Tag: capitalism

Chance & Necessity: Another Look

In everyday experience, we think of chance as what governs gambling, barring schemes to harness probability in their favor. Necessity, on the other hand, brings to mind the air we breathe, food and/or water. Previously, we discussed Jacques Monod as an early explorer of the collision of probability and chance in biology. In Laws of the Game: How the Principles of Nature Govern Chance (German: Das Spiel: Naturgesetze steuern den Zufall), Manfred Eigen & Ruthild Winkler critique Jacques Monod, stating that his innovation was that the substrate of all biology is chance and accident. You may note that the subtitle of Laws of the Game states the opposite.

This gets even more subtle if you consider Johan Huizinga’s Homo Ludens: A Study of the Play Element in Culture. He emphasizes the role of playful behavior as the university that educates us in the connection between chance and necessity.

Foreword

The lay reader interested in the natural sciences is exposed to a constantly rising flood of information. He may often feel himself cast in the role of a judge before whom different authors appear like competing litigants, each of whom hopes to be found in the right. If these authors are sufficiently clever in presenting their cases, the reader may be swayed by each in turn. But then a reviewer appears on the scene and objects that each cannot be as right as the other, particularly when one author’s claims are the exact opposite of another’s. The reader has no choice but to find the reviewer right, too.

This familiar anecdote, which we have slightly adapted to suit our purposes, contains a moral: Everyone could in fact be right if each one did not insist on being the only one to be right.

Everything that happens in our world resembles a vast game in which nothing is determined in advance but the rules, and only the rules are open to objective understanding. The game itself is not identical with either its rules or with the sequence of chance happenings that determine the course of play. It is neither the one nor the other because it is both at once. It has as many aspects as we project onto it in the form of questions.

We see this game as a natural phenomenon that, in its dichotomy of chance and necessity, underlies all events. Our interpretation of games and play thus goes far beyond Huizinga’s, which considers play only in its relation to human behavior. In applying the concept of play to art, we come much closer to Adorno’s views, which clearly disagree with Huizinga‘s identification of play and art.

The considerations that gave rise to this book go back to the molecular theory of evolution worked out a few years ago. It also draws on the models developed in connection with that theory, models for simulating phenomena like equilibrium, selection, and growth, all of which are based on natural laws. Although this book makes frequent use of examples drawn from the field of biology, its scope is much broader and includes general scientific, philosophical, sociological, and aesthetic perspectives. Our main purpose is to show play in its symbolic nature and in all its metamorphoses. We also make use of its different aspects to illuminate both our scientific understanding of the world and various philosophical positions. We are aware that this brings us into conflict with those who attribute validity to one and only one aspect.

The actual writing of the book was preceded by innumerable talks and discussions with friends and colleagues during our Engadin winter seminars, on hikes and ski tours in the mountains, and, occasionally, over a bottle of wine. We first thought a dialogue would be the appropriate form for our exchange of ideas, but we soon abandoned this concept. The classical dialogues are without exception artificially constructed. Simplicio and Salviati, for example, are both mouthpieces for Galileo. We finally decided that we would both take turns going over all the material point by point. We have, of course, ventured into areas in which we are only dilettantes. We hope the reader will forgive us this in the light of our efforts to uncover parallels and so to emphasize the unity of nature and mind.

We do not want to go any further into the substance of the book here than is necessary to make clear why we chose the title we did. Similarly, the introductions to the individual chapters are meant to lead the reader into the material treated, not to summarize it.

Chance and law (or principles) are the basic elements of games. The subtitle of the book suggests the interaction between them. And here we should add that it is the consequences of chance that are subject to regulation. Only if there is a large number of individual events does the element of chance come under the control of statistical law. This law is at work, for instance, when chance fluctuations undergo self-regulation in equilibrium or when they are amplified in the evolutionary process. The origin of the genetic code, the development of languages by which we transmit our thoughts, the intellectual play of artistic imagination are all based on the same fundamental principles of evolution, even though the results of individual games are determined by the caprice and variability of chance.

The manifestations of the game that matter plays in time and space and the effects this game has on human beings are the themes of the central chapters in the book. Much as we may agree with Jacques Monod in his view of molecular biology, we differ from him greatly in the conclusions he draws from it for mankind and society. We see Monod’s demand for an “existential attitude toward life and society” as an animistic inflation of the role of “chance.” Such a demand neglects the complementary role played by natural law. Criticism of the dialectical overemphasis on “necessity”—a criticism we find fully justified—should not move us to deny completely its obvious infiuence.

We are in complete agreement with Monod’s statement that ethics and knowledge cannot be divorced from each other. For us, however, this view does not condemn the great religions but rather sets them a new task. As we have occasion to point out in the present work, the natural sciences yield no proof of God’s existence, but neither do they claim that men “can do without faith in God.”

The unity of nature is expressed more in the laws governing the relationships between structures than in the structures themselves. Taking this “motto” as a point of departure for Part IV, we examine a number of problems that have recently come more and more under the purview of the natural sciences and that are still far from being solved. In these considerations, we are mainly concerned with the mechanisms of cognizance. In terms of the elementary processes involved, these mechanisms always amount to a falsification in Karl Popper’s sense. Still, we cannot fully accept the views of this great epistemological logician, particularly when he claims: “There is no induction.” Good enough! But there are different mechanisms of falsification that vary in their degree of inductive adaptation.

One of our main concerns in this book lies at the heart of Part III. There we raise the still unsolved question of the hubris of human knowledge. Friedrich Dürrenmatt’s categorical imperative “What concerns all can only be worked out by all” is as relevant for the physicist whose knowledge can unleash the forces of nature as it is for the biologist who is now in a position to manipulate genetic material and influence psychic behavior with drugs. And our appeal here is also directed at the economist and the politician, who have the task of creating, maintaining, and protecting the conditions necessary for a worthwhile human existence.

Pessimistic predictions based on simple extrapolation are widespread today. We will not be able to solve the problem of limited resources by frugality alone. A raw material that will be used up in about fifty years at present rates of consumption might last a hundred years if we cut down on its use. (Such a reduction might, of course, threaten the stability of our economy.) In other words, the catastrophe could be delayed for another fifty years. Would it not be more sensible to concentrate on ensuring unlimited resources, perhaps by reusing our raw materials in a recycling economy and by developing sufficiently productive sources of energy? However we solve this problem, the practicability of our solution will depend on stopping population growth, perhaps even on reducing the world’s population.

We must be clear about one thing: The human being is not a fluke of nature, nor does nature automatically guarantee his survival. The human being is one player in a huge game, the outcome of which is, for him, uncertain. He has to make full use of his capabilities to hold his own as a player and not become a plaything of chance.

Manfred Eigen / Ruthild Winkler-Oswatitsch
Göttingen, September 1975

ONE

The Taming of Chance

Research in physics has shown beyond the shadow of a doubt that in the overwhelming majority of phenomena whose regularity and invariability have led to the formulation of the postulate of causality, the common element underlying the consistency observed is chance.

Erwin Schrödinger, “What Is a Natural Law?” (Inaugural Address delivered at the University of Zurich, December 1922)

1

The Origin of Play

Play is a natural phenomenon that has guided the course of the world from its beginnings. It is evident in the shaping of matter, in the organization of matter into living structures, and in the social behavior of human beings.

The history of play goes back to the beginnings of time. The energy released in the “big bang” set everything in motion, set matter whirling in a maelstrom of activity that would never cease. The forces of order sought to bring this process under control, to tame chance. The result was not the rigid order of a crystal but the order of life. From the outset, chance has been the essential counterpart of the ordering forces.

Chance and rules are the elements that underlie games and play. Play began among the elementary particles, atoms, and molecules, and now our brain cells carry it on. Human beings did not invent play, but it is “play and only play that makes man complete.”1

All our capabilities arise from play. First, there is the play of limbs and muscles. The aimless grasping and kicking of an infant develop into carefully coordinated movements. Then there is the play of our senses. Playful curiosity sends us in search of profound knowledge. From play with colors, shapes, and sounds emerge immortal works of art. The first expressions of love take the form of play: the secret exchange of glances, dancing, the interplay of thoughts and emotions, the yielding of partners to each other. In Sanskrit, the union of lovers is called kridaratnam, “the jewel of games.”2

Every game has its rules that set it apart from the surrounding world of reality and establish its own standards of value. Anyone who wants to “play” has to follow those rules. In parlor games, rules established before the game begins determine the course the game will take and define the scale of values by which it is played. But the effects of a chance occurrence can change the constellation of the game and set it running in a totally new direction. This is how life initiated its first games, and this is how our thoughts and ideas continue to play those games.

From the terrifying realm of elemental forces and the holy realm of laws arises the aesthetic impulse, which creates a third, carefree realm. This is the realm of play and appearance. In it, man is freed from the bonds of all circumstance and liberated from compulsion, moral as well as physical.1

It is our intention in this book to trace the interplay of chance and law that has come down to us from the farthest reaches of time and found its most perfect expression in the inexhaustible creativity of our ideas. We hope to translate Hermann Hesse’s symbol of the glass bead game back into reality. Hesse described this game as one that incorporated all the values of our culture.

All the insights, noble thoughts, and works of art that the human race has produced in its creative eras, all that subsequent periods of scholarly study have reduced to concepts and converted into intellectual property—on all this immense body of intellectual values the Glass Bead Game player plays like the organist on an organ. And this organ has attained an almost unimaginable perfection; its manuals and pedals range over the entire intellectual cosmos; its stops are almost beyond number. Theoretically this instrument is capable of reproducing in the Game the entire intellectual content of the universe.3

There is something mysterious about glass beads. The reflection and refraction of light make them glow, and as we explore the idea of play in this book, Hesse’s glass beads will take on a new life. Part of their symbolic significance derives from the fact that they can exemplify the constant transformations and metamorphoses we observe all around us: atoms evolve into crystals, molecules into genes, living cells into cognitive beings, letters into words, notes into harmonies. The course the bead game takes is determined by the roll of the dice, yet at the same time it is also influenced by the rules of the game, just as chance in nature is subject to the laws of physics. The dice and the rules of the game these are our symbols for chance and natural law.

List of References

  1. Schiller, Friedrich von, “Über die ästhetische Erziehung des Menschen (On the Aesthetic Education of Mankind),” in a series of letters from the years 1793-94, printed in his Philosophical and Critical Writings (many eds.).
  2. Huizinga, Johan, Homo Ludens: A Study of the Play Element in Culture. Boston: Beacon Press, 1955.
  3. Hesse, Hermann, The Glass Bead Game: Magister Ludi. New York: Holt, Rinehart & Winston, 1969.
Manfred Eigen & Ruthild Winkler. Laws of the Game: How the Principles of Nature Govern Chance. Translated by Rita & Robert Kimber, Princeton University Press, 1993, pp. xi-5.

Theodor Adorno, a Marxist theoretician, believed the filter before any interpretation of the world was ever-present advertising and, by extension, capitalism. While Adorno thinks of capitalism as destiny, Yeats came to realize that “accident is destiny” (as we previously discussed). Amid these infinitely debatable opinions, the world is often a perplexity machine that may not be described by a single view.

Newspapers and the “Manufacture of Consent”

When we think about newspapers, various associations come to mind. Examples include Jeff Bezos purchasing The Washington Post or William Randolph Hearst inspiring Citizen Kane. Newspapers have, to some extent, devolved into a vehicle for propaganda, as described in Walter Lippmann’s Public Opinion.

Lippmann is famously quoted for advocating the “manufacture of consent.”

Max Weber describes the economic function of newspapers:

The newspaper as an institution came into the service of commerce at an astonishingly late date.

The newspaper, as an institution, is not a product of capitalism. It brought together in the first place political news and then mainly all sorts of curiosities from the world at large. The advertisement, however, made its way into the newspaper very late. It was never entirely absent but originally it related to family announcements, while the advertisement as a notice by the merchant, directed toward finding a market, first becomes an established phenomenon at the end of the 18th century—in the journal which for a century was the first in the world, the “Times.” Official price bulletins did not become general until the 19th century; originally all the exchanges were closed clubs, as they have remained in America virtually down to the present. Hence in the 18th century, business depended on the organized exchange of letters. Rational trading between regions was impossible without secure transmission of letters. This was accomplished partly by the merchant guilds and in part by butchers, wheelwrights, etc. The final stage in the rationalization of transmission of letters was brought about by the post, which collected letters and in connection therewith made tariff agreements with commercial houses. In Germany, the family of Thurn and Taxis, who held the postal concession, made notable advances in the rationalization of communication by letter. Yet the volume of correspondence is in the beginning surprisingly small. In 1633, a million letters were posted in all England while today a place of 4,000 population will equal the number.

Max Weber, General Economic History, Collier Books, 1966 (Third Printing), page 220.

Herbert Hunt provides a useful overview of the newspaper as a political tool in his introduction to Honoré de Balzac’s Lost Illusions (French: Illusions perdues).

The first half of the nineteenth century witnessed the rapid rise to power of the periodical press. Journalism had been active — though dangerous to those engaged in it — during the Revolutionary period. Napoleon had kept the press under his thumb, as Giroudeau points out on page 235. The ‘freedom’ of the press was one of the most controversial issues both under the Restoration and the July Monarchy. Under Louis XVIII and Charles X the struggle between those who, like the Liberals and Bonapartists, wanted to keep the Revolutionary principles and gains intact, and the Conservatives of various hues, especially the ‘Ultras’, who wanted to put the political clock back, was an affair of major importance; likewise, under Louis-Philippe, the conflict between the spirit of stagnation and the parties in favour of ‘movement’. Balzac’s contention is that the majority of journalists under these three monarchs, instead of recognizing that they were called to a serious, even sacred mission, turned the Press into an instrument for self-advancement, prostituted principles to intrigue and used journalism merely as a means of acquiring money, position and power. He is reluctant to admit that there were great, responsible press organs, like Le Journal des Débats, Le Conservateur, Le Constitutionnel and, from 1824, Le Globe, which stood firm on principle; he is above all aware of the vogue which the petits journaux enjoyed after the fall of Napoleon, and of the role they played as political privateers.

The petits journaux were so-called because they were produced in smaller format than the important dailies or weeklies, which were more or less grave, staid and ponderous. They proliferated in Paris once the fall of the Empire had given a relative, though still precarious liberty to the Press — precarious because it was constantly threatened by the increasingly reactionary governments of the time. The politicians of the Right found it difficult to keep the newspapers under control even by such means as stamp-duty, caution-money, fines, suspensions and suppressions, the object of these being mainly to put obstacles in the way of would-be founders of hostile periodicals. The ‘little papers’, short-lived as they often proved to be, were much given to journalistic sharp-shooting. They preferred satire, personal attack, sarcasm and scandal-mongering to serious argument or the affirmation of ideals. They were mostly Opposition journals and were a constant thorn in the flesh of the Government. Balzac’s aim was to expose their addiction to ‘graft’, intrigue, blackmail and the misuse of the feuilleton, namely the bottom portion of the first page or other pages generally reserved for critical articles and frequently devoted to the malicious task of slashing literary reputations. Andoche Finot — the prototype of such later newspaper magnates as Émile de Girardin and Armand Dutacq, pioneers in 1836 in the founding of cheap dailies which relied on advertisement and serialized novels as a chief source of income — acquires a large share in a big daily and hands on to the equally unprincipled Lousteau the editorship of the ‘little paper’ he already owns. Balzac probably had Le Figaro chiefly in mind, a periodical which was constantly going bankrupt or being suppressed but kept popping up again under different editors. Hector Merlin’s royalist Drapeau Blanc, edited by Martainville, really existed, having been founded in 1819; so did Le Réveil. Other examples of ‘little papers’ before 1830 were Le Nain Jaume (Bonapartist), Le Diable Boiteux and Le Corsaire (both Liberal), Le Voleur, La Mode, La Silhouette, and, under Louis-Philippe, not only the phoenix-like Figaro, but also La Caricature, Le Charivari (ancestor of our English Punch), and once more Le Corsaire: a few among many. Louis-Philippe and his Cabinets were easy prey for these stinging gad-flies whose unremitting satire and innuendo remind one of the present-day Canard Enchaîné.

It is an amusing thought that, in the late twenties and early thirties, Balzac had himself been a contributor to these disreputable rags and sometimes had a hand in the running of them; for instance he had helped Philipon to found La Caricature. Throughout his career he contributed many novels in serial form to the more important newspapers, notably those founded by Girardin and Dutacq — La Presse and Le Siècle. But by the time he was writing A Great Man in Embryo he had left the petits journaux far behind him. He himself tried his luck as a newspaper-proprietor and editor: he bought La Chronique de Paris in 1836 and founded La Revue Parisienne in 1840. Both of these ventures failed. We can well imagine therefore what a large amount of bile was accumulating inside him. On the whole, reviews of his works appearing in periodicals had been hostile if not harsh. He suffered much from the disparagement of editors and critics such as Sainte-Beuve and Jules Janin respectively. He was always quarrelling with Émile de Girardin. And so he took his revenge. He had already made a preliminary attack on the periodical press in The Skin. And he followed up his attack of 1839 with his Monograph of the Paris Press (1842).

Honoré de Balzac, Lost Illusions, translated and introduced by Herbert Hunt, Penguin Books, 1971, pages xiv-xvi.

Balzac’s novel is very concerned with all aspects of journalism. For example, chapter 17 is titled “How a news-sheet is edited” and chapter 18 is a symposium on newspapers. Chapter 18 quotes a German guest who states, “I thank god there are no newspapers in my country.” (page 312). Another participant states, “In corporate crimes no one is implicated.” “A newspaper can behave in the most atrocious manner and no one on the staff considers that his own hands are soiled.” (page 314).

‘The influence and power of newspapers are only just dawning,’ said Finot. ‘Journalism is in its infancy; it will grow up. In ten years from now, everything will be subject to publicity. Thought will enlighten the world…’

Honoré de Balzac, Lost Illusions, Penguin Books, 1971, page 313.

‘Newspapers are an evil,’ said Claude Vignon. ‘An evil which could be utilized, but the Government wants to fight it. There’ll be a conflict. Who will go under? That’s the question.’

Honoré de Balzac, Lost Illusions, Penguin Books, 1971, page 313.

We should heed Vignon’s warning. Nazi Germany’s three main newspapers confirm this danger.

Price Revolutions and Their Historical Impact

In 1996, leading economic historian, David Hackett Fischer, published The Great Wave: Price Revolutions and the Rhythm of History. If you ponder the subtitle, you may grasp the work’s ambition.

Nobel Prize-winning economist Paul Krugman has been arguing with Fischer for many years that, in making the transition from business to historical cycles, Fischer’s position is problematic.

There are, of course, detailed histories of prices, such as Thomas Tooke’s A History of Prices and of the State of the Circulation during the Years 1793–1856 (6 volumes, 1838–1857).

In the first four volumes he treats (a) of the prices of corn, and the circumstances affecting prices; (b) the prices of produce other than corn; and (c) the state of the circulation. The two final volumes, written with William Newmarch, deal with railways, free trade, banking in Europe and the effects of new discoveries of gold.

Wikipedia (links added)

Tooke-type price histories are one thing, but what about Fischer’s price revolutions? Max Weber (who predates Fischer by almost a century) seems to endorse this concept. In Weber’s General Economic History (German: Wirtschaftsgeschichte), he writes:

The great price revolution of the 16th and 17th centuries provided a powerful lever for the specifically capitalistic tendencies of seeking profit through cheapening production and lowering the price. This revolution is rightly ascribed to the continuous inflow of precious metals, in consequence of the great overseas discoveries. It lasted from the thirties of the 16th century down to the time of the Thirty Years’ War, but affected different branches of economic life in quite different ways. In the case of agricultural products an almost universal rise in price set in, making it possible for them to go over to production for the market. It was quite otherwise with the course of prices for industrial products. By and large these remained stable or rose in price relatively little, thus really falling, in comparison with the agricultural products. This relative decline was made possible only through a shift in technology and economics, and exerted a pressure in the direction of increasing profit by repeated cheapening of production. Thus the development did not follow the order that capitalism set in first and the decline in prices followed, but the reverse; first the prices fell relatively and then came capitalism.

Max Weber, General Economic History, Collier Books (3rd printing), 1966, pages 230-231.

Notice the last sentence above, Weber explicitly describes price revolutions exactly as Fischer argues.

In the history books we read, the emphasis is always on colorful personalities, inventions and other more theatrical events. This obviously omits the idea of phenomena like price revolutions. We cannot explain history merely by these personalities; we need to zoom out and view the larger picture.

Movies As Parallel Universities: The Promised Land

The Promised Land is a Polish film masterpiece based on Nobel laureate Reymont’s 1899 novel. The novel describes the industrialization of the Polish city of Łódź in the nineteenth century and reminds one a little of Upton Sinclair’s The Jungle of 1906 but with the emphasis not on dangers and miseries for labor but on the “mad dance” of the capitalist industrial free-for-all:

“The Promised Land (Polish: Ziemia obiecana) is a 1975 Polish drama film directed by Andrzej Wajda, based on the novel by Władysław Reymont. Set in the industrial city of Łódź, The Promised Land tells the story of a Pole, a German, and a Jew struggling to build a factory in the raw world of 19th century capitalism.”

(Wikipedia)

Wajda presents a shocking image of the city, with its dirty and dangerous factories and ostentatiously opulent residences devoid of taste and culture. The film follows in the tradition of Charles Dickens, Émile Zola and Maxim Gorky, as well as German expressionists such as Dix, Meidner and Grosz, who gave testimony of social protest. Think also of the English poet, William Blake’s metaphor describing industrial England as a world of “dark Satanic mills.”

Reymont, the author of the original novel, was in his heart a ruralist and intensely disliked the modern industrial world, which he saw as maniacal and destructive.

In the 2015 poll conducted by the Polish Museum of Cinematography in Łódź, The Promised Land was ranked first on the list of the greatest Polish films of all time.

Plot

“Karol Borowiecki (Daniel Olbrychski), a young Polish nobleman, is the managing engineer at the Bucholz textile factory. He is ruthless in his career pursuits, and unconcerned with the long tradition of his financially declined family. He plans to set up his own factory with the help of his friends Max Baum (Andrzej Seweryn), a German and heir to an old handloom factory, and Moritz Welt (Wojciech Pszoniak), an independent Jewish businessman. Borowiecki’s affair with Lucy Zucker (Kalina Jędrusik), the wife of another textile magnate, gives him advance notice of a change in cotton tariffs and helps Welt to make a killing on the Hamburg futures market. However, more money has to be found so all three characters cast aside their pride to raise the necessary capital.

On the day of the factory opening, Borowiecki has to deny his affair with Zucker’s wife to a jealous husband who, himself a Jew, makes him swear on a sacred Catholic object. Borowiecki then accompanies Lucy on her exile to Berlin. However, Zucker sends an associate to spy on his wife; he confirms the affair and informs Zucker, who takes his revenge on Borowiecki by burning down his brand new, uninsured factory. Borowiecki and his friends lose all that they had worked for.

The film fast forwards a few years. Borowiecki recovered financially by marrying Mada Müller, a rich heiress, and he owns his own factory. His factory is threatened by a workers’ strike. Borowiecki is forced to decide whether or not to open fire on the striking and demonstrating workers, who throw a rock into the room where Borowiecki and others are gathered. He is reminded by an associate that it is never too late to change his ways. Borowiecki, who has never shown human compassion toward his subordinates, authorizes the police to open fire nevertheless.”

(Wikipedia)

Notice the sentence above:

Borowiecki’s affair with Lucy Zucker (Kalina Jędrusik), the wife of another textile magnate, gives him advance notice of a change in cotton tariffs and helps Welt to make a killing on the Hamburg futures market.

Textiles and hence cotton prices and tariffs are, as elsewhere, “the name of the game” in Łódź industry.

There is a concrete basis in reality for this 19th century version of our derivatives trading contributing to 2008 and the Great Recession:

In a discussion of futures markets, we read:

“Already in 1880 merchants were buying an idea rather than a palpable commodity, as we saw happen in the grains futures market. In that year, sixty-one million bags (coffee, in this example) were bought and sold on the Hamburg futures market, when the entire world harvest was less than seven million bags!

It was this sort of speculation that caused the German government to shut down the futures market for a while.”

(Global Markets Transformed: 1870-1945, Steven Topik & Allen Wells, Harvard University Press, 2012, page 234)

The danger with such speculative excesses is that the economy, national or global, becomes a “betting parlor” (bets on bets on bets in an infinite regress, as in the lead-up to 2008) and governments have been paralyzed and passive in the face of such “casino capitalism” (to use Susan Strange’s vocabulary) because laissez-faire neoliberal ideology has a profound hold in the West, especially in Anglo-America.

Professor Milton Friedman (died in 2006) argued in interviews going back to the 1960s and before, that speculators fulfill a valuable economic function since they “keep the system efficient.”

The current semi-dismantling and neutralizing of the Dodd-Frank financial reforms and guidelines has to do not only with lobbying but also with the hold of various strands of such “laissez-faire” ideology and market fundamentalism.

Keynes’s classic essay, “The End of Laissez-Faire” tends to yield to the countervailing force of this market fundamentalism/“laissez-faire religion.”

Education and “Then and Now” Thinking: Zola’s Novel L’Argent

It is amazing to see how certain nineteenth century phenomena, such as Émile Zola’s novel L’Argent (“Money”), eerily echo with our own times. The novel has fundamentalist evangelical Christianity, international financial chicanery, anti-Semitism, the signs of full-blown “casino capitalism” convulsing the whole of society, global technical innovations. The historical background as all this unfolds is explosive and complex.

L’Argent is the eighteenth novel in the Rougon-Macquart series by Émile Zola. It was serialized in the periodical Gil Blas beginning in November 1890, before being published in novel form by Charpentier et Fasquelle in March 1891.

The novel focuses on the financial world of the Second French Empire as embodied in the Paris Bourse and exemplified by the fictional character of Aristide Saccard. Zola’s intent was to show the terrible effects of speculation and fraudulent company promotion, the culpable negligence of company directors, and the impotency of contemporary financial laws. (Think of Dodd-Frank in our time and how insiders have “noiselessly” dismantled it.)

The novel takes place in 1864-1869, beginning a few months after the death of Saccard’s second wife Renée (see La Curée). Saccard is bankrupt and an outcast among the Bourse financiers. Searching for a way to reestablish himself, Saccard is struck by plans developed by his upstairs neighbor, the engineer Georges Hamelin, who dreams of restoring Christianity to the Middle East through great public works: rail lines linking important cities, improved roads and transportation, renovated eastern Mediterranean ports, and fleets of modern ships to move goods around the world.

Saccard decides to institute a financial establishment to fund these projects. He is motivated primarily by the potential to make incredible amounts of money and reestablish himself on the Bourse. In addition, Saccard has an intense rivalry with his brother Eugène Rougon, a powerful Cabinet minister who refuses to help him after his bankruptcy and who is promoting a more liberal, less Catholic agenda for the Empire. Furthermore, Saccard, an intense anti-Semite, sees the enterprise as a strike against the Jewish bankers who dominate the Bourse. From the beginning, Saccard’s Banque Universelle (Universal Bank) stands on shaky ground.

In order to manipulate the price of the stock, Saccard and his colleagues in the syndicate, which he has set up to jumpstart the enterprise, buy their own stock and hide the proceeds of this illegal practice in a dummy account fronted by a straw man.

While Hamelin travels to Constantinople to lay the groundwork for their enterprise, the Banque Universelle goes from strength to strength. Stock prices soar, going from 500 francs a share to more than 3,000 francs in three years. Furthermore, Saccard buys several newspapers which serve to maintain the illusion of legitimacy, promote the Banque, excite the public, and attack Rougon.

The novel follows the fortunes of about 20 characters, cutting across all social strata, showing the effects of stock market speculation on rich and poor. The financial events of the novel are played against Saccard’s personal life. Hamelin lives with his sister Caroline, who, against her better judgment, invests in the Banque Universelle and later becomes Saccard’s mistress. Caroline learns that Saccard fathered a son, Victor, during his first days in Paris. She rescues Victor from his life of abject poverty, placing him in a charitable institution. But Victor is completely unredeemable, given over to greed, laziness, and thievery. After he attacks one of the women at the institution, he disappears into the streets, never to be seen again.

Eventually, the Banque Universelle cannot sustain itself. Saccard’s principal rival on the Bourse, the Jewish financier Gundermann, learns about Saccard’s financial trickery and attacks, losing stock upon the market, devaluing its price, and forcing Saccard to buy millions of shares to keep the price up. At the final collapse, the Banque holds one-fourth of its own shares worth 200 million francs. The fall of the Banque is felt across the entire financial world. Indeed, all of France feels the force of its collapse. The effects on the characters of L’Argent are disastrous, including complete ruin, suicide, and exile, though some of Saccard’s syndicate members escape and Gundermann experiences a windfall.

History itself is of course “bubbling along” and does not go away:

Because the financial world is closely linked with politics, L’Argent encompasses many historical events, including:

By the end of the novel, the stage is set for the Franco-Prussian War (1870–1871) and the fall of the Second Empire.

The twentieth century world and the twenty-first century one do resonate with Zola’s novel. That tells you, the student, that there are deep structures underlying endless changes.

The arrival of cars and planes, computers and lasers, internet and AI have not altered these substructures entirely and that is educational, since “then and now” thinking is part of a meta-intelligent (i.e., perspectival) education process.