Jessica Whyte Calculation and Conflict

Jessica Whyte Calculation and Conict In July 1919, the Austrian philosopher and econ- omist Otto Neurath was convicted of high trea - son for his role as head of the Central Economic Administration of the short-lived Munich Soviet Republic (Cartwright et al. 2008: 55)—the “most pronouncedly revolutionary episode of the Ger- man revolution of some endurance” (Uebel 2006: 81n87). The path that led to Neurath being sen- tenced to eighteen months imprisoned in a fortress began in January that year, when he presented a paper on the prospects for a socialized economy to the Bavarian Workers’ and Soldiers’ Council in Munich.1 There, Neurath invoked the impact of the Great War on the German economy: “Just as the economy had been made to serve the needs of war with the Hindenburg programme,” he wrote, “one should be able to make it serve people’s happiness” (quoted in Cartwright et al. 2008: 55). Neurath had argued for a planned economy that would place “the satisfaction of basic needs” (housing, nutrition, and clothing for all) above the desire for protability (44). This program had animated his brief stint as a revolutionary economic administrator. While the Munich Soviet Republic gave Neurath an opportunity to put his ideas into action, this opportunity was short-lived. The South Atlantic Quarterly 119:1, January 2020 10.1215/00382876-8007641 © 2020 Duke University Press Downloaded from https://read.dukeupress.edu/south-atlantic-quarterly/article-pdf/119/1/31/744605/1190031.pdf?casa_token=LYKNsUwo0zkAAAAA:nTeze575H8EGeePCEZcvTGxR4RlFEgSnQ2rkVAzF-k7RDJhGJAf7gMfcVEHDN9GumoV3Tua4tQ by UNIVERSITY OF NEW SOUTH WALES user on 08 February 2020 32 The South Atlantic Quarterly • January 2020 On May 2, 1919, the right-wing Freikorps militias conquered Munich and bru- tally suppressed this experiment, killing six hundred people in the process (Balakrishnan 2000: 19). The painter Paul Klee, who had joined a committee of revolutionary art- ists the previous month, described the destruction of the Munich Soviet Republic as a “tragedy”—“the collapse of a fundamentally ethical movement” (quoted in Uebel 2006: 40). The following year, Klee painted his Angelus Novus, which the German Jewish philosopher Walter Benjamin later hung above his desk. Klee’s portrait of a stunned angel with its outspread wings played a starring role in Benjamin’s nal text, “On the Concept of History” (Benjamin [1942] 2006). In a poetic and excoriating critique of the progres- sivism that had animated the German Social Democrats who had ordered the suppression of the Munich Soviet Republic, Benjamin depicted progress as a storm that propels the “angel of history” toward the future while, in the past, “the pile of wreckage goes skyward” (392). Neurath’s attempt to construct a socialized economy dedicated to human happiness was buried amid that wreckage. So too, his insistence that utopias were not “accounts of impossible happenings” but simply “orders of life which exist only in thought and image but not in reality” (Neurath 1973f: 150–51) was buried beneath the weight of the neoliberal insistence that there is no alternative to the capitalist market. Almost seventy years later, in 1986, the Marxist theorist Ernest Man- del (1986: 9) complained of what he called a new “cult of the market” on the left, and indicted what he described as “an unbridled rehabilitation of the market and of commodity production as civilizational values in themselves.” More than thirty years after that, environmental devastation, rising economic inequality, a new generation of authoritarian leaders, and ongoing wars have taken the sheen o¥ the neoliberal market utopia. The rise of what one commentator has referred to as “Pro-Christendom, Pro-European and Pro-Western” “civilisationist” parties (Pipes 2018) has shattered the assump- tion that the victory of liberal market capitalism would lead to universal tol- erance and perpetual peace. In this context, this article returns to a key moment in the construction of the idea that there is no alternative to market capitalism: the socialist calculation debate of the 1920s and 1930s. In returning to the arguments between defenders of economic planning, including Neurath, and liberal advocates of the competitive market, I aim to uncover possibilities for economic life that were buried under the weight of liberal triumphalism after the fall of the Berlin Wall. The socialist calculation debate was critical to the development and intellectual clarication of those strands of classical liberalism that would Downloaded from https://read.dukeupress.edu/south-atlantic-quarterly/article-pdf/119/1/31/744605/1190031.pdf?casa_token=LYKNsUwo0zkAAAAA:nTeze575H8EGeePCEZcvTGxR4RlFEgSnQ2rkVAzF-k7RDJhGJAf7gMfcVEHDN9GumoV3Tua4tQ by UNIVERSITY OF NEW SOUTH WALES user on 08 February 2020 Whyte • Calculation and Conict 33 ultimately metamorphose into neoliberalism (Kirzner 1988). The arguments in favor of the market made by the Austrian economists Ludwig von Mises and Friedrich Hayek profoundly shaped neoliberal thinking in the subsequent decades. Today, the debate is best remembered for Mises’s argument that rational economic calculation is impossible in the absence of pri- vate ownership of capital goods and a system of market prices, and for Hayek’s defense of the superiority of the market in enabling individuals to draw on dispersed tacit knowledge. Yet there is a striking contemporaneity to the arguments of their socialist adversaries, who criticized the systematic perversion of the relation between market demand and social needs that ensured that “while some are starving others are allowed to indulge in lux- ury” (Lange 1937: 124; Dickinson 1939: 5). Market capitalism, the socialists argued, led to extensive “social waste”—in the form of ecological damage, contamination of waterways, ill health, and work injuries—as the “life, secu- rity and health of the workers are sacriced without being accounted for as a cost of production” (Lange 1937: 125). Today it is often forgotten that the socialist calculation debate was not simply a technical argument about the eªciency of market calculation. Rather, as I aim to show, it was also a con«ict about political order, economic history, and the possibility of perpetual peace. “Civil war is raging in Ger- many,” Neurath wrote in mid-1919. “Famine, disease and murder are at work, the Horsemen of the Apocalypse” (Neurath [1920/21] 2006e: 345). After asking how these could be resisted, he responded: “Only by our will and our knowledge” (345). At stake in the calculation debate was the ques- tion of whether human beings must submit to the impersonal results of the market process, or could subject their collective lives to their knowledge and their will. The central neoliberal victory in that debate was not so much their “proof” that economic calculation required a system of market prices. Rather, it was their insistence on the impossibility of what Peter Hallward (2009: 17) calls “a deliberate, emancipatory and inclusive process of collective self-determination.” A central legacy of the calculation debate was the resignication of conscious deliberation and self-determination (Neurath’s knowledge and will) as a totalitarian impingement on individual freedom and a recipe for permanent war. In recovering the political arguments at stake in the calculation debate, I aim to show that early neoliberalism was not a narrowly economistic doc- trine. For Mises and his fellow liberals, the rise of economic planning was not merely a threat to rational economics; it was a threat to the individualistic political order and the peaceful coexistence of “Western civilization.” Only Downloaded from https://read.dukeupress.edu/south-atlantic-quarterly/article-pdf/119/1/31/744605/1190031.pdf?casa_token=LYKNsUwo0zkAAAAA:nTeze575H8EGeePCEZcvTGxR4RlFEgSnQ2rkVAzF-k7RDJhGJAf7gMfcVEHDN9GumoV3Tua4tQ by UNIVERSITY OF NEW SOUTH WALES user on 08 February 2020 34 The South Atlantic Quarterly • January 2020 market relations, they argued, would allow diverse individuals to cooperate peacefully without needing to agree on ultimate ends, and thus ward o¥ vio- lent struggles. For Mises, the turn toward economic planning was a historical regression to a more “primitive” and war-mongering age. 2 In what fol- lows, I suggest that the characterization of the calculation debate as a narrow, technical argument has obscured the vision of civilizational development that underpinned the arguments of the calculation debate’s liberal protago- nists. It has rarely been noted that their arguments against planning were thoroughly racialized. Russians “yearned for a dictator,” Mises argued, which was why socialism had taken root there.3 Socialism threatened the cooperative system built up in Europe over thousands of years, he warned; if its intellectual dominance was not broken, “nomad tribes from the Eastern steppes would again raid and pillage Europe, sweeping across it with swift cavalry” (Mises [1922] 1962: 511). In returning to Neurath’s early contribution, I seek to illuminate the competing visions of historical development and peace that were at stake in the calculation debate. Like Benjamin’s angel of history, Neurath sought to “awaken the dead, and make whole what has been smashed” by the march of economic progress (Benjamin [1942] 2006: 392). His account of economic planning was underpinned by a challenge to a conception of history that rel- egated nonmarket forms of life to superseded historical stages, thereby licensing colonization, expropriation, and trade

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