What’s Missing

Katrina Navickas

  • The Moral Economists: R.H. Tawney, Karl Polanyi, E.P. Thompson and the Critique of Capitalism by Tim Rogan
    Princeton, 263 pp, £30.00, December 2017, ISBN 978 0 691 17300 9

Capitalism is in crisis, again. Inequality, measured in wages, wealth distribution, employment, ‘affordable’ housing, has become the dominant framework for understanding the economy. Through this lens, people can extrapolate to the macroeconomic from their own individual experiences. Widespread anxiety produces phenomena unthinkable in more prosperous times: for example, Thomas Piketty’s seven hundred-page volume of economic theory, Capital in the 21st Century, joining the bestseller lists.

During crises of capitalism in the 20th century, the equivalent bestsellers were narratives of social history. R.H. Tawney’s Religion and the Rise of Capitalism, published in 1926, was, Tim Rogan writes, by some estimates ‘the most widely read work of history in the interwar period’. Charting the social and economic impact of the Protestant Reformation in 16th-century Europe, Tawney’s book also served as a warning against the moral perils of a market economy. E.P. Thompson’s The Making of the English Working Class, published in 1963, was ‘surely the most widely read and most influential work of history published in English during the 20th century’. Thompson, like Tawney, lamented the social destruction wreaked by the free market, in his case during the Industrial Revolution. But he also attributed agency to the working class: rather than being passive victims of economic forces, the working class was ‘present at its own making’, fostering solidarity through collective mobilisation and forming the first mass movements in support of democracy.

The third book Rogan discusses is Karl Polanyi’s The Great Transformation: The Political and Economic Origins of Our Time, published in 1944. The book sought to explain why a long period of peace and stability in Europe ended suddenly and violently with the First World War and the Great Depression. There are in fact two ‘great transformations’ in the book. Like Thompson after him, Polanyi saw the first major change as having taken place in the early 19th century, with the emergence of laissez-faire liberal economics. The pursuit of material gain, encouraged by successive governments’ economic policies, went uncontrolled until it exploded in the financial crises of the early 20th century. After the First World War the pendulum swung towards full state control over the economy: the New Deal, the Soviet Five-Year Plans, and fascism in Italy and Germany. As Rogan sees it, the urgency of the argument of The Great Transformation, hurried into print by a New York publisher to meet its moment, explains some of its flaws as well as its significance. Polanyi wanted to make his mark on the postwar settlement, to warn of the dangers of divorcing the economy from society.

But his book received little acclaim on either side of the Atlantic. His daughter, the Canadian economist Kari Polanyi Levitt, wrote in 1990 that in England, ‘where The Great Transformation was conceived, Polanyi’s work has been greeted with a deafening silence. Strange and yet to be explained.’ Since then, political theorists have rediscovered the book. For Rogan, the revival in Polanyi’s reputation points to a major absence from current debates about austerity: morality. The Moral Economists is part historiographical exegesis, part subtle polemic about the limitations of contemporary critiques of capitalism. It does not dismiss the arguments of Piketty or other contemporary economists. But, following his subjects’ example, Rogan looks to history for help in understanding capitalism, its works and its empty promises. The power of Tawney, Polanyi and Thompson’s models of capitalism stemmed from the fact that they were not economists: they studied everything the economists left out.

Adapting an epithet from Thompson’s influential article from 1971 on the 18th-century food riots, Rogan calls these men ‘moral economists’. Each of them sought to understand the relationship between morality and economics in historical societies. Each identified a crucial moment in the life of those societies when ‘tensions between old ethical injunctions and new economic imperatives became acute.’ And each claimed that while the development of the market economy may have appeared natural and inevitable, it was in fact contingent on political circumstances.

Early on Rogan identifies a crucial parallel: Tawney, Polanyi and Thompson all experienced an epiphany when they moved out of their comfortable intellectual milieux and began teaching adult education classes. From 1903 to 1906, Tawney lived at Toynbee Hall, where well-meaning graduates undertook social work in the East End of London. But, as he quickly realised, he had no aptitude for doling out ‘soup and blankets’ to the ‘demoralised’ poor of Whitechapel. Charity wasn’t a solution to the crisis of capitalism. Tawney looked instead to the newly formed Workers’ Educational Association. He moved to Manchester in 1909 and worked as a tutor in Rochdale and other places in the North-West, becoming the WEA’s president from 1929 to 1945. The WEA was distinctive in its highly decentralised organisation, supported by trade unions, the co-operative movement and the Labour Party. Tawney supported its paternalistic aim of neutralising class conflict, a mission resented by Marxist critics. Many of its students, however, found the experience politically energising. Tawney’s admiration for the working-class solidarity he found in these Northern industrial towns was so great that during the First World War he joined up as a private in a Pals battalion, returning to Manchester after being wounded at the Somme. His reflections in Religion and the Rise of Capitalism on the discrepancy between the medieval social order and atomised modernity were informed by his experience of the differences between Lancashire and London.

In 1948, Thompson moved to Halifax with his wife, Dorothy, to work as a tutor in history and English for the extramural department at the University of Leeds. The subject and approach of The Making of the English Working Class reflect the time he spent there. Its opening chapter on the London Corresponding Society of the 1790s described a radical working-class coterie of the sort Thompson admired. But the majority of the book is about the wool croppers and artisan craftsmen of the towns and villages of the West Riding of Yorkshire. In the culture, idioms and, most important, the solidarity of his students, Thompson detected the legacy of their ancestors, those who became class conscious as a result of the Industrial and French Revolutions.

Polanyi also taught for the WEA in London and for the Oxford extramural department in the 1930s, but according to Rogan, Polanyi’s Damascene conversion occurred when he fled Hungary for Austria following the failed revolution of 1919. He arrived in ‘Red Vienna’, where a new autonomous municipal government run by the Social Democratic Workers’ Party was pioneering reforms in health and education. Polanyi saw this as a truly democratic form of socialism. Living with his new wife in a rundown area and teaching economics, he began to believe that ‘an alternative to Wilsonian and Leninist principles of social order was conceivable’. Postwar Austria was flooded with British relief workers, interested in the latest trends in social thought. Because of them, Polanyi read and admired Tawney and other British critics of capitalism. The admiration became mutual. Tawney wrote an article for the New Statesman in November 1935 in which he cited Polanyi as a thinker who linked Christianity and popular communism through ‘an idea of human personality’.

The three books offered different chronologies of the rise of capitalism. In Tawney’s version, the process took place in the period 1540-1640. The Protestant Reformation displaced a medieval society in which ‘economics is still a branch of ethics … the appeal of theorists is to natural law, not to utility; the legitimacy of economic transactions is tried by reference, less to the movements of the market, than to moral standards derived from the traditional teaching of the Christian church.’ The dissolution of the monasteries created a market for land and employment. It was every man for himself (and this was a male world; family ties were also increasingly separated from economic life). The individualising ethos of Calvinism and Puritanism secularised economics, resulting in ‘the new science of Political Arithmetic’, which ignored or eroded the social bonds that had been upheld by religious and moral obligations.

Polanyi and Thompson located the origins of free-market economics much later, during the Enlightenment. In Polanyi’s view, laissez-faire peaked in England with the introduction in 1834 of the New Poor Law, a punitive welfare system influenced by utilitarian ideas of efficiency and Malthus’s theories of population control. In Thompson’s account, English society had originally been governed predominantly by a ‘moral economy’ based on age-old ideas of a just price and a fair wage, enacted through negotiation, customary regulations and tradition. During the French wars, however, economic elites became increasingly enamoured of the laissez-faire political philosophy of Adam Smith’s Wealth of Nations (1776). Landowners enclosed common land, and employers took on unskilled labour and introduced machinery, transforming skilled workers into ‘hands’, subject to the whims of the free market. This process was intensified by government withdrawal from regulation of the new industrial economy, including the repeal of the Elizabethan legislation which controlled the number of apprentices and set piece rates for cloth. During the Napoleonic Wars, Thompson complained, ‘almost the entire paternalist code was swept away.’ A central chapter in his book discusses the Luddite machine breakers of 1811-12 and concludes:

Luddism must be seen as arising at the crisis point in the abrogation of paternalist legislation, and the imposition of the political economy of laissez-faire upon, and against the will and conscience of, the working people. It is the last chapter of a story which begins in the 14th and 15th centuries, and whose greater part has been told in Tawney’s Religion and the Rise of Capitalism.

This moral critique of utilitarian liberalism was in part inherited from Victorian prophets, especially Carlyle and Ruskin. But Rogan’s moral economists drew on socialism rather than conservative nostalgia. The question ‘What is it to be human?’ came to dominate their search for a solution to the problems of capitalism. The socio-economic reforms enacted by Lloyd George and the ‘New Liberal’ government of 1906-14 were influenced by Seebohm Rowntree’s concept of a poverty line as well as an imperialist drive for national efficiency. But for Tawney and his successors, these solutions were grounded in utilitarianism, and shaped by Fabians such as the Webbs. Tawney opposed the Webbs’ proposals for a national minimum wage. ‘It means that people are not paid what they are worth,’ he argued, ‘but what is necessary to keep them working.’ Tawney rose to public prominence in 1919 when he defended the rights of miners at the Royal Commission on the Coal Industry. His biographer, Lawrence Goldman, saw this speech as the first evidence of Tawney’s pivot towards a more state-centred approach.[*] Rogan argues instead that Tawney’s line didn’t change much. He was never tempted by syndicalism, and saw the state as ‘only part of a wider social matrix’. Material inequality and poverty, therefore, couldn’t be solved solely by a utilitarian rebalancing of the market. A rebalancing of human relations was required.

Tawney’s morality was influenced by his Christian faith. But by the 1930s, with the threat of fascism growing, Polanyi reformulated Tawney’s critique to ‘give that reverence for human personality a secular grounding’. He explained that the economy was ‘embedded’ in pre-industrial societies, functioning as a by-product of kinship, political and religious obligations. Like Thompson’s 18th-century English villagers, non-Western tribal groups’ production and exchange of goods was governed by rules of reciprocity and custom. This, for Polanyi, was the natural state of society. General economic theories were unnatural, indeed inhuman. Adapting a form of guild socialism, Polanyi placed his faith in a local economy in which socially fair compromises on prices would be reached without the need for collectivist state planning.

Tawney and Polanyi’s arguments for the significance of customary rules and locally negotiated regulations appeared anachronistic, but Thompson repackaged the idea as the ‘moral economy’, which appeared more relevant to the contemporary crisis of capitalism. Whereas Polanyi imagined Tory paternalist elites as acting according to moral rules in 18th-century society, Thompson argued that these principles were generated by ordinary people, who had sufficient agency and power to change their situations. In The Making of the English Working Class, he broke with orthodox Marxism by taking the point of view not of the state, but of those ‘below’. The active agents in the formation of the working class, he argued, included the rag-bag of workers that industrialisation left behind, the ‘poor stockinger, the Luddite cropper, the “obsolete” hand-loom weaver, the “utopian” artisan, and even the deluded follower of Joanna Southcott’.

When Polanyi arrived in London in 1934, he struggled to find work. He had hoped that his brother, Michael, a distinguished physical chemist who had been recruited by the University of Manchester after the Nazis’ rise to power, would give him an entrée, but their relationship was strained. He wrote The Great Transformation during a sabbatical as a resident scholar at Bennington College in Vermont, from late in 1941 to the spring of 1943. When he emigrated to America for good in 1947, he was ‘a professional failure’. He had no permanent academic position, and the localist form of guild socialism advocated in The Great Transformation didn’t align with the Keynesianism and demand-management that dominated postwar economic and welfare policy.

Rogan is more blunt, in his otherwise careful intellectual history, blaming the poor quality of Polanyi’s historical scholarship. To take one example, he points out the widespread rejection of Polanyi’s interpretation of the Speenhamland system: the graduated structure of poor relief based on bread prices and family size enacted by a group of Berkshire magistrates in 1795. Polanyi saw it as the last gasp of paternalist humanitarianism before the New Poor Law enforced the commodification of labour. To Tawney and the rest of the historical profession, it was a ‘hot fit’ of ‘hateful policy’ grounded in the utilitarianism Polanyi was supposed to despise.

*

The moral economy critique of capitalism faded in the last quarter of the 20th century. Secularisation had already eroded the appeal of Tawney’s Christian framework. As Rogan admits, postcolonial and feminist critiques challenged the concentration on the white male working class that structured Tawney and Thompson’s work and Polanyi’s anthropology of ‘primitive’ communities. The theme of Anglo-Saxon liberties and freeborn Englishmen – crucial to Thompson’s portrayal of the constitutionalist tradition in English working-class radicalism – was suddenly ‘doubly discontinuous with unfolding arguments about colonial oppression and global inequality’. The transatlantic swing to the right in the 1980s displaced once dominant Marxist interpretations of the economy.

The central aim of The Moral Economists is to rescue Polanyi ‘from the condescension of posterity’ (to appropriate another of Thompson’s famous phrases). It takes about fifty pages for Rogan to admit his mission. First, he ‘reveals’ Polanyi’s position as an intermediary between Tawney and Thompson, writing that The Great Transformation was probably ‘among Thompson’s key sources in writing The Making’. He makes this suggestion solely on the basis of his close reading of the texts and the similarities in their main arguments. There is as yet no direct evidence for it (the bulk of Thompson’s papers at the Bodleian are still inaccessible). For what it’s worth, I’m convinced.

Rogan also argues that ‘Polanyi has something more to offer for our own time now than either Tawney or Thompson.’ He rests this claim on Polanyi’s now influential theory of ‘double movement’, which concerned the development of new kinds of social solidarity within the market economy. As soon as the medieval settlement was snuffed out by free-market capitalism, the ‘self-protection of society set in’, producing Victorian and Edwardian social legislation such as the Factory Acts. This conjuncture created room for a political and industrial working class to spring into being. Polanyi replaced Tawney’s pessimistic dichotomy of medieval good v. modern bad with an optimistic belief in the possibility of a counter-movement in reaction to laissez-faire liberalism. He went further by questioning whether critics of free-market capitalism even needed to think in terms of countering the utilitarian orthodoxy. He accepted that free-market economics had to exist in order to engender a popular reaction of social reciprocity.

Rogan sees social choice theory, as expounded by Kenneth Arrow in 1951 and Amartya Sen from the 1970s onwards, as a successor to the moral economy. Social choice theory rejects the free-market presumption that the economy is governed by rational choice and abstract rules. Both Arrow and Sen began to factor back into political economy some of the moral framework and social relationships that Tawney and Thompson argued had been eroded by utilitarianism in the 19th century. They posited that societies are not just engines of prosperity, but are shaped by sometimes irrational human decision-making. Sen thought the challenge for economists and policymakers was how to ‘make non-economic norms affecting market conduct legible’. In a recent article, Rogan explained that Sen is the true successor to Polanyi in that he employs moral and material models together rather than in opposition: ‘There have been two critiques of capitalism, but there should be only one. Amartya Sen is the new century’s first great critic of capitalism because he has made that clear.’

Rogan is predominantly concerned with the moral economists’ early ideas, so their activism is less important in his narrative. Tawney’s role in writing the Labour Party’s 1929 election manifesto, or his reports on education in China for the League of Nations, are mere background to this story. Rogan doesn’t discuss Thompson’s later political activism, concerning himself instead with the messy theoretical debate Thompson conducted in 1978 with Perry Anderson about Althusser’s structuralism, which he argues led Thompson to narrow his concept of the moral economy to apply solely to the 18th-century food riots. Yet Thompson’s history-in-practice shows a different kind of influence. The grainy video of Thompson delivering a thunderous speech on nuclear disarmament on the main stage at Glastonbury in 1984 (he appeared after the Smiths), is evidence of his popular reach long after the publication of his most famous book.

*

The role of the historian has changed today. In the mid-20th century social history was able to speak directly to people about their ability to change their condition, something modern day academics find much more difficult. Historians who currently work on the same periods and themes now focus more narrowly on the ‘politics of hunger’ and the agency of the poor. This framing of the relationship between the state and the poor reflects the dominant discourses of austerity and material inequality that Rogan finds inadequate. Historians who derive inspiration from Thompson, notably Selina Todd, author of The People: The Rise and Fall of the Working Class, 1910-2010 (2014), formulate their notions of class from the perspective of individual experience and identity. The poststructuralist turn of the late 1980s in academic history banished material structures and economic history to separate fields. If Tawney, Polanyi and Thompson studied everything the economists left out, historians now need to return to the economic structures they themselves now neglect.

The most inspiring example can currently be found in human geography. Marxist geographers such as David Harvey emphasise that buildings and land are the products of capitalist elites, while the late Doreen Massey argued that space ‘is always in the process of being made’, by people as much as by capital. She showed how ordinary people could produce their own spaces, linking local sites with global movements in resistance to neoliberalism. Here perhaps are new versions of Polanyi’s theories of embeddedness and double movement, reinterpreted in a broader frame for the contemporary moment.

As for the communities that originally inspired the moral economists, Rochdale today resembles Tawney’s Whitechapel in the early 20th century; Northern towns are depressed, socially as well as financially, by the long-term impact of the industrial closures that began in the 1980s, replaced by a zero-hours gig economy and food bank charity. The reduction in opportunities for adult learning are causes as well as symptoms of this decline. The WEA and the extramural departments of universities still survive but are much weaker than they once were. Cuts to the funding of access courses and the virtual disappearance of night school have reduced the numbers of mature students. Workers can no longer easily upskill their way out of poverty. One must hope there are still tutors around like Tawney, Polanyi and Thompson who can inspire them.

[*] Susan Pedersen wrote about Lawrence Goldman’s Life of Tawney in the LRB of 21 August 2014.