innocence” by William Blake, as it happens) which caused me to dismiss Rockwell’s statement as overly-broad hogwash. Now along comes Joseph Schumpeter to show me how to understand Rockwell’s statement.
Schumpeter, the graduate school classmate of Ludwig von Mises at the University of Vienna, demonstrates in his “Imperialisms and Social Classes – Two Essays” (Schumpeter notes in the text that the original German had “imperialisms” in the plural) that market society fundamentally re-orientates away from a “warrior” mentality. Imperialisms (with their accompanying militarist codes of conduct) “tend(s) to disappear as an element of habitual emotion reaction, because of the progressive rationalization of life and mind.” (p. 65, 1955 Meridian Books hardcover edition). The reasoning is carried into analysis of social classes – “Ultimately this demilitarization made the armed class struggle – if one wishes to call it that – altogether impossible…” (p. 149).
Consider your statement saved, Mr. Rockwell.
The difficult in understanding imperialisms and social classes is that, like law and custom, they’re always an evolutionary jumble from the past. “The social pyramid is never made of a single substance, is never seamless,” (p. 111) Schumpeter tells us with his characteristic seamless erudition. This realization should make us cautious about equating things from different epochs. But you’d be a fool to look past the repetition of psychic patterns.
Consider: “Here is the classic example of that kind of insincerity in both foreign and domestic affairs which permeates not only the avowed motives but also probably the conscious motives of the actors themselves – of that policy which pretends to aspire to peace but unerringly generates war, the policy of continual preparation for war, the policy of meddlesome interventionism.” (p. 51). Schumpeter is discussing the Roman Empire but could any other words be as accurate about the United States today?
Modern imperialism and war are very often a diversion from domestic problems, Schumpeter tells us (p. 4). This should help us realize what happened to American conservatives post-FDR. After the New Deal triumphed domestically, many conservatives rode off to save the rest of the world. The peaceful, America First Old Right was supplanted by the internationalist Cold War New Right lead by William F. Buckley Jr. (and this occurred gradually as per Schumpeter’s teaching).
“Imperialisms, Social Classes” contains stout-hearted words in support of free trade very much in line with the views of the Mises Institute (perhaps giving us a reason why this is the only Schumpeter book the Institute sells). Schumpeter sets up free trade opposite imperialism, juxtaposing economic development with the growth of the state. The argument is compelling yet I would venture to say imperialism (in the form of standing armies and navies) tends to hang around when a nation is highly dependent on foreign commerce whether it engages in free trade or 18th-century-style mercantilism.
The economic system and its thinking is a filter that all phenomena pass, Schumpeter reminds us. In that spirit, the essay on social classes gives us wisdom about the value and importance of saving (p. 120). His discussion about the decline of entire classes raised a question to me about why the seeming failure of Ivy Leaguers hasn’t swept them out of America’s political class. Schumpeter would probably say that the Ivies are performing “necessary social functions.” I would add that “failure” is a relative concept to most voters.
“The bourgeois knight” mentioned on p. 129 reminded me of Mises (see the recent biography “The Last Knight of Liberalism”). Schumpeter and Mises subtly needled each other for decades, an art perfected in the Vienna coffee houses of their youth. The cover of the edition of “Imperialisms, Social Classes” offered by the Mises Institute may be one more well-disguised parry. Depicted is a fencing match, reminding the astute of Schumpeter’s ill-advised sword duel with a librarian at the University of Czernowitz. Humorous as all this is we should remember that economic science and those of us who study it are the beneficiaries of the great intellectual tennis match of Schumpeter and Mises. Not bad for two men said to be lousy at the actual game of tennis.
As a portent for America (and essential knowledge for anybody hoping to revive the moribund Republican Party), Schumpeter serves up this beauty (p.71) that could have easily come from the racquets of Mises or Rockwell – “No people or ruling class can openly afford to regard war as a normal state of affairs.”