Posts Tagged ‘J.A. Hobson’

D.G. Ritchie’s Philosophical Justification for State Interference

December 18, 2018

Okay, this is going to be a long extract, but bear with it. It all needs to be said. One of the arguments I’ve seen Libertarians use to defend their ideology of a minimal state and absolute laissez-faire free enterprise and zero state welfare, is that liberals and socialists don’t have any philosophical arguments to justify their position beyond pointing to the practical, positive effects. I’ve seen this line stated by one of the more notorious Libertarians, Vox Day. Not only is Day a supporter of the miserable and immiserating economics of vons Hayek and Mises, but he has extreme right-wing views on feminism and race. You can tell just how far right he is by the fact that he calls Donald Trump ‘the God Emperor’ and refers to Anders Breivik, the man who called 70 odd children at a Norwegian Young Socialists’ camp, a saint. He really is despicable.

In fact, the philosophers of the New Liberalism, which appeared in Britain in the 1880s, like T.H. Green, D.G. Ritchie, J.A. Hobson and L.T. Hobhouse, produced philosophical defences of state interference to justify the new change in direction taken by the Liberals. These had broken with the stance of the old Radicals, who were firmly against state legislation. Instead, these philosophers argued that state interference, rather than reducing human freedom, actually enlarged it by empowering the individual. Ritchie, in the piece below, attacks the simplistic notion of the state versus personal liberty expressed by Herbert Spencer, the founder of Social Darwinism, and provides a philosophical justification for collective ownership not just in nationalization but also municipalization. In his The Principles of State Interference of 1891 he wrote

Underlying all these traditions and prejudices there is a particular metaphysical theory-a metaphysical theory which takes hold of those persons especially who are fondest of abjuring all metaphysics; and the disease is in their case the more dangerous since they do not know when they have it. The chief symptom of this metaphysical complaint is the belief in the abstract individual. The individual is thought of, at least spoken of, as if he had a meaning and significance apart from his surroundings and apart from his relations to the community of which he is a member. It may be quite true that the significance of the individual is not exhausted by his relations to any given set of surroundings; but apart from all these he is a mere abstraction-a logical ghost, a metaphysical spectre, which haunts the habitations of those who have derided metaphysics. The individual, apart from all relations to a community, is a negation. You can say nothing about him, or rather it, except that it is not any other individual. Now, along with this negative and abstract view of the individual there goes, as counterpart, the way of looking at the State as an opposing element to the individual. The individual and the State are put over against one another. Their relation is regarded as one merely of antithesis. Of course, this is a point of view which we can take, and quite rightly for certain purposes; but it is only one point of view. It expresses only a partial truth; and a partial truth, if accepted as the whole truth, is always a falsehood. Such a conception is, in any case, quite inadequate as a basis for any profitable discussion of the duties of Government.

It is this theory of the individual which underlies Mill’s famous book, Liberty. Mill, and all those who take up his attitude towards the State, seem to assume that all power gained by the State is so much taken from the individual, and conversely, that all power gained by the individual is gained at the expense of the state. Now this is to treat the two elements, power of the State and power (or liberty) of the individual, as if they formed the debit and credit sides of an account book; it is to make them like two heaps of a fixed number of stones, to neither of which you can add without taking from the other. It is to apply a mere quantitative conception in politics, as it that were an adequate ‘category’ in such matters. the same thing is done when society is spoken of as merely ‘an aggregate of individuals.’ The citizen of a State, the member of a society of any sort, even an artificial or temporary association, does not stand in the same relation to the Whole that one number does to a series of numbers, or that one stone does to a heap of stones. Even ordinary language shows this. We feel it to be a more adequate expression to say that the citizen is a member of the body politic, than to call him merely a unit in a political aggregate…

Life Mr. Spencer defines as adaptation of the individual to his environment; but, unless the individual manages likewise to adapt his environment to himself, the definition would be more applicable to death.

It must not be supposed that we wish to blind ourselves to the many real difficulties and objections which there are in the way of remedying and preventing evils by direct State action. If assured that the end is good, we must see that the means are sufficient and necessary, and we must be prepared to count the cost. But, admitting the real difficulties, we must not allow imaginary difficulties to block the way. In the first place, as already said, State action does not necessarily imply the direct action of the central government. Many things may be undertaken by local bodies which it would be unwise to put under the control of officials at a distance. ‘Municipalisation’ is, in many cases, a much better ‘cry’ than ‘Nationalisation’. Experiments may also be more safely tried in small than in large areas, and local bodies may profit by each other’s experience. Diffusion of power may well be combined with concentration of information. ‘Power’, says J.S. Mill, ‘may be localized, but knowledge to be most useful must be centralized.’ Secondly, there are many matters which can more easily be taken in hand than others by the State as presently constituted. Thus the means of communication and locomotion can in every civilized country be easily nationalized or municipalized, where this has not been done already. With regard to productive industries, there may appear greater difficulty. But the process now going on by which the individual capitalist more and more gives place to enormous joint-stock enterprises, worked by salaried managers, this tendency of capital to become ‘impersonal,’ is making the transition to management by government (central or local) very much more simple, and very much more necessary, than in the days of small industries, before the ‘industrial revolution’ began. The State will not so much displace individual enterprise, as substitute for the irresponsible company or ‘trust’ the responsible public corporation. Thirdly, and lastly, be it observed that the arguments used against ‘government’ action, where the government is entirely or mainly in the hands of a ruling class or caste, exercising wisely or unwisely a paternal or ‘grandmotherly’ authority-such arguments lose their force just in proportion as government becomes more and more genuinely the government of the people by the people themselves. The explicit recognition of popular sovereignty tends to abolish the antithesis between ‘the Man’ and ‘the State’. The State becomes, not ‘I’ indeed, but ‘we.’ The main reason for desiring more State action is in order to give the individual a greater chance of developing all his activities in a healthy way. The State and the individual are not sides of an antithesis between which we must choose; and it is possible, though, like all great things, difficult for a democracy to construct a strong and vigorous State, and thereby to foster a strong and vigorous individuality, not selfish nor isolated, but finding its truest welfare in the welfare of the community. Mr. Spencer takes up the formula ‘from status to contract’ as a complete philosophy of history. Is there not wanting a third and higher stage in which there shall be at once order and progress, cohesion and liberty, socialistic-but, therefore, rendering possible the highest development of all such individuality as constitutes an element in well-being? Perhaps then Radicalism is not turning back to an effete Toryism, but advancing to a further and positive form, leaving to the Tories and old Whigs and to Mr. Spencer the worn-out and cast-off credd of its own immaturity.

In Alan Bullock and Maurice Shock, eds., The Liberal Tradition: From Fox to Keynes (Oxford: OUP 1956), pp. 187-90.

Libertarianism was discredited long ago, when 19th century governments first started passing legislation to clear slums and give the labouring poor proper sanitation, working hours and education. Its philosophical justification came later, but I think also effectively demolished it. The people promoting it, such as the Koch brothers in America, are big businessmen seeking to re-establish a highly exploitative order which allowed industry to profit massively at the expense of working people. It became popular through aligning itself with left-wing ideas of personal liberty that emerged in the 1960s, such as the drug culture, and in the ’90s produced the illegal rave scene. In the form of Anarcho-Capitalism, it also appealed to some of those who were attracted to anarchism, while attacking the communist elements in that philosophy. Its adherent also try to justify it by calling it Classical Liberalism.

But it’s still just the same old reactionary ideology, that should have finally gone out with end of the Nineteenth Century. I think that as more people become trapped in poverty as a result of its policies, it’ll lose whatever popularity it once had. And perhaps then we can back to proper political theories advocating state intervention to advance the real, practical liberty of working people.

Review: The Liberal Tradition, ed. by Alan Bullock and Maurice Shock

November 6, 2016

(Oxford: OUP 1967)

liberal-tradition-pic

I picked this up in one of the secondhand bookshops in Cheltenham. I am definitely not a Liberal, but so many of the foundations of modern representative democracy, and liberal political institutions, rights and freedoms were laid down by Liberals from the 17th century Whigs onward, that this book is of immense value for the historic light it sheds on the origins of modern political thought. It is also acutely relevant, for many of the issues the great liberal philosophers, thinkers and ideologues argued over, debated and discussed in the pieces collected in it are still being fought over today. These are issues like the freedom, religious liberty and equality, democracy, anti-militarism and opposition to the armaments industry, imperialism versus anti-imperialism, devolution and home rule, laissez-faire and state intervention, and the amelioration of poverty.

Alan Bullock is an historian best known for his biography of Hitler: A Study in Tyranny, which remains the classic work on the Nazi dictator. In the 1990s he produced another book which compared Hitler’s life to that of his contemporary Soviet dictator and ultimate nemesis, Hitler and Stalin: Parallel Lives. The book has an introduction, tracing the development of Liberalism from its origins to the 1930s, when the authors consider that the Liberal party ceased to be an effective force in British politics. This discusses the major issues and events, with which Whig and Liberal politicians and thinkers were forced to grapple, and which in turn shaped the party and its evolving intellectual tradition.

The main part of the book consists of the major historical speeches and writings, which are treated in sections according to theme and period. These comprise

Part. Fox and the Whig Tradition

1. Civil Liberties.

Two speeches by Charles James Fox in parliament, from 1792 and 1794;
Parliamentary speech by R.B. Sheridan, 1810.
Parliamentary speech by Earl Grey, 1819.
Lord John Russell, An Essay on the History of the English Government and Constitution, 1821.
Lord John Russell, parliamentary speech, 1828.

2. Opposition to the War against Revolutionary France

Speeches by Charles James Fox, from 1793, 1794 and 1800.

3. Foreign Policy and the Struggle for Freedom Abroad

Earl Grey, parliamentary speech, 1821;
Marquis of Lansdowne, parliamentary speech, 1821.
Extracts from Byron’s poems Sonnet on Chillon, 1816, Childe Harold, Canto IV, 1817, and Marino Faliero, 1821.

4. Parliamentary Reform

Lord John Russell, parliamentary speech, 1822.
Lord Melbourne, parliamentary speech, 1831.
T.B. Macaulay, parliamentary speech, 1831.

Part II. The Benthamites and the Political Economists, 1776-1830.

1. Individualism and Laissez-faire

Two extracts from Adam Smith’s The Wealth of Nations, 1776.
Jeremy Bentham, A Manual of Political Economy, 1798.

2. Natural Laws and the Impossibility of Interference

T.R. Malthus, Essay on Population, 1798.
David Ricardo, The Principles of Political Economy and Taxation, 1819.

3. Free Trade

Adam Smith, The Wealth of Nations,
David Ricardo, Principles of Political Economy,
Petition of the London Merchants, 1820.

4. Colonies

Adam Smith, The Wealth of Nations.

5. Reform

Jeremy Bentham, Plan of Parliamentary Reform, 1817.
David Ricardo, Observations on Parliamentary Reform, 1824.
Jeremy Bentham, Constitutional Code, 1830.
John Stuart Mill, Autobiography.

Part III. The Age of Cobden and Bright.

1. Free Trade and the Repeal of the Corn Laws

Petition of the Manchester Chamber of Commerce to the House of Commons, 20 December 1838.
Richard Cobden, two speeches in London, 1844.
Cobden, speech in Manchester, 1846,
Lord John Russell, Letter to the Electors of the City of London (The ‘Edinburgh Letter’) 1845.

2. Laissez-Faire

Richard Cobden, Russia, 1836.
Richard Cobden, parliamentary speech, 1846.
T.B. Macaulay, parliamentary speech, 1846.
Joseph Hume, parliamentary speech, 1847.
John Stuart Mill, Principles of Political Economy, 1848.

Education

T.B. Macaulay, parliamentary speech 1847.
John Bright, parliamentary speech 1847.

4. Religious Liberty

T.B. Macaulay, parliamentary speech, 1833.
John Bright, two parliamentary speeches, 1851 and 1853.

5. Foreign Policy

Richard Cobden, parliamentary speech, 1849;
Viscount Palmerston, speech at Tiverton, 1847;
Richard Cobden, parliamentary speech, 1850; speech at Birmingham, 1858; speech in Glasgow, 1858;
John Bright, letter to Absalom Watkins, 1854;
W.E. Gladstone, parliamentary speech, 1857;

6. India and Ireland

T.B. Macaulay, parliamentary speech, 1833;
John Bright, four speeches in parliament, 1848, 1849,1858, 1859;
Richard Cobden, speech at Rochdale, 1863.

Part IV. The Age of Gladstone

1. The Philosophy of Liberty

John Stuart Mill, On Liberty, 1859;
John Stuart Mill, Representative Government, 1861;
Lord Acton, A Review of Goldwin smith’s ‘Irish History’, 1862;
Lord Acton, The History of Freedom in Antiquity, 1877.
Lord Acton, A Review of Sir Erskine May’s ‘Democracy in Europe’, 1878.
Lord Acton, letter to Bishop Creighton, 1887.
Lord Acton, letter to Mary Gladstone, 1881;
John Morley, On Compromise, 1874.

2. Parliamentary Reform

Richard Cobden, two speeches at Rochdale, 1859 and 1863;
John Bright, speech at Rochdale, 1863; speech at Birmingham, 1865; speech at Glasgow, 1866; speech at London, 1866;
W.E. Gladstone, speech at Chester, 1865; speech at Manchester, 1865; parliamentary speech, 1866;

3. Foreign Policy

W.E. Gladstone, two parliamentary speeches, 1877 and 1878; speech at Dalkeith, 1879; speech at Penicuik, 1880, speech at Loanhead, 1880; article in The Nineteenth Century, 1878.

4. Ireland

John Bright, speech at Dublin, 1866 and parliamentary speech, 1868.
W.E. Gladstone, two parliamentary speeches, 1886 and 1888.

Part V. The New Liberalism

1. The Philosophy of State Interference

T.H. Green, Liberal Legislation or Freedom of Contract, 1881;
Herbert Spencer, The Coming Slavery, 1884;
D.G. Ritchie, The Principles of State Interference, 1891;
J.A. Hobson, The Crisis of Liberalism, 1909;
L.T. Hobhouse, Liberalism, 1911;

2. The Extension of Democracy

Herbert Samuel, Liberalism, 1902;
Sir H. Campbell-Bannerman, speech at Plymouth, 1907;
D. Lloyd George, speech at Newcastle, 1909;
H.H. Asquith, speech at the Albert Hall, 1909.
L.T. Hobhouse, Liberalism, 1911.

3. Social Reform

Joseph Chamberlain, speech at Hull, 1885, and Warrington, 1885;
W.E. Gladstone, speech at Saltney, 1889;
Lord Rosebery, speech at Chesterfield, 1901;
Winston S. Churchill, speech at Glasgow, 1906;
D. Lloyd George, speech at Swansea, 1908;
L.T. Hobhouse, Liberalism, 1911;
Manchester Guardian, leading article, 8th July 1912;

4. The Government and the National Economy

H.H. Asquith, speech at Cinderford, 1903;
Sir H. Campbell-Bannerman, speech at Bolton, 1903;
D. Lloyd George, speech at Bedford, 1913, and speech at Middlesbrough, 1913;
L.T. Hobhouse, Liberalism, 1911.

5. Imperialism and the Boer War

Sir William Harcourt, speech in West Monmouthshire, 1899;
J.L. Hammond, ‘Colonial and Foreign Policy’ in Liberalism and the Empire, 1900;
J.A. Hobson, Imperialism, 1902;
Sir H. Campbell-Bannerman, speech at Stirling, 1901.

6. Armaments

Sir H. Campbell-Bannerman, speech at London, 1905;
William Byles, parliamentary speech, 1907;
Sir E. Grey, two parliamentary speeches from 1909 and 1911;
Sir J. Brunner, speech at the 35th Annual Meeting of the National Liberal Federation, 1913.

7. Foreign Policy

House of Commons debate 22nd July 1909, featuring J.M. Robertson and Arthur Ponsonby;
Sir E. Grey, two parliamentary speeches, 1911 and 1914;
House of Commons debate, 14th December 1911, featuring Josiah Wedgwood and J.G. Swift MacNeill;
Manchester Guardian, leading article, 1 August 1914;

Part VI. Liberalism after 1918

1. The End of Laissez-faire

J.M. Keynes, The End of Laissez-Faire, 1926;
Britain’s Industrial Future, the Report of the Liberal Industrial Inquiry, 1928;
J.M. Keynes and H.D. Henderson, Can Lloyd George Do It? 1929,
Sir William Beveridge, Full Employment in a Free Society, 1944.

2. The League and the Peace

Viscount Grey of Fallodon, The League of Nations, 1918;
Gilbert Murray, The League of Nations and the Democratic Idea, 1918;
Manchester Guardian, leading article, 24th June 1919;
J.M. Keynes, The Economic Consequences of the Peace, 1919;
D. Lloyd George, speech at London, 1927;
Philip Kerr, The Outlawry of War, paper read to the R.I.I.A., 13 November 1928;
The Liberal Way, A survey of Liberal policy, published by the National Liberal Federation, 1934.

Epilogue

J.M. Keynes, Am I a Liberal? Address to the Liberal summer school at Cambridge, 1925.

In their conclusion, Bullock and Shock state that Liberal ideology is incoherent – a jumble – unless seen as an historical development, and that the Liberal party itself lasted only about seventy years from the time Gladstone joined Palmerstone’s government in 1859 to 1931, after which it was represented only by a handful of members in parliament. The Liberal tradition, by contrast, has been taken over by all political parties, is embodied in the Constitution, and has profoundly affected education – especially in the universities, the law, and the philosophy of government in the civil service. It has also inspired the transformation of the Empire into the Commonwealth. It has also profoundly affected the British character at the instinctive level, which has been given expression in the notion of ‘fair play’.

They also write about the immense importance in the Liberal tradition of freedom, and principle. They write

In the pages which follow two ideas recur again and again. The first is a belief in the value of freedom, freedom of the individual, freedom of minorities, freedom of peoples. The scope of freedom has required continual and sometimes drastic re-defining, as in the abandonment of laissez-faire or in the extension of self-government to the peoples of Asia and Africa. But each re-definition has represented a deepening and strengthening, not an attenuation, of the original faith in freedom.

The second is the belief that principle ought to count far more than power or expediency, that moral issues cannot be excluded from politics. Liberal attempts to translate moral principles into political action have rarely been successful and neglect of the factor of power is one of the most obvious criticisms of Liberal thinking about politics, especially international relations. But neglect of the factor of conscience, which is a much more likely error, is equally disastrous in the long run. The historical role of Liberalism in British history has been to prevent this, and again and again to modify policies and the exercise of power by protests in the name of conscience. (p. liv).

They finish with

We end it by pointing to the belief in freedom and the belief in conscience as the twin foundations of Liberal philosophy and the element of continuity in its historical development. Politics can never be conducted by the light of these two principles alone, but without them human society is reduced to servitude and the naked rule of force. This is the truth which the Liberal tradition has maintained from Fox to Keynes – and which still needs to be maintained in our own time. (pp. liv-lv).

It should be said that the participation of the Lib Dems was all too clearly a rejection of any enlightened concern for principle and conscience, as this was jettisoned by Clegg in order to join a highly illiberal parliament, which passed, and is still passing under its Conservative successor, Theresa May, legislation which is deliberately aimed at destroying the lives and livelihood of the very poorest in society – the working class, the disabled and the unemployed, and destroying the very foundations of British constitutional freedom in the creation of a network of universal surveillance and secret courts.

These alone are what makes the book’s contents so relevant, if only to remind us of the intense relevance of the very institutions that are under attack from today’s vile and corrupt Tory party.

Lenin on Britain as International Financial Creditor

March 29, 2014

Lenin Pic

Lenin: Russian Revolutionary and critic of international capitalism

I’ve already blogged on the harmful way the British financial sector is geared towards external investment, with the result that the vast concentration on developing it since Margaret Thatcher has decimated British manufacturing. British investment in the Developing World, along with the rest of the financial aid offered in the form of loans, has also contributed to the massive debt accrued by these nations and the consequent damage to their economies. I believe that Britain is now one of the world’s major creditors, owed billions by the nations in which she has invested. Private Eye has criticised the way British aid agencies, such as the Centre for Development, have been transformed into commercial funding agencies to allow British banks to invest for profit in various enterprises in Africa and the Developing World. These enterprises are purely commercial, and do not provide any valuable services to the countries in which they are established – such as alleviating mass poverty, developing food or water supplies, providing better and more widespread medical care – other than a dividend for their shareholders and investors.

Great Britain as Global Creditor in 19th Century

This financial exploitation of the Developing World has its roots in British and Western imperialism. Already by the beginning of the 20th century economists and critics of capitalism, such as the leader of the Russian Communists, Lenin, had noticed the change in Britain from an industrial economy to one based on international finance. In his Imperialism, the Highest Stage of Capitalism, Lenin states

“Great Britain,” says Schulze-Gaevernitz, “is gradually becoming transformed from an industrial into a creditor state. Notwithstanding the absolute increase in industrial output and the export of manufactured goods, there is an increase in the relative importance of income from interest and dividends, issues of securities, commissions and speculation in the whole of the national economy. In my opinion it is precisely this that forms the economic basis of imperialist ascendancy. The creditor is more firmly attached to the debtor than the seller to the buyer.”…

The rentier states is a state of parasitic, decaying capitalism, and this circumstance cannot fail to influence all the socio-political conditions of the countries concerned…

Britain without Industry or Agriculture: Hobson on the Impact of European Conquest and Investment in China

He then cites the Liberal journalist, Hobson, on the destructive effects on the domestic economy caused by dependence on the colonies. Considering the partition of China by the European powers, Hobson predicted that this would lead to the de-industrialisation of Britain and the other European countries. The country would, according to Hobson, be dominated by wealthy aristocrats living off their investments in the Far East, surrounded by the servants and a few tradesmen they supported. But domestic industry would completely vanish as it was overtaken by cheaper competition from the Middle Kingdom.

The quotation from Hobson runs:

The greater part of Western Europe might then assume the appearance and character already exhibited by tracts of country in the South of England, in the Riviera, and in the tourist-ridden or residential parts of Italy and Switzerland, little clusters of wealthy aristocrats drawing dividends and pensions from the Far East, with a somewhat larger group of professional retainers and tradesmen and a larger body of personal servants and workers in the transport trade and in the final stages of production of the more perishable goods; all th emain arterial industries would have disappeared, the staple foods and manufactures flowing in as tribute from Asia and Africa … We have foreshadowed the possibility of even a larger alliance of Western states, a European federation of great powers which, so far from forwarding the cause of world civilisation, might introduce the gigantic peril of a Western parasitism, a group of advanced industrial nations, whose upper classes drew vast tribute from Asia and Africa, with which they supported great tame masses of retainers, no longer engaged in the staple industries of agriculture and manufacture, but kept in the performance of personal or minor industrial services under the control of a new financial aristocracy. Let those who would scout such a theory [it would be better to say: prospect] as undeserving of consideration examine the economic and social condition of districts in Southern England today which are already reduced to this condition, and reflect upon the vast extension of such a system which might be rendered feasible by the subjection of China to the economic control of similar groups of financiers, investors, and political and business officials, draining the greatest potential reservoir of profit the world has ever known, in order to consume it in Europe. The situation is far too complex, the paly of world forces far too incalculable, to render this or any other single interpretation of the future very probable; but the influences which govern the imperialism of Western Europe today are moving in this direction, and, unless counteracted or diverted, make towards some such consummation. Hobson, Imperialism, 1902, pp. 1o03, 205, 335, 386, cited in Lenin, Imperialism, The Highest Stage of Capitalism, in Lenin: Selected Works (Moscow: Progress Publishers 1968) 243.

British Economic Decline Today, and Modern China as Centre for Investment

Clearly, the situation isn’t quite like Hobson predicted. Britain no longer has an empire as such, though she still has an extensive commercial system tying her former colonies to economic dependence. China is now a free nation, that has become an economic superpower in its own right. We also still have some manufacturing industry and agriculture. Nevertheless, it did provide a roughly accurate prediction of the way the British economy has been devastated to become dependent on a financial sector orientated towards overseas investment, including that of China. This can also be clearly seen in the adverts for one of the main British high street banks – I can’t remember whether it’s Lloyd’s, TSB or Barclays. The advert shows various ‘quaint’ customs in China, such as giving presents of money in red envelopes, or fishermen using birds to catch fish, before ending with the headline ‘-: the world’s local bank’.

Now I don’t begrudge the Chinese or anyone else the development of their economies. I would, however, like some of the investment we have directed to the outside world redirected inwards to stimulate and support British agriculture and industry here, rather than simply providing an income to the small part of the British economy consisting of the City of London.