Author: Simon Sheridan

Since the subject of Karl Marx has come up in the last couple of posts, I thought I would share a personal story of how I first came to learn his theories. Unsurprisingly, it happened when I went to university. Since I decided to do first year sociology, hearing about Marx was not surprising. What was surprising was a certain revelation that came from our tutor, who was a self-declared Marxist.

While introducing himself in the very first class of the semester, the tutor told the class he only worked part-time at the university. His second job involved stacking shelves at one of Australia’s largest supermarket chains. He wasn’t doing it for the money, he told us. Rather, he was bringing down the system from within by stealing from the supermarket at every opportunity. This declaration of criminal activity earned a snigger from several students in the class, even though it wasn’t meant as a joke. It did sound kind of lame coming from a middle-aged man who was supposed to be in a position of authority.

Later in the semester, we finally got round to learning some Marxist theory, which our tutor delivered with great passion. By then, I’d realised that I was the odd one out in the class because I had actually done several working-class jobs before entering university. Although I couldn’t be sure, because I never asked him, I would wager that our shoplifting tutor had never worked a factory job. Meanwhile, the other students that I got to know seemed to largely be from wealthier demographics.

I’d had five years’ experience as a member of the “proletariat” by the time I started uni. Mostly, that was through my father’s small manufacturing business where I’d been working during school holidays ever since I was 13. As part of that work, I’d also seen the inside of several large manufacturing sites including with the giant Australian mining company BHP, and I’d taken a couple of other summer jobs to earn some cash.

The result of all this was that I had an unusually large amount of empirical knowledge to draw on when trying to understand Marx. I realised quickly that Marxist theory seemed to have very little to do with my lived experience of being a worker. This is not surprising when you consider that Marx himself never worked in a factory. He was an intellectual. The same was true of most of the big-name socialists: Engels, Proudhon, Bakunin, Lenin, Stalin etc. One notable exception, who we’ll return to later, is Robert Owen.

Of course, it has to be said that the conditions I faced as a worker were far superior to those which obtained when Marx was writing in the 19th century. Especially in Australia, the modern working class enjoys decent wages and conditions, generous overtime provisions, and all the other benefits that have been fought for over the last two centuries. Nevertheless, the core of Marxist theory is not about these details, and the ongoing attraction of Marx is largely theoretical and ideological in nature. Marx did get some things right, but it was the things he got wrong that stood out to me even as an 18 year old.

One of those is the concept of the alienation of labour. Marx believed that the ability to produce was what separated man from the animals. Therefore, production should be an expression of individuality. We can contrast this position with the ancient Greek philosophers for whom it was the ability to think that separated man from the beasts. Nevertheless, according to Marx, workers were alienated from their work because they didn’t get to choose what to produce. Their individuality was stifled, and their lives lacked meaning as a result.

Although I think there is a kernel of truth in this idea, what stood out to me at the time was how little alienation there had been in my lived experience of work. Marxist theory predicted that I should have been alienated, yet that wasn’t true, and I didn’t believe it to be true of most of the people I had worked with. Now that I have a lot more experience in the matter, I can confidently state that the most alienating and meaningless jobs tend to be those in the professional realm and not traditional working class employment.

Work can be physically exhausting, dirty, and dangerous, but if it’s meaningful, you don’t feel alienation. On the other hand, a high-paying, high-status job is alienating if it is meaningless. The work I had been doing in the factory was dirty, difficult, and dangerous. But it was meaningful because it produced things that were actually of value. We could see the results of the work and we knew to what purpose they would be put. That’s why nobody there was alienated.

Another reason why the factory job was not alienating was because of the camaraderie among the workers. It was this aspect that was arguably the most valuable to me at the time. The factory was an all-male affair and it gave me what amounted to an initiation into the world of manhood. I was now part of a team and I was expected to contribute. If I screwed up my part of the job, I would let everybody else down and create extra work. I had been given a small measure of responsibility and I was directly accountable to others.

That dynamic creates a tight-knit group that’s very similar to a sports team. Unlike (amateur) sports, however, if you screw up in a work setting, you become a burden to others, a fact that they will remind you about ad nauseum. Keep screwing up and you’ll lose your job. Because there are real consequences on the line, this raises the tension, but it also raises the feeling of achievement you get from successfully carrying out your part of the work. That satisfaction increases as you improve your skills and win the respect of your workmates.

Although it’s politically incorrect to speak about it these days, there’s an aspect of masculinity that is revealed in such settings. Throw a group of men together to carry out a task, and they effortlessly, unconsciously, and automatically arrange themselves into a meritocratic hierarchy. Something like this has been happening ever since the first group of men decided to get together and hunt animals, i.e., for pretty much all of human history.

I’ve never been part of a hunting party, but I’m pretty sure a small-scale factory setting bears a lot of resemblance. When you work together as a team, you learn each other’s strengths and weaknesses. As a result, everybody knows who is the strongest guy in the factory, who can fix motors or electrical devices, and who can perform this or that skill to the highest level. None of this ever gets said explicitly. To the extent that it ever gets discussed, it is always via jokes and jibes which allow room for the development of the less practical but no less important skill of taking-the-piss.

For these reasons, my initiation into the working class was not alienating at all. It was about teamwork leading to friendship, the satisfaction of building skills and knowledge which I still use to this day, and also of earning reasonable money, which was certainly a welcome bonus for a teenage boy. Although I certainly had no idea about it at the time, I now realise it was a kind of male initiation ritual, very similar to that which young men have been going through since time immemorial.

This way of viewing it also brings into doubt Marx’s theoretical opposition between capitalist and worker. If we assume that men automatically form hierarchies, then the fact that there is a manger is not surprising. In fact, there are very good practical reasons why there has to be a “boss”. There’s a reason why hunting parties, military platoons, sports teams, or manufacturing businesses all have leaders. A hierarchy is adhered to because everybody intuits that it is required to get the job done.

The problems come when somebody challenges the hierarchy, usually implying a disagreement with the implied or overt leader. It’s always astounded me how groups can form themselves so easily and work together with no explicit coordination for long periods of time and then instantly fall apart over the most trivial disagreement. We seem to have an instinct that lets us get along in groups but no instinct about how to handle conflict. 

The British liberal tradition solved this problem by making work into a contract which either party could terminate. Thus, if you disagree with your boss, you can just quit. When we look back at 19th-century capitalism, however, the clear problem was that workers had no real option to quit because they had no wealth or unemployment benefits. But the more important problem was that the power dynamic between capitalists and workers massively favoured the former. Many capitalists abused that power, as most humans do when they find themselves in such a situation. That’s not a problem of capitalism, it’s a problem of human nature.

One way to address that would be to enact policies that tilt the scales in favour of the workers. If you make labour scarce, you create conditions where capitalists have to compete by offering better pay and conditions. That’s what ended up happening through unionisation and the democratic process.

However, the incremental progress of democracy did not appeal to Marx and the other socialists. They wanted to rearrange the entire political structure through a dictatorship of the proletariat, which invariably ended up becoming a dictatorship of a dictator, as the 20th century showed in great detail.  In this respect, it’s worth comparing Marx and his intellectual colleagues against another prominent 19th-century socialist, Robert Owen.

Whereas Marx, Engels, and most other socialists were intellectuals, Robert Owen was born into a working-class family and received very little formal education. At the tender age of 10, he started an apprenticeship as a draper. By his late teens, he had become an entrepreneur, investing in new enterprises. By his late 20s, he owned and ran a large-scale fabric-manufacturing business.

Several things differentiate Owen from the average socialist intellectual. Firstly, he worked his way up from the bottom, doing the hard work of learning a trade and then rising through the ranks to positions of management. Owen started as a worker and then became a capitalist. His empathy for workers came from direct experience, not theoretical considerations.

Secondly, Owen’s intellectual activity was an outgrowth of this real-world experience. It was not divorced from practical concerns. Thirdly, and most importantly, Owen put his ideas into practice by changing the way he ran his company. This enabled him to try things and judge the results. Later, he would take what he had learned and launch various experiments, such as the establishment of co-operatives and intentional communities.

Because Owen was empirically testing his ideas, and because he was implementing them on a relatively small scale, he was able to judge the results with more precision and clarity. Most of his projects failed, often in very quick order. One of his associates on one project quipped that all they had done was to reproduce the French Revolution on a smaller scale. Just like the French Revolution, the projects started with grand ideals but quickly got punched in the face by reality. Meanwhile, the one area where Owen had long-term success was in the management of the business that he himself owned and was directly involved in.

Here is where the link back to Marx and Engels becomes important. One of the main overarching differences between the continental and Anglo societies of this period was that the Anglo societies, including and especially the USA, were empirical and entrepreneurial in nature. They were full of men like Owen who put theory into action and learned the pain of failure first hand. By contrast, the continental tradition was full of academics like Marx and Engels who had no practical experience in trade or organisational management but who had a lot of wonderful ideas about changing the world through political action.

Marx and Engels were the precursors to the middle-class intellectuals that have come to dominate in our time. They were born into relative wealth and were educated prior to having any real-world experience. Even though they claimed to speak on behalf of the working class, their most devoted followers were other middle and upper class people. While the working class had genuine reason to want to change the system, the middle and upper classes were actually the beneficiaries of it. Why, then, were they interested in the theories of Marx and Engels?

That is a question that probably requires a book to answer. The deeply weird kind of self-loathing that exists in our time among educated Westerners is not a new thing. It goes back at least to the start of the 19th century. One of the outcomes is that this class of people convinced themselves that it was permissible to break the established rules in the name of ideology, for example by stealing stuff from supermarkets. This was seen to be necessary in order to bring about the leap into the socialist utopia. It was in opposition to the incremental and iterative approach of capitalism and democracy.

Thus, Marx and Engels actually criticised Owen for the fact that he was a “capitalist”. It’s not hard to see that his pragmatic approach was kind of a bummer because it seemed to show that the grand theories were not all they were cracked up to be. In terms of broader social dynamics, it’s still true in our time that the leisured classes prefer to be swept up in grand ideologies rather than deal with the difficult work of organisation.

We shouldn’t neglect the romantic appeal of it all. Engels was a handsome young man who swanned about Europe speaking passionately about revolution. In the process, he enchanted more than his fair share of young ladies. He was very similar to Byron, Wagner, and the other romantic poets, philosophers, and artists of the era.

The bourgeoisie were dedicated, disciplined, and hard-working, but also mostly invisible. They had a full-time job keeping their organisations running and had little time left over for political activity.  By contrast, the intellectuals were dramatic, exciting, and inspiring, and they had nothing better to do than organise political rebellion.

The contrast between these two archetypes of the romantic intellectual and the hard-nosed capitalist still sits at the heart of many current issues, although the reality is that the intellectuals have been dominant ever since WW2. One of the obvious ways in which that is true is that about a third of the public now attends university. In the post-war years, we have set about creating a society not of the bourgeoisie but of intellectuals in the vein of Marx and Engels.

The result has been predictable: ideology over pragmatism. Communist utopias are no longer fashionable, but it’s not hard to see that climate change, renewable energy, saving the world from pandemics and many other issues fit the bill. The yawning chasm between the practicalities involved and the promises of the ideology is of no concern to the intellectuals who push such schemes. Vague utopian visions with no definable criteria for success are a feature, not a bug. Political activity is the end in itself. It is the way in which dominance is exercised.

By contrast, when we look at the Robert Owenses, Thomas Edisons, or Henry Fords of the world, we find men who received almost no formal education. They were autodidacts who started life very poor, got a trade or other working-class job, and then worked their way upwards. Their skills at organisation came from practical experience, not intellectual reasoning.

Even though it was this latter demographic which built the modern world in which we live, it should be obvious that it is the ideologues who have taken over. How that happened probably also needs a whole book to answer. But there’s one unappreciated point to make.

The weird self-loathing of the intellectual class has been matched by an equally strange inferiority complex on the part of the bourgeoisie. They genuinely thought that the philosophers and intellectuals had access to a kind of knowledge that they themselves lacked. Possibly this was the result of their lack of formal schooling. As Chesterton once quipped, the point of education is to learn not to take educated people seriously. Many of the most successful bourgeoisie never had the chance to learn that lesson, and still to this day the working class happily send their children off to university to learn how to shoplift.

My writing over the last few years has centred around a pattern that I picked up from the works of a number of scholars in seemingly unrelated fields. The anthropologist, Arnold van Gennep, called it the rites of passage. The comparative mythologist, Joseph Campbell, called it the hero’s journey. Comparative historians such as Toynbee and Spengler called it the cycle of history. In addition to these, I noticed the same pattern implied in various theological and psychological works.

When I realised that all these different thinkers were using the same pattern, I set out to try and identify it at a more abstract level. As part of that, I also tried to give it a name. It turned out to be a difficult task. One option I have used is the Cycle-Ending-in-Transcendence. In my most recent book on the relationship between Nietzsche and Wagner, I used the Journey into the Sacred. We could also combine the two and call it a Sacred Cycle.

The cycle begins in a state of holiness (wholeness), which is characterised by equilibrium, consciousness, and equanimity. We understand the world in which we exist and are at ease with our position in it.

Then something arrives which breaks us out of equilibrium. We transition into the state of sacredness (un-wholeness). We are thrust into a world we do not understand and forced back into a more fundamental mode of being that we might call instinct or will. The sacred state is irrational in nature. Our desire to enter it is also irrational. It requires a leap of faith.

It is because we must transition from the state of holiness to the state of sacredness that the beginning of the cycle is marked by a sacrifice. One way to think about it is that we sacrifice our old identity in order to attain a new one (where identity includes both external and internal dimensions). The most important turning points in life – puberty, marriage/childbirth, retirement, and death – all require a sacrifice of identity. Therefore, they are all Journeys into the Sacred.

From these brief considerations, we can see that the sacred cycle is about transformation, transcendence, and evolution. It is the process by which we incorporate something new into ourselves, a reconfiguration of our identity.

Although the sacred cycle is easiest to understand in relation to the life of the individual, one of the great insights of the comparative scholars of the 18th and 19th centuries was that it also seems to apply to collectives. I mentioned Leopold von Ranke a few posts ago. He believed each historical epoch to be guided by the divine, which is another way to say that each epoch is a Journey into the Sacred. His insight was taken to its logical conclusion later by Spengler and Toynbee.

But there’s a more famous example of a collective cycle that is obvious in hindsight but which I only realised after writing last week’s post. The work of Karl Marx also implies the sacred cycle, not just in relation to capitalism itself but the larger historical arc which Marx believed would end in communism.

It was the Austrian economist Joseph Schumpeter who fully explicated the cyclical nature of capitalism. He described it with the phrase creative destruction. But creative destruction is exactly what happens in a Journey into the Sacred. Destruction = sacrifice. Creativity = transformation. Therefore, capitalism is also a Cycle-Ending-in-Transcendence.

To show why that’s true, we can expand on the thought experiment I used in last week’s post, which is taken from the actual history of capitalism when England set about breaking the monopoly that Belgium and the Netherlands had on clothing manufacturing in the 16th century.

Every Journey into the Sacred begins in the state of holiness or equilibrium. Since clothing is a staple necessity of life, the market for it is relatively fixed. However, back in medieval times, there was an extra reason for the stability of the clothing industry. The market was dominated by guilds of craftsmen who regulated everything and were able to dictate the price by controlling supply. Enormous wealth accrued to those guilds which had cornered the market for luxury clothing, especially silk and high-grade wool. Venice, Florence, Bruges, and similar cities were built upon the profits of these monopolies.

The guilds were part of the network of social, political, and economic relationships that we call feudalism. That system had been in a stable (holy) state for centuries. At the time, it couldn’t have been known that the battle over clothing would eventually spiral into the destruction of the entire paradigm.

This leads to another crucial insight about the sacred cycle, which is that it is fractal in nature. There are cycles within cycles. Accordingly, there are sacrifices within sacrifices. The sacrifice of the clothing monopoly ended up leading to the sacrifice of the feudal system altogether. All that was also tied in with the religious shift from Catholicism to Protestantism, which was not just a theological change but also a financial one because the Catholic Church had been sucking money out of Northern European economies (it had also been abusing its monopoly position).

Within these larger abstract cycles, we can identify more fine-grained ones affecting various demographics. For example, the sacrifice made by the early entrepreneurs who challenged the authority of the guilds was to become social pariahs and to face whatever consequences were inflicted upon them by the authorities that were loyal to the status quo. Eventually, those entrepreneurs got the upper hand, at which point the guild workers had to sacrifice their livelihoods.

These different cycles were all related to the larger cycle that was forming. However, they were distributed unevenly over time and place. England and the Netherlands moved to democratic capitalism earliest, while other nations such as Germany and Italy waited until the 19th century.

The transition into capitalism was itself a Journey into the Sacred that involved a reconfiguration of societal relationships. As Max Weber pointed out, that reconfiguration was predicated on a new understanding of the sacred embodied in Protestant doctrines. More importantly from our point of view, however, we can see that capitalism is itself predicated on the sacred cycle. It follows the same pattern.

The starting state for the capitalist cycle is an equilibrium where monopolists extract profits and build wealth. This accumulation of wealth gives entrepreneurs the incentive to innovate. It is the innovation of the entrepreneur which breaks the equilibrium and ushers in the sacred part of the cycle. Note that this is the same pattern we see in the mythical stories of the dragon slayer. The monopolist is the dragon guarding his hoard. The entrepreneur is the hero.

The people who work for the monopolist will face unemployment as a result of the innovation that begins the cycle. Therefore, they also form part of the sacrifice. Each of them is thrust into their own Journey into the Sacred because their economic identity is lost. The consequences will depend on the individual but can span an arc from the mild inconvenience of looking for a new job through to long-term unemployment, marriage breakdown, alcoholism, crime, etc. The cycle is only sacred to the extent that catastrophic failure is a real possibility. The sacrifice must be real.

When viewed in this way, we might ask the question why anybody would willingly enter into the cycle. Why not just remain in holy state forever and take it easy? Ultimately, that is a theological question. Seemingly all religions promise that there does exist an eternal holy state which can be attained. The Christian tradition relegates the holy state until after death. While we are still down here on earth, we are sinners, meaning that we are liable to be thrust into the sacred at any time.

Another way to say the same thing is that we may always be called on to sacrifice everything to go through a process of transformation. There is no rest for the wicked. We must continually evolve. We have learned in the modern world to focus more on this positive side of the equation. The sacred cycle is dangerous, but it also has its rewards. The dragon slayer risks his life but, in the end, he gets the gold.

Looking back on the liquidation of the medieval guilds, it might be argued that the guild workers had the most to lose. However, when we take a broader viewpoint, we see that things did improve over time. Guild members worked very hard. The average medieval farm peasant worked between 30 and 40 hours a week. Guild members worked almost double that. It would take all the way till the 19th century for tradesmen to get the same hours of work via the 8-hour workday.

This comparison between guild workers and peasants shows an important fact about capitalist monopolies. Feudal lords had monopolies over their lands. However, they were not able to extract profit. Therefore, they had no incentive to try and get the peasantry to work longer hours. By contrast, clothing, and especially luxury clothing, was a profitable business. That is why many of the guilds, and the cities in which they were located, became fabulously wealthy.

It wasn’t really until the 18th century that agricultural produce started to become a profitable market due to increasing urbanisation and the consolidation of land holdings. Once the profit arrived, so too did the technological innovation. Capitalism expanded into the agricultural sector.

Marx and his followers emphasised that the profits were won at the expense of workers, and therefore it would be preferable to be a medieval peasant safely ensconced in a locality where a monopolist could not extract wealth. Perhaps that’s true. But there are at least two arguments in favour of the capitalist paradigm.

The first is the one we have already made: that, for manufacturing workers, hours of work did decline over time and conditions did eventually improve. However, the far more important point is the transformative nature of capitalism. It is this that really sits at the heart of the modern Western worldview.

The Journey into the Sacred is about change, adaptation, and transcendence. There can be no question that capitalism turbocharged this attribute of the sacred cycle. That was especially true in the 19th century as capitalism became dominant. While there have been many people who have objected to the destructive and extractive nature of the paradigm, there have been just as many who supported it on the basis of its dynamism and vigour.

In truth, both of these are properties of the overall cycle. The sacred cycle is destructive. It requires a real sacrifice. Those who prefer to stay in holiness and equilibrium resent being forced into the sacrifice. On the other hand, those who do not align with the equilibrium position see the cycle as an opportunity to break free. Capitalism has always favoured the latter group, and that is why the modern concept of “freedom” is very much related to the destruction of the status quo.

The secret to the success of capitalism was its ability to destroy existing monopolies and unlock wealth. What happens, however, when a majority of the population find their interests aligned with the status quo? What Marx and Schumpeter believed was that eventually capitalism would come to an end when monopolies become so powerful that they could prevent any competition from displacing them. Once that happened, the extractive power of these giant monopolies would create a state of affairs so intolerable that the only recourse would be to have the state take over as the über-monopolist.

We’re not quite there yet, but this is a pretty exact description of what has happened in the years after WW2. In every Western nation, the state retained most of the monopoly position it had exercised during the wars. Arguably, neoliberalism was about breaking those monopolies, but all that has happened instead is that the banks and multinational corporations have become monopolists extracting enormous wealth at a global scale. These monopolies are backed by the ultimate monopoly of the United States as the global superpower. In fact, the imperial system of the USA is predicated on monopoly control of global banking and multinational corporations.

The irony is that the USA was born out of a rebellion against the most powerful monopolist of the 18th century: the British East India Company. Still, that’s why capitalism is cyclical. The entrepreneur at the start of the cycle becomes the monopolist at the end. St George grows old and turns into a dragon. It’s not inevitable, but it does seem to be the most likely outcome.

The question before us now is whether the overall cycle of capitalism really is coming to a close as Marx and Schumpeter predicted. It’s telling that even so-called capitalists like Elon Musk are predicting that money and work will be a thing of the past soon and a utopia of leisure awaits us as robots and AI take over all the work. This is exactly what the Marxists were predicting in the late 19th century.

It’s also telling that so-called AI is a technology predicated on the extractive mentality of the monopolist. It sucks into itself all the innovations of all the entrepreneurs of history. But, of course, there’s nothing to stop it vacuuming up all future innovations. It would then become the exact kind of über monopolist that Marx said would usher in communism.

Of course, the so-called capitalists who are pushing it tell us that AI will somehow become an entrepreneur whose innovative power will supercede that of humans. Either way, capitalism comes to an end with a monopoly that cannot be broken, a dragon that cannot be slain.

These utopian fantasies theoretically portend a return to the holy state that ends the sacred cycle. Once we have passed through the uncertainty and confusion of the sacred phase, we once again return to equilibrium.

Does that sound like an accurate description of the world we live in? I don’t think so. On the contrary, our current state of affairs seems like it could collapse at any moment. History has not come to an end. There will be more Journeys into the Sacred tom come. Will they be capitalist in nature? Will Marx have the last laugh as capitalism collapses into communism? Or will some new paradigm take over? My money’s on the third option, but time will tell.

What have unemployment, outsourcing, immigration, asset bubbles, and so-called populist politics all got in common? They’re all the outcome of one of the central dynamics of capitalism. Karl Marx got a lot of things wrong, but this is one thing he got right. One of the spectres that has haunted capitalism from the beginning is that profits always fall. The second-order effects from that dynamic have driven much of Western politics for the last two hundred years. Since we are going through one such crisis right now, it’s worthwhile understanding how it works.

To show why profits always fall, let’s run through a thought experiment. We start with a stable, mostly agrarian society with full employment. Everybody in that society needs clothing. Therefore, the market for clothing is stable, and there exists a skilled workforce who have secure employment.

A capitalist invents a machine that facilitates an order of magnitude improvement in the productivity of clothing manufacturers. He now produces clothing at a far cheaper rate than the competition, and he can undercut them on price. At the beginning, however, he doesn’t need to offer the lowest possible price to the consumer because he has a competitive advantage. Therefore, he will set the price that maximises his profit, just far enough below the competition to win the market.

The capitalist’s competitors must either adapt or die. Many will go out of business. Some will figure out how to copy the new technology. They will now lower their own prices and start to eat into the profits of the first guy. He has no choice but to match it. Profits begin to go down, as does the price of clothing. Prices and profits continue to fall until the new equilibrium is reached.

Because fewer workers are required to make the same amount of clothing, unemployment occurs at the beginning of the cycle. That might sound like a bad thing, and initially it is for the workers who get fired. In the long run, however, the price of clothing goes down, and everybody benefits. Consumers will have more money to spend, and new industries will pop up to hire employees.

The sweet spot for capitalist production comes during the high-profit part of the cycle. Producers who have adopted new technology are flush with money but still have a level of protection while competitors scramble to catch up. My favourite example of this is the post-war pop music industry. The technology to produce recorded music was very expensive, but consumer demand was also very high. The industry was obscenely profitable, but its success was predicated on producing music that people wanted to buy. This created a huge demand for songwriting and musical talent, which hit its peak in the 1960s and 70s, certainly the golden age of pop music.

One of the main causes of the collapse of the industry was that recording technology became cheaper and cheaper over time. Alongside the internet’s destruction of the distribution monopoly that record labels had, profits began to tumble and have ended up at just a fraction of what they once were. As for the quality of the music, well, even AI-generated slop is now competitive.

All this is exactly what Marx had noted about how capitalism works. Profits fall over time due to competition via technology. Capitalism commodifies everything, and the commodification process always entails replacing humans with machines. Next thing you know, you’ve got computers making music instead of people.

We can sum up the cycle of capitalism like this. A capitalist employs new technology and takes profits by making workers redundant. Competitors catch up and take a share of the profit. The price falls, and profit returns to baseline. It’s easy to see that the workers are the ones who feel the brunt of this dynamic because they lose their jobs at the beginning of the cycle. Only later on, once they have hopefully found new work, can they benefit from the lower price of the good they once produced.

Because workers get the short end of the stick at the start of the cycle, it’s no surprise to find that they go looking for ways to protect their interests. That process has been ongoing since the start of capitalism. One of the main ways it began to manifest in the 19th century was through the rise of democracy.

This brings up one of the things that Marx got wrong. He correctly diagnosed that parliamentary democracy in Britain was originally dominated by the bourgeoisie. In fact, the rise of parliament represented the supremacy of the bourgeoisie against the remnants of the feudal aristocracy. In a parliament dominated by the bourgeoisie, the workers’ interests would not be represented. However, Marx underestimated the extent to which universal suffrage would bring about real change.

In fact, when you look at the main themes of democratic politics in the 19th and 20th centuries, programs to alleviate the second-order effects of the cycle of capitalism were fundamental. Democracy became a battle between capitalists and workers. Another way to say the same thing was that democracy became a battle over the cycle of capitalism and who should bear the costs.

Per Marx, capitalists always face the falling profit dynamic. There are a number of ways they can respond to it. One is to extract more value out of workers by requiring longer working hours. This was the favoured approach in the 19th century. Capitalists demanded twelve-hour workdays, and, because workers faced the prospect of unemployment, they had no choice but to agree.

In the longer term, workers figured out that they needed to band together to counteract the power of the capitalists. This led to the formation of unions which led the demand for reduced hours of work. Here in Australia, there was a famous strike in the middle of the 19th century carried out by the stonemasons in Melbourne who demanded and received an 8-hour workday. It took many decades more before all other workers would win the same, but eventually this became the standard.

Of course, passing laws to reduce working hours did not solve the problem of falling profits, it just removed one of the options available to capitalists. That led to the pursuit of a second option: immigration. If you couldn’t extract more value from workers, you could drive down their wages by increasing the supply of labour.

In countries like Australia and the USA, it was immigration which kickstarted the economy in the first place via the indentured servitude that came from willing or unwilling transportation. (Individuals who had no money could have the cost of their ship fare paid by agreeing to work a certain number of years as an indentured servant on arrival).

Once the economies of both nations became established, however, free citizens began to see that the continued importation of indentured servants was suppressing wages and job opportunities for themselves. A big part of the political pressure to abolish the practice came from these economic considerations. However, once slavery and indentured servitude were outlawed, capitalists simply turned to the next option: free immigration.

In eastern Australia and California, there were numerous Chinese who followed the gold rushes. In the north of Australia, Pacific Islanders were brought in to work on farms. In the colonies of South Africa, immigrants from India worked the sugar plantations. All of these practices allowed the capitalists to drive down wages at the expense of the local workforce.

It should be no surprise, therefore, that immigration became a political hot topic, with the parties representing the working class being most opposed. Here we see an interesting divergence between the USA and most other Western nations. Because the US lacked a firm federal government, it had less ability to control its borders.

In fact, there was a period of out-of-control immigration from Southern and Eastern Europe at the beginning of the 20th century. So large were the numbers of people coming in that the wages of the working class were suppressed for more than two decades until finally legislation was passed in 1924. Of course, this was all very much in the interests of the capitalists who profited from reduced wages.

The disruption in America did not go unnoticed internationally. Here in Australia, an immigration bill was passed in the early years of the 20th century. The then prime minister, Alfred Deakin, praised the bill to parliament by stating that it would prevent a repeat of the American debacle.  It’s no coincidence that Deakin was the leader of the Labor Party and therefore represented the economic interests of workers.

With working hours fixed and immigration off the table, capitalists only had one option left to counteract falling profits, they could make workers redundant. It does seem rather coincidental that the Great Depression followed shortly after immigration restrictions were enacted. In most Western nations, one-third of the workforce found themselves out of a job.

Once again, it was left to the parliament to solve the problem. The eventual solution was unemployment benefits and the welfare state more generally. It should be noted that these kinds of programs had already been put in place in the 19th century by unions and mutual societies. The government was copying a model that had already been proven to work.

More generally, what occurred at this time was that the state intervened in the cycle of capitalism by taxing the profits of capitalists and redistributing them to workers via unemployment benefits. This reduced the burden that workers bore at the start of the cycle but also reduced the payoff to capitalists. Once again, democracy had intervened to alleviate a problem caused by the inherent falling profits dynamic of capitalism.

Putting it all together, we can see that it was through parliamentary democracy that the workers were able to protect themselves. Of course, the democratic solutions only came after long periods of suffering, but better late than never. By contrast, countries which did not have the tradition of parliamentary democracy were not able to mitigate the second-order effects of the falling profit problem, including Italy and Germany.

All of this is directly relevant to the world we live in because the iron law of declining profitability did not go away. All that has happened is that we have found new and ingenious ways to try and mitigate it. One of them is the arbitrage that comes from outsourcing work to nations who are happy to depreciate their currency. This gives capital what it always wants, cheaper labour. In this case it is entire nations which have their wages suppressed. That is what China is currently doing, but the model had already been established by both Japan and Germany in the post-war years.

Unemployment was always one of the problems caused by the falling profit dynamic. If you go by the official statistics, we have very low unemployment these days. Look a bit closer, however, and you see a different story. In most Western nations right now, somewhere between 20% and 30% of the working-age population is not in the labour force, meaning they are not counted as unemployed. We still have lots of unemployment, we have simply re-categorised it in the hope that nobody will notice.

The massive asset bubbles of recent decades are also predicted by Marx’s model because both falling profits and wages are offset by relative growth in capital assets. One of the solutions that was enacted to solve that was to ensure that the general public owned assets, most notably real estate. That measure is also disappearing fast, meaning that the general public is no longer sharing in the accumulation of wealth.

Finally, we have the capitalists’ old trick of using immigration to drive down wages. That issue had been put to bed for the first half of the 20th century but got re-opened on the back of the civil rights movement in the 1960s. As a result, it is now filtered through the lens of the culture wars, meaning that anybody who objects to having their job taken by a low-wage foreigner must be a lazy, stupid racist. This moralising tactic has been so successful, especially in the US, that blatant immigration fraud has now become standard business practice.

In short, we are living through a period where capital is once again doing its old trick of pushing the costs of falling profits onto the general public. This is the logical outcome of the neoliberal reforms of the 1990s, which were basically a laundry list of the old capitalist demands for immigration, asset bubbles, labour arbitrage, unemployment, etc. We gave capital whatever it wanted and the results have been entirely predictable.

Part of what made it hard for the average person to see what was happening was that the neoliberal agenda was implemented by the parties that had traditionally represented the workers (Democrats in the US, Labour parties elsewhere). Why that happened is an interesting question. It does seem that the fall of the USSR led to an ideological collapse among the elites of the West. It was concluded that capitalism really was the superior system. History was at an end, and a capitalist utopia was now upon us.

The absurd irony is that this kind of utopian thinking was what had motivated the Marxists in the first place. Furthermore, the capitalist ideologues made the exact same mistake as Marx in discounting the extent to which parliamentary democracy had kept capitalism from self-destructing. That’s why they collapsed into a screaming heap once Brexit and Trump showed up. Democracy has returned right on cue to spoil their little ideological fantasy.

Long-time readers would know my love of etymology. I like to think of it as semantic archaeology. You dig down into the deeper meanings of words and discover old truths long since buried.

One of my favourite examples is the etymology of the words “history” and “story”. Both originally come from the Latin “historia”. “Story” is just the shortened form of “history”. Once upon a time, they meant something like what we these days call a “narrative” and could denote both fictional stories and factual histories. Even in modern times, most European languages use a variation on “historia” for both meanings. Modern Italian uses the shortened form “storia”. German uses “Geschichte”. 

By themselves, these facts are mere curiosities. What’s important is to think through the implications. For most of Western history, people did not feel the need to have different words to demarcate fictional stories from factual histories. This made sense because they had a worldview that we might call mythological or spiritual. In that worldview, the distinction between fact and fiction was far less important. By contrast, the reason why we need a hard distinction between fictional story and factual history is because we have what is sometimes called a demythological worldview.  

Our worldview first arose during the Enlightenment. However, the specific change that occurred in our understanding of history has a more concrete origin. Our emphasis on historical facts arose from innovations in the scholarly study of history that occurred in Germany in the late 18th century.

The father of modern historical scholarship, the one who demanded facts and evidence be rigorously researched, was Leopold von Ranke. He turned the University of Berlin into the epicentre of the new approach. Alongside other luminaries such as Alexander von Humboldt, the success of the new German university model led to it being copied in all other Western nations. Our modern distinction between story-as-fiction and history-as-fact arises directly from these developments.

Thus, the changes in the meaning of the words “history” and “story” are not accidental but are tied to a major upheaval in our worldview, the one that still dominates in our time. It was this same upheaval that led to a similar shift in the meaning of the word “culture”, which is what we will be discussing in this post. If anything, the new concept of culture that arose in the late 18th century has even more relevance to our time since practically all of modern politics revolves around what is called the “culture wars”.

Because of the centrality of “culture” to our modern worldview, it is quite startling to realise that seemingly no thinkers of importance paid any attention to it prior to the 18th century. Plato and Aristotle never discussed culture. The word does not get a single mention in the Bible or any of the works of Shakespeare. It’s as if, all of a sudden in the 18th century, we started to think about culture for the first time.

Of course, that’s not true. What was really going on was a different understanding of what culture is. We can elucidate that by doing a little semantic archaeology on the word itself.

Like “history”, “culture” comes from Latin. “Cultura” meant to cultivate land in preparation for crops. Its primary meaning was what we would nowadays refer to as agri-culture. That was true in the ancient world all the way through the medieval era.

Let’s think about what it means to cultivate something. In last week’s post, we talked about sourdough “starter”. This is a culture (there’s that word again) of microorganisms that must be deliberately nurtured by a baker in order to produce high-quality bread. To cultivate a sourdough culture, you must understand something about what the microorganisms need in order to thrive. Like all living things, they need food, water, a certain temperature range, etc. A sourdough baker must create the conditions in which the right microorganisms thrive and the wrong ones do not.

Cultivation implies an understanding of the outcome you are trying to achieve. A farmer decides what crops to grow and then cultivates the soil accordingly, adding whatever fertiliser works best for the specific plant, and tweaking other relevant variables.

Therefore, cultivation implies both an understanding of the desired ends and the means to achieve them. That is what people understood by the word “culture” (cultura) prior to modern times. But when we think about culture in this way, we can see that some of the greatest thinkers in the Western canon were very much concerned with culture in the sense of cultivation.

The most obvious here is Aristotle. In his books on ethics, he reasons in the exact same way that we have just described, only instead of cultivating bread or crops, he talks about cultivating people and societies. He begins by asking what qualities make a person or society virtuous and then how we can attain those qualities. Plato had taken the same approach in The Republic.

The reason why Plato and Aristotle never talked about “culture” was because their discussions were carried out using the concepts of ethics and politics. This makes perfect sense because, in Greek, the word ethics meant character, habit, or disposition. Ethics was about defining virtue; the end goal of cultivation.

Because man is a social animal, the cultivation of virtue can only take place through the institutions of society. In Athens, this was the polis. Therefore, the means of attaining virtue had come via politics. Putting it all together, we see that the cultivation of virtue was a combination of ethics (defining the character, habit, and dispositions that were to be desired) and politics (how to achieve them).

Thus, the ancient Greeks were very much concerned with “culture”, they simply used different words to talk about it. Since Aristotle’s philosophy dominated all through the scholastic period of medieval Europe, these matters were always discussed using the concepts of ethics and politics. That’s why nobody talked about “culture” prior to modern times.

It’s noteworthy in this respect that the rediscovery of ancient thought during the Renaissance also produced works that were concerned with the cultivation of virtue. One of the best of these is Castiglione’s “The Book of the Courtier”, which is about the cultivation of the Italian courtesan. Lord Chesterfield’s letter to his son on “the fine art of becoming a man of the world” follows in the same vein but aims to produce the English gentleman.

Machiavelli’s “The Prince” is about the cultivation of an ideal ruler in the ruthless environment of Italian city states. All of these works have in common that they define the qualities to be sought after and then give advice on how to attain them, just as Aristotle had done about two millennia earlier.

In summary, what we can call the classical approach to culture was concerned with the cultivation of virtue. Now that we know that, we can compare this way of thinking to the new concept which arose primarily in Germany in the late 18th century. What we find is that the new approach was almost an exact inversion of the classical one.

The first major difference was that the classical approach to culture was about the cultivation of excellence in the individual. One of the ways this manifested was that the writings themselves were usually composed for specific persons. For example, Aristotle’s two major works on ethics are called the Nichomachean and Eudemian, both referring to the intended recipient. Lord Chesterfield’s letter was to his son. Machiavelli’s treatise was for the Duke of Urbino, Lorenzo de’ Medici, with whom he was hoping to obtain employment.

The classical approach was also normative in the sense that it laid out a positive vision for virtue and then how to attain it. By contrast, the modern approach is descriptive. It finds a culture as it is and sets about illustrating its customs, practices, institutions, etc. This follows from the fact that the modern conception was born in university settings, including the fieldwork that occurred when scholars travelled to foreign lands. A scholar visiting a strange country is not going to have need of a normative vision of culture since he or she is not a member of that society.

Another major difference is that the classical approach appeals to reason. That is why it was subsumed under the discipline of philosophy. The underlying assumption is that virtue can be achieved by analysing it and disseminating information about it. The promise that Machiavelli makes to Lorenzo de’ Medici in the forward to The Prince is that he has spent much time studying politics so that the Duke may learn from his efforts. Since reason is seen to be the highest virtue in classical thought, the exercise of it is inherently good.

Appeals to reason were necessarily targeted to the elites of society since classical philosophy assumed that the general public was incapable of using it. The body politic was usually characterised as a rabble who were guided by emotion and base instinct. The exercise of philosophy, on the other hand, required an education, something that the average person did not have and was assumed to be incapable of attaining.

For all these reasons, the classical approach was concerned with exceptional individuals capable of attaining the highest possible virtue. By contrast, our modern conception of culture focuses on what can be said in general about the cultural practices of a collective. It is concerned with the average, not with the exceptional.

Another way to think about it is that the modern conception of culture is about the relationships between individuals and not with the individuals themselves. Because it is descriptive and not normative, it makes no value judgements about what it finds. This was one of von Ranke’s main precepts for history, i.e., that every epoch has its own value independent of any others (an idea that would later form the basis of Spengler’s comparative history, but not Toynbee’s).

From these qualities, it’s easy to see why a golden age of anthropological research followed in the wake of innovations that had taken place in German scholarship. Scholars trained in these ideas were far more objective than their predecessors, and although many of them still carried inevitable biases in their analysis, they did an excellent job of describing foreign cultural practices without passing moral judgement.

Furthermore, because of the deprecation of logic and reason and the incorporation of the practices of the average person, the new approach was able to identify a whole host of material that had been deliberately omitted from the classical schemes. For most people throughout history, the cultivation of culture did not happen through reading and reasoning but through doing.

In the medieval Western tradition, that job fell primarily to the Catholic Church, which was the predominant influence on the culture of the general public, whose cultivation as good Christians happened not through reason and logic but through ritual. The appreciation of these irrational aspects of culture came to play a major part in our modern understanding.

It’s no coincidence that these new ideas should have arisen in Germany in the aftermath of the Protestant rebellion. One of the things the Protestants rejected was the awkward compromise that the Catholic Church had made to try and synthesise classical philosophy with Christian teaching. The Protestant theology was faith-based and therefore irrational.

This had a major influence on subsequent German scholarship. Thus, even though von Ranke insisted on rigorous objectivity in the collection of facts, he nevertheless believed that each historical epoch and culture was independently motivated by the divine. (Once again, the later influence on Spengler is clear and can be contrasted with Toynbee’s more Darwinian perspective).

With the rejection of the classical viewpoint, one of the things that has disappeared from our modern conception of culture is the idea of cultivation. Each culture is believed to receive its character from an irrational source (God, instinct, nature). Therefore, it is all but immutable and there is no point trying to improve it, certainly not by the mechanisms of reason and logic.

That’s also why there is an implied fatalism in the Germanic notion of culture which played no small role in the events of the 20th century and which still haunts us to this day. Cultures are born whole and they die whole. They are either lively and rising or decaying and doomed. No adaptation is allowed. (Again, this is one of the main differences between Spengler and Toynbee).

The classical conception of culture as the cultivation of virtue still lives on in our time, although in rather degraded form under the guise of “self-help” or “self-improvement”. The implied individualism of these terms is something that Aristotle and the Greeks would have found difficult to understand. For them, the cultivation of virtue was inherently a political matter.

This is not to say that the new conception of culture does not play a role in modern politics. On the contrary, almost the entirety of our politics is now carried out via the “culture wars”. Culture once belonged to the realm of philosophy, but philosophy is all but dead in our time. Any public figure who even tries to define a conception of virtue can count on being howled down by a screeching mob.

Meanwhile, the inherent irrationality in the Germanic concept of culture has made our politics borderline hysterical. Public figures are no longer expected to make sense, only to have great conviction. Our politics has become “faith-based” in a way that is very much in keeping with its Protestant origins. Of course, mild-mannered scholars such as von Ranke would be horrified to witness it, and Aristotle and Plato would also be shaking their heads since it’s the exact mob mentality they warned about two and a half thousand years ago.

Still, there is no doubt that the new conception of culture opened up new truths that were previously concealed. One of those is tight correspondence between the concepts which a society foregrounds and the political and economic structure that dominates. In fact, the change that occurred in the meaning of “culture” is a direct example of this because it came into fashion at just the same time that the feudal economic and political structures were in terminal decline, taking the old aristocracy with them.

Meanwhile, the modern collectivist understanding of culture was a perfect match for the growing dominance of the bourgeois institutions of capitalism and democracy that arose in the late 18th century. We shouldn’t forget, however, that this dominance was not just ideological in nature. It was won with the pointy end of guillotines and gun barrels.