The Anti-Capitalists

0:00Now there's some important things to consider in regard to the question that was raised yesterday afternoon and that is why intellectuals tend by and large to be opponents of the marketplace and of private enterprise and business. Some raised some theories yesterday afternoon and there are some other theories that we should take a look at. A very important book, again, available from the Liberty Press. If you don't know about them, you check out their Liberty Fund website, and then they'll have the Liberty Press. A very large number of very important libertarian and conservative books, including, for instance, a beautiful, but their production values are terrific, a beautiful edition of Mises Socialism, which still to me, I read it many years ago and have re-read it since, still to me is probably the single most important book in the social sciences that I've ever read.

1:03Now, another book, the one I'm going to mention now, is by a German-American sociologist named Helmut Scherck. And he wrote an important book that is titled simply, Envy, Envy.

1:32Scherck was a very smart man, very widely read and learned, a sociologist, anthropologist sort, not an economist, although he was familiar with economics. And he begins by saying it's a very funny thing, it is as clear as anything can be that envy is a universal human motivation, we find it in every culture, however there's very little in the sociological literature of the West on the question of envy. Why? Because if it is as universal as it seems to be and as deep-seated as it appears to be then it stands in the way of that beautiful, perfectly harmonious, utopian society that the left-wingers and the socialists Human beings are by nature prone to envy, which springs from a primitive conception of causality that interprets the good fortune of others as having been achieved at the cost to oneself.

2:48For instance, in economic and financial matters, right? People are equally subject, however, to an allied feeling, a kind of reaction to this, to a universal fear of one's neighbor's envy and the envy of the gods and spirits. Fear of the envy of others in regard to the evil eye. The Evil Eye is a concept that is found all over the world, certainly among the Mediterranean peoples, the Italians, the Greeks, the Arabs and so on, even in Northern Europe, throughout Africa, throughout South America, in the Far East.

3:36The evil eye is a malediction directed at you by somebody who envies something you have. So that folklore of all peoples is filled with stories about the evil eye being wielded by envious people against somewhat more prosperous neighbors so that your cow doesn't give milk or your wife is not fertile. For anything that someone else has, there are people who envy them for it and wish to deprive them of it. So, there is this envy and it gives rise to a primitive, pre-religious, irrational sense of guilt guilt, with its behavior patterns that aim at envy avoidance, avoiding the envy of others.

4:36In various societies, varying means have evolved to cope with the sense of guilt and to ward off the retribution of the envious. A characteristic of Western society, that is capitalist society, is that envy has been has been suppressed as much more than it has in any other society in history so that although people are envious, they tend to be somewhat ashamed of their envy and try to hide it This is a Shirk's theory going on. With intellectuals in capitalist society, envy avoidance, trying to avoid the envy of others, manifests itself in support for egalitarian causes. The diffuse dread Instead of the envy of others, Shirk finds, is the root of that general, aimless sense of guilt which, during the past hundred years, now 150 years, has exercised so disrupting and disorienting an influence. The pangs of guilt, sometimes called social conscience, and the naive assumption that there could ever be a form of society that was either classless or otherwise non-provocative of envy, have been responsible for the adherence

5:50leads to leftist movements of large numbers of middle and upper class people. In adhering to movements that preach social and economic equality, they assuage their guilt and anxiety, for now they can feel that they are helping to set up a society in which no one is envious. Schuck's theory has the advantage of accounting also for the peculiar self-righteous idealism are often displayed by leftist intellectuals, especially among the young. As he says, sensitivity to the envy of others is so deep rooted in the human psyche that most people erroneously interpret the sense of redemption and peace which they feel when they have made concessions to envy as confirmation not only of their moral superiority but also the expediency of their action in the reality of the here and now.

6:42We may add that the blessed release experienced by those who have, they feel, place themselves safely beyond the envy of the resentfully dispossessed, often turns to fury when they are faced with those of their class brethren who have casually spurned the psychological capitulation. Now, the question arises, we've talked about theories that try to account for the anti-capitalism of intellectuals, but is it really so important what intellectuals think? The authors so far considered have agreed, at least in assigning a great deal of weight, in the ultimate determination of political events to intellectuals and the ideologies they generate.

7:33But the political relevance of the intellectuals has been challenged by another group of classical liberal scholars, that would include today Gary Becker, but most particularly George Stigler, whom I've mentioned before, Stigler with Friedman, was the head of the Chicago School in its heyday. Stigler was aware that despite the many benefits they reap from the capitalist system, Intellectuals have, by and large, been its implacable critics in all the sectors they dominate. In Stigler's view, claims regarding the decisive influence of intellectuals, however, are unscientific, since the claims have never been quantified and subjected to empirical testing, typical Chicago school positivist approach.

8:28In fact, he says, there is a total lack of any theory of how ideologies originate and change. In contrast, Stigler proposes to attack the problem with the conventional analytical methods of neoclassical economics. Hypotheses are to be formulated in quantifiable terms and tested against the data. A central implication of economic theory, he says, is that man is eternally a utility A maximizer in his home, in his office, be it public or private, in the church, in his scientific work, in short, everywhere. A utility maximizer. Just as they act on the market to maximize their personal utility, so individuals consistently behave in a utility increasing manner with respect to the use of the state.

9:15That is, in supporting measures that in the aggregate constitute the historical expansion of state power. So that he recognizes the existence of ideology, the question is does ideology really have much of an impact on individual decisions or are those more or less determined by the individual's perception of his own self-interest and utility maximization? Very sensibly, Stigler warns against defining utility in such a way as to make the hypothesis tautological, conceding that there is no accepted content to the utility function, or really. He proposes one, namely that a person's utility, quote, depends upon the welfare of the actor, his family, plus a narrow circle of associates.

10:07Welfare. How far this advances the argument, however, is unclear. After all, a person's adherence to a given ideology is usually conditioned by his belief that it will, in some sense, promote his welfare and that of his family and close associates, so that reliance on utility functions does not automatically obviate the need to reckon with the impact of ideology. In fact, for Stigler, utility, he has written many essays on this subject, as with all of my lectures, any of the sources that you'd be interested in, you give me your email address, you give me your mailing address and I'll send them on to you. In fact, for Stigler, utility appears for all practical purposes to mean maximization of income.

10:56This is sensible from his point of view, since employing another value, for instance, maximization of Power would seem to create insuperable difficulties for formalizing and empirically testing in Steglerian terms. Stigler further holds that the desire of intellectuals to maximize their incomes, but then sometimes he adds the incomes including prestige, prestige and apparent influence, explains the distribution along the political spectrum. He refers to Schumpeter, whom we've talked about, as having partially accepted this position. But that is incorrect. Schumpeter's description of economic motives to the intellectuals is a very different one from Stigler's. As we have noted, Schumpeter held that economic factors over production of university-trained individuals, their underemployment, Such economic factors tend to create a mindset among intellectuals which is apt to generate anti-capitalistic ideologies that in turn spread throughout society.

12:09Stigler seems to maintain that economic factors operate upon intellectuals directly and immediately. George Stigler, who was, in my understanding, a very great scholar, sometimes says things which are very hard to believe. George Stigler, that could also be said for Milton Friedman, by the way, especially in regard to his remarks on Austrian economics. George Stigler sometimes combined his deprecatory estimation of the influence of intellectuals with a similarly low evaluation of the influence of individuals, individual human beings altogether, including any political leaders. As a general explanation of political change, Stigler's own hypothesis is as follows. We live in a world of reasonably well-informed people acting intelligently in pursuit of their In this world, leaders play only a modest role, acting much more as agents than as instructors or guides of the classes they appear to lead.

13:24There are very few economists I think who can be trusted when they discuss historical matters. Robert Higgs, who I hope some of you have the chance to hear next week, is certainly one of them. Murray Rothbard and other, Mises, as I've mentioned, and Hears Stigler really gets himself into trouble. He says, as a rule, the effect of prominent leaders on history is almost infinitesimal. It is safe to say that this assessment would find little agreement among students of the careers of of Mohammed, Napoleon, Bismarck, Hitler, Lenin, Stalin, those individuals made quite a difference.

14:09And we can take as a case study of the impact of ideology, the Soviet Union itself. Authors who minimize the impact of ideology in politics would seem to have a very hard time It is difficult to imagine what could explain crucial episodes in the history of Soviet Communism if ideology is relegated to a subordinate position. Such episodes include Lenin's own revolutionary career, the formation of the Bolshevik Party, the coup d'état of October 1917, The institution of war communism, as it was called, victory in the civil war for the Bolsheviks and the fanatical dedication of the cadres who carried out the collectivization and the terror famine.

15:02How those could possibly be explained without bringing in the major role of ideology, it's very hard to believe. Believe. In a major study, Martin Malia, I'll be talking about him when I discuss Soviet communism, he's now professor emeritus from Berkeley, he wrote a book called The Socialist Idea as it pertains, there was a title of the book as it pertains to the Soviet Union. Martin Malia asserts He notes that the key to understanding the Soviet phenomenon is ideology, specifically Marxism, Leninism. He traces the story back to the mid-19th century Russia. It's a great book, a lot of important information there.

15:53Russia, where civil society was weak, I mentioned that in discussing the European miracle. The state was strong. Russia proved to be fertile ground for the spread of socialist ideas very early on. Liberal Social Theory, the ideas of Locke, Hume, Adam Smith, Chagot, Madison and others never struck root in Russia, really. By the time an intelligentsia sprang up in Russia, European intellectuals, from whom the Russians derived most of their political ideas, had made capitalism into an object of horror. The chaos following the fall of the Tsar and the demoralization caused by the First World War permitted Lenin and his highly disciplined, ideologically driven Bolsheviks to effect their coup d'etat.

16:46I say coup d'etat, by the way, since modern research has shown that there was no October Revolution. There was in fact a coup d'etat in Petrograd and then in Moscow and other cities that brought the Bolsheviks to power. The Bolsheviks had once set about to realize the Marxist dream, to construct a free and prosperous society by abolishing private property in the market. But that task, Malia maintains, citing the Austrian School by the way, and particularly Mises and Hayek, You know, at last, somebody who realizes that Mises and Hayek had something to say about central economic planning was and is inherently impossible.

17:31He calls it an assault, the idea of trying to plan society in the way that the Bolsheviks intended and the Marx intended is inherently impossible. He calls it an assault on reality. From the start, the Soviet Union was, he says, a world historical fraud. The land that was supposedly in the vanguard of progressive humanity was in truth an arena of endless oppression, mass poverty and boundless despair. Suppressing this reality, generating and propping up a sure reality, became the job of the legions of state intellectuals at home and abroad, the fellow traveling intellectuals in every Similarly, the collapse of the Soviet regime can only be understood as a case study in the operation of ideology in this sense of the end of a particular ideology's sway.

18:29The subversion of the Leninist faith began after Stalin's death, or the intellectual and cultural thaw introduced by Khrushchev. In the 1960s, a few dissident intellectuals, often zamizdat publishers, that's the Russian word that meant the publishers of illegal anti-regime writings, generally by using carbon paper on typewriters. Now, you probably don't know what carbon paper is. Certainly your kids are not going to know what carbon paper is. There was a way of making duplicates on a manual typewriter.

19:16And that's what these Somersdott intellectuals were often reduced to. Since they, by law, had no access, terror had no access to a reproduction of writings by other means. Samizdat, the publisher, sowed the seeds of doubt in small urban and university circles. Still, a great mass of Soviet citizens remained indoctrinated until the declaration of Perestroika and Glasnost under Gorbachev. It was a big mistake of his, especially Glasnost, that is the open airing of political and other It was then that the truth of the crimes of Lenin as well as Stalin, the truth of the poverty prevailing in the socialist homeland, the true nature of the fantasy world, the The surreality woven by Soviet ideologists for decades came to light.

20:29This fantasy world had been propagated by what Hayek called the second-hand dealers of ideas in the press, television and radio. In Malia, says, by 1991, polls showed the majority of Soviet citizens and a substantial majority of urbanites had lost that basic faith in the system. The Soviet world picture had been wrecked not by tanks and bombs, but by facts and opinions, by the release of information bottled up for decades. What changed minds was the cumulative synergistic effect of a great deal of new information on a variety of subjects at once. The swelling cascade of information shattered the faith of the Soviet ruling class, which Which is the important point in a revolution. It's what happened in France, for instance, after 1789, when the ruling class itself loses faith in its right to rule. So the faith of the Soviet ruling class was shattered and finally its will even to coerce. It was impossible People with this cascade of information for anybody to not to laugh or snort and derision

21:50at the great slogan of the Brezhnev years, Soviet communism, the radiant future of all mankind. Well, it seems to me that this is a very good counter example to the Stiglarian position And some scholars have also re-asserted the importance of the intellectuals in regard to politics. Particularly Douglas North, whom I've mentioned before in connection with his work in economic history in The Miracle of Europe. Now, North and also Bob Higgs, whom I'll talk about in a moment. North freely concedes that public choice theory is invaluable in explaining much of political behavior, especially in democratic societies. Interest group pressures do account for a good deal of political decision making. But to regard this as the whole story is to fall victim, in North's view, to the myopic vision of neoclassical economics. As he says, casual A general observation provides evidence that an enormous amount of change occurs because of large group action which should not occur in the face of the logic of the free rider problem.

23:11You know, the free rider, you're familiar, I imagine, with the free rider problem and the logic it generates. But he says in spite of this, there is obviously, we can see it all around, an enormous amount of group action. Large groups do act when no evident benefits counter the substantial costs to individual participation. People do vote and they do donate blood anonymously. Individual utility functions are simply more complicated than the simple assumptions so far incorporated in neoclassical theory. It may be noted that it would be especially difficult to explain The phenomenon of voting on the simple assumptions North rejects.

23:56It is well known that in the United States, fewer than half of those eligible to vote, vote in national elections. Still, tens of millions take the trouble to go to the polls to cast their individual vote, which they can be certain could not possibly affect the outcome of the national election. I'll grant you 500 votes in Florida, Mike. And if I had 500 votes to cast, I probably would bother to go to the polls, but a single individual vote can't possibly make a difference. Although nobody's bothered to investigate this, it is morally certain, I think, that there are more people who get killed in traffic accidents on the way to the polls than people Ideology, according to North, is ubiquitous. It is an economizing device by which individuals come to terms with their environment and are provided with a world view so that the decision-making process is simplified for them. The fundamental aim of ideology is to energize groups to bathe believe contrary to a simple hedonistic individual calculus of costs and benefits.

25:17And aside from rare exceptions, to cap the argument, ideologies develop under the guidance of intellectuals. A crucial part of ideologies, ignored by scholars who minimize their significance, are judgments of right and wrong, just and unjust. In this connection, North presents an argument that might well give pause to followers of the Stigler position. If the concept of just and unjust is not crucial to the way in which choices are made, then we are left with the puzzle of accounting for the immense amount of resources invested throughout history in attempting to convince individuals about the justice or injustice of their position.

26:06In other words, if, as Stigler believed, people are reasonably well-informed and act intelligently in pursuit of their self-interest, how are we to account for the massive and continual misuse, according to his way of looking at things, of resources in contending over questions of right and wrong? Robert Higgs is another critic of the Stiglerian position. One of the two indispensable books, besides, of course, all the works of Mises and Murray Rothbard, that I want to mention to you, one of the two is Robert Higgs' book, Crisis and Leviathan. It is a treasury of important insights, analyses, facts, and in just a few pages, as far as I'm concerned, he settles this issue of whether ideology and intellectuals are important.

27:05In that book, Crisis in Leviathan, published by Oxford, he presents a detailed examination of the growth of the U.S. federal government in the 20th century, highlighting the importance of intellectuals. An understanding of ideology, he asserts, is essential to an understanding of the growth of government. Higgs, too, believes that the conventional neoclassical approach does not explain a wide range of political behavior. Drawing on the accepted conclusions of social psychology, as well as the writings of Amartya Sen, you may have heard of, won the Nobel Prize, generally considered a left-wing intellectual, Higgs notes that individuals often act to confirm, enhance, and validate their identity or self-image.

28:00For instance, he says, the kind of groups to which a person chooses to belong is closely connected with the kind of person he takes himself to be, which is a matter of prime importance to the typical individual. This also holds for the political dimension of the self-image that people have. Again like North, Higgs stresses that in acting politically, people are often truly concerned with what is right and wrong, just and unjust, issues that cannot be reduced to a narrow hedonistic calculus. Citing Schumpeter on the purely formal nature of the utility theory of value, as employed by the Chicago people, which implies nothing regarding the content of people's wants.

28:49Higgs concludes that one cannot demolish an ideological fortress with the weapons of neoclassical economics. Higgs's insight that much political behavior involves the affirmation of one's self-image prompts the question, how do people acquire political identities which they then act to instantiate and confirm? A fountainhead of such identities is clearly the system of formal education. From this point of view it would prove highly instructive to examine how the educational establishments of Western countries, especially higher education, function not only to convey the panoply of particular anti-capitalist ideas, but also to impart a particular self-image to a significant portion of the students it processes. A self-image which they will then try to live out, roughly their identities as members of the adversary culture, the bearers of a lifelong animus against private enterprise. I hope you've made myself clear, maybe that's a bit of a verbiage How did they come to adopt that self-image, which then will be with them probably for the rest of their lives?

30:17In discussing the Industrial Revolution, I talked about the role of historical myths. and Hayek in that essay which I urged you to consult and look up, History and Politics, analyzes that. It may be useful to focus on another example of a legend that has been part of the socialist pseudo-history and that has likewise been exploded as a myth of the immiseration of working people under the Industrial Revolution. for Decades the prevailing view was the German big business played a central and essential role in the Nazi rise to power.

31:07Oddly enough, this interpretation echoed the official common turn line set forth in the 1920s and 1930s, according to which a generic fascism, including its German variant, represented The Naked Fist of a Bourgeoisie Confronting the Final Proletarian Assault I'm going to be talking about this organization which I hope that you've come across because it played a crucial role in the history of the 20th century and in the terrible history of the 20th century The common term, the Communist International, the International of Communist Parties set up by Lenin to promote the communist revolution in every country in the world by any means necessary, and that was very active in the 1920s, 1930s, early 1940s.

32:10and they had a particular definition and analysis of German National Socialism which turned out to be the one that was accepted by so many historians. For years, socialists continued to tout the line that the financial and political support of German big business was to a great degree responsible for Hitler's coming to power and of course then for World War II and all its atrocities. The Federal Republic of Germany, when it was still just West Germany, intellectuals never tired of repeating Max Horkheimer's aphorism couched in the patented portentousness of the Frankfurt School, the unspeakable Frankfurt School.

32:55He who does not want to speak of capitalism should also be silent about fascism, very coy that. The view was shared and propagated, however, not just by leftists like Horkheimer and communists, but also by prominent non-socialist writers, famous writers on the subject, Alan Bullock, Lord Bullock, Norman Stone, H. Stuart Hughes and others. In 1985, a work of superb scholarship was written by Henry Ashby Turner, in those days the great Yale history department, who demonstrated that this interpretation was simply a myth.

33:48His own analysis is now accepted by practically all writers in the field. Whether Turner will have any more success in seeing his version passed on to the educated public, I doubt it, because don't you feel, don't you have the impression somehow that Hitler was brought to power by German big business? Whether his interpretation will have any more success than the demolition of the myth of the Industrial Revolution remains to be seen. Why do we observe the persistence of historical accounts that are demonstrably false? Towards the end of his work, he reflects on why so many professional historians should have accepted All I can tell you is, look at the book, German Big Business and the Rise of Hitler, it's very interesting, right, the History Channel has made it clear that the Nazi phenomenon and episode is more interesting and important than everything else that has ever happened in human history put together.

34:57And also you can see a great scholar at work. He goes into details. He went into the files of all of these German companies, found out, well, it couldn't be that their vice president was at this meeting with Hitler because he was at that time, at another place. Details of that kind. To put it very briefly, what he finds is that the Nazis adopted the fundraising techniques of the German Social Democrats, but now apply to a substantially more affluent part of the population, the middle class. They charged for entry into their meetings, they sold matchbooks, playing cards with the Hitler's picture on it, all sorts of fundraising techniques, and that was the major source of their funding, together with certain middle-class businessmen.

35:51Big business hardly came into the picture at all. Now, why should so many people, so many historians keep repeating this? And he attempts, he says, as an ultimate conclusion, bias, in short, appears over and over again in the treatment of the political role of big business, even by otherwise scrupulous historians. It's not a question of their fabricating evidence, Professionals historians generally have little or no personal contact with the world of big business. Like so many intellectuals, they tend to view big business with a combination of condescension and distrust. Since almost all of those who have concerned themselves with the relationship between the business community and the Nazis have, to one degree and others stood left or at least left of center. A great many have found it difficult to resist the temptation to implicate big business in the rise of Nazism. Although deliberate distortion does figure in some publications on the subject, the susceptibility of most historians to the myths dealt with in this volume is attributable not to intellectual dishonesty but rather to the sort

37:10of preconception that hobbles attempts to come to grips with the past. Another way of putting Turner's explanation is in terms of one of the several components of the Marxist concept of ideology, as refined by John Elster. The individual's comprehension of social relations, any individual, you, me, anyone, is inevitably skewed by the particular position he himself occupies in the network of these relations. He necessarily comes to understand the whole from the point of view of the part. Seen in this light, the root of the problem lies in the social position, the way of life of the academic intellectual, whose views in turn profoundly shape and condition those of virtually Essentially, the academic intellectual is a Mandarin, accustomed to reiterate the point that Von Mises made to living from an assured source of income, usually taxes, but the case is similar with guaranteed endowments.

38:27As such, he will rarely find it possible to appreciate or even understand the way of life The Life of Capitalists, Entrepreneurs, Traders, Speculators, Men and Women who live and die by the vicissitudes of the market. Thus, the problem turns out to be one not so much of invidious personal motivation as of a socially determined distorted cognition. But, in reply, one might object that it is academic intellectuals who, of all people, are morally obliged to free themselves from socially imposed blinders and to strive to see the market order as it really is. That they have manifestly not lived up to this obligation is however just another way of posing the problem that we've considered all along of the animosity towards the marketplace of intellectuals.

39:21Now, I want to go on to discuss some of the particular intellectuals who have opposed capitalism, some of the most prominent of them. and I want to talk about the French Enlightenment to begin with and then the rise of what Marx and Engels called utopian socialists. Now, there was in fact a trend towards socialist thinking during the French Enlightenment but it was scattered and rare and not central.

40:08and in fact the author I'm going to talk about now was not himself a socialist however he was such an enemy of capitalist society that he deserves a good deal of attention and this is Jean-Jacques Rousseau

40:32as we write the whole thing out

40:38Not Rousseau, by the way, which some of my students take his name to be, it is R-U-S-S-O, as if he ran the local pizzeria or something, Jean-Jacques Rousseau. These are one of the most destructive, to my mind, one of the most destructive characters in modern intellectual history, but really very quite interesting. You all know, as sensible people, especially after listening to the lectures of Dr. Yates on logic, that the ad hominem argument is invalid.

41:30You can't say that somebody's ideas or claims are wrong because of the sort of person that he is. That's an invalid argument, and generally I agree with that. But really we shouldn't make a fetish of this or be overly fanatical. There are some cases where one has to bring in the ad hominem argument. Two that I can think of is obviously in the case of Jean-Jacques Rousseau, and the other, needless to say, is Woodrow Wilson. Rousseau's mother died in giving birth to him. He came from a family in Geneva, not a Frenchman to begin with. For the first part of his life Life didn't accomplish very much or have much success.

42:24And then his friend Diderot, he moved to France and to Paris, which he hated, he hated cities. His friend Diderot pointed out that there was a competition by one of the provincial academies, how has the progress of arts and sciences affected society and human life. And in those days, obviously, we're talking about the Enlightenment, almost everybody would be writing an essay saying, well, it has tremendously advanced human life and so on. He cleverly took the negative and tried to show that the advance of arts and sciences was very destructive of true humanity and won the prize. From then on, he became more and more celebrated, among other reasons, because he was a fantastic stylist, a beautiful stylist.

43:18It seems that he never wrote anything down that he hadn't first repeated in his head. That is, every single sentence and every part of the sentence had to sound right. So he was a master of French and became, together with Voltaire, the most famous figure of the French Enlightenment. I don't care for Voltaire as much as many people do, as much as I once did. However, the choice between Voltaire and Rousseau is no choice as far as I'm concerned, as human beings. Voltaire, of course, he had the mores of the 18th century, had many lovers, but in succession, and the ladies were always ladies of accomplishment. One of his mistresses Rousseau, at one time of his life, for instance, had written a book explaining Newtonian physics for the average person and so on.

44:17And Voltaire made his own money through the sale of his books and pamphlets, his plays and so on, became a very rich man. Rousseau, on the other hand, lived off aristocrats, noble people, rich people who liked to have a star-like Rousseau around. Voltaire loved Paris and the Salerno Society, the wit, the repartee and so on, Rousseau hated it. Voltaire read Rousseau's second important work on equality and inequality, and because Rousseau had sent him a copy of it and he thanked Rousseau kindly for the gift showing why human beings really should go back to the jungle and operating like as if they lived in trees.

45:16From the start they hated each other and they kept reporting each other to the police. Voltaire once said that Rousseau is to human beings as the apes to man. I'm sorry, Rousseau is to philosophers. He's supposed to be a philosopher, right? As the apes to man. Now, in contrast to Voltaire's private life, whatever you want to think of that, nonetheless there was certainly a certain style to it. Rousseau had a common-law wife, Thérèse Lavasseur, who was a domestic servant in the boarding house where he lived.

46:01And he fell in love with her. This is something out of Atlas. He fell in love with her because she had a provincial accent and everybody made fun of her. So she was a kind of poor, pathetic creature. And she was his common-law wife and I guess he was faithful to her through his life. However, she was not what you could call a polished lady of the sort that Voltaire preferred. She could never remember the correct sequence of the months of the year, for instance. And once, when some priest came to visit Rousseau in his room, she thought he had been the pope. That he was the pope and she boasted to her girlfriends that the pope came to visit her husband.

46:52Now, Rousseau had five children from this woman and now we're getting into his social philosophy and how that perhaps comes out of some of his own personal experiences. Every single one of them he gave up for adoption. A friend of his, a later one of these aristocratic ladies, wrote him and said, how could you do that? You who have written on education and on the cultivation of the mind of the young, who have talked in such glowing terms about childhood and youth and so on, how could you give up your own children? And he said, madam, please, I'm not in a position to give them I can't give them writing lessons, I can't give them fencing lessons, I can't pay for an expensive education, I do not have the means.

47:41Let society, which makes these demands on parents to spend in this way for their children, let society take care of them. This is only one example of the fact that he was the originator, as far as I can see, of the society made me do it excuse. I'm not responsible. People aren't responsible. It's evil society that makes them do the sort of things that they do. And somehow, if we got back to nature in some primitive form, we would be much better off. As I say, he had a good style, and some of his very deeply flawed ideas caught on for that reason.

48:34In his essay on inequality, he says, private property originated when the first scoundrel fenced off a piece of land and said, this is mine, and found the first fool to believe Voltaire answered this in correspondence by saying, what is he saying? That a person who goes into the woods, clears the ground, makes it arable, sets up a farm there, sows and reaps a harvest for himself and his family, has no right to a private property? Rousseau really didn't care what he was saying. For one thing, he didn't deduce from his own analysis the idea that property should be abolished.

49:21He was not a socialist in that way. I'm saying that because of his anti-capitalist views, he was influential in the formation of later socialists. Now, Rousseau's most famous book is The Social Contract, although he wrote many books. The most interesting book by Rousseau is really his Confessions. This is another aspect in which he's a modern. One major aspect in which he's a modern is that he deified nature. This was not the tradition in Europe. This was certainly not the tradition among the philosophes, but he said the lakes, the woods, the mountains and so on. where the human being gets in touch with his deepest, most authentic feelings and love to roam around in nature.

50:14And, well, I mentioned the confessions. This is another aspect that makes him into a modern, let's say, of a certain sort. Voltaire had, by the way, a bourgeois, he was not a aristocrat. Voltaire had a bourgeois sense of discretion and dignity. Rousseau, on the other hand, says in his confessions, I will tell you everything. I will make myself transparent to you. So you see who Jean-Jacques really was. He tells us things which, I'm not going to get into this, among other things, the Mises Institute doesn't allow it in public lectures. But he tells us things we really didn't want to know, but on the other hand, what he shows in his confessions is one of the deepest, if maybe the deepest feeling that he had was his hatred of any inequality.

51:13He says that sometimes he's seen a big dog attack a small dog, and when he's thrown rocks at the big dog, because it just seems so unfair to him, this inequality of power. And inequality leads, of course, and private property leads to all sorts of viciousness. Who is the merchant who does not hope that his competitor's ship sinks at sea? And, of course, competition is something that he hated very deeply. Now, his most famous book is The Social Contract.

52:02Don't think that this has anything in common, really, with the social contract of John Locke. Rousseau is sometimes put in the liberal tradition. Okay, you're going to put Keynes in the liberal tradition, that's bad enough. But to put Rousseau in the liberal tradition causes a total collapse of any kind of coherence in the conception of liberalism. And one reason people do that is because, I would say, they don't read very carefully. This is how the social contract begins, and maybe you've heard these words. Man was born free, and he is everywhere in chains. How did this transformation come about? I do not know.

52:47How can it be made legitimate? That question I believe I can answer. Maybe you've heard those lines. Man is everywhere in chains. Does he say he's going to strike off the chains? No. How can that be made legitimate? You follow what I'm saying? Scholars don't seem to be able to get to what Rousseau is talking about. He's talking now about how to legitimate the enslaved condition or relatively enslaved condition of human beings in society. Well, famously he talks about the social contract, very different from Locke's. Locke's social contract was the setting up of government in order to ensure the natural rights of life, liberty and property and government to be given certain very restricted authority and power.

53:45In Rousseau's view, it's different. The different articles of association of human beings in society are reducible to a single one, namely, the total alienation by each associate of himself and all his rights to the whole community. Thus, in the first place, as every individual gives himself absolutely, the conditions are the same for all, and precisely because they are the same for all, it is in no one's interest to make the conditions onerous for others. Since each man gives himself to all, he gives himself to no one, and since there is no associate over whom he does not gain the same rights as others gain over him, each man recovers which is the equivalent of everything he loses and in the bargain acquires more power to preserve what he has.

54:43This is very typical of Rousseau. He has a very nice style. Did you notice the contradiction? Each individual gives up everything to the community and now he says he acquires the power better to preserve what he has. He doesn't have anything. He's given everything up, according to Rousseau. Now, and much more could be said about this, but that's the essential problem with Rousseau. Total alienation of everyone's rights to the community. And through that, the creation of something he calls the general will. He has a chapter here that people who consider him a liberal should pay more attention to. The chapter called The Lawgiver, The Lawgiver or the Legislator.

55:34The Lawgiver is the engineer who invents the machine, the machine of society. Whoever ventures on the enterprise of setting up a people must be ready, shall we say, to change human nature. Now, setting up a people here is institutue, to institute a people. This is the puerile theory that Rousseau and other writers of the French Enlightenment had as to how society comes into existence. Society is instituted by some great law giver. Moses instituted Institute of the Hebrews, Salon Institute of the Greeks, Lycurgus Institute of the Spartan People, and so on.

56:31And this is why, there's one reason I would say, since the theory is so puerile, the idea that some super genius somehow created a society, this is one reason why people pay, scholars pay much more attention nowadays to the Scottish Enlightenment, the Enlightenment of Adam Smith The Lawgiver who ventures on the enterprise of instituting a people must be ready to change human nature to transform each individual who by himself is entirely complete and solitary into a part of a much greater whole from which the same individual will then receive in a sense his life and his being.

57:27So much, and more can be said about this. For instance, he says, a sublime reason which soars above the heads of the common people produces those rules which the lawgiver puts into the mouths of the immortals. It's this lawgiver, this really superhuman individual who institutes a people by setting up the basic social rules and pretends that some God had made up these rules, suggesting for instance Moses created the Hebrew people by pretending that God had sent down the Ten Commandments. And there's more along these lines, but people should also pay attention to a couple of chapters towards the end of his book.

58:22In the Ideal Society that he proposes in the true republic, he's going to revive the Roman institution of the censors. Censors, not so much really in regard, as we use the term now, in regard to literature and other artistic productions, but censors, meaning boards, empower to inquire into the personal morality of individuals, personal behavior of individuals, and to expose individuals who have acted immorally. Just as a general will is declared by the law, so is the public judgment declared by the office of the censor. And there is no limitation on what the censor may investigate because it is legislation that gives birth to morals.

59:18A more perverse and ridiculous statement on social theory could hardly be imagined. First there was legislation, right? First there was the lawgiver, and it comes up with his laws and so on, and then somehow morality comes from that. Whereas it's a truism of a social theory of anthropology, sociology and so on, that every society, every tribe even, produces a set of morals. How could it exist otherwise? How could it continue to exist otherwise? And then very eventually, very gradually and eventually, legislation comes into existence. Now he has another chapter, the civil religion.

1:00:04Rousseau was not an atheist, as some of the French philosophers were. He was really what can be called a deist. that is a believer in God, but not in any particular religion, in fact a rejected organized religion, rejected religious dogma, religious services and so on. Nonetheless, he thought that it was important to believe in the existence of God and rewards and punishments in the afterlife. In this chapter he attacks Christianity. This is the great enemy as far as he's concerned.

1:00:51One reason is that Christianity created a system of dual power in European history. The consequence of this dual power has been an endless conflict of jurisdiction, which has made any kind of good polity impossible to Christian states, where men have never known whether they are to obey the civil ruler or the priest. Does this sound familiar? This is what I talked about when I talked about the division of power in European history between the church and the state and how that generated free institutions in Europe. He says this led to all kinds of confusion. The church interfered in political matters. It would have been better if there had been no church or a church with no pretensions to political influence and the princes could have ruled at will.

1:01:40Of all the Christian authors—he's wrong about Hobbes being a Christian—the philosopher Hobbes is the only one who saw clearly both the evil and the remedy and who dared to propose reuniting the two heads of the eagle, that is, making the state supreme in religious matters as well as in civil matters. Rousseau, the great liberal, some people think, here I'm going to be praising Hobbes for his authoritarian position. As I say, he so hated Christianity. He was born in Geneva, so Protestant, but living in France hated especially the Catholic Church. Christianity is a holy spiritual religion concerned solely with the things of heaven.

1:02:29The Christian's homeland is not of this world. What he's talking about, and he goes on about this, in Rousseau's view, and this is one reason why Rousseau can be considered the start of many things, romanticism, a kind of proto-socialism, but also nationalism, because the highest duty of the individual, in his view, was to devote himself totally to his fatherland, and if necessary, Here he says the Christian doesn't believe that the state is the individual's fatherland. The individual's home's true destination is in heaven with Augustine and the city of God. So he says a Christian republic can never really be a home of patriots.

1:03:20But I err in speaking of a Christian republic, for each of these terms contradicts the other. Right, you've never heard of the Presbyterian preachers rebelling against the Stuarts, or the New England preachers rebelling against George III, well that was a little later anyway, or the Dutch Protestants. Christians, Christianity preaches only servitude and submission. Its spirit is too favorable to tyranny, the tyranny not to take advantage of it. True Christians are made to be slaves. They know it and they hardly care. This short life has too little value in their eyes. Well, I don't know what you want to make of that.

1:04:08I think it's historical rubbish by this great political philosopher and you know to think that maybe I've said this more or less before that so much effort has been devoted to trying to disentangle the contradictions and the nonsensical statements of Rousseau on the one hand whereas Benjamin Constant as I told you until recent years has been relatively relegated to oblivion in the English-speaking world, at least. Okay, what I think I'll do is, well no, let's continue a bit, because this afternoon I want to get into Marxism.

1:04:54Now, Rousseau's impact politically was obvious during the French Revolution. People will tell you, and it's clear enough, Rousseau says everything he's talking about has to do only with a small state where individuals can assemble and vote. Delegated authority, he says, is no true legitimate authority. So what is he saying? He seems to be saying that this whole system of the social contract holds only for some place like Geneva or maybe ancient Athens. It doesn't hold for a modern state like France. Well, at other times he contradicts that and says that the Kingdom of France could also be a system manifesting the general will under certain circumstances. But in this major work he denies that. Nonetheless, he had followers. And the question is, so what is the relevance of this then? If it holds only for a situation where people can get together and directly and he immediately vote on these issues and without intermediate representation.

1:06:07But nonetheless he had followers and he had followers who had to deal with the possibility and the potential and the opportunity of instituting Rousseau's ideas for France. This occurred during the revolution and his major declared follower was a terrorist, Robespierre. Writing this in red for blood. Lepfier claims to have actually met Rousseau when he was younger, in any case he constantly talks about Rousseau, and he was the major figure, as you probably know, in the reign of terror. The idea was that Rousseauian virtue, total dedication of the individual to the welfare of the state, had to be brought about in France. France had to be made over in the The favorite image of the people like Rousseau and Robespierre, ancient Sparta. Not even so much Athens, but ancient Sparta. And this, and not any practical need to oppose invasion or anything else, accounts for the last burst of terror under Robespierre in the spring in summer of 1794. Whether the French Revolution showed any examples of socialism? Well, because

1:07:54of the Aseniat inflation, prices of course went up enormously, it was a runaway paper inflation, and the revolutionaries instituted price controls. Guess what effect the price Price Controls had and the shortages that were created, people were living on the margin already, led to further terror and then a general law of the maximum as it was called overall price controls and wage controls and so state management of the economy which lasted in just a very few months. You could call that an example of socialism, but there was no, aside from the confiscation of the enemies of the revolution, like the church and the aristocrats, there was no general urge towards socialism.

1:08:50However, a few years after, around 1797, first socialist, what you could call the socialist movement, conspiracy, They Called it a Conspiracy occurred in Paris under Barbeuf. They were somewhat inept and it was called the conspiracy of the equals. They were somewhat inept conspirators. They would hold meetings to plan and further their conspiracy and hand out leaflets to people announcing where the meeting was to take place. They were all arrested. They were all put on trial. Babiff and his co-conspirators had a bit of a theoretical structure.

1:09:41And one thing that's interesting from these writings is this, everything is to be run by the community. There's not going to be any private property. Everybody will work for the community. Everything that they produce is going to be put into storehouses and then distributed to people according to need. And they say, if you think that this can't work, look at our great revolutionary armies. Our armies are an example of this kind of system. They don't use the word socialist yet, but essentially what they're saying, our armies are socialized enterprises, and look how immensely successful they are. They're conquering all of Europe. So why can't, you know, people, if we can put a man on the moon, why can't we, you know, do X, Y, and Z?

1:10:28If we can conquer Europe through this kind of socialized effort, why can't we run the economy in the same kind of way? But they were put on trial and most of them were executed. It follows a period of thought, Paris is the center of it, that the Rousseauian idea and Jacobin idea never dies out. Paris is Red Paris until the last gasp of radicalism and revolution in Paris in the Paris Commune of 1871 and then after that I think it's the case that real estate prices in Paris virtually everywhere get so high that it becomes Paris is a center of revolutionary radical and what is now safe to call socialist thought and agitation for the next few decades.

1:11:29This itself, by the way, is one superfluous refutation of the Marxist theory of history. But in the Marxist theory of history, socialism should have arisen in England, because England was much more advanced in the way of capitalism than France was. It didn't. It originated in France, although there was Robert Owen in England, but a very minor figure compared to the French thinkers. Because in the first decades of the 19th century, you have a series of French thinkers, as we'll see, who decisively influenced Karl Marx and the German socialists and are important in that respect.

1:12:16Now, the best book, the best book on socialist thought by far, single volume, large single volume, is by Alexander Gray, and it's called The Socialist Tradition from Moses to Lenin. But Moses' part of it is a kind of example of Grey's Donnish wit. He was a Scottish professor, and the book is filled with, well, if you like that kind of humor, which I do, witticisms along the line.

1:13:12One of the things he tries to prove in the book is that there is no socialism in the Old or New Testaments. When people talk about socialism under the mosaic law, or socialism in the early Christian church, these are misnomers, and he deals with other figures who could reasonably be put in the socialist tradition, like Plato or Thomas More, the author of Utopia, and others. For our purposes, the interesting chapters have to do with modern socialism, starting with the French Utopian Socialists as they're called. They're called Utopian Socialists by Marxists, they were given this name by Marx and Engels.

1:14:02In the Communist Manifesto, Marx and Engels talk about different schools of socialist thought and one is the Utopian School. Marx and Engels called these writers, and the most important of them are Charles Fourier and Henri de Saint-Simon and his followers. And Marx and Engels called them utopians not because they had a kind of utopian vision of what society could become eventually, an Marx and Engels had exactly the same vision. They were utopians because they did not believe in the historical inevitability of socialism.

1:14:48They didn't have a Hegelian understanding of the historical process. They just hoped that somehow socialism would come into existence. A Fourier had his plans for setting up communities and be in some Paris Cafe at a certain hour of the day, available to any millionaire who wanted to come and invest in these socialist communities. Well, Marx and Engels is ridiculous, that's so unrealistic, that's so visionary. That should be kept in mind, I think, because Marx and Engels themselves had an absurd view of what socialism would bring about in the way of total harmony, total freedom, absolute prosperity and so on.

1:15:38Now I can say a few things about Fourier, Fourier, poor Fourier, I mentioned to you that Mises wanted to call the psychiatric ailment, the mental illness of being envious of Successful People in a Capitalist Society. He wanted to call it the Fourier Complex. Well, I mean, leave the poor guy alone. He believed that communities could be set up where everyone had to work, and work could be made such that people would bound out of How was that possible? Every single human instinct is going to be satisfied by the work that is done.

1:16:30There is, for instance, the papillon instinct, the butterfly instinct. You don't want to do the same work all day long. You get tunnel vision from that kind of thing. So, there would be platoons doing different kinds of work, and you'd go from one platoon to another every couple of hours, okay, so you don't have to do the same work, you could be digging ditches one time, you could be building a housing unit another time, you could be putting out a newspaper another time, during the same day, abolition of the division of Labor. There are dirty jobs to be done in society. However, it is a very happy circumstance that children like to mess around in the mud. So we have kids doing that. And then he went around as a traveling salesman and spent his evenings writing this stuff up. All of these These different labor platoons somehow would be so arranged as to have young ladies also involved in them, so that this would add to the merriment in the course of the day.

1:17:43And ultimately, he literally says, and he was a disturbed man, but he literally says that the seas would turn to lemonade, lions would be tamed, ridden by humans, and on and Don't think that this is of no historical interest. Fourier always had a steady influence over the years and generations on a certain variant of socialism, a kind of bohemian socialism, you might say, that shrugs off any real responsibility or the need for hard work in society brings in also a kind of bohemian attitude towards sexual relations and so on.

1:18:34That did have an influence over time, not a major influence, but a steady influence in a certain kind of socialism. and much more important was Saint-Simon and the Saint-Simonians and that and Marxism I'll leave for a discussion for this afternoon. Thank you. Now we're going to have, thank you, we have some time for questions and comments about the role of the intellectuals, about the origins of socialism Do you think the conception of so-and-so, when there was so much fact to be applied to so-and-so that's been heard in the rush, in that revolutionary party, is kind of more of a distaste for the liberal movement?

1:19:43Not to make important distinctions between writers who were terrific classical liberals like Turgot, for instance, or decent conservative type liberals like Montesquieu, on the one hand, and people like Rousseau. At this time, in England, we have the great Tory writer, whom everybody loves really, Samuel Johnson, who was asked in Boswell's Life of Johnson, Boswell asked him one time, what do you think of these French philosophers? And Johnson says, they are more evil than any felon who has gone from the old Bailey these many years.

1:20:30I would like to see Rousseau and Voltaire transported to the plantations as indentured servants, whipped and living out their life, harvesting the crops. So that combination, total melding of Rousseau and Voltaire, who in many ways were very different, is typical of people, of conservatives, as you say, who don't make much of a distinction. And Burke also talks about the philosophers in general. Burke talks about, if you know one of the famous passages, the philosophers, calculators, economists. The economist was a school of the physiocrats and the free trade people whose doctrines, whose free trade ideas Burke himself favored, so he's not making the kind of distinctions that one should.

1:21:27Yes? One last question to you. You mentioned yesterday that how do you want to make a difference when going into the system and it's not really a chain area. What did you suggest?

1:21:58Education, or lower levels of public education isn't going to make very much of a difference, so that alternatives really should be found. You'd be just fighting to get such tremendous odds. Now, that's if you want to have a lot of political influence, or that's from the point of view of political influence. For the sake of personal satisfaction, if you're If you're interested in the discipline, economics, philosophy, history or whatever, yes you can have a, it's a good idea to follow an academic route, but just don't expect to have much influence in the whole academic scene, that is in these educational institutions. I guess that's what I meant.

1:22:53Well, you see, here what we have, and I hope that I'm not going to be at this university, but a lot of very good people that you may have had occasion to hear, maybe not, like Hans Hoppe and others, will be there, and you'll see, there, that's one of the big get-togethers of the calendar in the Mises Institute to see people from all over the world. We've had in the past students from China, that is what used to be called Red China here, South America, Europe, everywhere, 150 students or whatever. One way of changing Robert Owen, was he not a volunteer? Secondly, wasn't he the first one you had to cancel?

1:24:10In the sense of not forcing people to do social work, what's the gain for the people?

1:24:40in the terms that he wanted, that is to extort increases in wages and so on from their employers would also necessarily be a coercive institution. I don't know what you're getting at exactly, but what it may be is this, the idea of central and economic planning of a modern economy does come from the Sansemonians, as we see with Fourier you have small collectivist communities, with Robert Owen you have the idea of reforming factories so that they become kind of factory communities with welfare, all sorts of welfare Could you tell me exactly what the date was? What time period was it?

1:25:49Rousseau, Darden, 1774, the same year as Voltaire, Fourier, the first decades of the 19th century, Robespierre was guillotined in 1794, Babeuf, the Conspiracy of the Equals, was 1796-1797. During the extended French Revolution, if you want to look at it that way, that ends with Napoleon, but after Robespierre. What's that? Let's see, I think he testified before parliamentary commissions around 1825.

1:26:38So that'd be a midpoint. Yeah.

1:27:08and the way people accept the foundation of the new capital of Africa. When I was reading liberalism, I thought that Mises didn't give enough emphasis to this cultural foundation. When he had this idea that his ideas of workers could go anywhere they want. Well, okay, it's an interesting point that you raised. You're referring to the pages in liberalism where Mises talks about what could be called open borders or free immigration.

1:28:03I can use Australian shutting off the heat. Yeah, it really disliked Australia for some reason in those days. And I think what you're saying involves a very big issue. And there's certainly some truth to your idea. I wonder sometimes what would happen to Switzerland if it had open borders. The Swiss society is a very stable one, a very old one, a very traditional one, a one that is very distinctive, based on total adherence to private property and the idea of contractual relations and so on.

1:28:50and if they're open borders, well, Switzerland only has about 6 million people. What would finally come of it? But it's not something that we can just talk about in a few minutes. If you want to raise it in our last session, which is going to be maybe a little more wide open, talking about the future of freedom, that would be maybe not a bad idea. Joe? Well, can you tell me something about these successors, the competitive and original literature, these, sort of, latter-day Republicans who were paying around the Circle Second webinar, who were never complicating, communicating down the road with these guys, sort of, in the background?

1:29:44Yeah, there was, as I say, there was a revolutionary subculture culture in Paris for a long time. And during the revolution of 1848 in Paris, the revolution of 1848 affected most of Europe. I think it was the first time, during the June days as they call it, the first time the red flag was raised. Not the tricolored flag of the of the French Revolution, and beyond that, the flag of the social revolution, the flag of the red flag as it was, and that was crushed very pretty easily. An interesting point to me anyway, is that up until that point, up until 1848, whoever controlled Paris pretty much controlled France, so during the great French Revolution or even In 1830, with Louis Philippe, all you had to do was take over Paris, declare whatever your new government from the city hall, and the rest of France had to lump it.

1:30:55By 1848, however, the railroads had come in, and the Red Revolutionaries could easily have taken over Paris, and they did control some eastern sections of Paris, but at this point The rest of France reacted and the people, fighters started coming in from Normandy and Champagne and Brittany and in the south and so on and crushed the Red Revolutionaries. And after that, Paris couldn't dictate to the rest of France as, for instance, the case of the Paris Commune of 1871. There were different socialist subgroups, but until these theoreticians came along, they were more Jacobin oriented.

1:31:44That is, yeah, let's go back to the days of stringing up the capitalists, guillotining the capitalists, that'll solve all our problems. Yeah, Dan. You mentioned that Rousseau had a hatred of inequality and can't help but notice that a call for a planned society would automatically involve a majority of planners and a majority of followers. Did he recognize this contradiction?

1:32:26So the masses would vote on everything?

1:33:13Each is a precondition of the free development of all, which is really very informative. You're going to have to hand it to Fourier, as dotty as the guy was, telling us what color they were going to paint the dining hall and the future socialist communes. At least he did go into substantial detail. Thank you very much.