THE Global Justice Movement Website

THE Global Justice Movement Website
This is the "Global Justice Movement" (dot org) we refer to in the title of this blog.

Thursday, July 5, 2018

Government of the Élite, by the Élite, and for the Élite

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.
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.
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.
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.”
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.
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.
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.