Is it possible to institute a moral politics, moral law or moral economics that would help most people to humanise the impersonal social forces that govern their lives? This question does not come to us out of nowhere and certainly not just in the circumstances of the recent financial crisis. It concerns the possibility of legitimate government in capitalist states.
The genealogy of this problem begins with Locke and the liberal (bourgeois) revolution of the 18th century Enlightenment culminating in Kant. Locke sought a protected zone for private property free of interference by public agents (of the king). This led to the normative separation of public and private interests which was never actually achieved (as in the establishment of the Bank of England, a private institution, to nationalise the king’s war debts). This confusion was resolved in two ways: by the invention of ulititarian economics (Smith, Bentham) which reduced public outcomes to the interplay of private individual interests or by Kant’s attempt to discover the grounds for a cosmopolitan moral politics. State laws ended at territorial boundaries and geography generated endless cultural variations. So how could humanity make society in the world as a whole? His answer was the categorial imperative. We all want to be good or at least to be seen as being good. Cultures define the good differently, but the desire to be good makes a conversation across them possible. This project is still liberal, nourished by the American and French revolutions, plus the drive to abolish slavery. The liberal legacy emphasises personal responibility for ones actions, especially in common law traditions, where intention is key to legal culpability. Civil law traditions, as in Continental Europe, retain a strong division between law and right, lex and ius, loi et droit.
Hegel broke all this up with The Philosophy of Right (1821) where he argued that the problem was that bourgeois morality (a property of individual persons) could not address the problem of how and why societies move in history. Modern social thought has followed him. The main problems addressed by Marx, Weber and Durkheim can be found in this book: why capitalism generates poverty and economic inequality, the legitimation crisis of the modern state and the sources of solidarity in an advanced division of labour. Hegel also devoted a large part of the book to corporations. His position on responsibility can be summarised as follows: a child offers to help dry the dishes, then breaks a plate, bursts into tears and says “I didn’t mean to…” Hegel says, If you meant to, you would be a monster, but we are responsible for the social consequences of our actions and you must learn not to break plates when helping out. He identified three sources of social action: abstract right (from the family to coercion), morality (see above) and “the system of needs” (Sittlichkeit). This last is the most advanced basis for society, when citizens internalize the laws as being in their own interest — i.e. most people stop at a red because it is right to and has become a habit.
Fast forward to Max Weber who wanted to retain Kantian subjectivity, but also aspired to a Hegelian historical science of society. He identified three sources of social action: tradition (habit), charisma (force of personality) and rational-legal (embodied in market and bureaucracy, respectively). The movement of history was towards rationalization, but this was at the expense of social relations between persons based on morality (which were essential to the other two forms). This led to the legitimation crisis of the modern state and made him pessimistic about our future (the iron cage being made with bars that were stronger than our individual wills). He thought Kant’s categorical imperative was a pipedream, so what might be the basis for international comparison? His answer was social science organized in associations and journals to accumulate objective knowledge of the world. Weber was thus a neo-Kantian positivist. He could not have accounted for how the world’s largest and most coercive bureaucracy (the Soviet Union) collapsed from the inside with almost no loss of life.
Talcott Parsons set out to build a more hopeful American sociology in The Structure of Social Action (1937). He was convinced that Herbert Spencer, the evolutionary utlitarian who dominated the turn of the century, was dead and he had been killed by a quartet: Durkheim, Weber, Marshall and Pareto. Following the twin founders of British social anthropology, Malinowski and Radcliffe-Brown, he took his lead from Durkheim’s project of finding the basis for moral education in a capitalist division of labour and he bowdlerised Weber (whom he translated contentiously, giving rise to rival American and German traditions of intepreting W) to make him seem more Durkheimian than he was. D wanted to know how the social glue of the Third Republic might be strenghtened, whereas W was mostly interested in the consequences of certain ideological claims. His sources were historical records written by the powerful. He had no way of knowing what ordinary people believed. So if the king claims divine right to rule, he should not kill the head of his church. Claims to legitimacy constrain how power may be exercised. Parsons wanted to argue that people believe in their doctor, professor, lawyer, banker etc on moral grounds of their performing a social task responsibly and not just because they are rational experts.
Parsons’ vision emerged as the dominant ideology of the social democracy instituted in the leading Western industrial nations after World War 2. For the first time in history a world revolution was driven by developmental states committed to raising ordinary people’s purchasing power, to providing for their needs (education, health, transport, security) through enhanced public services and to equalising income distribution as far as possible, since this maximises demand in the home market and reduces conflict between citizens. In this period, an ethos of public responsibility did often shape the actions of private individuals. It was not outlandish to suppose that many doctors cared for their patients and even bank managers gave advice in their customers’ interests and not just their own.
The next part of the story is more familiar to thirtysomething researchers. The social democracy was eroded by a series of global crises in the 1970s culminating in the election of politicians committed to removing state controls and regulations from market economy. This was a naked return to Victorian utilitarianism, as well as a return to the gilded age, and it was sustained by belief in the benevolent consequences of giving free rein to markets. Economists who had previously acknowledged the social context of economic action now turned inward to a technical science based on manipulating prices. Following the emergence of money markets in the 70s and of the internet in the 90s, a credit boom for three decades supported the notion that this was a new era of rational economic management in which finanical professionals could do no wrong. The best students flocked into banking. Every Wall St bank spawned a tell-all confession of corporate malpractice from the late 1980s. We can’t claim that we had no way of knowing what was going on. Deregulation of finance generated political and cultural excess on a massive scale at all levels.
Then came the crash. Immediately and ever since, the American and the European governments put public money into rescuing the banks (whose true circumstances were usually hidden from view) rather than let them fail and use the money to regenerate job creation through public spending. The democratic deficit has become ever more obvious (an immobilised and partisan Congress, the euro crisis and the growing split between a German-dominated ECB and S Europe). Failure to take responsibility for public transgression is endemic and not just in financial circles (Berlusconi, priest child molesters etc). The emasculation of governments, privatisation of public interests, corruption and wrongdoing have been exacerbated by the collapse of national capitalism, Hegel’s recipe for modern political economy that was installed in the late 19th century and has been unravelling since the 1970s. The money system has gone global. Central banks exercise diminishing influence over their own currencies. The world economy is ripe for takeover by transnational corporations whose impersonal purpose is most singular: the make money for shareholders. In many ways industrial capitalism has been replaced by a rent-seeking system which, like the Old Regime, grants wealth to those with political privilege not to those who sell competitive products for profit. A world dominated by the US has become increasingly plutocratic.
So what is to be done? The first question is whether anything sustainable can be rescued from this mess or are we rather condemned to a sequence of wars and revolutions until a more just society emerges, as after 1945? If “neoliberalism” has indeed restored the Old Regime that was once overthrown by the liberal revolutions of the 17-19th centuries, perhaps instead of pining for the workerist revolutions of the 20th century, we should take insipration from the anti-colonial revolution which sought to rid the non-Western peoples of empire. The world is no longer unipolar, but Asia, Africa and Latin America are rising to challenge western hegemony. We are in the thick of a world revolution of unknowable dimensions and it is unlikely to be illuminated by asking how bankers might be made more morally accountable to their respective publics. A first step would be to learn where the contemporary divorce of morality from politics, law and economics came from; to look for positive examples in the intellectual and social history of the last 400 years; and to come up with sharp, original questions that help define the mess we now find ourselves in, that help return us somehow to a viable democratic life in which all human beings have a common interest.