IV

Capitalism, Royalism, and the Social Question

THE MOST VIVID ILLUSTRATION of the initial connection between concepts of capitalism and concepts of liberty can be found in another early presentation of the concept of capitalism, this time published in 1836 in a multivolume collection of memoirs and documents entitled Mémoires tirés des papiers d’un homme d’état compiled and edited by two French royalist journalists named Alphonse de Beauchamp and Armand François, comte d’Allonville. Here too the initial context was formed by the relationship between trade and politics. “The question of trade envisaged from a political point of view” was, according to a memorandum quoted by the editors of the compilation, “a particularly important question that has yet to be resolved.”

Born of the natural products whose venal value and ease of placement it facilitates, does it not, when it grows to be more extensive and moves towards its final term, produce two social vices that are as ruinous as they are corrupting? On the one hand, there is the superabundance of producers over consumers, which gives rise to inferior production. On the other, there is the substitution of a sterile traffic in gold and money in place of the vivifying flow of the products of agriculture and industry.¹

Not much more, the memorandum continued, needed to be said about the imbalance between production and consumption because a just equilibrium could be expected to be established after the wave of inevitable misfortunes had passed. “But,” its author exclaimed rhetorically,

what is there to say about this new power of capitalism which, born of the trade that it ruins, has succeeded in all its immorality to the more moral power of fructifying the land that it now oppresses by diverting capital from it? What is there to say about that power that sacrifices the future to the present and the present to that contemporary leprosy, individuality? What is there to say about that egoistical, cosmopolitan power which takes hold of everything, but produces nothing and is intimately connected only to itself? What is there to say about this sovereign of sovereigns who can neither make war without it, nor make peace with it, which enriches itself from both their prosperity and their ruin, from the goods belonging to the people that it shares and the evil done to them that it augments?²

At this point, Allonville, who by then was the editor of the series, added a long footnote to the text, noting that “this power” had only just come into being at the time that the memorandum was written, but that everything already announced its “inevitable triumph.” It had been foreseen at the beginning of the French Revolution and subsequently had been deployed by “those sovereigns of sovereigns,” the Rothschild brothers. The result, Allonville announced, was predictable.

Ever since Adam Smith said that “money is nothing other than the motive force (mobile) of circulation,” it has come to be seen by economists as no more than a representative sign of wealth, with credit as real wealth, giving rise to the creation of fictive values equally representative of that same wealth. Hence, banks, paper-money, and speculation as the fruits of the abundance of public effects, culminating in the aristocracy of the Bourse and the endless resources of loans and debts or, more accurately, disguised bankruptcy, because the multiplication of the sign undermines its value, and the final result of that multiplication will probably be a great financial catastrophe.³

In the age of the Rothschilds, Allonville concluded, it was no longer public opinion that was queen of the world, but real or fictive money.

The initial claim of this essay is, therefore, that the concept of capitalism began as a concept that looked back to the eighteenth-century preoccupation with the nexus of capital, war, and debt but acquired its conceptual identity when that conceptual nexus was transferred from an international to a national setting. In this respect, it inherited much of its content from an older, still French, but largely royalist literature centred on Britain’s rise to world power in the eighteenth century and the price that both Britain and the rest of the world had paid for it. In this literature, the concept of a commercial society was counterposed to the concept of a political society, but, in contradistinction to later usage, the combination was taken to be a harbinger of ruin rather than revolution. In this type of argument, the concept of a commercial society was, ultimately, self-defeating. This was the type of argument that was set out vividly in 1796 by the royalist political theorist Louis de Bonald in his Théorie du pouvoir politique et religieux dans la société civile (Theory of political and religious power in civil society), partly to explain why it would be a mistake for opponents of the French Revolution to advocate a mixed or British-style system of government as an alternative to the republican regime presently in power in France.

FIGURE 4. Louis de Bonald, Théorie du pouvoir politique et religieux dans la société civile (1796)

“In England,” Bonald wrote, “there are two powers because there are two societies.” There was a political society, which was constituted and monarchical, but there was also a commercial society (here Bonald used the term une société de commerce, which was the one used in the first, 1790, French translation of Adam Smith’s Wealth of Nations). It was, he wrote, “the most extensive there has ever been in the universe because the state is commercial in England and is properly commercial only in England.”⁴

In this commercial society, Bonald continued, power was separated by its nature from the power that existed in political society. There, power was unitary, while the power that existed in commercial society was collective. To explain the difference between the two types of power, Bonald drew upon a distinction between two types of society described much earlier by the seventeenth-century English political philosopher Thomas Hobbes. Some societies were bound together so tightly that they formed a union. Others, however, relied on reciprocity and concord.⁵ To Bonald, a commercial society was one of these. Unlike a political society, a commercial society was not a society in which it was “the opposition of particular interests and opposing wills that made the establishment of that type of society necessary, but the free union of common interests and unanimous wills that made it possible.”⁶ On Bonald’s terms, a commercial society was synonymous with concord, while a political society presupposed union. The combination of the two, which, he argued, was a distinctively British attribute, was both a strength and, ultimately, a weakness. It would be a strength for as long as the commercial society left the executive with the initiative to maintain peace at home and project power abroad. But it would turn out to be a fatal weakness if government policy gave rise to financial instability and to arguments and conflict over taxation and public expenditure. Then, Bonald argued, fear of royal power would provoke the commercial society to encroach upon the political society; the resulting spiral of uncertainty and instability, which, he argued, was built into collective decision making, would give rise to war, civil war, and, ultimately, catastrophic state failure. This, he claimed, was the real meaning of the enigmatic prophecy that Montesquieu had issued about Britain’s future in 1748 in his The Spirit of Laws. “This state will perish,” Montesquieu had written, “when the legislative power has become more corrupt than the executive.”⁷ France and the events of the French Revolution were, from Bonald’s point of view, in the process of proving that Montesquieu had supplied the right answer even if he had singled out the wrong country. It was a characterisation of the French Revolution that had a striking resemblance to the one set out some two centuries later by the great German historian Reinhart Koselleck in his Critique and Crisis.⁸

In Bonald’s rendition, a commercial society was condemned to fail because, in the final analysis, it did not have the stability supplied by the vertical structure of command that was the hallmark of a properly constituted political society. Much the same diagnosis applied to capitalism, but instead of the tensions between borderless trade and commercial reciprocity on the one hand and bounded politics and political authority on the other that were the hallmarks of Bonald’s characterisation of commercial society, the tensions that first gave capitalism its name arose in the context of domestic struggles for power. As can be seen from Bonald’s examination of Britain as a warning to France and from the compilation edited by Allonville, capitalism, like many other words that end in -ism, was used by writers from the royalist and legitimist right of French politics during the 1830s to crystallise both the problem and the challenge that could be generated by turning a single word into a signal of the moral and political choices that France now faced.⁹ Much the same type of ideological crystallisation lay behind the long list of potential causes of French ruin set out by another royalist, Pons Louis Frédéric, marquis de Villeneuve, in a pamphlet entitled De l’agonie de la France (France’s agony) published in 1839. As its title indicated, the pamphlet was intended to highlight the many threats to French survival built, according to Villeneuve, into the arrangements and policies followed by the July Monarchy, beginning with the decline of Christianity, the inadequacies of education, the “pulverisation” of the soil and the family by the “progressive solvent” of the Civil Code, and the ruin of both the old and the new aristocracy—whether noble or bourgeois, provided that they owned land—under the aegis of the new “democratic element.” The threat of ruin extended to property owners because of the combination of inequality and a poorly timed land tax; to industrialists because of the impoverishment of the soil and the resulting potential for “general disorganisation”; “to capitalism and finance” because of the oversupply of credit; to rentiers because of the fiscal squeeze produced by providing an income to “people who take but do not give”; and, ultimately, to almost every component of modern French society. “Alongside the malaise or instability of private wealth,” Villeneuve warned, “there is the complementary and more penetrating malaise of public wealth. A new evil, capitalism, that seductive and dangerous serpent, threatens to suffocate them both in its coils.”¹⁰

It could be claimed, therefore, that the concept of capitalism began as either a French royalist nightmare or a royalist political threat. In this respect, its meaning was somewhat similar to that of the phrase “the social question” that also began to become current and also initially in legitimist circles in the decade after the French revolution of July 1830. The point of the phrase was made clear in an article published in November 1831 in a legitimist newspaper named La Quotidienne attacking the Orleanist regime for its failure to win a broad body of popular support after a major insurrection by silk workers in the city of Lyon. “In the end,” the newspaper commented, “it is necessary to understand that, beyond the parliamentary conditions on which the existence of power depends, there is a social question that still has to be answered.… A government is always wrong if it has no more to offer than a flat refusal to listen to people calling for bread.”¹¹ The social question, in this rendition, was a question about a government that was based on the idea of popular sovereignty, but refused to recognise the needs and entitlements of the sovereign author of its power. Ultimately, on these premises, the real answer to the social question would have to be a reforming (legitimist or Bonapartist) royal government.