7. The Anti-Capitalists

Humans are prone to envy, writes Helmut Schoeck in Envy: A Theory of Social Behavior. Humans try to set up a society in which none is envious of another. George Stigler of the Chicago School saw man as always a utility maximizer.

Robert Higgs disagreed with Stigler’s position. Higgs presents that the kind of person one becomes confirms a self-image. When acting politically, people are often concerned about what might be right or wrong.

Russia was fertile grounds for socialist ideas. European intellectuals had made capitalism an object of horror. The Marxist dream was to be obtained by abolishing private property. One prevailing historical myth has been part of socialist pseudo-history. Did German big business play an essential role in the rise of Hitler? No, finds Henry Ashby Turner, but historians keep repeating this story.

Jean-Jacques Rousseau was not a socialist, but was an enemy of capitalism. His views and his activities were destructive. Rousseau and Voltaire hated each other. Rousseau’s famous book is The Social Contract. It is very different from Locke’s. Rousseau should not be put into the liberal camp. Raico calls Rousseau historical rubbish.

Robespierre was one of the most influential figures of the French Revolution and the Reign of Terror. Surprising to Marx, socialism arose in Paris not in London. The best book on socialism is by Alexander Gray –The Socialist Tradition: Moses to Lenin. Gray was Rothbard’s favorite historian of economic thought.

Lecture 7 of 10 from Ralph Raico’s History: The Struggle for Liberty.

[This transcript is edited for clarity and readability. The Q and A at the end of the lecture has been omitted. Annotations have been added by Ryan McMaken.]

I now want to mention a book by German-American sociologist Helmut Schoeck in regard to the question of why intellectuals tend to be opponents of the marketplace. Schoeck wrote an important book that is titled simply, Envy.1 Schoeck was a very smart man, very widely read and learned, a sociologist and anthropologist. He was not an economist, although he was familiar with economics. The book begins by saying that it’s a very funny thing, it is as clear as anything can be, that envy is a universal human motivation. You 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 wish to bring into existence.

The Problem of Envy

In connection with envy, he uses social psychology, history, anthropology, and sociology. This is basically what his theory is: 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; for instance, in economic and financial matters. People are equally subject, however, to an aligned 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.”2

There is also 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 even in Northern Europe, throughout Africa, throughout South America, and in the Far East. The evil eye is a malediction directed at you by somebody who envies something you have. Folklore of all peoples are filled with stories about the evil eye being wielded by envious people against somewhat more prosperous neighbors. The wish is that the neighbor’s cow doesn’t give milk anymore, or his 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”3

With these behavior patterns that aim at avoiding the envy of others, in various societies varying means have evolved to cope with this 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 suppressed much more than it has in any other society in history. The result is that although people are envious, they tend to be somewhat ashamed of their envy and try to hide it. This is Schoeck’s theory: With intellectuals in capitalist society, envy avoidance, trying to avoid the envy of others, manifests itself in support for egalitarian causes. The diffuse dread of the envy of others, Schoeck 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 (social conscience), and the naïve 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 to leftist movements of large numbers of middle and upper-class people.”4 In adhering to movements that preach social and economic equality, they assuage their guilt and anxiety, for now they can feel that they’re helping to set up a society in which no one is envious.5

Schoeck’s theory has the advantage of accounting also for the peculiar self-righteous idealism often displayed by leftist intellectuals, especially among the young. 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 of the expedience of their action in the reality of the here and now.6

We may add that the blessed release experienced by those who have, they feel, placed 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.

Do Intellectuals Matter?

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. But, 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 Milton 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.7 This is a typical Chicago school positivist approach. In fact, he says, there is a total lack of any theory of how ideologies originate and change. 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 maximizer, in his home, in his office—be it public or private—in the Church, in the scientific work, in short, everywhere.”8 Just as they act on the market to maximize the personal utility, “so individuals consistently behave in a utility-increasing manner with respect to the use of the state.”9 That is, these individuals are supporting measures that in the aggregate constitute the historical expansion of state power. Stigler therefore 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 hypotheses tautological, conceding that “there is no accepted content to the utility function.”10 He proposes one. Namely that a person’s utility, “depends upon the welfare of the actor, his family, plus a narrow circle of associates.”11

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, with Stigler, utility appears, for all practical purposes, to mean maximization of income.12 This 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 Stiglerian terms. Stigler further holds that the desire of intellectuals to maximize their incomes—sometimes he says “income” includes prestige and apparent influence—explains the distribution along the political spectrum.

He refers to Schumpeter 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—e.g., overproduction of university trained individuals and their underemployment—tend to create a mindset among intellectuals which is apt to generate anticapitalistic ideologies. That, in turn, spread throughout society. Stigler seems to maintain that economic factors operate upon intellectuals directly and immediately.

Stigler, who was in my understanding a very great scholar, sometimes says things which are very hard to believe. (That could also be said for Milton Friedman, by the way, especially in regard to his remarks on Austrian economics.) Stigler sometimes combined his deprecatory estimation of the influence of intellectuals with a similarly low evaluation of the influence of individual human beings altogether, including 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 self-interest. 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.

This view illustrates why there are very few economists, I think, who can be trusted when they discuss historical matters.13 Here Stigler really gets himself into trouble. He says, as a rule, the effect of prominent leaders on history is “almost infinitesimal.”14 It is safe to say that this assessment would find little agreement among students of the careers of Mohammed, Napoleon, Bismarck, Hitler, Lenin, and Stalin. Those individuals made quite a difference.

Why Ideology Matters: the Case of the Soviet Union

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 accounting for the rise, duration, and final demise of communism in Russia. 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.

It’s very difficult to believe how those could possibly be explained without bringing in the major role of ideology. In a major study, Martin Malia—I’ll be talking about him when I discuss Soviet Communism. He is now Professor Emeritus from Berkeley—wrote a book called The Soviet Tragedy: A History of Socialism in Russia, 1917-1991.15 Malia asserts that “the key to understanding the Soviet phenomenon is ideology,” specifically Marxism-Leninism.16 He traces the story back to mid-nineteenth-century Russia. It’s a great book, with a lot of important information there. In Russia, civil society was weak—I mentioned that in discussing the European Miracle—and 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, Turgot, Madison and others, never really struck root in Russia. 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 its Tsar and the demoralization caused by the First World War, permitted Lenin and his highly disciplined ideologically driven Bolsheviks to effect their coup d’état.

I say “coup d’état,” by the way, since modern research has shown that there was no October Revolution. There was in fact a coup d’état in Petrograd, and then in Moscow and other cities that brought the Bolsheviks to power. The Bolsheviks at once set about to realize the Marxist dream, to construct a free and prosperous society by abolishing private property in the market. That task, Malia maintains, was inherently impossible. Malia cites the Austrian school, by the way, particularly Mises and Hayek, and Malia was somebody who realized that Mises and Hayek had something to say about central economic planning. Malia calls the idea of trying to plan society in the way that the Bolsheviks intended—and that Marx intended—as inherently impossible. He calls it an assault on reality. From the start, the Soviet Union was, he says, “a world-historical fraud.”17 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, and generating and propping up a pseudo-reality became the job of the legions of state intellectuals at home and abroad. This included the fellow traveling intellectuals in every Western country.

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. The subversion of the Leninist faith began after Stalin’s death. It was the intellectual and cultural thaw introduced by Khrushchev. In the 1960s, a few dissident intellectuals, often “samizdat” publishers—that’s the Russian word that meant the publishers of illegal anti-regime writings generally by using carbon paper on typewriters— sowed the seeds of doubt in small urban and university circles. That’s what samizdat intellectuals were often reduced to, since they by law and terror had no access to reproduction of writings by other means.

Still, the great mass of Soviet citizens remained indoctrinated until the declarations of perestroika and glasnost under Mikhail Gorbachev. Those reforms were a big mistake of his, especially glasnost—the open airing of political and other opinions. He himself wanted to preserve communism, at least in its last Leninist form of the new economic policy, but the reforms undermined everything. 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 pseudo-reality woven by Soviet ideologists for decades—came to light. This fantasy world had been propagated by what Hayek called “the secondhand dealers in ideas” in the press, television, and radio.18 And Malia says, that by 1991, 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 is an important point of a revolution. It what happened in France, for instance, after 1789, when the ruling class itself lost faith in its right to rule. The faith of the Soviet ruling class was shattered, including, finally, its will even to coerce. It was impossible, with this cascade of information, for anybody not to laugh or snort in derision at the great slogan of the Brezhnev years: “Soviet communism, the radiant future of all mankind.”19

Well, it seems to me that this is a very good counterexample to the Stiglerian position. Some scholars have also reasserted the importance of the intellectuals in regard to politics, particularly Robert Higgs and Douglas North, whom I’ve mentioned before in connection with his work in the economic history of the European miracle. 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. He says,

Casual 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. . . . 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.20

It may be noted that it would be especially difficult to explain the phenomenon of voting on the simple assumptions North rejects. It is well known that in the United States fewer than half of those eligible to vote do so 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 might, and if I had 500 votes to be cast, I probably would bother to go to the polls. But, a single individual vote can’t possibly make a difference. 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 who can make a difference in a national election with their one single vote.

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.”21 The fundamental aim of ideology is to energize groups that behave contrary to a simple hedonistic individual calculus of costs and benefits. 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 the significance—are judgements of right and wrong, just and unjust. In this connection, North presents an argument that might well give pause to followers of Stigler’s 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.22

In 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” of resources in contending over questions of right and wrong?

Robert Higgs is another critic of the Stiglerian position. Higgs’s book, Crisis and Leviathan is a treasury of important insights, analyses, facts.23 In just a few pages, as far as I’m concerned, he settles the question of whether ideology and intellectuals are important. In the book he presents a detailed examination of the growth of the US federal government in the twentieth century, highlighting the importance of intellectuals. “An understanding of ideology,” he asserts, “is essential to an understanding of the growth of government.”24 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, Higgs notes that individuals often act to confirm or validate their “self-image.” For 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—a prime concern to the typical individual.”25 (Sen won the Nobel Prize and is generally considered a left-wing intellectual, but is an interesting writer nonetheless.)26 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. These are 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—Higgs 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. This is then a self-image—their identities as members of the adversary culture—which they will try to live out as the bearers of a lifelong animus against private enterprise. You’re all aware of fellow students who identify themselves as whatever type of leftist in some sense. How did they get that self-image? How did they come to adopt that self-image which then will be with them probably for the rest of their lives?

Historical Myths, National Socialists, and Big Business

Hayek, in his essay “History and Politics,” analyzes how historical myths influence how we think about the Industrial Revolution. It may be useful to focus on another example of a legend that has been part of the socialist pseudo-history—and which has also been exploded, as the myth of the immiseration of working people under the Industrial Revolution has been exploded. For decades, the prevailing view was that German big business played a central and essential role in the Nazi rise to power. Oddly enough, this interpretation echoed the official Comintern line set forth in the 1920s and 1930s. According to this myth, a generic fascism—including its German variant—represented the naked fist of a bourgeoisie confronting the final proletarian assault. The Comintern, the Communist International, played a crucial role in the terrible history of the twentieth century. It was set up by Lenin to promote the communist revolution in every country in the world, by any means necessary. It was very active in the 1920s, 1930s, the early 1940s and the Comintern 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, German big business was then responsible for World War II and all its atrocities. In 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 unspeakable Frankfurt School: “He who does not want to speak of capitalism should also be silent about fascism.”27 The view was shared and propagated, however, not just by leftists like Horkheimer and communists, but also by prominent non-socialists writers—famous writers on the subject— like Lord Alan Bullock, Norman Stone, H. Stuart Hughes, and others.

In 1985, a work of superb scholarship, German Big Business and the Rise of Hitler, was written by Henry Ashby Turner of, in those days, the great Yale history department. Turner demonstrated that this interpretation was simply a myth.28 His own analysis is now accepted by practically all writers in the field. Will Turner have any more success in seeing his version passed onto 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? So, whether Turner’s interpretation will have any more success than the demolition of the myth of the Industrial Revolution, remains to be seen. Turner posed the question: “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 have accepted the view, and there you can see a great scholar at work. He goes into details. He went into the files of all of these German companies. He found out important details such as the fact that a company’s vice president couldn’t have met with Hitler at a certain time because Hitler was known to be somewhere else at that time. Turned discovered those sorts of details. To put it very briefly, what Turner finds is that the Nazis adopted the fundraising techniques of the German Social Democrats and applied those methods to a substantially more affluent part of the population: the middle class. The Nazis charged for entry into their meetings. They sold matchbooks and playing cards with Hitler’s picture on them, and all sorts of fundraising techniques, and that was the major source of their funding, together with certain middle-class businessmen. Big business hardly came into the picture at all. Now, why should so many historians keep repeating the myth? Turner concludes “Bias, in short, appears over and over again in the treatment of the political role of big business, even by otherwise scrupulous historians.”29 It’s not a question of fabricating evidence, but the historians are biased. His general conclusion is this:

Professional 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 mistrust. … Since almost all of those who have concerned themselves with the relationship between the business community and the Nazis, have, to one degree or another, 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 Naziism. 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 a sort of preconception that hobbles attempts to come to grips with the past.30

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 individuals, 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.”31 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 all other intellectuals. Everybody, almost everybody, who becomes an intellectual goes through college. 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. As such, you rarely find it possible to appreciate or even understand the way of 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 intellectuals’ animosity towards the marketplace.

Rousseau and the Utopian Socialists

I want to go on to discuss some of the most prominent particular intellectuals who have opposed capitalism, beginning with the French Enlightenment, and to the rise of what Marx and Engels called utopian socialists.

There was, in fact, a trend of socialist thinking during the French Enlightenment, but it was scattered and rare and not centralized. 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. This is Jean-Jacques Rousseau.

Jean-Jacques Rousseau is, to my mind, one of the most destructive characters in modern intellectual history. He’s also really quite interesting. You all know as sensible people that the ad hominem argument is invalid. We 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 cases that I can think of are obviously the case of Jean-Jacques Rousseau, and the other is Woodrow Wilson.

Rousseau’s mother died in giving birth to him. He came from a family in Geneva, so he was not a Frenchman to begin with. For the first part of his life, he didn’t accomplish very much or have much success. Then he moved to France and to Paris—which he hated. He hated cities. His friend Denis Diderot pointed out that there was an essay competition by one of the provincial academies. The question that was posed was “how has the progress of arts and sciences affected society and human life?” In those days of the Enlightenment, almost everybody would be writing an essay saying progress has tremendously advanced human life, and so on. Rousseau cleverly took the negative and tried to show that the advance of arts and sciences was very destructive of true humanity. And he won the prize.

From then on, he became more and more celebrated, among other reasons, because he was a fantastic and beautiful stylist. It seems that he never wrote anything down that he hadn’t first repeated in his head. That is, every single sentence in every part of a 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—as human beings—is no choice, as far as I’m concerned. Voltaire, of course, he had the mores of the eighteenth century. He had many lovers, but in succession, and the ladies were always ladies of accomplishment. One of his mistresses, at one time in his life, for instance, had written a book explaining Newtonian physics to the average person. Also, Voltaire made his own money through the sale of his books, pamphlets, plays and so on, and became a very rich man.

Rousseau, on the other hand, lived off aristocrats—rich people who liked to have a star like Rousseau around. Voltaire loved Paris and the salon society, the wit, the repartee, and so on. Rousseau hated it. Voltaire read Rousseau’s second important work on equality and inequality because Rousseau had sent him a copy of it.32 Voltaire thanked Rousseau kindly for the gift of showing why human beings really should go back to the jungle and operate as if they lived in trees. From the start, Rousseau and Voltaire hated each other. They kept reporting each other to the police. Voltaire once said Rousseau is to philosophers as the ape is 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 Levasseur, who was a domestic servant in the boarding house where he lived, and he fell in love with her. He fell in love with her because she had a provincial accent and everybody made fun of her. She was a kind of poor pathetic creature, 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. Once, when some priest came to visit Rousseau in his room, she thought he had been the pope, and she boasted to her girlfriends that the pope came to visit her husband.

Now let’s get into his social philosophy and how that comes out of some of his own personal experiences. Rousseau had five children from this woman, and every single one of them he gave up for adoption. A friend of his, 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? You who have talked in such glowing terms about childhood and youth? How could you give up your own children?” He said, “madam, please, I’m not in a position to give them what they need. I can’t give them riding lessons. I can’t give them fencing lessons. I can’t pay for an expensive education. I do not have the means. Let 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. It’s the idea that people aren’t responsible for their own actions and it’s evil society that makes them do the sort of things that they do. By this thinking, somehow, if we got back to nature in some primitive form, we would be much better off. As I say, Rousseau had a good style and some of his very deeply flawed ideas caught on for that reason.

In 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 that believed him.33 Voltaire answered this in correspondence by asking how it can be 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, and still has no right to private property. Rousseau really didn’t care. For one thing, he didn’t deduce from his own analysis the idea that property should be abolished. He was not a socialist in that way. Yet, because of his anti-capitalist views, he was influential in the formation of later socialists.

Here is another aspect in which he’s a modern: 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, this is where the human being gets in touch with his deepest most authentic feelings. Rousseau loved to roam around in nature.

Rousseau wrote many books and his most interesting book is really his Confessions.34 In the Confessions, there is another aspect that makes Rousseau a modern, let’s say, of a certain sort. Rousseau says in his Confessions, “I will tell you everything. I will make myself transparent to you.”35 So, you see who Jean-Jacques Rousseau really was. He tells us things which I’m not going to get into here because, among other things, the Mises Institute doesn’t allow it in public lectures. He tells us things that we really didn’t want to know. (Voltaire was, by the way, a bourgeois. He was not an aristocrat. Voltaire had a bourgeois sense of discretion and dignity.)

On the other hand, Rousseau shows in his Confessions that one of the deepest—maybe the deepest feeling—that he had was his hatred of inequality. He says that sometimes he’d see a big dog attack a small dog and he’d throw rocks at the big dog because it just seemed so unfair to him.36 For Rousseau, this inequality of power and inequality in private property leads to all sorts of viciousness. Rousseau suggests that merchants hope that their competitors sink at sea, and, of course competition is something he hated very deeply.

His most famous book is The Social Contract.37 Don’t think that this has anything really in common with the social contract of John Locke. Rousseau is sometimes put in the liberal tradition. You can put Keynes in the liberal tradition, and 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. One reason people do that is because, I would say, they don’t read very carefully.

This is how The Social Contract begins: “Man was born free and he is everywhere in chains. How did this transformation come about? I do not know. How could it be made legitimate? That question I believe I can answer.”38 Maybe you’ve heard those lines? “Man is everywhere in chains.” Does Rousseau say he’s going to strike off the chains? No. He says “How can that be made legitimate?” Do you follow what I’m saying? Scholars don’t seem to be able to get what Rousseau’s talking about here. He’s talking now about how to legitimate the enslaved condition, or relatively enslaved condition, of human beings in society.

His answer is the social contract, but Rousseau’s version is very different from Locke’s. Locke’s social contract was setting up a government in order to ensure the natural rights of life, liberty and property and government to be given certain very restricted authority and power. In 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 the equivalent of everything he loses and in the bargain acquires more power to preserve what he has.39

This is very typical of Rousseau. He has a very nice style, but did you notice the contradiction? Each individual gives up everything to the community and now Rousseau says the individual acquires the power better to preserve what he has. But, he doesn’t have anything. He’s given everything up, according to Rousseau. 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—called “The Lawgiver” or “The Legislator.” Rousseau writes “The Lawgiver is the engineer who invents the machine.”40—the machine of society—“Whoever ventures on the enterprise of setting up a people must be ready, shall we say, 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.”41

Now, “setting up a people” here is written as “Instituer un peuple,”—to “institute a people.” This is the puerile theory— the idea that a super genius somehow created a society—that Rousseau and other writers of the French enlightenment had as to how society comes into existence. Society is instituted by some great lawgiver. Moses instituted the Hebrews, Solon instituted the Greeks. Lycurgus instituted the Spartan people, and so on. The puerile nature of this theory is one reason why scholars pay much more attention nowadays to the Scottish Enlightenment—the enlightenment of Adam Smith and David Hume and others, who were writing around the same time—than to writers like Rousseau when it comes to these questions.

So much more can be said about this. For instance, Rousseau says, “sublime reasoning, which soars above the heads of the common people,” produces those rules which the lawgiver puts into “the mouths of the immortals.”42This lawgiver, this really superhuman individual, institutes a people by setting up the basic social rules and pretends that some god made up these rules,. This suggests, for instance, that Moses created the Hebrew people by pretending that God had sent down the Ten Commandments.

There’s more along these lines, but people should also pay attention to a couple of chapters towards the end of The Social Contract. In the ideal society that Rousseau proposes, in the true republic, Rousseau says he’s going to revive the Roman institution of the censors. These censors are not so much what we think of when use the term now in regards to literature and other artistic productions. The censors described by Rousseau are boards empowered to inquire into the personal morality of individuals, the 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.43 There is no limitation on what the censor may investigate because it is legislation that gives birth to morals. A more perverse and ridiculous statement on social theory could hardly be imagined. According to Rousseau, first there was the lawgiver and he comes up with these laws. Then, somehow, morality comes from that. It’s a truism of social theory of anthropology, sociology, and so on, that every society—every tribe, even—produces a set of morals. How could it exist otherwise? After this, eventually and very gradually, legislation comes into existence.

Rousseau has another chapter, “The Civil Religion.” Rousseau was not an atheist, as some of the French philosophes were. He was really what can be called a deist. That is, a believer in God but not in any particular religion. In fact, he rejected organized religion and 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. One 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. According to Rousseau, this has made any kind of good polity impossible in Christian states where men have never known whether they are to obey the civil ruler or the priest.44 He says, this led to all kinds of confusion. The Church interfered in political matters, and Rousseau believes society would have been better if there had been no Church—or a Church with no pretentions to political influence—and the princes could have ruled at will.

Rousseau continues: “Of all the Christian authors…”—he’s wrong about Hobbes being a Christian—”…the philosopher Hobbes is the only one who saw clearly of the evil and the remedy and who dared to propose reuniting the two heads of the eagle.”45 That is, making the state supreme in religious matters as well as in civil matters. Rousseau, the great liberal—some people think—is here praising Hobbes for his authoritarian position. Rousseau hated Christianity. He was born in Protestant Geneva, but living in France, Rousseau hated especially the Catholic Church.

Rousseau goes on: “Christianity is a wholly spiritual religion concerned solely with the things of heaven; the Christian’s homeland is not of this world.”46 He goes on about this. This is one reason why Rousseau can be considered the start of many things such as 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, to die for his fatherland. Here he says the Christian doesn’t believe that the state is the individual’s fatherland. The individual’s home, his true destination, is in heaven with Augustine and The City of God. So, Rousseau says a Christian republic can never really be a home of patriots: “But I err in speaking of a Christian republic, for each of these terms contradicts the other. Christianity preaches only servitude and submission.”47

He’d never heard of the Presbyterian preachers rebelling against the Stuarts. or the New England preachers rebelling against George III—admittedly that came later—or the Dutch Protestants.

Rousseau continues: “Christianity preaches only servitude and submission. Its spirit is too favorable to tyranny for 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.”48

Well, I don’t know what you want to make of that. I think it’s hysterical rubbish, by this “great” political philosopher. To think 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, until recent years, has been relatively relegated to oblivion in the English-speaking world, at least.

Rousseau and the French Revolution

Rousseau’s impact, politically, was obvious during the French Revolution.

Rousseau says that 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 here? He seems to be saying that this whole system of the social contract holds only for a place like Geneva or maybe ancient Athens.49 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 a “general will” under certain circumstances. But in The Social Contract, he denies that. There remained a question as to the relevance of the general will if it holds only for a situation where people can get together and directly and immediately vote on issues without intermediate representation.

Nonetheless, Rousseau had followers, and the followers had to deal with the possibility, the potential, and the opportunity of instituting Rousseau’s ideas for France. This occurred during the Revolution and Rousseau’s major declared follower was the terrorist Robespierre. Robespierre claims to have actually met Rousseau when he was younger, and Robespierre constantly talks about Rousseau. Robespierre was the major figure in the Reign of Terror and he pushed the idea 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 favored image of people like Rousseau and Robespierre, which was ancient Sparta. The model was not even so much Athens. It was Sparta. It was this, and not a practical need to oppose invasion or anything else, that accounts for the last burst of terror under Robespierre in the spring and summer of 1794.

Did the French Revolution show any examples of socialism? A potential example can be seen when the assignat paper money led to runaway inflation and the revolutionary government’s implementation of price controls. Guess what effect price controls had? Shortages were created as people were living on the margin already. This led to further terror and then a general “Law of the Maximum,” as it was called, which created controls over all prices and wages. This then led to state management of the economy, which lasted just a very few months. You could call that an example of socialism, but aside from the confiscation of the property of the enemies of the revolution—like the Church and the aristocrats—there was no general urge towards socialism.

However, around 1797, the first socialist-movement conspiracy occurred in Paris under François-Noël Babeuf. 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.

Babeuf and his co-conspirators had a bit of a theoretical structure and 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. 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 is, “our armies are socialized enterprises and look how immensely successful they are. They’re conquering all of Europe.” Nowadays, people say “we can put a man on the moon, why can’t we do X, Y and Z?” So, the Babeuf conspirators argued “if 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.

There follows a period of thought—and Paris is the center of it—during which the Rousseauian idea and Jacobin idea never die out. Paris is “Red Paris” until the last gasp of radicalism and revolution in Paris in the Paris Commune of 1871. After that, it’s the case that real estate prices in Paris, virtually everywhere, get so high that it becomes quite a conservative town. But Paris is a center of revolutionary radical—and what is now safe to call—socialist thought and education for the next few decades.

This itself, by the way, is one superfluous refutation of the Marxist theory of history. 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. There was Robert Owen in England, but he was a very minor figure compared to the French thinkers because in the first decades of the nineteenth century, you have a series of French thinkers as we’ll see, who decisively influenced Karl Marx and the German socialists.

The Utopian Socialists

The best book—the best large single volume—on socialist thought, by far, is by Alexander Gray and it’s called The Socialist Tradition from Moses to Lenin.50 That “Moses” part of it is a kind of example of Gray’s donnish wit. He was a Scottish professor and the book is filled with—if you like that kind of humor, which I do—witticisms along that line. One of the things he tries to prove in the book is that there is no socialism in the Old and New Testaments; that is, when people talk about socialism under the Mosaic law or socialism in the early Christian Church, these are misnomers. He deals with other figures who could reasonably be put in the socialist tradition, like Plato or Thomas Moore—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.

The utopian socialists were given this name by Marx and Engels in The Communist Manifesto. The most important of them are Charles Fourier and Henri de Saint-Simon and his followers. Marx and Engels call them “utopians” not because they had a kind of utopian vision of what society could become—an unrealistic utopian vision—because Marx and Engels had exactly the same vision. They were “utopians” because they did not believe in the historical inevitability of socialism. They didn’t have a Hegelian understanding of the historical process. They just hoped that somehow socialism would come into existence. Fourier had his plans for setting up communities and he’d be in some Paris café at a certain hour of the day available to any millionaire who wanted to come and invest in the socialist communities. Marx and Engels say “that’s 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.

I want to say a few things about Fourier.51 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 bed in the morning to run to go to work. And how is that possible? How that was possible was that every single human instinct was going to be satisfied by the work that is done. There is, for instance, the “papillon instinct,” the butterfly instinct. That is, you don’t want to do the same work all day long—you get tunnel vision from that kind of thing. So, it would be platoons doing different kinds of work and you’d go from one platoon to another every couple of hours. 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, and all during the same day. It’s abolition of the division of labor. There are dirty jobs that have 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.

He went around as a traveling salesman and spent his evenings writing this stuff up. All of these different labor platoons somehow would be so arranged as to have young ladies also involved in that, so that this would add to the merriment in the course of the day. Ultimately, he literally says—and he was a disturbed man—that the seas would turn to lemonade, lions would be tamed to be ridden by humans, and on and on.52

Don’t think that this is of no historical interest. Fourier always had a steady influence over the years. It was not a major influence, but it was steady.  Fourier influenced generations of supporters of a certain variant of socialism, a kind of bohemian socialism, you might say, which shrugged off any real responsibility or need for hard work in society. This brings in also a kind of bohemian attitude towards sexual relations and so on. Fourier’s socialism was not as important, however, as that of Saint-Simon and the Saint-Simonians.

• 1

  Helmut Schoeck, Envy: A Theory of Social Behavior (New York: Harcourt, Brace and World, 1970).

• 2

  Ibid., p. 257.

• 3

  Ibid.

• 4

  Ibid., p. 280. 

• 5

  Ibid., p. 292.

• 6

  Ibid., p. 304. 

• 7

  George J. Stigler, The Economist as Preacher and Other Essays, (Chicago, IL: University of Chicago Press, 1982), p. 35.

• 8

  Ibid.

• 9

  Quoted in Ralph Raico, Classical Liberalism and The Austrian School (Auburn, AL: Mises institute, 2012), p. 131.

• 10

  Stigler, The Economist as Preacher and Other Essays, p. 26.

• 11

  Ibid., p. 36.

• 12

  See George Stigler, ”The Adoption of Marginal Utility Theory,” History of Political Economy 4, no. 2 (1972): 571–586.

• 13

  Raico contends there are exceptions to this, such as economists Robert Higgs, Murray Rothbard, and Ludwig von Mises.

• 14

  George Stigler, “The Intellectual and His Society,” in ed. Richard T. Selden, Capitalism and Freedom: Problems and Prospects (Charlottesville, VA: University Press of Virginia, 1975), p. 319. 

• 15

  Martin E. Malia, The Soviet Tragedy: A History of Socialism in Russia, 1917-1991 (New York: Free Press, 1994). In the original lecture, Raico misspeaks and states the book’s title is The Socialist Idea

• 16

  Ibid., p. 16. 

• 17

  Ibid., p. 15. 

• 18

  F.A. Hayek,  ”The Intellectuals and Socialism,” University of Chicago Law Review 16: no. 3 (1949): 418.

• 19

  The phrase “Long live communism—the radiant future of all mankind” was among the slogans used by the Soviet regime. The phrase became better-known in the West through Alexander Zinoviev’s 1978 novel The Radiant Future. Zinoviev was a Russian dissident and used the phrase ironically. 

• 20

  Douglass C. North, Structure and Change in Economic History (New York: Norton, 1981), p. 46-47. 

• 21

  Ibid., p. 49.

• 22

  Ibid., p. 51.

• 23

  Robert Higgs, Crisis and Leviathan: Critical Episodes in the Growth of American Government (New York: Oxford University Press, 1987).

• 24

  Ibid., p. 36.

• 25

  Robert Higgs, Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government, (Oakland, CA: Independent Institute, 2007), p. 68. 

• 26

  Sen’s often-quoted observation on this topic is “the purely economic man is indeed close to being a social moron.” Quoted by Higgs, Ibid., page 41. 

• 27

  Ernst Nolte, Marxism, Fascism, Cold War, trans. Lawrence Kader (Atlantic Highlands, NJ: Humanities Press, 1982), p. 76. 

• 28

  Henry Ashby Turner, German Big Business and the Rise of Hitler (Oxford: Oxford University Press, 1985). 

• 29

  Ibid.. p. 350.

• 30

  Ibid., 350-51.

• 31

  Jon Elster, Making Sense of Marx (Cambridge: Cambridge University press, 1985), p. 476.  

• 32

  Jean-Jacques Rousseau, “Discourse on the Origin of Inequality” in Basic Political Writings, trans. Donald A. Cress (Indianapolis: Hackett Publishing Company, 1987).

• 33

  Jean-Jacques Rousseau, “Discourse on the Origin of Inequality” in Basic Political Writings, trans. Donald A. Cress (Indianapolis: Hackett Publishing Company, 1987), p. 60. Cress’s translation reads: “The first person who, having enclosed a plot of land, took it into his head to say this is mine and found people simple enough to believe him, was the true founder of civil society.”

• 34

  Jean-Jacques Rousseau, The Confessions of Jean-Jacques Rousseau, trans. Edmund Wilson (London: Grant Richards, 1924).

• 35

  Ibid., p. 214.

• 36

  Ibid., p. 22. 

• 37

  Jean-Jacques Rousseau, The Social Contract, trans. Maurice Cranston, (London: Penguin Books, 1968).

• 38

  Ibid., p. 49.

• 39

  Ibid. p. 60-61.

• 40

  Ibid., p. 84.

• 41

  Ibid. Raico is using the Cranston translation here. Some translations put this in more heroic terms, framing the effort to “establish a people” as something one must “dare” to do. The original French reads “Celui qui ose entreprende d’instituer un people doit se sentir en état de changer, pour ainsi dire, la nature humaine.” 

• 42

  Rousseau, The Social Contract, p. 87.

• 43

  Ibid., p. 174.

• 44

  Raico notes this relates back to the first lecture, “The European Miracle.”

• 45

  Ibid., p. 180.

• 46

  Ibid., p. 183. 

• 47

  Ibid., p. 184.

• 48

  Ibid.

• 49

  Ibid., p. 136-38.

• 50

  Alexander Gray, The Socialist Tradition: Moses to Lenin (London: Ballantyne Press, 1946).

• 51

  Raico here reminds that audience that Mises labeled the psychiatric ailment of being envious of successful people in a capitalist society the “Fourier Complex.”

• 52

  Charles Fourier, The Theory of the Four Movements, eds. Gareth Stedman Jones and Ian Patterson (New York: Cambridge University Press, 1996), p. 50.