Authoritarian Liberalism, Class and Rackets

Understanding the critique of political economy as a critical social theory includes the critique of so-called neo-liberalism as the theoretical expression of capitalist social relations. In contrast to normative critics of neoliberalism, which reject it abstractly as a doctrine of narrow-minded economic interests, especially the interests of financial capital, neoliberalism did not corrupt capitalism.[1] It is rather a theoretical expression of capitalism.

Rejection of neo-liberalism as the ideology of market fundamentalism fails to grasp its social validity. It denounces the contemporary mode of capitalist organisation as malign to the interests of workers without asking about the character of capitalist wealth and what it means to be a worker in capitalist society. Why indeed does this content, that is, human social reproduction, take the form of money as more money? Contemporary critical theory asks different questions. It asks about the ways and means of achieving the promises of the Enlightenment and proposes communicative actions to emancipate capitalism from uncivilised forms of profit making, class exploitation, gender oppression, war, and prevent ecological destruction. Honneth’s theory of recognition expands on Habermas’ ideas of civilising capitalism by communicative actions. According to Axel Honneth society contains within itself the ‘promise of freedom’ (Honneth 2010, 10). This would suggest that society also contains within itself the ‘promise’ of a freedom from want and therewith from the daily struggle of a whole class of individuals to make ends meet. For the sake of this freedom, Honneth’s argument suggests that the existing form of society has to develop its potential to the full in order to make its promise a reality. In this view, the working class struggle for subsistence is not innate to capitalist society. Rather, it manifests a social pathology. Society ought to be free from it. Who would object to that view? Yet, what really does this mean?^[2] Contemporary critical theory is premised on realizing enlightened rule by the rational democratic regulation of contemporary society. It identifies state and economy as distinct forms of social organization and recognizes the state as the predominant power of that relationship. Seemingly, the relations of production manifest either (democratic) reason or (neoliberal) unreason. In contemporary critical theory, the critique of economic categories is a non-topic.

Understanding neoliberalism as a theoretical expression of the capitalistically organised form of social reproduction entails its critique as a critique of capitalist society. Instead of some abstract, purely formal, rejection of neoliberalism as an uncivilised pathology of the capitalist promise of a great society, the critique of neoliberalism is valid only as a critique of the economic object, which by means of invisible principles ‘takes care of both the beggar and the king’ (Adorno 1990, 110). For Adorno, ‘the abolition of hunger’ was not a matter of enlightened government. Rather it required a ‘change in the relations of production’ (Adorno 1976, 62). Contemporary critical theory shies away from such critique. As a consequence, it really has nothing of note to say about the social conditions of poverty. It proposes various ways of overcoming poverty through the redistribution of wealth and the democratic regulation of the economy without asking about the constitution of the economic object. Humanisation of social relations is the purpose of the critique of political economy. However, the effort of humanising is confronted by the paradox that it presupposes inhuman conditions, which provoke the effort of humanisation in the first place. Inhuman conditions are not just an impediment to humanisation but a premise of its concept.

In the meantime, Trump exploited the socio-economic blow back from the financial crisis of 2008 with populist distrust of those in power and an appeal to nativism. He promises a return to and for business by means of the state. His stance expresses a fundamental neoliberal insight that has largely been ignored by its well-meaning critics. Neoliberalism recognises the free economy and the strong state as interdependent categories (for a thorough account, see Bonefeld 2017). Trump’s stance made clear also that the rulers have nothing to fear from the discontentment of the ruled for as long as they express their rage as followers of authoritarian personalities, who make it their business to say what everybody else seems to know already: their misfortune is not their fault at all. Trump names the guilty parties and demands that they are locked up and kept out of the business of American labour. Nativism personalises the cause and effects of freedom as economic compulsion. It gives permission to express rage within the bounds of supreme order thinking. Instead of illusory assurances of a politically correct and better capitalism, authoritarians name the Other as undesirable elements to some illusory national harmony. Trump succeeded because he projected a nation divided by friends and enemies and offered action, for the sake of business and nativist pleasure. Paraphrasing Adorno, nativism, this idea of a people as rooted in nature, is ‘bound to become a fetish unto itself; there [is] no other way [capitalism] might have integrated the individuals, whose economic need of that form of organization is as great as its incessant rape of them’ (Adorno 1990, 339).

In the order of presentation Adorno’s understanding of the class character of bourgeois society comes first. The second section expounds the neoliberal conception of class, presents its argument that the free economy amounts to a practice of government, and explores the meaning of an authoritarian liberalism. The term was coined by Hermann Heller in 1933 with further elaboration by Marcuse in 1934. Authoritarian liberalism recognises the state as indispensible for the free economy, a conception that is well understood by Trump. The final section bespeaks the time of Trump. It argues in summary and offers the term ‘racket’ that Horkheimer and Adorno employed in the Dialectic of Enlightenment as a category of government.

Class and Struggle: On Hunger

Adorno’s critical theory argued that in capitalist society ‘the needs of human beings, the satisfaction of human beings, is never more than a sideshow’ (Adorno 2008, 51). What existing society thus promises is not freedom from want. It rather promises that the poor will continue to ‘chew words to fill their bellies’ (Adorno 1978, 102). That is, capitalist ‘society remains class struggle’ (Adorno 1989, 272). Indeed, he asserts that the ’total movement of society’ is ‘antagonistic form the outset’. That is to say, bourgeois ‘society stays alive, not despite its antagonism, but by means of it’ (Adorno 1990, 304, 320).

‘To the vanishing point in death of all’, the ‘life of all man hangs by’ the success of turning her labour power into a profitable means for its buyer (cf. Adorno 1990, 320). The profitability of her labour is the fundamental condition of sustaining access to the means of subsistence. Yesterday’s profitable appropriation of some other person’s surplus labour buys the labour power of another seller today, the buyer for the sake of making another profit so that he avoids bankruptcy by enriching himself, the seller in order to make a living. The profitable consumption of her labour power is the premise of maintaining access to the means of life. For the seller of labour power, competition is not some abstract economic law. Rather, it is an experienced concept. For the seller of labour power, then, the class relation does not just amount to the wage relation; rather, it subsists through the wage relation. That is, the line of class antagonism falls not merely between but, also and importantly, through the social individuals. For the sellers of labour power, the freedom of contract entails the common class experience of labour market competition. Competition is not a category of social unity. It is a category of disunity. Class society exists in the form of individualised commodity owners, each seeking to maintain themselves in competitive, gendered and racialized, and also nationalised labour markets where the term cutthroat competition is experienced in various forms, from arson attack to class solidarity, and from destitution to collective bargaining, from gangland thuggery to communal forms of organising subsistence-support, from strike-breaking to collective action, etc.

The class struggle really is about access to ‘crude and material things’ (Benjamin 1999, 246). What then are the dispossessed struggling for? ‘In-itself’ they struggle for access to the means of subsistence to satisfy their needs. They struggle for wages and conditions, and to defend wage levels and conditions. They struggle for respect, education, and recognition of human significance, and above all for food, shelter, clothing, warmth, love, affection, knowledge, time for enjoyment, and dignity. Their struggle as a class ‘in-itself’ really is a struggle ‘for-itself’: for life, human distinction, life-time, and above all, satisfaction of basic human needs. The working class struggles for making ends meet, for subsistence and comfort. It does all of this in conditions, in which the increase in material wealth that it has produced, pushes beyond the limits of its capitalist form. Every so-called trickle-down effect that capitalist accumulation might bring forth presupposes a prior and sustained trickle up in the capitalist accumulation of wealth. And then, at the blink of the eye society ‘suddenly finds itself put back into a state of momentary barbarism; it appears as if famine, a universal war of devastation had cut off the supply of every means of subsistence’ (Marx and Engels 1996, 18).

In summary, the struggle of the class tied to work is ‘dictated by hunger’ (Adorno 1978, 102). Whether this struggle turns concrete in the changing forms of repression as resistance to repression or whether it turns concrete in forms of repression, is a matter of experienced history. To be a productive labourer is not an ontological privilege. It is a great misfortune. At its best, the wage contract is governed by the rule of law. It treats the buyers of labour power and the producers of surplus value as equal legal subjects. In distinction to contemporary critical theory, the law in society does not contain a promise for general well-being. Rather the ’law in society is a preservative of terror always ready to resort to terror with the aid of quotable statues. […] Law [Recht] is the primal phenomenon of irrational rationality. In law the formal principle of equivalence becomes the norm; everybody is treated alike’ (Adorno 1990, 309). Critical theory is critical on the condition that it recognises its entanglement with the irrational rationality of bourgeois society.

The Free Economy and the Strong State: On the Real People

In the late 1920s / early 1930s Hermann Heller characterised what we now refer to as neoliberalism as an authoritarian liberalism. He applied this concept to Carl Schmitt’s political theology and the proponents of the then emerging account of German neoliberalism, which is also known as ordoliberalism. The common feature of these accounts is the acceptance of the state as the essential institution of social peace in capitalist society. In relation to the economy, the state is the predominant power. Schmitt and the ordoliberals conceive of the state as a security state and characterise it as the concentrated power of a continuously prevented civil war. For them, Weimar was a state of lamentable weakness – it allowed the governed to influence the conduct of government. For the sake of the free economy, the state had to be built like a fortress to safeguard it from becoming the prey of mass democratic demands for material security. Schmitt argued his case on the basis of Hobbes – the Leviathan always comes first – and through the tradition of conservative opposition to the egalitarian principles of the French Revolution. He rejected the idea of political equality and identified law making in mass democracy as mob rule. The German neoliberals argued on the basis of Adam Smith’s insights that the power of the state is fundamental to the establishment of a civil society. The state is to sustain the law of private property and prevent ‘bloodshed and disorder’ (Smith 1976a, 340). In the Wealth of Nations Smith (1976b, 428) thus defined political economy as a science of the statesman and legislator. In the founding neoliberal argument, civil society amounts to a political practice of ‘market police’ (Rüstow 1942; also Friedman 1951, 110-11).^[3] Competition is unsocial in character. It is not a category of social cohesion and integration.

Market police are required to secure its orderly conduct on the basis of non-directive, abstract rules of law. Competition entails therefore the power of the state to secure the fundamental sociability of the unsocial interests. The competing individuals are mutually dependent upon each other and express their independence by means of contract. Their private interests are reconcilable on the basis of a common interest in the security and the freedom of contract and the guarantee of the rights of property. In its role as market police, the state civilises the conduct of the ‘greedy self-seekers’ (Rüstow) on the basis of morally binding and politically enforceable rules of the game. Law is the means of social peace. It is the category of individual freedom. Individuals are free if they only have to comply with the law. Nevertheless, law does not apply to disorder. The rule of law is premised on social order. Order is a political category. For authoritarian liberalism the rule of law thus entails the power of the state as the concentrated force of order and law. Should a situation arise in which a decision has be made between law and order, law is to be sacrificed for the sake of order.

However, for the founding neoliberal thinkers individualism is not the essential category of the state in its role as the concentrated power of social order. The essential category of social (dis-)order is the proletariat. In their argument the proletariat is a capitalist phenomenon. Capitalism entails a natural tendency towards proletarianisation. They understand that the working class has no direct access to the means of subsistence and that it therefore struggles to make ends meet. In this context proletarianisation characterises politicised market relations that are founded on entrenched class relations. In their argument proletarianised workers demand the satisfaction of their wants by means of welfare state guarantees and a politics of full employment. In this argument proletarianisation is a real menace. It denies the workers the social right and removes from them the moral permission to contribute to society as self-responsible entrepreneurs of labour power, as agents of human capital. They identify the proletarianised mass society as entirely irrational. In this context Schmitt and the German neoliberals reject laissez faire liberalism as a theology of freedom because it neglects the state as the predominant power of social order, of peace and tranquillity. The consequences of neglect are formidable. It abandons the state to social democracy, leading to big government. In the context of the crisis of the early 1930s, the Germans were not alone in identifying the dangers of a proletarianised mass society. In the context of the US, Bernard Baruch, who was a leading Democrat, had protested against Roosevelt’s decision to abandon the gold standard in 1933 by stating that ‘it can’t be defended except as mob rule. Maybe the country does not know it yet, but I think that we’ve been in a revolution more drastic then the French revolution. The crowd has seized the seat of government and is trying to seize the wealth. Respect for law and order has gone’ (quoted in Schlesinger 1958, 202). For Baruch, correctly, the dispossessed traders in labour power are the social majority. For the sake of the freedom of labour, their curtailment within the limits of private property is of vital importance. In fact, it is a condition of liberty.

Hermann Heller and Herbert Marcuse provided telling critiques of the authoritarian turn of liberalism in the early 1930s. According to Marcuse, authoritarian liberalism bemoaned that the unemployed lacked the stamina to cope with the economic downturn in the self-responsible manner of the entrepreneur. Instead they demanded government support to alleviate their plight. As Marcuse (1988, 36) put it tongue-in-cheek, whereas Man used to accept her ‘responsibility to the state’, now ‘the state is responsible to man’. Furthermore, he recognised that authoritarianism entailed the ‘existentialization and totalization of the political sphere’, that is, the depoliticisation of the social relations entails the politicisation of the state as the power of social depoliticisation. There cannot be any claim for or assertion of political power outside the state. Heller (2015, 296-301) argued in a similar manner. He identified liberalism’s turn towards authoritarianism as a demotion of democratic government ‘in favour of the dictatorial authority of the state’. Authoritarianisation was the means of drawing a line between society and state, removing what Barauch referred to as the mob out of the state, reasserting the autonomy of the political will. Indeed, the independence of the state from society is fundamental to both, the ability of government to govern and to the ‘initiative and free labour power of all economically active people’. For Heller, the authoritarian liberal scheme could not be maintained in democratic form. Rather, a state ‘that is determined to secure “the free labour power of those people active in the economy” will…have to act in an authoritarian way’ (citing Schmitt 1998). Authoritarian liberalism thus defends ‘work as a duty, as the psychological happiness of the people’. The authoritarian state governs by its own free will to secure and maintain the ‘psycho-moral forces’ at the disposal of a capitalist society, transforming rebellious proletarians into self-responsible and willing entrepreneurs of labour power (Röpke 1942, 68; Eucken 1932). Neoliberalism recognises the state as the authoritative planner for competition (Hayek 1944, 31).

In summary, for the German neoliberals, capitalism entails proletarianisation, which they associate with the revolt of the masses. Laissez faire is neither an answer to riots nor do socio-economic disorder. Liberty has to be defended by means of state. In fact the revolt of the masses ‘must be counteracted by individual leadership’ (Röpke 1998, 131) to ensure incorporation of competitiveness into a total life-style, as Müller-Armack put it in 1978. They say the masses dislike to be ‘satiated by the state’ (Röpke 2002, 245). In fact, like their employers the masses, too, are keen to participate in the free economy as self-responsible and self-reliable entrepreneurs of labour power if only they knew how and whom to follow. For their own sake, the masses need to be led by man of good intensions so that they do not become the prey of anti-capitalist demagogues. In order to lead the masses, the establishment of a plebescitarian leadership democracy is of the essence. The leadership of the masses appears as an accentuated democracy between leader and movement. It articulates real mass grievances through the denunciation of the guilty parties, personalising the causes of misery. In this manner, and following Müller-Armack (1933), the masses are the movement of the Volk, that is, the real people. The category Volk presupposes the identity of another kind of Man, that is, the Other who wrongs the real people of their lifelihood.

The category of the real people depends on the identification of the enemy of the people. The enemy is the most important category – the identity of the national friend, the real people, depends on the definition of the enemy of the people. There cannot be a real people, a Volk, without the enemy. Nevertheless, identity thinking is pseudo-concrete, at best. That is, the identity of the other is both concrete and intangible. The real people fear the enemy because each one of them might be classified as an enemy of the people, too, at any moment. Rage against the Other is a means of expressing nativist identity. Its essence is impotence. Secretly the enraged know that. It is because of this that their rage is boundless and all pervasive. Race rage makes a people. It is all embracing – because it comprehends nothing. Everybody who wants to be somebody will have to be enraged. Participation is everything. Standing on the side does not offer security. It offers a target. What does not belong to the nature of the nativists has to be returned to nature; or at least locked up for good. The demand for Clinton to be locked up produced the kind of enraged frenzy of incomprehension that holds the idea of a freedom from want in contempt. The declaration of the enemy gives identity and purpose to the real people who are set loose as enraged subjects. The leader of the Volk does not govern real individuals. He governs disciples. For the leader of disciples the very idea of an equality of individual human needs is a provocation. He demands an executive state – autoritas non legem – in which political decisions have the force of law.

Misery and Trump

In Dialectic of Enlightenment Horkheimer and Adorno (1979, 179) write that the ‘rulers’ are safe for as long as the ‘ruled’ struggle under the spell of the inverted world, in which, say, the cause of financial crisis, economic downturn and conditions of abject misery are attributed to the greedy behaviour of identifiable individuals. Rather than the capitalistically organised relations of social reproduction, it is, say, the greed of the speculator that is criticized, rejected and condemned. ‘We have been robbed of our country’! Let us make America great again! For the sake of employment and industry, something needs to be. Something can be done!

The false critique of capitalist society recognizes the misery of the many and offers nationalist solutions, sometimes in the name of socialism and sometimes in the name of patriotism. Trump condemns the world-market society of capital abstractly as anti-American; and does not pay his taxes for reasons of business. He rages against cosmopolitan peddler of misery and calls them crooks. He says ‘lock her up’ and keep them out. Walls become freedom-walls. The supply of enemies is inexhaustible.

In the meantime, the majority of the worst-off voted for Clinton. Like Trump she too stood for the continuity of misery. Unlike Clinton, Trump sees unemployment as an opportunity for employment and conceives of misery as an opportunity to do better. In authoritarian liberalism, the state governs for business. However, it rejects the idea of the state as a business as illiberal in its consequences. The appropriate term for the state of Trump is racket. This state does not admit of knowledge, only of acknowledgment.

There really is ‘tenderness only in the coarsest demand: that no-one should go hungry any more’ (Adorno 1978, 156).

Notes

[1] As implied by Habermas (2012) and argued by Brown (2015).

[2] It might of course be the case that Honneth’s conception ‘freedom’ does not include the freedom from want. If that were to be the case, his freedom does not promise very much, if anything at all.

[3] On the Smithean origins of and Hegelian insights into this concept, see Bonefeld (2014, chap. 8).

References

Adorno, Theodor (1976). ‘Sociology and Empirical Research’. In The Positivist Dispute in German Sociology, 68-86. London: Heinemann.

Adorno, Theodor (1978). Minima Moralia. London: Verso.

Adorno, Theodor (1989). ‘Society’. In Critical Theory and Society, edited by Stephen Eric Bronner and Douglas Mackay Kellner, 267–75. London: Routledge, 1989.

Adorno, Theodor (1990). Negative Dialectics. London: Routledge.

Adorno Theodor (2008). Lectures on History and Freedom. Cambridge: Polity.

Benjamin, Walter (1999). ‘Theses on the Philosophy of History’, in Illuminations, 245–55. London: Pimlico.

Bonefeld, Werner (2014). Critical Theory and the Critique of Political Economy. London: Bloomsbury.

Bonefeld, Werner (2017). The Free Economy and the Strong State. London: Rowman & Littlefield.

Brown, Wendy (2015). Undoing the Demos: Neoliberalism’s Stealth Revolution. Cambridge, MA.: MIT.

Eucken, Walter (1932). ‘Staatliche Strukturwandlungen und die Krise des Kapitalismus’. Weltwirtschaftliches Archiv 36: 297-321.

Friedman, Milton (1951). ‘Neo-liberalism and Its Prospects’, Farmand, February

17: 89-93.

Habermas, Jürgen. (2012). The Crisis of European Union. London: Polity.

Hayek, Friedrich. (1944). The Road to Serfdom. London: Routledge.

Heller, Hermann (2015). ‘Authoritarian Liberalism’. European Law Journal 21(3): 295-301.

Honneth, A. (2010) The Pathologies of Individual Freedom. Cambridge MA.: Princeton University Press.

Horkheimer, Max and Theodor Adorno (1979). Dialetic of Enlightenment. London: Verso.

Marcuse, Herbert (1988). “The Struggle Against Liberalism in the Totalitarian View of the State.” In Negations, 3-42. London: Free Association Books.

Marx, Karl and Friedrich Engels (1996). The Communist Manifesto. London: Pluto.

Müller-Armack, Alfred (1933). Staatsidea und Wirtschaftsordnung im neuen Reich. Berlin: Junker & Dünnhaupt.

Müller-Armack, Alfred (1978). ‘The Social Market Economy as an Economic and Social Order’. Review of Social Economy 36(3): 325-331.

Röpke, Wilhelm (1998). A Human Economy. Wilmington, Delaware: ISI Books.

Röpke, Wilhelm (2002). The Moral Foundation of Civil Society. New Brunswick, NJ: Transaction Publishers.

Röpke, Wilhelm (1942). International Economic Disintegration. London: Hodge.

Rüstow, Alexander (1942). ‘General Sociological Causes of the Economic Disintegration and Possibilities of Reconstruction’. Afterword to Wilhelm Röpke, International Economic Disintegration, 267-283. London: Hodge.

Schlesinger, Arthur (1959). The Age of Roosevelt. Cambridge, Mass: Riverside Press.
Schmitt, Carl (1998). ‘Sound Economy – Strong State.’ Appendix. In Renato Cristi, Carl Schmitt and Authoritarian Liberalism, 212-232. Cardiff: University of Wales Press

Smith, Adam (1976a). The Moral Sentiments. Oxford: Oxford University Press.

Smith, Adam (1976b). The Wealth of Nations. Oxford: Oxford University Press.