From Crooked Timber:
I’ve got an essay in Raritan about Edmund Burke, Adam Smith, and the problem of value.
The essay is part of my long-term book project, on the political theory of capitalism, which I’ll be coming back to once I’m done with my book on Clarence Thomas (though I’ve been periodically teaching on the topic at the Graduate Center as a preparatory to writing the book). You could read the essay as a kind of prequel to this other essay I wrote on Nietzsche and Hayek and the problem of value.
The idea of the book is to look at how theorists and philosophers (and even some economists) conceived of capitalism less as an economic system and more as a political system, at several junctures in time. Part I will look at the idea of capitalism in the so-called Age of Democratic Revolution, from 1776 to 1848, mostly focused on Britain and France, with an extended detour through Haiti. Part II will turn to the US and the Americas, with a special focus on the idea of capitalism during the Age of Slavery and Emancipation, roughly 1830 to 1876. Part III will return to Europe, taking us from 1865 to 1945, with a focus on the idea of capitalism during the rise of fascism and the radical right as a counter to socialism and the left. Part IV will take us across the globe, in the post-1945 era, as we look as the idea of capitalism during the slow ascendancy of neoliberalism as a second counter, or answer, to socialism and the left.
This Raritan essay, on Burke and Smith, reflects some of the ideas I intend to explore in Part I. Among other things, it challenges the widespread notion of Burke the traditionalist as somehow a steadfast critic of the emerging order of the monied man. It is Smith rather than Burke, as we’ll see, who offers the more scathing critique of that emerging order.
Here are some excerpts:
Yet it was in this crucible of value, heated to the highest degrees by the French Revolution, that Burke found a potential if uneasy settlement between the market—including, critically, an unregulated market of wage labor designed to serve the cause of capital accumulation—and the aristocratic order. In the meeting ground of the market, where personal identities were opaque but roles transparent, where the preferences of the buyer were as whimsical and weighty as the judgments of a king, Burke found an analogue to the irregular theater of the ancien régime. Burke knew the days of that regime were numbered. Not just in revolutionary France, where even a restoration of the monarchy would “be in some measure a new thing,” as he admitted to an émigré, but also in Britain, where the “antient divisions” of old Whigs and Tories were “nearly extinct.” But with the help of his new vision of value, Burke laid the foundation, in these last years of his life, for a system of rule in which the market might replicate the manor.
That he could not, in the end, fully envision the edifice that would be erected upon that foundation—and to the extent that he could, would shield his eyes from it—matters less than we might think. In the centuries that followed, others—most notably the conservative economists of the so-called Austrian School emerging out of fin-de-siècle Vienna—would take up his cause, creating an understanding of the economy in which the demiurges of capital would step forth as the modern equivalent of the feudal aristocracy. As Joseph Schumpeter was to write of these men in 1911, “What may be attained by industrial and commercial success is still the nearest approach to medieval lordship possible to modern man.” That vision was first mooted in these late works of Burke.
Value in the Age of Revolution
There is a reason that Burke found himself, despite these differences of context and circumstance, repeatedly driven back to the question of value. Looming over all the particular controversies and arguments was the specter of revolution and the destruction of the ancien régime. Not only had the French Revolution toppled the ancien régime but it also pried open, as Burke predicted it would, a great many other regimes to scrutiny….
With so many traditional orders of rule under siege, it’s not surprising that the systems of value that undergirded them would be subject to the most ruthless criticism as well. As Nietzsche would later argue, all systems of value are predicated upon a hierarchy of judgment and status, taste and place. Rank entails reward—offices, privileges, wealth—and reward must be worthy of rank. It was simply impossible to threaten so many orders of society without raising the question of their ranks and rewards, and the schemes of value that underlay them. At a moment of free fall like the mid-1790s, when the usual justifications for rule had been taken away or challenged, how could questions of value be resolved without interrogating the contributions of the persons who composed these ranks and received these rewards? What had any of these men done to merit his position? What contributions ought to merit rank or reward? Even those most resistant to raising these questions, like Burke, found themselves dragged into discussions of value—whether it was the wage of the laborer, the rate of the financier, or the rank and reward of the statesman.
The crisis of value that the French Revolution inaugurated found a corollary in the economic sphere with the imposition of price controls, grain requisitions, bread rations, and other market regulations. The latter were hardly new, but since the 1770s they had been implemented against a backdrop of growing unease about the conflict between equality and laissez-faire. With the arrival of the French Revolution, that conflict intensified. Every economic choice was now refracted through the vocabulary of morals and politics; every economic development seemed a portent of a larger renovation of the human estate. Robespierre and the Convention had made it their top priority to keep Paris pacified with bread, at times nearly starving the provinces with requisitions for the capital. When the Directory began to loosen those controls and the bread lines started growing, Paris remembered. As one policy spy explained in March 1795, “There is talk of the regime of before 9 Thermidor, when goods were not as dear and money and assignats [the paper money of the Revolution] were worth the same.”
The fact that value was now up for debate in so many realms meant that whatever systems of value came out of that debate—and whatever ranks and rewards were determined to coincide with these systems—would forever carry the taint of their having been debated. It would be difficult to forget that these values had once been argued over and chosen. Where theological notions of chosenness—Moses receiving the tablets at Sinai—endow the chosen and their values with an aura of the holy, secular chosenness does not generate the same glow. Values that are chosen in secular (as opposed to sacred) time are stained by their originating moment: they were chosen, but they might not have been chosen. Any chosen system of value, and the social distributions (of rights, resources, powers, and privileges) that follow from it, will seem contingent, even arbitrary. More important than its content is the fact that it has been ordained by real men and women at a not-so-distant moment in the past. Having been made in time, it must bear the weight of its contingency, the possibility of its nonbeing, throughout time. A sense of the accidental and the arbitrary will continue to haunt it.
The fact that values were now understood to have been made, rather than given, focused men and women on the activity of making more generally, on the act of bringing things into the world. While there are many ways of conceiving that activity of introduction and inauguration, no model at that moment seemed as pertinent as the production of commodities and the creation of wealth. Still in its infancy in the eighteenth century, the discourse of political economy captured this sense of creating something from nothing, of generating more from less. Labor epitomized that activity, as even Burke acknowledged when he associates the commandment to labor with God’s“creation wrought by mere will out of nothing.” So labor— with its concomitant theory of value—was put at the center of political economy. The Wealth of Nations does not open with the landlord or the merchant or the market; it opens with workers in a pin factory, figuring out ways to economize their actions, increase the pace of production, and thereby create the conditions for the creation of value.
It is thus not surprising that Burke should have returned to questions of value in the last years of his life. The French Revolution had unsettled the distribution of ranks and rewards throughout all of Europe. Whether the topic was the price of bread or the wage of the worker, the fees of the money man or the rank of the man of state, the question of value could not be avoided. Nor could its contingency or the labor that went into its making.
From Markets to the Capitalist
Burke here anticipates a celebration of the market that the historian Daniel Rodgers has argued is more characteristic of social thought since the 1970s than it is of the classical economics of Smith and Ricardo. More than producers or consumers, it is the impersonal market that grounds and drives the argument. More than individuals pursuing their self-interest, it is the market that does the work of creating harmony out of dissonance, settlement from conflict.
Deeper into the argument, however, Burke moves away from the market as the settler or maker of value. We hear less of two estimates materializing as one price and more of the man of money as the decider, the diviner, of value. In the same way that Marx, in moving from the market to the workshop, speaks in Capital of a change “in the physiognomy of our dramatis personae”—“the money owner now strides out in front as a capitalist; the possessor of labour-power follows as his worker. The one smirks self-importantly and is intent on business; the other is timid and holds back, like someone who has brought his own hide to market and now has nothing else to expect but—a tanning”—so does Burke effect a change in his dramatis personae. It is no longer the market settling price but the man of capital determining value, whether he’s buying or selling, whether the commodity is labor or money.
Burke v. Smith
That Burke should have come to these positions at all—much less when and how he did—is more surprising than we might think. Whether one takes Burke to be arguing that the market settles price and that price is value, or that the men of money determine the price and thus the value of commodities, his position is sharply at odds with the arguments of Adam Smith, whose writings already dominated the age and whose thinking Burke believed to be in harmony with his own. In this respect, as in so many others, Burke wrote less as a conventionalist than as a controversialist, the lead player of a still incipient avant-garde.
What ultimately undergirds Smith’s specific claims about labor as the measure of value—and concomitant claims about the distortions wrought by capital’s power and control of the legislature—is a vision of labor as the prime mover in the world. Insofar as labor is a universal measure of value, it is also a marker of our common humanity: what we, as human beings, have to do in the world in order to secure what we want from the world. It is how we make our way in the world.
That picture, in all its detail, is different from Burke’s. Where Smith insists on distinguishing between value and price, Burke collapses the two. Where Smith sees labor as the measure of value, Burke sees the market as the measure of value. Where Smith sees the needs and contributions of labor as partial determinants of the price of labor, Burke disclaims any interest in the needs or contributions of labor. The price of labor is a function of capital’s demand for labor; any consideration beyond that, says Burke, is “passed out of that department” of commerce and justice and “comes within the jurisdiction of mercy” and Christian charity. Where Smith sees capital using its economic and legal power to extract the most damaging contracts from labor, Burke sees the free market at work. Where Smith seems to countenance those legislative interventions that favor labor—and points out all the ways in which the legislature already favors capital—Burke insists that “the moment that Government appears at market, all the principles of market will be subverted,” while remaining silent about all the ways in which the government already appears at market on behalf of capital. And where Smith sees labor as the driving agent of the world, Burke sees capital contributing “all the mind that actuates the whole machine.”
Subjectivism in the Market v. Objectivism in the Social Order
Thus we have in Burke two views of value. On the one hand, value is subjective, dependent on the wit and whimsy of the men of capital. On the other hand, there is a hierarchy of value that divides and distinguishes rich from poor, capital from labor. That value is objective. In the case of labor, it can be quantified and measured; in the case of capital, it is beyond measure. So it is the task of capital to set the value at market of whatever it is selling and whatever it is buying. The final intimation of Burke, never developed or realized but hinted at and suggested, was of an objective order of ranks and rewards, in which the better man occupied the superior rank, while the worse man occupied the lower one.
Two moves would follow, for Burke, from the blend of subjectivism in the market and objectivism in the social order. The first would be to call into question not the legitimacy of social hierarchy as such, but the composition of the higher orders, to raise the question of who is rewarded by membership in the nobility. The second would be the growing sense that the proving ground of that social hierarchy—the determination of higher and lower value, not just in the economy but throughout society—was to be found in the market. In A Letter to a Noble Lord, Burke toys with both moves…
Take it away, I can’t look!
In that context, it might prove the better part of prudence to embrace the market as the proving ground of a new ruling class.
As I said, Burke never really could go there. He flirted with the idea but in the end had to pull back from it. He distrusted new money as much as he distrusted new power. That he himself was a creature of both sorts of novelty—his political and financial rewards were founded on a system of value closer to that of the coming society he rejected than they were to that of the dissolving society he mourned—was but one of the many contradictions he could never quite resolve. It would fall to later theorists, most notably the Austrian economists, to take up those contradictions and work out their kinks and implications.