As we saw in the
previous posting on this subject, Woodrow Wilson’s political philosophy boiled
down to “might makes right.” Something
was right because he believed it was so, not because it met or measured up to
any objective standard of good. In that,
Wilson simply echoed the totalitarian philosophy of Thomas Hobbes.
Wilson, however,
was not a student of Hobbes . . . directly.
He was, as previously noted, a disciple of Bagehot, and Bagehot derived his
theories in part from Hobbes.
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| Walter Bagehot |
Not surprisingly,
then, Wilson was an elitist who had a deep suspicion and mistrust of ordinary
people, as well as those he seemed to view as demagogues, such as William Jennings
Bryan and Theodore Roosevelt. Bryan was someone to be used to counter
Roosevelt, a sort of a backfire, or (perhaps more consistent with Wilson’s
attitude) a thief to catch a thief.
This, of course,
raises the issue of Bagehot’s political theories.
Bagehot developed
his political and economic theories in light of the abandonment of the natural
law and the fixed belief that only existing accumulations of savings can be
used to finance new capital formation that characterized the seventeenth and eighteenth
centuries following Hobbes. According to Bagehot’s analysis, published in 1867
in The English Constitution, a
relatively small economic élite (not
to be confused with the “Upper Ten Thousand” that ruled “society”) were the
real power in the country, having gradually usurped political power since the
days of the Tudors, and (according to Bagehot) properly so.
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| No, we imagine not. . . . |
Bagehot carefully
distinguished leadership in “society” (meaning parties, balls, race meets, and
so on) from leadership in government and the economy. The Queen (a “retired
widow”) and the Prince of Wales (“an unemployed youth”) were the leaders of “society”
and played an important role in providing the lower classes with the easily
understood fallacy that the monarch ruled the country. Bagehot called this the “dignified”
aspect of the English Constitution, a social convention to pacify the
unintelligent masses.
The real power,
according to Bagehot, resided in the House of Commons, the House of Lords being
another “dignified” aspect of the constitution of the country. The House of
Commons was “efficient” as opposed to “dignified,” and, so far as the
traditional structures of government allowed, ran the country essentially as a
business corporation. The House of Commons, elected by a relatively small
number of voters, was, essentially, the board of directors of the country, “a
class . . . trained to thought, full of money, and yet trained to business.”
The propertied
classes were (in a sense) the shareholders of the national corporation. Common
unpropertied people, as well as aristocrats whose wealth and power were in
decline as agriculture diminished in relative importance, were to some extent
supernumeraries, that is, redundant employees and pensioners of the national
corporate State.
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| Getting out the vote, English-style. |
Contrary to the
impression that Bagehot’s claim might give that ultimate power resided in the
House of Commons, Bagehot did not support popular sovereignty. The English electorate
at the time he wrote, 1867, was extremely small, and composed exclusively of
men of property, a financial élite
which thereby secured a self-perpetuating political power. The “pocket” or “rotten
borough” system was the order of the day.
This was only
right as far as Bagehot was concerned. He believed that the masses were too
stupid to be able to vote or do anything other than take orders. As these quotes from The English Constitution
make clear, Bagehot had what amounted to absolute contempt for ordinary people:
“We have in a great
community like England crowds of people scarcely more civilized than the
majority of two thousand years ago; we have others, even more numerous, such as
the best people were a thousand years since. The lower orders, the middle
orders, are still, when tried by what is the standard of the educated ‘ten
thousand’, narrow-minded, unintelligent, incurious.”
“We have whole classes
unable to comprehend the idea of a constitution.”
“A free nation rarely
can be — and the English nation is not — quick of apprehension.”
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| The rulers of England, according to Bagehot. |
According to
Bagehot, “The principle of popular government is that the supreme power, the
determining efficacy in matters political, resides in the people — not
necessarily or commonly in the whole people, in the numerical majority, but in
a chosen people, a picked and
selected people.” [Emphasis in original.]
Not surprisingly,
one of the “defects” Bagehot listed in the American system is the impossibility
of a dictatorship in times of national emergency. Another problem is that
Americans do not accept the opinions of their betters without question: “They
have not a public opinion finished and chastened as that of the English has
been finished and chastened.”
Natural rights,
the judiciary, — such things are irrelevant. They are unimportant because they
are not “efficient,” that is, they do not increase the effectiveness of
government, the purpose of which is to protect the interests of the propertied
classes who run the country. Weaknesses appear in government to the extent that
the State administration departs from the principles of business, e.g., lack of efficient structure,
unnecessary redundancy, etc.
The fact that
many of these structures were at least initially intended to provide
accountability of the government to the citizens is also irrelevant. The
capitalist of Bagehot’s day — or, more accurately, the non-owning manager — was
not accountable to his workforce or to his customers. It followed that the
government should not be accountable to the citizens it governed.
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| John Maynard Keynes |
Bagehot’s 1873
book, Lombard Street: A Description of
the Money Market, is an application of Bagehot’s theories of sovereignty
described in The English Constitution.
Bagehot embraced a political — and thus economic — system that assumed a
political (and thereby financial) élite
as a given and a positive good. Bagehot, in fact, regarded the élite as a necessity if society is to
advance socially, economically, and politically.
Less than half a
century later John Maynard Keynes took Bagehot’s assertions as proven fact. He
based his entire economic theory on the assumption of the absolute necessity
for existing accumulations of savings to finance capital formation.
This is based in
part on the belief that human labor is really responsible for all production.
Technology at best only enhances human labor. The problem is that as technology
becomes more expensive, only those who can afford to cut consumption can own,
because they are the only ones who can save. It makes sense, therefore, that
the economic élite and the political élite should be the same people, at
least to Bagehot, and to Keynes after him.
In reality, while technology makes for an independent (though not
autonomous) addition to the mere animal power of humanity, it does not change a
human being’s physical capabilities. This causes a problem when technology
begins to take over the bulk of the physical and even mental input to production,
replacing human toil, as we see accelerating today as computer science advances
by leaps and bounds.
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| Charles Babbage |
This is nothing new. Charles Babbage (1791-1871), often
credited with being the inventor of the first computer (Babbage’s “analytical
engine”), made the same point. As Babbage explained in his essay, On the Economy of Machinery and Manufactures
(1835):
(4.) The advantages
which are derived from machinery and manufactures seem to arise principally
from three sources: The addition which they make to human power. — The economy
they produce of human time. — The conversion of substances apparently common
and worthless into valuable products.
(5.) Of additions
to human power. With respect to the first of these causes, the forces
derived from wind, from water, and from steam, present themselves to the mind
of every one; these are, in fact, additions to human power, and will be
considered in a future page: there are, however, other sources of its increase,
by which the animal force of the individual is itself made to act with far
greater than its unassisted power; and to these we shall at present confine our
observations.
Bagehot, and Keynes after him, therefore regarded economic
and political control by an élite
as the proper ordering of society. Like Keynes,
Bagehot (and Wilson after him) rejected the substance of democracy, while
calling his system democratic. The only real issue was whether the élite that
controlled the economy should be an unaccountable private élite, as
Bagehot supposed, or a marginally accountable public élite, as
Keynes proposed. This, of course, depended on who controlled money and credit,
and thus both political and economic power.
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