Review of Othmar Spann's 'The True State'

 

Recently published by Taxiarch Press and translated by Ellery Edwards, Othmar Spann's The True State is an explication of the author's social theory of Universalism (also known as Corporatism), which holds the Society-as-Organism Idea, and his critique of the Atomist social theories of Individualism and Marxism. Spann's True State is both difficult to summarize and to review, as it crosses so many categorical boundaries - it is a critique of Marxism, a critique of Individualism, a proposal of the organizational principles of Corporatism, partly social science and partly economics.

As it pertains to Western countries and the possibility of becoming socially-harmonious wholes, this is an important and timely work (timely in the sense that it has only just now been translated and published in English, as far as I know). In many ways, Spann represents the culmination of the reactionary tradition insofar as it took the ideas of social organization as a serious and pressing matter. In his rejection of what he calls Atomistic doctrines (Individualism & Marxism) and his support of what he calls Universalist doctrine (Corporatism), Spann gives a coherent proposal for the - for lack of a better word - reactionary worldview in social-scientific terms. This is valuable work, from the perspective of the reactionary camp, seeing as much-to-most of their writings on social organization didn't/don't contain coherent or internally-consistent social proposals or explanations of principles so much as they contained criticisms or complaints launched against modernity. Karl Marx said of Capitalism that "All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind." This was exactly the tendency that Reactionaries hated and sought in some way, however ham-fistedly, to contradict: the tendency of everything solid to melt into air. They didn't understand the logic of economic processes because, in large part, the idea of society being governed and transformed by automatically self-regulating abstractions like Market Forces or Technology was novel and they weren't yet capable of articulating a defense of the pre-modern social order on economically rational terms. Here Spann is articulating a defense of the principles which manifested in Feudal European orders and which could still yet be combined with the machine-mode of production characteristic of Capitalism without surrendering to it the whole Spiritual and Social World.

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It's worth noting here that when we use the word Reactionary, we intend to avoid an association of meaning with the term Neoreactionary, which, in the writer's view, is categorically flawed. The main flaw is obvious: it assumes that the object of Reaction's original resentment, i.e. the sovereignty of market forces above that of traditionally-ordered states, is in fact an intrinsic and default setting in the fabric of reality. In fact, it is an historically-contingent phenomenon, not innate to reality at all. Neoreaction thus cedes the entire ideological territory to the enemies of original Reaction from the outset, which makes it something of a misnomer. A better title would be Neoliberalism, but that's already been taken (although the differences are scant).

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Part 1

There are negatives and positives in this work. In order to end with the positive, so that the tone of the review is in general positive, we will begin with the negative, which is not insubstantial. Spann's critique of Marxism can't decide whether it wants to be a critique of Marx's economics or his social doctrine, and even when it is confined to the economic, he judges clearly descriptive statements as if they were normative, apparently confused as to where the line of Is/Ought distinction has been drawn. Here is the start of Spann's summary of Marx's economic theory, beginning with its claim that only productive labor creates value:

"The doctrine encompasses the following assertions: that only vital and material labour creates value, is productive; that a specific entrepreneurial function does not exist; that entrepreneurial profit is therefore "surplus value", "exploitation"; that a specific capital function (which would be attributable to a capital interest) does not exist; capital is therefore only a means of exploitation, 'capital is surplus value generated from value.'"

We can reasonably infer, by the passionate tone of the later passages, that Spann is offended by the proposition that only productive labor creates value and that there is no value in the entrepreneurial function. Without wanting to be too uncharitable, it seems he hasn't understood the definition of value (which, for the most part, is short for exchange-value) within the Marxian economic framework. Value here does not signify "social usefulness" or "worthiness", it signifies the intrinsic property in a commodity which determines that ratios at which it exchanges against other goods. As such, Value, in the Marxian framework, is a term devoid of moral content. For all the offense he takes at the notion of value being derived from labor, Spann has projected his own, much broader, definition of value onto the object of his criticism. Continuing on with Spann:

"As no value is generated in the circulation of goods, no value is added. The "mercantile labour" employed by the merchant cannot possibly add value to it. The profit (surplus value) of the merchant is formed by the total surplus value "in proportion to the capital he advanced, in the mass of profit produced by the industrial capitalist class"."

Here again we can infer that he is implicitly disapproving of Marx's claim that mercantile labor adds no value to the stock of commodities. Keep this in mind as we go forward.

Moving onto his critique (having shown parts of his presentation and summary of Marxian economy theory):

"No economist today, no matter which approach or school he belongs to, can deny that Marx's economic theory, in all its doctrinal pieces, indeed, in most of its points, is completely backward and untenable. Let us consider the first basic concepts (communicated above, p.123): wealth, value, exchange, price. Wealth for Marx is a sum of material goods, the economy a full repository of them; a sum! A completely mechanical and quantitative conception, just as with Smith and Ricardo, who as individualists should be Marx's antipodes. The organic composition of the components of wealth, the spirit behind production and the economy as a whole, the attribute of intrinsic value in the objectives, the productive forces, all of this remains unconsidered. How different, how infinitely deeper was the determination of wealth's essence reached, long before Marx, by Adam Muller, Friedrich List, Carey, and the German utility theorists. The greater wealth, says Adam Muller, is not where more goods are found, but where the greater powers are present to maintain them, and where the most significant sentiments are present to appreciate them. [emphasis added]

Marx is also mechanistic in his measure of material value. Value is frozen work, is a substance, something quantitative, which can be measured by the hour. The same applies in exchange. For Marx, it is essentially an equation of quantities of work; and price is only a construct of value, which results from the comparison that weighs goods with respect only to that which is "commensurable" (comparable), held in common: the hours of work contained therein. Today there can remain no doubt that this whole line of thinking, which is nothing but pure Ricardo, put research on the wrong track. Value is not frozen work; it is not materially objective at all but is subjectively determined (or at least partially so); it is not something mechanical, but is based on a utility, a want, that is, a spiritual concern, essentially a purpose (a goal). The economy is based on utility,not labour. It is therefore not mechanically composed of component working hours but consists of the living context of a validity of relations between means, derived from the overall context of the goals. The exchange between two market parties is not an equation but an inequation. If the shepherd gives a lamb to the farmer in exchange for potatoes, the exchange occurs because both give an inequivalence, for with a total equivalence the exchange would have no meaning; if the worker sells labour and the entrepreneur buys it (as an element of the production process) with money, again the exchange occurs because both give unequally. In the division of labor as well as in the natural economy, only unequal things can be exchanged, because the merits of each good are different in their respective bodies than in foreign economic bodies. However, the main problem with confronting Marx's doctrine of price is as follows: already with Ricardo it was proven that the labour value of a good fundamentally cannot coincide with its price. Since all profits are equal in perfectly free competition, then, according to Ricardo himself, those businesses which use a lot of permanent capital and have a long turnaround time (e.g. machine factories) have to sell their products above the labour value; otherwise they would not be able to enjoy the same profit from the slow use of capital as those competitors who implement their capital in short turnaround times (e.g. domestic publishers). But if the prices of goods constantly deviate from the labour value, the axis on the labour value theory is already broken. The same difficulty persists in Marx, but it is further compounded by his theory of surplus value. If the entrepreneur really lived on surplus-value, unpaid work, then those enterprises which employ many workers and little "constant capital" (investment capital), as is the case in the manufacturing industry, would make a lot of profit, while those who employ fewer workers but more constant capital (e.g. the steel mill) would make little profit (Writer's Note: They do). Moreover, the concentration of capital would necessarily have to be hindered by this, because an entrepreneur who has three factories for 500 workers, that is to say, 1500 workers in his surplus-value source, would be foolish if he then concentrated his production into one giant factory, where he was forced to use more machinery and more modern technology but might employ only 1000 workers (more constant and less variable capital).

A further fundamental shortcoming of Marx is that he only takes account of the living labour in the production of goods, but not the labour employed in the spheres of circulation (for example, in the merchant's capital), since, as stated above (as a result of Marx's concept of material goods and labour) in the circulation of goods, neither value nor surplus value is generated. The wages of mercantile labourers, who deal with the merchant's capital, are therefore disputed as an element of surplus value belonging to the industrial and agricultural workers! Marx later considered all these and other difficulties himself, and therefore admitted in the third volume of Das Kapital that the price of commodities can only coincide with their labour-value in exceptional circumstances. (Of the weak defence attempted on the basis of the relative and absolute surplus value rate found in the first volume, I probably do not need to speak here). According to Marx, the surplus value is to be taken from the entire capitalist class' total profit and divided through free competition between all the enterprises in society, a completely artificial construction not accepted even by most Marxists. Because the prices are not formed on the basis of total annual products for entire classes!"

We can summarize Spann's objections to Marx's economic theory in the following list of points: (1) that his definition of wealth as a sum is mechanistic and somehow meaningless, (2) that the labor theory of value is not only incorrect but patently absurd, and (3) that Marx's assertion that mercantile labor adds no value to the stock of commodities is just as absurd. In his criticisms of these points, Spann does not field an actual argument so much as state the points in a weakened form and then point mockingly at them, as if this spells an adequate refutation. Regarding his first objection, against the mechanistic conception of wealth as an aggregate, we won't spend so much time on this, seeing as Marx doesn't either and it seems only to be a point of contention for Spann. Regarding the third objection, it's curious that Spann who lists Muller, List and Carey, a kind of original Protectionist triumvirate as "infinitely deeper" thinkers but then goes on to ridicule the idea that mercantile labor adds no value to commodities as if it were self-evidently false. Regarding the second objection, in giving a fuller treatment of this issue, we will hopefully address the substance of the criticisms in points 1 & 3 also. In order to do this we must, for a moment, break away from a review of True State and into a primer on the Labor Theory of Value and its importance for meaningful economic science.

The Labor Theory of Value (or LTV) emerged as a foundation of Classical economics, essentially, in response to the ways in which improved productivity from technology cheapened the stock of goods. In other words it explained how, as the labor-content of goods decreased, due to labor-saving machinery, their value also decreased. It ran as a common current in economics classics like Smith's Wealth of Nations and Ricardo's Principles of Political Economy, and many-to-most English works of political economy. Existing in its immature form in these works, it was given its most developed and internally-consistent treatment in Marx' Kapital.

The meat of the LTV essentially goes something like this - each commodity (i.e. standardized, exchangeable good available on the market) exchanges at different ratios for other commodities and is mediated by the use of money. Four quarters of wheat cost $12 and one new jacket costs $12. If we remove the monetary element from this situation, a clear relation between the two commodities vis a vis each other emerges: Four (4) Qts of Wheat exchanges for One (1) New Jacket. This relation, which is a property of each of the commodities, is called Exchange-Value, which can be defined thusly: the property inherent in a commodity determining the ratios at which it exchanges against other commodities. If we introduce another commodity, say one hundred (100) Birch branches, which exchange for a jacket or four quarters of wheat, we begin to see a complex of interlinked exchange-values. 4 Qts Wheat -> 100 Branches, 100 Branches -> 1 Jacket, 1 Jacket -> Qts Wheat, and so on and so forth. These commodities at their given quantities and given a generally stable economic situation, all have the same value.

Before the widespread adoption of money in the economy, when things were exchanged "in kind", i.e. in the barter system, the exchange-values of goods were somewhat murky and nebulous; society and economics did not function on a principle of exchangeability that penetrated into all spheres, and so that the value (by which we mean exchange-value) of something was somewhat obscured. With the societal adoption of money, money-prices for goods proliferated, exchange-values became stable and came to apply on a society-wide basis, and the idea of an universal exchange-value inherent to a commodity came to the forefront of consideration.

Labor, the creative substance that is common to the production and circulation of everything in the economy, is the determining factor in the exchange-value of a commodity. This insight first cropped up when the English economists noticed that, as labor-saving machinery was introduced into production, the prices of the produced commodities dropped in tight correspondence with the amount of labor-time saved in their production due to the use of machinery. As economics carried on, labor as the source of value, i.e. the factor determining something's exchange-value, continued to fit squarely with new economic theory. And it still does today, so long as the proper parameters are held in place; the LTV is an explanation of the value-relationship between labor and commodities in their spheres of production and circulation. Its conceptual boundaries do not expand so far as to be able to explain the value-relation between labor and services, because it was never meant to; it was meant only to give predictive power and explain the behaviors of labor and goods in a capitalist economy. And this is entirely appropriate considering the circumstances that 90+% of the labor-force at the time of its conception was bound up in producing goods, rather than maybe the ~15-20% (maybe less?) of labor-force allotted for goods-producing purposes in the US today.

Bringing this back to Spann's critique, he appears to be personally offended by the notion that labor determines the exchange-value of commodities as they circulate on a normally-functioning market. Furthermore, the source of this personal offense, appears to follow from his misinterpretation of the LTV; it seems he has substituted his own definition: the Spannian definition would be "Whatever is not produced by standardized manual labor has no value". He is taking moral offense at a claim that has no moral content; it is purely intended to explain the behaviors of things in an economic setting and in a narrowly economic sense. This is part of the problem with Spann's work, is that he often relaxes his discipline and allows himself to slide between different categories of thought willy-nilly; sometimes Economics, sometimes Sociology or Social Thinking. He hasn't launched any substantive criticism of the LTV in this work so, unfortunately, there's nothing really to overturn. In the passage where he says:

"If the entrepreneur really lived on surplus-value, unpaid work, then those enterprises which employ many workers and little "constant capital" (investment capital), as is the case in the manufacturing industry, would make a lot of profit, while those who employ fewer workers but more constant capital (e.g. the steel mill) would make little profit. Moreover, the concentration of capital would necessarily have to be hindered by this, because an entrepreneur who has three factories for 500 workers, that is to say, 1500 workers in his surplus-value source, would be foolish if he then concentrated his production into one giant factory, where he was forced to use more machinery and more modern technology but might employ only 1000 workers (more constant and less variable capital)."

Here he is only revealing his own ignorance of what he's criticizing. He is saying "If labor were the source of value, it would follow that the more labor-intensive industries would have a higher rate of profit. Moreover, there would be no reason to accumulate capital because this would make industry more capital-intensive and thus drive the profit rate down." It's hard to address this without suspecting that Spann hasn't even read Kapital because of the superficiality of analysis. Yes, the adoption of labor-saving machinery does ultimately drive the profit rate down but it awards the first-adopter a greater profit-rate in the short-term, before his competitors adopt it. Ultimately the rate is driven down because competition in a capitalist economy compels all market actors to adopt the most efficient modes of production or else they are pushed out of the market. After competition brings about a uniformity of modes of production among competitors in a normal market, the rate of profit will indeed be lower. Individual economic actors in the market do not have the privilege of deciding the technique of production for the whole economy (barring monopolistic circumstances). The fact that the profit-rate is driven down by the adoption of machinery is in fact a difficult issue and does pose an obstacle to the indefinite cultivation of the productive forces. So thank you Spann for finally arriving to the party; these are paradoxes that long been the object of contemplation in Marxian economics.

Furthermore, there is no need to take the term "surplus-value" as a morally-charged concept. Although it is true that many Marxists do take this phrasing to signify that the non-working-class people of a country are worthless parasites, "surplus-value" does not itself contain that significance. In Spann's criticism of the Marxian conception of mercantile labor and merchant's capital, where he simply implies that it's silly, this too is another case of Spann projecting his own morally-charged notions onto a piece of descriptive/predictive economic writing. It seems that many objections to the LTV stem from semantic misunderstandings, like Spann's belief that a necessary corollary of the LTV is that services have no value in the sense that they are worthless. It seems that these misunderstandings could be avoided if, instead of using the word 'value', LTV-adherents used the term 'goods-value', and instead of 'exchange-value', 'goods-exchange-value'. Perhaps then the parameters of the theory would be made clear.

His reference to List & Carey earlier is ironic for the fact that their conception of trade and profit is quite in sympatico with Marx's. The idea that mercantile labor does not contribute any surplus-value to a stock of commodities is simply the Marxian way of phrasing the Carey-Listian insight that the volume of commerce is constrained by the stock of available goods, which itself is constrained by degree to which the productive forces have been cultivated. The Marxian idea of mercantile labor as barren in the exchange-value sense is common-sensically seen to be true if we consider the following Carey-Listian hypothetical: if there is an economic scenario with merchant capital and productive capital, and merchant capital consistently takes the lion's share of profits by buying at a low price from productive capital for its output, the result will necessarily be a high level of luxury consumption on the part of merchant capital and a stagnation of the productive forces; even if the merchant wanted to expand his commercial capacity, he would have no reason to because the incoming stock of goods would be the same as in the last round of production. If on the other hand, productive capital takes the lion's share of profits because it can sell its output to merchant's capital at a higher price, the result will not be greater luxury consumption on the part of productive capital, but a greater cultivation of the productive forces, because productive capital will now have appropriated to itself the means necessary to expand production. It will then sell a greater number of goods into the sphere of circulation (merchant's capital), and the latter will take its own profits and expand in order to accommodate the new higher volume. Merchant capital cannot and will not expand its own commercial capacity if the given stock of tradable goods does not itself expand prior to reaching the mercantile sphere; it would simply be a dead-loss. Productive capital can and will expand its own productive capacity if and when it is allotted the sufficient profits in excess of the reproduction cost of the capital structure. Before the advent of machine-production, mercantile capital was the dominant party in the mercantile-productive relation of capitals and so, of course, output was low and the productive forces remained immature. But we digress...

The worst part about Spann's critique of Marx is that he lumps in Muller, Carey & List with the Austrian utility theorists, thereby ceding practically all economic ground to the adherents of the utility theory, also known as the Subjective Theory of Value (STV), which would itself give birth to neoclassical economics. In order to unpack this statement we need to give the STV its own treatment and compare with the LTV. The STV, which Spann defers to as the correct theory of value, is the idea that value does not exist as an intrinsic property of a commodity but instead in the perception which we, as humans, have of the commodity. This theory came about because of perceived inadequacies in the LTV. This perception of inadequacy of the LTV was partially because of the embarrassment of the financial, landlord, and mercantile interests, which the LTV rightfully identified as rentier or quasi-rentier sectors; it could not be allowed to survive lest the Usury of the economic system was excised with the official sanction of economic orthodoxy. If we take the Good Faith interpretation, however, the LTV supposedly ran aground when confronted with the question of mercantile profits and the paradox of exchange: how could it be that value was intrinsic in a good, if people often exchanged goods for each other? Surely if two goods had the same exchange-value, then there would be no benefit derived from the act of exchange, as the two parties would have no more reason to exchange their goods with each other than they would with simply holding onto them. But, again, this was a vulgar reduction of the LTV. The full conception of the LTV held/holds Value to be a complex property with two aspects: exchange-value and use-value, the former being an objective and intrinsic property of a commodity and the latter being a subjective property based on a person's use for the commodity. The Paradox of Exchange, as it applied to the LTV, was solved in Marx's conception by the insight that the Profits of Production were in fact a magnitude that exceeded the profits that were appropriated by productive capital, and that they were equal everywhere to the sum of productive capital's and merchant capital's profits. In this conception, productive capital's profits are a positive-sum magnitude (meaning that when productive capital's profits expand, both it and merchant's capital's profits can expand together) and merchant's capital's profits are a zero-sum magnitude, i.e. a magnitude that can only increase at the expense of productive capital's profits. Surprisingly, Spann rejected this theory in favor of the utility theory. This is surprising because Marx's theory of mercantile profits is completely compatible and complementary with the works of List & Carey, those being fundamental in the Romanticist economic tradition, which Spann calls his home.

The Romanticist tradition arose mostly out of a feeling of spite and resentment for the acquisitive and soulless bourgeoisie, who, by their cold and calculating intellect, made themselves rich but also began to tear apart the fabric of society. The Romanticists were negative on 'creative destruction' and saw in the new phenomenon of the bourgeoisie a demonic and leveling force which would soon bring everything, even the State itself, even Ideals and God, down to the vulgar level of perfectly exchangeable and fungible commodities. They sought to resist this process of civilizational transformation, which had been kickstarted by the ascendancy of the governance of society at the hands of Market Forces by crafting their own economic doctrine, in which not just commodities had economic value. While undoubtedly an understandable and noble mission, it was flawed from the start because it sought to bring about a defense of Capital's prey (i.e. the delicate and unquantifiable things of civilization) on Capital's own terms (within the sphere of economics). It is only out of a deep sympathy with this tradition of writers that I am so critical of them, here and elsewhere. What the Romanticist tradition failed to recognize, and what Marx was quick to recognize, was that Capitalism was, objectively speaking, a more materially progressive form of social organization than Feudalism and, for all its destructiveness of the human and spiritual alike, there was no way to return to the past world, defined by a comparative indifference to the measurement and augmentation of productive power (as compared with Capitalist states), after its emergence onto the world scene.

Returning to the utility theory - it solves the Gordian Knot of the paradox of exchange in typical fashion, by chopping it in half, i.e. by throwing the baby out with the bathwater. Instead of confronting the zero-sum nature of mercantile profits, the utility theorists rejected the entire concept of exchange-value, and with that, started economics down the long path toward becoming a meaningless and syllogistic wilderness of mirrors. How exactly is that so? Let us think about the implications of an economics based entirely on the subjective valuations of economic actors and which jettisons the concept of intrinsic exchange-value.

Our orthodox economic science today is fundamentally the creature of the STV, although the fathers of the STV, the Austrian economists, constantly complain about being rejected and overlooked. In this way, much in the same way that Japan won WW2, the Austrian utility-theorists won the war of economics. I cannot expound any further specifically on that point. On the STV and its implications for economics however - the STV represents a flight from an objective and materially-grounded economic science into the realm of unfalsifiability and thus a relatively useless economics. The fundamental data of an LTV-based economics are the labor-hours and labor-derived exchange-values of commodities, all of which are practical and verifiable in the real world. The fundamental data of an STV-based economics is a complex constellation of inter-linked perceptions of commodities, perceptions which are assumed a priori by the Economists to exist in the peoples' minds and are revealed as preferences in the moment of exchange. The result of this psychological theory of economics is, as mentioned earlier, a maze of circularly- and self-referential data, i.e. a wilderness of mirrors. After the STV comes into effect in economics, the value of a thing is never not the price of the thing.

In order to see the difference between the two, let us take an economic scenario as perceived through the lenses of LTV-based economics and STV-based economics. In this scenario, a shoe-making factory goes bankrupt, and at the same time, with the resources that are freed up by the factory's bankruptcy, a phone-sex operating service moves in to the building, using much of the same resources but liquidating the shoe-making machinery and skilled labor. If we observe that the phone-sex line, housed in the old shoe factory, is more profitable than the old shoe-making business, we can draw two conclusions. If we observe this from the STV-based perspective, we will conclude that greater economic value has been created by this development, since profits are indicative of, ultimately, the satisfaction of preferences. If we observe this from an LTV-based perspective, we must conclude that a source of economic value has disappeared and been replaced by nothing at all, since the profits of service-based industries, ultimately, can only be drawn from the physical economic profit created by the production of commodities.

This is the crux of the issue - the STV gives us an economics that is blind to the cultivation of productive forces and sees no reason why commerce, production, services, finance, etc. shouldn't all be treated as qualitatively identical economic spheres, since ultimately, economics is really all about the satisfaction of preferences which exist only in people's heads, which may or may not exist according to the Economists' conception of them, and is not about the means of production as they exist in reality. In other words, the STV collapses the vital distinctions between economic sectors. On the other hand, the LTV gives way to an economics which, even if it is narrowly and perhaps imperfectly defined, can offer meaningful information about the state of economy as it exists: as a complex of productive forces generating the means of sustenance (housing, clothing, food & drink, transport, etc.). STV-based economics can observe an economy undergoing the process of deindustrialization, with all the necessaries of life becoming dearer and dearer as measured in terms of labor-hours, and conclude that the economy is growing, as long as the economic spheres facilitating said deindustrialization are making profits high enough to compensate for the collapse in production. LTV-based economics cannot bring itself, nor anyone else, to this delusion.

It is understandable why Spann rejected the LTV - he was an Austrian archconservative Corporatist; the LTV was the weapon of the Communists, and the STV was the innovation of Austrian conservative liberals. If it is understandable though, it is unfortunate. The rejection of the LTV is based in part on his moral indignation at the suggestion that the creation of beautiful artwork is worthless compared to the creation of 100 ingots of steel, but really, the indignation-fueled economic writing to prove that the artwork is in fact worth more than the steel, this degrades the artist more than the Communist could have ever managed. In shoving off the LTV in favor of a Theory of Value which incorporates all of human endeavor, he has brought the priceless works of art into the same mundane and material domain of the Economic in which pigs and lead ingots reside. The value of Art is precisely in that it is useless, in that it is worthless, in that the sphere of the Economic has no way engaging with it; that is what makes it so supremely valuable. If a precious artwork is worth more than a pig, then it is disgraced; if it is incomparable with a pig, then its value is assessed respectfully. Spann's expansion of the domain of value to incorporate these things is in fact, not an elevation of the station of the artist, but a degradation.

Part 2

Moving on from his critique of Marxism and onto his proposal of Universalist / Corporatist social organizing principles: - By Corporatist here, we are referring to the political ideology that is based on the principle of incorporating all of the elements of society into one cohesive whole, so that the various factions of society do not compete with each other but rather cooperate in the service of a single goal common to all of them. The principle of incorporation is the reason for the name of Corporatism. It does not, as many are led to believe, refer to a situation in which society is governed by corporations. That would be better known as Corporatocracy. In modern history, the formal proposals for Corporatist governmental structures have usually entailed a schema for organizing all the aspects of a state, the military, bureaucracy, teachers, farmers, workers, merchants, financiers, intelligentsia, aristocracy, and so on and so forth, into one self-cohering body. These proposals usually entailed the replacement of Parliamentary Democracy with a complex network of worker's councils, industrial councils, buyer's councils, architects guild's, artist's guilds, doctor's guilds, and so on. - Spann was a proponent of the Organicist conception of society, as opposed to the Individualist or Atomist conception, of which he counts both Liberalism and Marxism as members. The Organicist conception is more or less the idea that a Society is like a body: it has hands, feet, digestive organs, sensing organs and so on. Each of these components of the body are necessary and valuable to the body's functions but they are not equal in importance or function, in relation to the whole or to each other. For example, if we take a narrowly materialistic slant, the brain commands the rest of the body, therefore the brain is at the top of an hierarchy of bodily functions. Though the brain is at the top and the hands and feet might be at the bottom (being the farthest extremities from the core functions of the body), a body without hands might be able to run but it wouldn't be able to grapple with the world and therefore it wouldn't be a fully human body. This is the metaphor which Spann applies to the idea of a society with the Organicist conception. The Atomist conception, on the other hand, views society as a "pile of stones"; yes, a pile of stones may be a whole pile, but the relations between the stones are nothing, they are inoperative. If one were to remove one stone from a pile of stones, it would still just be a pile of stones and, furthermore, none of the stones' functions (including the removed one) would in any way be altered by the removal. This is a kind of physics-based metaphor which Spann ascribes to the doctrines of Liberalism and Marxism in their treatments of society as a whole. So we have two competing visions: one based on a biology-metaphor and the other on a physics-metaphor.

He addresses the way in which Liberalism has corroded society's natural form as an Organism and begun to transform it into the metaphorical pile of disconnected stones and, in response, proposes a set of principles which a society might use to restore itself to its natural, traditional, Corporatist form. They are the following: (1) A gradient of Dominions, (2) Mediacy as the principle of organization, and (3) an Upward-Looking social orientation. Explaining each of these:

(1) By Gradient of Dominions, he means formally establishing a hierarchy of estates, so that, starting from the bottom, there is a farmer's estate, worker's estate, merchant's estate, teacher's estate, civil servant's estate, warrior's estate, statesman's estate, priestly estate and so on. By estate here we mean some kind of official politically-sanctioned association, of which all constituents must be a member; all farmer's belong to the farmer's estate, all workers belong to the worker's estate and so on. These would be governing bodies that would be the vehicle for communication between the separate groups and interests of a society. Of course, in Liberalism, these things already exist but only in latent form; Liberalism does not officially recognize the existence of a farmer's estate, even though it does exist as a community of interests and concerns, only in an unacknowledged form.

(2) By Mediacy, he means 'the opposite of immediate'. In a democratic style of government, such as the U.S.'s, the people (at least theoretically) have an immediate relationship with the state. They vote for their representatives in Congress and in the Senate and, in that way, have direct contact with the Federal Government; this is a system of immediate involvement. If, on the other hand, the principle of Mediacy was operative in some hypothetical Corporatist state, citizens and workers would be members of their local civic councils, and those councils (in addition to governing local affairs) would have representatives to the regional councils, and the regional councils would (in addition to governing regional affairs) have representatives to the state councils, and so on and so forth.

(3) By Upward-Looking social orientation, he means (his actual words are "the rule which determines things as essentially flowing from above, rather than below (as individualistic natural law would have it)") that the governing principle would not be appeals to the sovereignty of the people but the legitimacy of the highest value. This was the principle operative in Monarchy, wherein everything was oriented upwards towards the King, who was himself personally in contact with and delegated by God to govern a group of people.

                                    Immediacy                                                                Mediacy

Having given these, he goes on to give an explanation of the form of the Corporatist state: how the economic sectors would be organized, how the super-economic sectors (the leadership, martial, spiritual, and intellectual estates) would be organized, and how it all would be organized as a whole, according to the principles of Universalism. In proposing the re-organization and segregation of society into estates, he echoes the words of Johann Fichte who, in his Closed Commercial State, written some 100 years before Spann's work, also proposed that the economy be re-organized into estates and that, instead of the free buying and selling of commodities, each estate would be entitled to the whole of the produce of every other estate (agriculture having positive rights to industry and vice versa). The reason that all of this re-organization is necessary is that, as Spann says, the goal of the state is for the best to govern, and a disordered, informal, ahierarchical state is only capable of producing outcomes in which the best kowtow to the worst, in the naive conservative's idea of Democracy, or even worse, that the acquisitive, incurious, and spiritually desolate rise to the top by the power of Money, in the more realistic idea of Democracy.

Most important in all of this is the spiritual nature of society. According to Spann, Corporatism is the only form of government in which the spiritual natures of the people constituting the society can align properly with the positions they are meant to occupy. In the Atomistic forms, the roles that ought to be delegated to the spiritually highest are delegated to the spiritually lowest and vice versa. In the most concrete terms, the mercantile and exchange-oriented are given the seat of the Leader and the least spiritually-oriented, most self-oriented are given the seat of the Priest. From his explicit declaration of the differences in innate spiritual qualities among people, we see that Spann is totally opposed to an egalitarian view of the world.

The question of knowing which are the spiritually superior and how to properly delegate them - Corporatism partially addresses this, but Spann also cedes somewhat by admitting that the possibility of stagnation is afforded by the Corporate form in his section titled "How is the Ossification of the Estates Prevented?"

"Every solid order of masses threatens to freeze, and does so, if not for the free mobility of the creative forces behind it, room for manoeuvre, if not for the purpose of constant replenishment, then at least for the occasional freshening of blood. There are two main means of providing for this: first, the free movement of talents and individualities, in particular due to the freedom and accessibility of higher education; second, the openness of certain areas of economic life for free economic activity, and for reorganizing and reshaping economic activity (which means the application of new processes, inventions, models, and types of goods, as well as organizational overhauls of companies themselves)."

So, although he advocates a rigidly hierarchical state, he is not yet calling for a Caste Society, in which the circumstances of one's birth are the immutable chains of fate.

As his work nears toward its conclusion, he begins describing Corporatism more and more in terms of Guild Socialism, showing his admiration for the forms of governance that prevailed in Medieval Europe. The core principles of this work are: (1) that the aim of society is to delegate the social roles to people as best corresponds with their spiritual natures, (2) that Atomistic societies necessarily violate this goal and that only Corporatism is capable of approaching it, and (3) that the requisite principles of Corporatism are the Segregation into Estates, Mediacy, and the Upward Orientation.

It is impossible to give a more concise overview of the formulation of Corporatism given by Spann here, so let the reader not think that, because the writer's coverage of the topic is somewhat nebulous, that Spann himself was imprecise in his treatment of this topic. The Romanticist tradition of economics, which was fundamentally a German-speaking phenomenon, has long had a reputation for imprecision and non-committal language. Spann, who rightfully saw himself as the apotheosis of this tradition, gives perhaps the most clearly-spoken and concrete proposal for a Corporatist state and gives its most articulate defense, while critiquing the alternative Atomistic doctrines of Marxism and Liberalism. If you want to see just how the principles that organized pre-modern societies could be applied to modern ones, or to know what, in concrete terms, the writers of the Romanticist tradition were talking about, you should read this book. As the endpoint of German Romanticism, an explanation of its principles, and a powerful critique of Atomism, it is a must-read for illiberal or post-liberal conservatives. Indeed, after Spann, this train of thought was extinguished. Romanticism was already a rather marginalized tradition within the sphere of economics, and after the defeat of the Axis in the Second World War, Spann, as well as most authentically German thinking on the Social Sciences, were snuffed out in the ideological victory of the Allies (who, together, embodied exactly what Spann considered the principle uniting them: Atomism).

It is probably inevitable that an Austrian conservative would have sided so quickly with the Utility Theorists against the generally Marxist (or at least, generally perceived to be Marxist) Labor Theory of Value. And this is unfortunate but a reconciliation of the LTV with Spannian Corporatism is not by any means impossible; it just requires a bit of moral and emotional detachment when talking about the substance of Labor, Value, and Surplus-Value. They are easily reconciled because, what Spann was trying to do with this book was straddling the line between Economics and Social Science, sometimes here sometimes there. Since his theory of Corporatism has no strictly economic content there's no reason that a Corporatist Theory of State and a Labor-based Theory of Economy cannot be advanced in unison.