By Reason or by Force The International Crisis and the Return of Public Intervention

arton494-2ae18In the uncanny calm that has followed the crisis a new “systemic” rationality is making headway. Neither individuals nor single states are capable by themselves of engaging it. Only international consensus and coordinated action can engage it. This is a novelty that will usher into a different geopolitical order in the years to come.An early patriotic paradigm

“By reason or by force” is the motto inscribed in the Chilean coat of arms. It dates back to 1812 and the wars of independence. Our own “political correctness” inclines us to reject it, because it sounds bellicose and authoritarian. However, this was not the original intent of the founding fathers of Latin American republics –self-made men that were guided by the principles of the European Enlightenment. For them, the goal of national independence was a just and rational objective. If it were not possible to attain it by persuasion, then the force of arms would earn it.

The time belonged to cultivated military men for whom reason and force went hand in hand. It was certainly the case of Jose de San Martin, the Argentine national hero, who was a member of the Philadelphia Lodge –a center of early American enlightenment. It was also the case of Bernardo de O’Higgins, the Chilean liberator, and of Simon Bolivar – a general far better educated than those who abuse his name today. Another Argentine general, Bartolome Mitre, wrote a learned biography of a fellow military man (Manuel Belgrano) and also translated Dante’s Divina Commedia on the side while he was fighting wars. The Chilean motto is a version of the ancient Roman motto «aut consiliis aut ense» (“by counsel or by sword”), which is at the origins of the concept of a state of law. The terms were elaborations by Romans of even older concepts in the philosophy of Plato, and have traveled through the centuries to reappear in any discussion of the relationship between knowledge and power (consilium/auxilium). Most Western representations of Justice consist of a blindfolded lady holding a scale that balances Reason (a book of laws) and Force (a sword). One may find such images in seals and statues in most courts of justice.

At the beginning of the administration of Chilean president Ricardo Lagos –exemplary in many ways—a debate took place in the Congress of that South American nation as to whether the motto “By reason or by force” should be kept (it brought back memories of the Pinochet era) or whether it should be exchanged for the less bellicose motto “By the force of reason.” The discussion went nowhere and the decision was tabled for lack of a quorum. In a way this result was all for the better because the proposed new motto was a cowardly distortion of the original statement by the founding fathers. And so the original forking judgment remained as sharp as ever: By reason or by force.

At the beginning of the administration of Chilean president Ricardo Lagos –exemplary in many ways—a debate took place in the Congress of that South American nation as to whether the motto “By reason or by force” should be kept (it brought back memories of the Pinochet era) or whether it should be exchanged for the less bellicose motto “By the force of reason.” The discussion went nowhere and the decision was tabled for lack of a quorum. In a way this result was all for the better because the proposed new motto was a cowardly distortion of the original statement by the founding fathers. And so the original forking judgment remained as sharp as ever: By reason or by force.

The philosophical dilemma

The forking judgment appears clearly in The Republic of Plato, who puts the words in the mouth of Socrates. The issue was none other than the relationship between the proper exercise of reason, on the one hand, and justice, on the other. The Greek philosophers observed quite sensibly that in everyday life, the common sense of people leads them to behave in many a devious manner, if and when they can get away with it. “Devious” would therefore seem to be “rational.” Success is often the result of an expeditious use of less-than-proper means to attain an agreed-upon goal. Those with fewer scruples often overtake those who are more punctilious, or plainly more honest. The calculus of individual gain trumps the spirit of solidarity. The norms of conviviality are often sacrificed in favor of competitive advantage. Even when they are obeyed, it is for fear of punishment or for mere convenience, and not by virtue of true conviction. As in the lyrics of the well-known tango Cambalache, the cheats have the advantage:

“If one man lives by his forgeries
and another steals his way to the top,
it makes no difference if he’s a priest,
a mattress-dealer, the Ace of Clubs,
a cutpurse or a cop!”

The philosophers thus reached a disturbing conclusion: injustice can be a key to success. Faced with this apparent triumph of devious cleverness, Plato proposed (always through the medium of Socrates’ reported statements) a superior argument. He effectively demonstrated that the very exercise of devious cleverness, that is, the unscrupulous use of reason for mere individual advantage ends up turning against itself in two basic ways: first, by undermining community, and second, by eventually producing bad results in the course of time. In other words, sooner or later the chickens come home to roost.

First, a “community” of elbowing advantage-seekers ends up canceling one and all initial individual advantage and ends up generating a general discomfort. Thus, when on a plain field full of spectators of let’s say a soccer match, one person stands on tiptoe to see farther than her neighbor, soon enough those around her will do the same thing and in the end everybody will be standing in the same relative position to others as they had at the beginning, except that everybody’s feet will hurt. Individual cleverness ends up as collective silliness.

Second, self-seeking behavior produces bad results in time because the improper use of resources for short-term advantage can lead to their depletion for those who follow us in life. We saddle our descendants with unsustainable burdens. To put it differently, what is rational in a small context is irrational in a larger context. Or, reason is a function of scale. I don’t know the mathematics of this statement, but I am sure those enamored of rational-choice models can figure it out.

The economic dilemma

It is well known that a market economy is subject to periodic fluctuations that are to cycles of boom and bust, growth and contraction. That rhythm is considered normal within certain parameters in a capitalist system. Nevertheless, in longer slabs of time a different set of crises –more severe and disruptive—erupt, such as the Great Depression of the thirties and the current Great Recession. Both were the product of prior excess, wrong calls, and poor policies undertaken by authorities. The great critics of capitalism, from Marx to Kondiatreff, made reference to the difficulty –in a capitalist system—to (1) anticipate and (2) prevent such big crises. The debacle is understood only after it starts. In other words, a rational understanding takes place retrospectively, when it is too late. Worse yet, the lessons of great crises are rapidly erased from the collective memory, especially after a recovery, thus sowing the seeds of future crises.

Sometimes the very crisis obliges the political leaders and the economic elite to take regulatory and control measures that in due course becomes institutionalized and which therefore delay a repetition of the syndrome for longer periods of time. But in the longer run the dynamics of the economy escapes the regulatory framework of the old institutions, bypasses their safeguards, and results in new crises, ever larger and more complex. Innovation –the essence of modern capitalism—has both a sunny side and a dark side. Only after the unexpected eruption of a novel crisis of great magnitude national states and international organizations are forced to engage in a new round of institutional innovation. Humanity moves forward looking resolutely to the past, stumbling upon hitherto unknown solutions to big problems. Reason prevails belatedly, riding on the wings of force. As Hegel wrote: “the owl of Minerva takes flight when dusk is falling.”

The great crisis of the thirties forced the authorities of the wealthiest countries to establish programs of public works, pension systems, unemployment compensation schemes, control rules, and eventually international arrangements that lasted for decades and which postponed, if not averted, a repeat of economic disasters. After seven decades, the evolution of the global economy managed to overtake or bypass a number of these compensatory institutions, and once again the capitalist system careened out of control. Financial technologies and a new, more extensive and intensive pattern of globalization led, under those poorly regulated circumstances, to the current systemic crisis. Just as the decade of the Great Depression led to the Bretton Woods agreements, the current crisis has already moved the steering of the world economy away from the conventional G-7 to the larger group of G-20, which includes the big emergent powers.

The net result is that the economic system acquires, by force, greater rationality. This increase of rationalization is not the result of a dictatorial imposition “from above”, such as the enlightened despotism of 18th century monarchs, nor is it the result of a revolutionary upheaval issuing in the “cult of reason” as during the French Revolution or the “educational dictatorship” of the Bolsheviks at the beginning of last century. The main force today is the force of circumstance, leading whoever is in power to take measures of moderate rationality and state intervention. But even these measures, which may seem weak by the standards of previous eras, would have been inconceivable a few years ago, when a seeming bonanza made them seem utopian. The force today is what the French call force majeure –the forced passage from the micro to the macro-level, from the cry “every man for himself” to the cry “let’s salvage the system”.

Who is the agent capable of carrying out, or at least steering, this shift? Systemic rationality is by definition beyond the scope and power of individual action –including the action of powerful but discrete groups. The only candidate, by default, is the state. But the state has changed as well. It is no longer the nationalist state of yesteryear, although national states must, under the circumstances, reassume the role they had so often abdicated under neoliberalism, to wit: guarantee social order and internal peace, effect some measure of redistribution, reinforce a social safety net, in short, compensate and placate the losers in the big game that we call a crisis. Every government –right, left or center—has had to act, in recent months under the common rationality of raison d’etat. There measures have been urgent stabilization measures and we do not know how long or how deep they will reach. But the national state has become an investor of last resort, if not an owner of last resort. It has done it reluctantly, pushed by circumstance, or begged to do it by a private sector, which by dint of privatizing so much collective value now feels the need to socialize its enormous losses. And so we are back at the beginning, under the motto of the Chilean coat of arms: Por la razon o por la fuerza

Nevertheless, there is a big difference this time. Decades of forced-draft globalization, which followed the opening up of hitherto out of bounds social systems, have transferred essential state functions to the international arena –without however issuing into global government. In the absence of the latter, we must experiment with global governance, that is, the cooperation under duress of formerly sovereign nations. All the forces of globalization have rendered obsolete a return to narrower forms of state intervention. Stateness has replaced state, just as, in Michel Foucault’s words, governmentality has replaced government. The state is not dead: it is superseded, sublated, in Hegel’s terms aufgehoben. Herein lie the challenge and the hope of our time. In the thirties sovereign states rapidly descended into bad policies of “beggar thy neighbor” until the tensions led to a massive war. Today any such move turns against the perpetrator almost immediately. Neither the tools nor the will are there, and that is a good thing.

None of these arguments leads to complacency. There is no guarantee of success in a global risk society. The current recovery is not yet credible and bigger dangers lurk on the horizon. But this time “force” is leading to ”reason” rather than to collective folly.

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