Wednesday, August 29, 2012

Japan, "Modernism" and the 19th century origins of Fascism

I said yesterday that I might say something today about the deeper reasons behind the West's early fascination with Japan. I need to set out a lot of background to get to that point, however, and "Modernism" is a rather surprising key to that. It explains both the fascination with Japan before WWI and the emergence of Fascism after WWI.

"Modernism" is a much abused term that has had a number of meanings over the years but the version that I want to discuss here was a movement, mostly in art and literature, in the closing decades of the 19th century and continuing into the early 20th century. It took a hit from the shattering events of WWI but rather surprisingly survived. It was particularly prominent in France and Italy and in Italy eventually merged with Fascism.

It was a rather euphoric movement marked by a general rejection of previous traditions and a feeling that the modernists could create the world anew. It all sounds rather silly and egotistical nowadays but its relationship with Fascism gives it more than ordinary historical importance. Wikipedia has one summary of it here for those who want to read further.

There is a book (briefly summarized here) by a frequent writer on Fascism (Roger Griffin) which attempts the daunting task of defining modernism -- and the author's apologies for the boldness of that endeavour must be my apologies too.

I think his approach to Fascism via Modernism is fruitful but there is also something in the Marxist account of social changes having economic causes -- so I would extend the analysis to say that even modernism can be seen as an economic product. I think economic history explains just about all of modernism in fact. But economic phenomena do not exist in a vacuum either. Behind economic history is political history. So on to that:

After the defeat of the French by German forces in 1870, Bismarck rapidly accomplished his long-pursued task of unifying most of the German lands under the Prussian crown. Only Austria proved indigestible.

Bismarck saw the great danger of the unification, however. Unified Germany was such a formidible economic and military power that it had great potential to strike terror into the rest of Europe. And a logical response to that terror would be for the rest of Europe to "gang up" on Germany in what would have to be a brutal and destructive war, whatever the outcome.

Rather surprisingly to some, however, Bismarck was a man of peace, despite his earlier talk of "blood and iron". His only real devotion was to his Vaterland so, although he made skilled use of war to bring about the widely desired unification of Germany, he was just as ready to use peace on behalf of Germany once that was accomplished.

And Bismarck saw the fatal weakness in hostility to Germany: Great alliances would have to be formed if there was to be any hope of taking Germany on. So for the remainder of his term as Reichskanzler he used diplomatic means to frustrate that. His constantly changing foreign policy confused everyone and prevented any firm alliances from forming. So purely to protect Germany, Bismarck achieved something remarkable: Peace in Europe.

And that peace became rather permanent. People got used to not being at war. Proof that peace was possible made it the status quo which most people wanted to continue. So even after Bismarck left the scene in 1890 the peace continued for nearly a quarter of a century more -- until 1914.

And peace in Europe had a hugely energizing effect. Scientific, technical and economic innovations had already begun in various places but with European energies diverted to peaceful pursuits rather than war, those developments got a huge kick-along and great economic progress took place. Europe emerged from a peasant age into an industrial age. Even in Russia, heavy industries emerged and railways snaked out across the land.

But these vast economic changes had a psychologically disruptive effect. As the old order crumbled before the steam train its assumptions crumbled too. Aristocracy lost legitimacy and all values were questioned. Any thinking that had been widely accepted in the past became automatically suspect as belonging to the past only.

And that, basically, was modernism: A confidence that the old could be swept away and replaced by a new more exciting and more heroic vision of just about everything.

But again at risk of seeming Marxist, the new vision had its antithesis. Many people were suspicious of the new enthusiasms and were not at all ready to throw away the wisdom of the past. This "reaction" was brilliantly managed by Disraeli in Britain, not managed at all in France and rather hamfistedly managed by Bismarck in in Germany. Bismarck was not nearly as successful in domestic policy as he was in foreign policy, though again his policies kept his opposition off-balance as long as he was around.

So, of the major European powers, only Britain merged smoothly into the modern world -- with only a minimum of social disruption. The values of the past were largely preserved while considerable innovations to cope with changed economic circumstances were also made. Russia was of course at the other end of the scale, where adaptation to the new was disastrously managed.

Perhaps the most vivid evidence of the orderly British transition is the survival right into the present day of the House of Lords, still a highly esteemed body but quite unlike any other present-day upper house that I know of. So Britain had plenty of cultural modernism in its day but Fascism never made significant inroads into British political life, despite the efforts of Sir Oswald Mosley.

So now I come to where I disagree with the Marxists (with whom Griffin, mentioned above, seems to agree partly). I think the Marxists have got the wrong end of the stick altogether. Marxists see Fascism as a form of defence of the old order when it was clearly quite the opposite. They see it as a defence of traditional values when Fascists themselves saw themselves as the vanguard of the new. Particularly in Italy it is clear that Fascists were the modernists, not traditionalists. Extreme modernists such as D'Annunzio were simply co-opted into Fascism.

One can perhaps excuse the Marxist confusion a little in that both Mussolini and Hitler did make major allusions to the past -- Mussolini aiming to re-establish the Roman empire and Hitler glorifying Germany's imagined pre-Christian lifestyle. But it is starkly clear that these allusions are to an imagined and remote past rather than to the actual immediate past. Neither man was a traditionalist in any sense. Both had visions for their countries that were thoroughly modernist. The visions were rather vague and inchoate but that was part of modernism.

But the major point behind the Marxist critique is that the changes wrought by the Fascists were much less sweeping than those wrought by the Bolsheviks in Russia. The Fascists left most of the existing structure of society in place. Does that not make them defenders of the status quo?

But it must be remembered that the modernists were idealists rather than the hate-filled smash-everything monsters of Bolshevism. And the "hope and change" message offered by the modernists was every bit as vague as a similar message in the 21st century. Their ideals left very little guide for action. So their actions were rather limited when they came to power. They were clear that they needed to gain close control over society but they saw that this could be done by laws and regulation rather than by mass-murder -- so chose that more orderly path.

The one ideal that they aimed to implement was the thoroughly socialist ideal of a better deal for the workers -- and they in fact did that by much expanded social welfare legislation. And they intruded further into the lives of the workers than even social democratic parties had ever envisaged -- even providing cheap recreations for the workers (The "Dopolavoro" system in Italy and the "Kraft durch Freude" movement in Germany).

A KDF "Holiday ship"

The Fascist control of their society was extensive and intrusive but not obviously destructive. They were in that way closer to the social democrats than the Bolsheviks. So the transformation of society under the Fascists was more restrained than what happened in Russia but it was still obviously motivated by socialist ideals and was just as disastrous in the end.

But what about the nationalism of the Fascists? Where does that fit in? It was in fact one way in which the Fascists did NOT innovate or stand out. Nationalism was normal across the political spectrum in Europe at the time. There were few more ardent German nationalists than Friedrich Engels, for instance. Yes. THAT Engels: Karl Marx's co-author. And Mussolini saw that. He saw that the working classes of Europe had supported their respective nation-states in WWI and it was largely that realization which eventually caused him to give up Marxist class-war ideas and invent Fascism instead. Hitler too was repulsed by class-war ideas.

So one can conclude that the political manifestation of modernism in the form of Fascism was largely a poorly managed response to an economic transformation. A new world called for new ideas and Fascism purported to offer that.

I will close by pointing out very briefly the rather obvious tie-in to the fascination with Japan that prevailed for a while in Europe. Japan modernized at the most breakneck speed of all and yet still seemed to retain all its traditional values! No wonder the modernists were fascinated! In fact, Japan had something for everyone, which is why it had so much influence (now mostly forgotten) in the run-up to WWI.

Footnote: I am mildly pleased to see that the Wikipedia entry on Bismarck agrees fairly closely with what I have said about him. I don't always have orthodox history on my side!


George Orwell, Call Your Office

Sometimes the mind just boggles. The Atlantic has an article this month with the title “Americans Want to Live in a Much More Equal Country (They Just Don’t Realize It).” I am always curious when intellectuals announce that the people (who in the American constitutional system serve as the sovereign power) don’t know what’s good for them (What’s the Matter with Kansas?) or don’t even know what they want.

Implicit in all of these revelations, of course, is the firmest, if never directly expressed, belief of the Left: That the average person is too stupid to run his own life, let alone make public policy decisions. Those few, those happy few, that band of liberal intellectuals, must do that for them.

The author of the Atlantic article, Dan Ariely—a professor of psychology and behavioral economics at Duke—divided the American population into quintiles according to wealth. He then asked a representative sample of more than 5,000 Americans to guess how the country’s wealth was distributed amongst these quintiles.

He doesn’t say exactly how he determined the population’s wealth. Are the hundreds of billions of dollars in union and government pension funds that will fund the retirement of millions of blue-collar and government workers considered an asset of those workers? I’d guess not. Does this money greatly improve their standard of living? You bet, just like a trust fund improves the standard of living of some rich man’s grandson. But let that go.

It turns out that the overwhelming majority of the sample population thought the distribution of wealth was much more equal than in fact it is. The average guess was that 9 percent of the country’s private wealth belonged to the bottom 40 percent and that 59 percent of it belonged to the top 20 percent. According to the author, it is in fact 0.3 percent of American privately held wealth that belongs to the bottom 40 and 84 percent that belongs to the top 20. But, again, without some insight into the methodology, these figures are impossible to evaluate. They are simply declared ex cathedra.

Ariely then asked people in the sample population to pick an ideal distribution of wealth among the quintiles. The average of their choices was much more egalitarian than is the American reality. The average proposed distribution was 11 percent for the poorest quintile and 32 percent for the richest.

The rest of the article is devoted to a discussion of how best to get to that preferred distribution.

A few points:

1) As long as no one lacks the wherewithal for a decent standard of living, is a very unequal division of wealth necessarily a bad thing and a more evenly distributed pattern of wealth necessarily a good thing? Professor Ariely blithely begs this fundamental question.

2) American society is notoriously fluid. Rising from a log cabin to the presidency is American folklore. It is also American reality. The majority of the Forbes 400 created their own fortunes.

But there is not an inkling here that individuals often transition through different quintiles during their lives. Someone might start off in the top quintile, living with his affluent parents. Then he graduates from college, gets an entry-level job and a studio apartment in a crummy part of town, and bam! He’s in the bottom quintile. He works hard, gets ahead, saves some money, and he’s in the next-to-bottom quintile. He marries a woman with a good job and moves up another. His parents help with the down payment on a house and 20 years later, once the mortgage is paid off, he’s in the next quintile. His father dies, leaves him a million dollars, and he’s in the top quintile. Then the market goes to hell, his net worth declines drastically, and, as a result, he drops down a notch or two. And so on.

Instead, there is an unmistakable implication in the article that the various quintiles are self-perpetuating, with the proletariat at the bottom leading lives of quiet desperation and a few fat cats at the top lighting cigars with hundred-dollar bills. That might have been true in the 1840s when Marx began writing (although the early 19th century was also a time of many new fortunes). It sure isn’t true in today’s America, where a bright idea for an iPad app can make you rich practically overnight (just ask the guy who invented Angry Birds) and talent is far more valued than ancestors.

3) How on earth are 5,500 people chosen from all walks of life—from janitor to rocket scientist—supposed to have the faintest idea what the ideal distribution of wealth should be in today’s rapidly changing economy? These people are picking numbers out of the air and saying, “Oh, that seems right.” Is it? Professor Ariely simply assumes that it is.

4) Shouldn’t we have some real idea as to what the ideal distribution actually is—if that’s even knowable—before we march the country off willy-nilly toward some arbitrary distribution chosen by a bunch of people in a random sample? The average of 5,000 guesses is an excellent way to produce an accurate estimate of the number of jelly beans in a big jar. It is a disastrously dumb way to determine the parameters of a vast social engineering project.

An even worse way to determine these parameters, of course, would be to have the choice made by a group of professors sitting around the faculty lounge and grumbling about the people who aren’t as bright as they are but who are worth tons more money.

5) Might deliberately trying to achieve a particular distribution of wealth—through taxation or other means—have terrible and utterly unanticipated real-world consequences? Neither I nor Professor Ariely nor anyone else has the faintest idea.

The American economy is a vast, hugely complex, and dynamic system, filled with individuals who are pursuing their self-interests whether the denizens of the faculty lounge (who are pursuing theirs) like it or not. It is beyond intellectually presumptuous to think that we understand the totality of the effects of a fundamental change in the economy.

6) In a highly dynamic system, such as a modern economy, when you pin down one number, requiring it not to move, all the other numbers will begin to behave differently, often in pernicious ways. Consider price controls. A price is the point in a free market where supply and demand balance. If the government requires that the price of a commodity not change in response to changes in supply and demand (such as with rent controls and minimum wage laws), one of two things will immediately begin to happen.

If the fixed price is set below the market price, scarcity will result. There is no current shortage of caviar. But set the price at $10 a pound, and there will be lines outside every gourmet shop in the country. And no caviar.

Set the price above the market price, however, and you will get an instant glut. Minimum wages for unskilled labor have produced armies of unemployed teenagers whom no one wants to hire at the legal price. So, if wealth must be distributed according to a set formula, heaven only knows what other numbers will promptly go out of whack. And, of course, the people whose wealth is scheduled to be redistributed are going to do what they can to prevent that. In a democracy, that will be a lot.

7) Major new technology produces new and larger fortunes than those known before. This, ineluctably, produces a more unequal distribution of wealth.

It happened with the steam engine. Benjamin Disraeli coined the word “millionaire” in 1826 to describe the new fortunes that were based on factories, not land. It happened with the railroads, with petroleum, and with the automobile, too.

And it is happening now with the most profound technological development at least since the steam engine—or perhaps ever—the microprocessor. The microprocessor is creating new fortunes (Microsoft, Amazon, Wal-Mart, Dell, Google, Bloomberg, Apple, Facebook, etc.) that are of unprecedented size. This is skewing the distribution of wealth sharply toward the top quintile. But no one is a dime poorer because Bill Gates and Michael Bloomberg are billions richer. Their wealth was created by the dynamic economic enterprises they brought into being, not transferred from others.

The only way to prevent the increase in wealth inequality brought about by major new technology would be to prevent the creation of new fortunes that new technology makes possible. The country would be mad, utterly mad, to try to do that. These fortunes came into being only because millions of people flocked to buy the new products, use the new services, and shop in the new stores. No new fortunes, no new products, services, or stores.

What do you prefer: An America with a very uneven distribution of wealth and an unending stream of new products and services that make life better for everyone, or an oversized North Korea?

The idea that something as fundamental as the distribution of wealth can be radically altered in a democracy without disastrous side effects is an intellectual fantasy. Prohibition, a far simpler social engineering project than fundamentally redistributing wealth, didn’t get rid of demon rum, it gave us Al Capone. And the people who wanted to drink kept right on doing so.

Intellectuals, especially in the social sciences, have a nasty habit of thinking that, “This is the way the world should be, therefore this is the way the world can be.” This is what leads them to come up with so many ideas that are, in George Orwell’s phrase, “so stupid that only intellectuals believe them.”



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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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