The Origins of Totalitarianism Part 3: Superfluous Capital and Superfluous People

Previous posts in this series:

The Origins of Totalitarianism Part 1: Introduction.

The Origins of Totalitarianism Part 2: Antisemitism

The Origins of Totalitarianism: Interlude on the Tea Party

In Part 2 of The Origins of Totalitarianism Arendt discusses the history of European Imperialism, primarily focused on England, France and Germany.

“Expansion is everything,” said Cecil Rhodes, and fell into despair, for every night he saw overhead “these stars … these vast worlds which we can never reach. I would annex the planets if I could.” He had discovered the moving principle of the new, the imperialist …); and yet in a flash of wisdom Rhodes recognized at the same moment its inherent insanity and its contradiction to the human condition. Naturally, neither insight nor sadness changed his policies. P. 124, fn omitted.

The driving force of imperialism the search for profits, The people pushing it were the bourgeoisie, the principal capitalists. Until the 1870s, the bourgeoisie were content to leave politics to others, and focus on manufacturing and infrastructure in the home country. Politicians were generally wary of the push into foreign countries.

Beginning in the 1870s as the money invested in foreign lands increased, the risks to the bourgeoisie and their money increased, as nations expropriated their assets or refused to cooperate, or threw them out. The bourgeoisie liked the enormous profits of these investments, but were not interested in taking the risks. They demanded that the nation-state provide the armed forces necessary to protect their profits, and the nation-states complied. Arendt says that this demand for intervention was its assertion of control of the government. She dates the Imperialist period to 1889-1914.

The goal of imperialism was neither assimilation nor integration.

Expansion as a permanent and supreme aim of politics is the central political idea of imperialism. Since it implies neither temporary looting nor the more lasting assimilation of conquest, it is an entirely new concept …. [T]his concept is not really political at all, but has its origin in the realm of business speculation, where expansion meant the permanent broadening of industrial production and economic transactions characteristic of the nineteenth century. production of goods to be used and consumed. P. 125-6.

The goal was to impose a system of capitalist production on the conquered territories for the enrichment of the capitalists. The power behind this drive for expansion was superfluous capital.

Imperialist expansion had been touched off by a curious kind of economic crisis, the overproduction of capital and the emergence of “superfluous” money, the result of oversaving, which could no longer find productive investment within the national borders.

The money was superfluous in the sense that it had no utility within the nation-states. There were no profitable investments that could absorb it, and there was little to purchase with it. The newly rich wanted income from their wealth even though neither the money nor the investments would provide anything of value to the nation-state or its citizens. They invested their money abroad and the nation-state protected their investments at enormous cost to the rest of their citizens. Arendt calls the bourgeoisie parasites.

Superfluous capital is not the only problem with unrestrained capitalism.

Older than the superfluous wealth was another by-product of capitalist production: the human debris that every crisis, following invariably upon each period of industrial growth, eliminated permanently from producing society. Men who had become permanently idle were as superfluous to the community as the owners of superfluous wealth. That they were an actual menace to society had been recognized throughout the nineteenth century and their export had helped to populate the dominions of Canada and Australia as well as the United States. P. 150.

Arendt calls these superfluous people the mob. They are not the same as the nascent working class, but were the people who could not find work at all, whether because of disability or some personal defect or just plain bad luck. The mob included refuse from all social classes. Polanyi refers to this as well. There were the working people, and everyone else. The impoverished and the unemployed able-bodied people were both in this group.

Imperialism provided a partial solution to the problem of superfluous men. They could be pushed into the armies and navies needed to protect the wealth of the rich, and they could be used as supervisors and workers in the mines and factories and on the transport ships carrying the investments of the capitalists and the products of those investments.

The mob of the mid to late 1800s is similar to the “masses” that emerged after WWI.

The relationship between the bourgeois-dominated class society and the masses which emerged from its breakdown is not the same as the relationship between the bourgeoisie and the mob which was a by-product of capitalist production. The masses share with the mob only one characteristic, namely, that both stand outside all social ramifications and normal political representation. The masses do not inherit, as the mob does (albeit in a perverted form) the standards and attitudes of the dominating class, but reflect and somehow pervert the standards and attitudes toward public affairs of all classes. The standards of the mass man were determined not only and not even primarily by the specific class to which he had once belonged, but rather by all-pervasive influences and convictions which were tacitly and inarticulately shared by all classes of society alike. P. 314.

The rich, with their superfluous and restless capital, demand profits with no responsibility to the society from which the wealth sprang. The constant movement of capitalism, generated by that demand, destroys the lives of superfluous people, who have no place in that society, and feel no obligation to it. The nihilism that infected the mob and the masses eventually infected the bourgeoisie, destroying any remaining social values. This destructive combination was fertile ground for the rise of the Nazis.

Notre Dame undergrad (math); JD, Indiana University at Bloomington; 1st Lieutenant, US Army.; private practice in corporate and securities law; Assistant AG in Tennessee for consumer protection and securities; Blue Sky Securities Commissioner, Tennessee; private practice, bankruptcy and corporate law.

I have had a lifelong interest in economics. For most of my career, that interest was practical, focused on the problems in front of me. Lately I have been more interested in economics as a theory, especially its impact on the lives of people like those I met in my bankruptcy practice, and on the politics of money in the US. I also enjoy reading philosophers, starting in college and steadily expanding my reading ever since. I wrote at FireDogLake for a number of years.

Generally, I think the problem facing the US is the dominance of neoliberal discourse. I think it clouds the vision, and limits the kinds of problems that can be identified and solved. For example, the existence and danger of climate change can easily be identified in a scientific discussion. However, the problem does not fit the neoliberal discourse because science insists that the pursuit of individual and corporate self-interest will lead to devastation. In neoliberal discourse, the pursuit of self-interest always leads to Eden.

The neoliberal project has two prongs. One is the police function of crushing dissent and alternative views. The police function is provided by government agencies and private and institutional actors. The counterpart is the economic system , which is operated by government and by private and institutional actors. Some of these actors operate in both spheres. I focus on the second prong.

10 replies
  1. icancho says:

    “The newly rich wanted income from their wealth even though neither the money nor the investments would provide anything of value to the nation-state or its citizens. They invested their money abroad and the nation-state protected their investments at enormous cost to the rest of their citizens.”

    This picture chimes nicely with the analysis (primarily of British imperialism) developed by J. A. Hobson in his prophetic 1902 “Imperialism: A study”. He showed that, despite the great quantities of blood and treasure expended in the imperialist venture, “it furnished a small [and diminishing] proportion of the total industry of the nation” and that “of the external trade, that with British possessions bore a diminishing proportion to that with foreign countries.”

    In seeking to comprehend the rationale of such a strange state of affairs — “How is the British nation induced to embark upon such unsound business?” he asks— he concludes, in Chapter IV, “Economic Parasites of Imperialism”, that “the only possible answer is that the business interests of the nation as a whole are subordinated to those of certain sectional interests that usurp control of the national resources and use them for their private gain.”

    Among those sectors benefiting are those manufacturing items related to national military and shipping procurement and those producing goods for the colonial export trade, but by a huge margin the greatest factor Hobson found to be interest from investments: “While the manufacturing and trading classes make little out of their new markets … it is quite otherwise with the investor. … To a larger extent every year Great Britain has been becoming a nation living upon tribute from abroad, and the classes who enjoy this tribute have had an ever-increasing incentive to employ the public policy, the public purse and the public force to extend the field of their private investments and to safeguard and improve their existing investments.”

    • Alan says:

      “the only possible answer is that the business interests of the nation as a whole are subordinated to those of certain sectional interests that usurp control of the national resources and use them for their private gain.”

      Which is the analysis of the Merchantilism, and the EIC in particular, that you’ll find in Wealth of Nations book IV: See for example sections starting at IV.7.150.

        • Alan says:

          Which is the real problem: the subordination of the interests of the many to the few. If one forgoes the fantasy of complete equality, the political problem consists in limiting inequality and political instability. All this is much easier in kinship-based societies, where a rough equality is more likely to be the norm.  In populous, urban, industrialized societies where most relationships are not kinship-based, it is not so easy.

          • icancho says:

            #8
            Agreed. Gross material inequality is not only morally repellent but also the inevitable corrupter and eventual destroyer of any pretensions a society might have to being a functioning democracy. Along the way, this same material disparity corrupts and destroys the humanity of all concerned, albeit in disparate ways.

    • Ed Walker says:

      Arendt relies heavily on Hobson for her analysis. Thanks for the quotes, which bring home the ideas nicely.

  2. bevin says:

    “Until the 1870s, the bourgeoisie were content to leave politics to others, and focus on manufacturing and infrastructure in the home country.”

    Unless one excepts the bourgeoisies of France, Britain, the USA, among others, from this curious generalisation this is simply untrue.
    Is it any more true of the Hapsburg Empire, Russia and Prussia? Possibly.

    Equally untrue is the idea that unemployable idlers constituted a significant part of the emigrations to Canada and the other “white dominions” in the C19th. Most of the emigrants were relatively well off as they had to be to pay their fares and carry them through the months it would take them to establish themselves. Even where there were subsidised “clearings” of ‘surplus populations’ as in the Highlands and Ireland, the unfit and weak were the least likely to emigrate not the first in line.

    Altogether both Polanyi and Arendt (if this is her account) had a very reactionary view of the ‘mob’ and the bases of pauperisation which had much more to do with the privatisation of commons and the expropriation of rural communities than ‘disability(ies) or some personal defect(s) or just plain bad luck.’

    As to ” The nihilism that infected the mob and the masses eventually infected the bourgeoisie, destroying any remaining social values.”.
    The nihilism in question stemmed from the bourgeoisie, (see privatisation and expropriation above) from capitalism and their utilitarian/political economy ideology. The idea that the destruction of communities, social values and their replacement by ‘callous cash nexus’ originated among the victims rather than the proponents of the nihilistic cannibalistic culture of capitalism, is thoroughly reactionary and entirely consonant with the world view of intellectuals devising an ideology that explained militant capitalism, violently defending itself from the poor as an emanation from the poor, the exploited and the otherwise victimised.

    • Ed Walker says:

      The first one is probably not a good summary of Arendt’s views. Obviously the nation-state was responsive to the new capitalists, but they did not ask much. It was not until the imperialist period that they demanded that the nation-state act for their benefit outside the boundaries of the nation-state. Here’s a quote from page 149 (fn. omitted):

      Export of money and foreign investment as such are not imperialism and do not necessarily lead to expansion as a political device. As long as the owners of superfluous capital were content with investing “large portions of their property in foreign lands,” even if this tendency ran “counter to all past traditions of nationalism,” they merely confirmed their alienation from the national body on which they were parasites anyway. Only when they demanded government protection of their investments (after the initial stage of swindle had opened their eyes to the possible use of politics against the risks of gambling) did they re-enter the life of the nation. In this appeal, however, they followed the established tradition of bourgeois society, always to consider political institutions exclusively as an instrument for the protection of individual property.

      Arendt doesn’t say that the physically or mentally unemployable were part of the emigration. She is saying that capitalism displaces plenty of people from productive work, and they are then useless to society, becoming part of the mob, or the masses. These are the people who emigrate and whose new employment serves the needs of those who invest in foreign lands.
      .
      Arendt’s discussion of the nihilist issue feels like a sort of intellectual prudery. She uses a framework of Hobbs to talk about the fascination of the bourgeoisie with the criminal class and with the immorality of the mob. Part of my problem in trying to summarize this section is a lack of clarity in the term bourgeoisie, which seems to cover both class and economic status. My understanding is that fascination with crime and with the underworld among the rich, whether bourgeoisie or the aristos, and the intellectuals, was widespread in the late 1800s. Perhaps that colors my summary.

      • bevin says:

        Thanks for your clarifications- I haven’t read the book so I am, unfairly relying on your brief summaries.
        So far as the first point-imperialism and the rule of the bourgeoisie- is concerned. In my assessment the bourgeoisie- by which I take it that she means the capitalists- had ruled Britain and the US since the mid eighteenth century. And the era of imperialism was very old by the time that the 1870s (Great Depression?) came about.

        Like you I am unsure what she means by the “bourgeoisie” a word that was probably among the five most often used in Frankfurt School circles: it means several different things, I’m guessing, and some of them are contradictory. The problem is that what the art critic sees as bourgeois and what the Marxist sees as characteristic of the capitalist class are only superficially alike. One good example is that of the slave owning planter in the 1850s: despite appearances, affectations and tastes he was not an aristocrat or feudalist but a capitalist utterly dependent on the Manchester dominated cotton economy, which in turn depended upon him.

        The truth is that by the beginning of the C19th the pre-capitalist relics of an earlier age were few, far between and rapidly being eradicated. Western europe was ahead but the eastern european economies were also, after the C17th, largely integrated into the capitalist world markets. It has to be understood that, mythology notwithstanding, the growth of the serf system in Russia and the east was because rather than in spite of this integration. Capitalism not only gave new life and depth to Aboriginal and African slavery but to European serfdom and to the imposition of a servile economic status on the peasants of India- a status that led to the enormous export of indentured servants and coolie labour from first India and then China.
        Wherever capitalism was established, people were subjected to various forms of involuntary servitude. It is a process that continues and it may be that George Fitzhugh is a more useful guide to the nature of our society than is Ms Arendt, because unlike her he was, instinctively, in tune with post modernism.

  3. bevin says:

    According to Annie Jacobsen (in Operation Paperclip) the Internal Security Act of 1950 ‘was meant to keep Communists out, but also covered anyone who had membership in a ‘totalitarian dictatorship’…”
    Leaving aside the question of what membership means in this context, this suggests the rapidity with which the ‘totalitarian dictatorship’- lumping together fascists and antifascists- idea had spread.
    One can see in this conflation the origins of the current campaigns against ‘extremism’ or ‘militancy’ being waged by centrist governments.
    One of the interesting aspects of Jacobsen’s book is that, apart from the occasional protests from, for the most part, Jewish groups the NAZI scientists fitted in very well and very rapidly.

    Of course in West Germany the careers of Hitler’s ruling class barely skipped a beat in its almost effortless transition from fascist monsters into reliable and skilled opponents of Soviet “totalitarianism.”

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