The mechanics of modernity in Europe and East Asia: The institutional origins of social change and stagnation

Ringmar, Erik Book The mechanics of modernity in Europe and East Asia: The institutional origins of social change and stagnation Routledge Explorations in Economic History, No. 29 Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Ringmar, Erik (2005) : The mechanics of modernity in Europe and East Asia: The institutional origins of social change and stagnation, Routledge Explorations in Economic History, No. 29, ISBN 978-0-203-33858-2, Routledge, London, https://doi.org/10.4324/9780203338582 This Version is available at: https://hdl.handle.net/10419/240574 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ The Mechanics of Modernity in Europe and East Asia This book provides a new answer to the old question of the ‘rise of the west.’ Why, from the eighteenth century onwards, did some countries embark on a path of sustained economic growth while others stagnated? For instance, European powers such as Great Britain and Germany emerged, whilst the likes of China failed to fulfil their potential. Ringmar concludes that, for sustained development to be possible, change must be institutionalised. The implications of this are brought to bear on issues facing the developing world today—with particular emphasis on Asia. Erik Ringmar teaches in the government department at the London School of Economics. He is the author of How We Survived Capitalism and Remained Almost Human (Anthem Books, 2005). Routledge explorations in economic history 1 Economic Ideas and Government Policy Contributions to contemporary economic history Sir Alec Cairncross 2 The Organization of Labour Markets Modernity, culture and governance in Germany, Sweden, Britain and Japan Bo Stråth 3 Currency Convertibility The gold standard and beyond Edited by Jorge Braga de Macedo, Barry Eichengreen and Jaime Reis 4 Britain’s Place in the World A historical enquiry into import controls 1945–1960 Alan S.Milward and George Brennan 5 France and the International Economy From Vichy to the Treaty of Rome Frances M.B.Lynch 6 Monetary Standards and Exchange Rates M.C.Marcuzzo, L.Officer and A.Rosselli 7 Production Efficiency in Domesday England, 1086 John McDonald 8 Free Trade and its Reception 1815–1960 Freedom and trade: volume I Edited by Andrew Marrison 9 Conceiving Companies Joint-stock politics in Victorian England Timothy L.Alborn 10 The British Industrial Decline Reconsidered Edited by Jean-Pierre Dormois and Michael Dintenfass 11 The Conservatives and Industrial Efficiency, 1951–1964 Thirteen wasted years? Nick Tiratsoo and Jim Tomlinson 12 Pacific Centuries Pacific and Pacific Rim economic history since the 16th century Edited by Dennis O.Flynn, Lionel Frost and A.J.H.Latham 13 The Premodern Chinese Economy Structural equilibrium and capitalist sterility Gang Deng 14 The Role of Banks in Monitoring Firms The case of the Crédit Mobilier Elisabeth Paulet 15 Management of the National Debt in the United Kingdom, 1900–1932 Jeremy Wormell 16 An Economic History of Sweden Lars Magnusson 17 Freedom and Growth The rise of states and markets in Europe, 1300–1750 S.R.Epstein 18 The Mediterranean Response to Globalization Before 1950 Sevket Pamuk and Jeffrey G.Williamson 19 Production and Consumption in English Households 1600–1750 Mark Overton, Jane Whittle, Darron Dean and Andrew Hann 20 Governance, The State, Regulation and Industrial Relations Ian Clark 21 Early Modern Capitalism Economic and social change in Europe 1400–1800 Edited by Maarten Prak 22 An Economic History of London, 1800–1914 Michael Ball and David Sunderland 23 The Origins of National Financial Systems Alexander Gerschenkron reconsidered Edited by Douglas J.Forsyth and Daniel Verdier 24 The Russian Revolutionary Economy, 1890–1940 Ideas, debates and alternatives Vincent Barnett 25 Land Rights, Ethno Nationality and Sovereignty in History Edited by Stanley L.Engerman and Jacob Metzer 26 An Economic History of Film Edited by John Sedgwick and Mike Pokorny 27 The Foreign Exchange Market of London Development since 1900 John Atkin 28 Rethinking Economic Change in India Labour and livelihood Tirthankar Roy iii 29 The Mechanics of Modernity in Europe and East Asia The institutional origins of social change and stagnation Erik Ringmar iv The Mechanics of Modernity in Europe and East Asia The institutional origins of social change and stagnation Erik Ringmar First published 2005 by Routledge Published 2017 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an infonna business Copyright © 2005 Erik Ringmar Typeset in Goudy by Wearset Ltd, Boldon, Tyne and Wear The Open Access version of this book, available at www.tandfebooks.com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license. British Library Cataloguing in PubUcation Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN 978-0-415-34254-4 (hbk) Contents Acknowledgements ix PART I The logic 1 1 The nature and origin of modern society 2 2 The failure and success of East Asia 9 3 The self-transforming machine 17 PART II Reflection 25 4 The discovery of distance 26 5 The face in the mirror 37 6 Institutions that reflect 46 PART III Entrepreneurship 57 7 Origins of the entrepreneurial outlook 58 8 The age of the demiurge 69 9 Institutions that get things done 80 PART IV Pluralism 91 10 A world in pieces 92 11 The polite alternative 105 12 Institutions dealing with conflicts 115 PART V European paths to modernity 124 13 Institutions and revolutions 125 PART VI China 134 14 Reflection 135 revolutionaries were followed by twentieth-century revolutionaries in Russia, China, and a host of other countries, often with the most disastrous of consequences. Yet in modern societies, revolutions are not only taking place in politics but in all walks of life: in social and economic conditions, in music, fashion and the arts.14 To be modern is to constantly create—or to believe that one constantly is creating—everything anew. To be modern is to always be different from what one is; it is to be up-to-date; in touch with the latest developments; at the forefront, or the cutting edge, of that which is best, most current, sophisticated and advanced. Hence our current obsession with economic growth. The steady improvement in economic indicators has a value in itself since it gives the impression that the past is ever more remote and the future is ever closer. Every day things are getting just a little bit better, and every improvement confirms our faith in the progressive movement of time. In modern society, where the future is god, economic change becomes our daily act of worship. The irony—and the fundamental predicament of all modern societies—is that none of us ever will be able to reach this final destination. The future is our god, but since the future is unknown, so are necessarily the truths we believe in. All we have for now are instead preliminary theses and best guesses.15 In the end the object of our worship is at least as remote as ever the gods of previous civilisations. The future, just as Jesus Christ, will never actually come. The poverty of economic theorising The question is why it was that certain societies in Europe suddenly began changing in this relentless and ever-progressive fashion. Why did the future suddenly become something to look forward to as something different from the past, and why did people feel they had the power to influence it? And, on a more concrete and practical level, how is it possible to organise a society in such a way that it is able to undergo continuous social, political and cultural changes? Economists have a simple and powerful way of answering all such questions. It is, they say, all a result of the development of capitalism. The development of capitalism is what makes all other aspects of society change. This was famously the view of Karl Marx who saw economic relationships as the ‘base’ on which the ‘superstructure’ of political, social and cultural life was founded. In Marx’s own life-time capitalism was making ‘all that is solid melt into air,’ as it undermined traditional authorities and created new wealth and new misery.16 And many classically trained, non-Marxist, economists have drawn much the same conclusions. The capitalist outlook, according to Joseph Schumpeter, starts upon its conqueror’s career subjugating—rationalizing—man’s tools and philosophies, his medical practice, his picture of the cosmos, his outlook on life, everything in fact including his concepts of beauty and justice and his spiritual ambitions.17 THE NATURE AND ORIGIN OF MODERN SOCIETY 5 As both Marx and Schumpeter would have it, if Western societies have been in a perpetual state of change over the last couple of centuries it is because capitalism perpetually has changed them. As a moment’s reflection makes obvious, however, capitalism cannot possibly be the original cause of all the changes that take place in modern society. The reason is that capitalist development itself has causes. Capitalist economies are not, after all, growing automatically and by themselves; capitalism is not a primum mobile, an ‘unmoved mover.’ Indeed, as we know from history, sustained economic growth is a relatively rare phenomenon and most societies have yet to experience much of it even at the beginning of the twenty-first century. Without in any way denying the importance of capitalism and its potentially world transforming powers, the question still has to be asked what it is that makes capitalist development possible in the first place.18 On the most general level, this question is easy enough to answer. Economies develop for basically two reasons: either because they come to employ more resources or because they come to employ existing resources more efficiently.19 When more resources are mobilised—more land, more people, more machinery —more can be produced. But production increases also if the resources are used more productively: if land is made more fertile, if people are better educated or if the machinery is operating more quickly or accurately. The first kind of growth we could call ‘input-led growth’ and the second could be called ‘productivity-led growth.’ These two forms of growth in turn refer to two different notions of efficiency: what we could refer to as ‘allocative’ and ‘adaptive’ efficiency.20 Allocative efficiency is improved when things are moved around in an economy to places where they are more productively employed. Allocative efficiency is essentially a function of the invisible hand of the market. As Adam Smith famously and powerfully argued, the most efficient allocation of resources is achieved where supply and demand are allowed to interact freely.21 But allocative efficiency also depends on the size of the market. Everything else equal, the larger the market, the more people are able to specialise on those particular tasks which they are relatively better at performing. The larger the market, the smaller pieces labour can be divided into, and the more extensive the division of labour, the higher the rates of growth. While acknowledging the validity of Smith’s insights, later generations of economists also noticed their limits.22 Sooner or later, they pointed out, the productive resources of society would be as well allocated as they ever could be and labour would be divided into its smallest possible units. When this point is reached the factors that go into the process of production—labour, capital and land—would necessarily start to yield declining returns.23 Most dramatically, Thomas Malthus argued, increases in income will result in more births which in turn will lower the income per capita.24 Thus, as Karl Marx concluded, once capitalism has exhausted its potential, it has to be replaced by a new and superior system. And even those economists who were less keen on revolutionary action 6 THE LOGIC than Marx suspected that the long-term prospects for economic growth were bleak.25 However, what none of these nineteenth-century economists sufficiently had considered was the possibility of improvements in productivity.26 Productivity-led growth takes place through the introduction of new management techniques, through improvements in education and training, or even through social or cultural change. What is taken to be important above all, however, are changes in technology. Radically new inventions such as the railroad, electricity, the automobile or the computer constitute technological quantum leaps that move the economy as a whole onto a new growth path. It is the ability of contemporary societies to constantly experience such leaps which up to now has made it possible to avoid the bleak predictions of the nineteenthcentury economists. Thanks to continuous improvements in technology we are never running up against the limits of what it is possible to produce. What is at stake here is not allocative but instead adaptive efficiency. Merely reallocating resources within a market will never make it possible to sustain growth over the long term. What matters is rather whether enough resources are devoted to increasing the productive potential of society.27 This the market mechanism alone cannot necessarily guarantee. The forces of supply and demand may operate with textbook-like ferocity—allowing people to perfectly satisfy their preferences—but a society where this is the case may still grow more slowly than another society in which market forces are less efficient but where resources are more obviously geared towards long-term growth. If Adam Smith provided the best analysis of how output-led growth takes place, Joseph Schumpeter provided the best analysis of productivity-led growth.28 According to Schumpeter, economies grow not by following their established paths but instead by breaking with them. Entrepreneurs are the ones who are responsible for these breaks. Entrepreneurs are people who constantly look for new things to sell and for new ways in which to sell them. In the process they introduce the kinds of innovations on which the economy ultimately depends for its development. The entrepreneur, according to Schumpeter, is the person who is responsible both for destroying the old and for creating the new.29 When looking at empirical series of growth rates for a country such as the United States economists have found that the vastly larger proportion of growth can be attributed to increases in productivity.30 Only around 12 per cent of growth between 1909 and 1949 can, for example, be explained by the expansion of capital per worker. The remainder—commonly referred to as ‘the residual’— accounts for the remaining 88 per cent. Since it cannot directly be attributed to any factor of production it is not immediately obvious what it refers to, but given the importance commonly given to technological factors, the assumption is that the residual represents a measure of technological innovation.31 However, the residual should surely also include all kinds of other things that result in productivity gains: institutional innovations, improvements in education and training, and perhaps also the impact of changes in culture or social norms.32 THE NATURE AND ORIGIN OF MODERN SOCIETY 7 The problem for economists is that they lack a good theory for dealing with this grab-bag of disparate and ultimately non-economic factors. To a large extent this is a consequence of the limits of any theory. The activities of entrepreneurs are unpredictable by definition and are hence necessarily difficult to theorise about. Much the same can be said about technology. Technological change is itself a species of social change that both affects and is affected by all kinds of other changes.33 If technological change ultimately is what drives economic change then the economists have to present a viable explanation of it. This, however, they have so far been unable to do.34 Again this is hardly surprising. Technological change is intimately related to a long range of cultural, social and political factors but none of these economists are particularly well equipped to study.35 Consider the case of China. There is a long and famous list of Chinese inventions which all were made well in advance of similar inventions in Europe.36 Yet the mere existence of this technology never allowed China to develop in the European fashion. Or consider the Industrial Revolution. It was not the case, as an economist might argue, that the innovations that provided the basis for the factory system were produced as a result of heavy capital investments.37 On the contrary, there was in principle nothing to the steam engine that a particularly skilled medieval craftsman could not have developed. Or consider the importance of wars. It is a well established fact that wars have technological spin-offs—in the twentieth century everything from atomic power and jet engines to the Internet—but the logic which produces them is military and political and not economic.38 Not surprisingly the attempts by economists to theorise about such factors are hopelessly simplistic. The conclusion is consequently that capitalism surely has played an important role in transforming Western societies but also that references to capitalism explain surprisingly little. Long-term growth depends on improvements in productivity but the sources of productivity growth are badly captured by economic theorising. Technological innovation is crucial but economists have no proper explanation of its sources. Ironically there is not all that much that economists can say in the end about the fundamental causes of economic growth. While economic theorising offers important insights, it does not provide the kind of answer we need. 8 THE LOGIC 2 The failure and success of East Asia Let us try a different tack. Instead of looking for a general explanation for economic and social change, what we could do is to study the issue as a historian would. An economic historian for example—at least an economic historian of the traditional mould—would pay scant attention to abstract theories and instead try to explain actual cases of development. Moreover, he or she would typically have few hang-ups about taking non-economic factors into consideration.1 As an economic historian might conclude, growth does not only depend on the availability and quality of the factors of production but also, for example, on factors like geographic location, on cultural norms or religious beliefs, the absence or presence of natural or epidemiological disasters, a country’s luck on the battlefield, and so on. In order to bring some order to such potentially endless lists of factors a comparison is often helpful. A well-chosen comparison allows us to observe the variation in some factors while keeping other factors constant. In this way it is possible to understand something about the relative importance of one explanatory variable as opposed to another. If, for example, two parts of the world at one stage seem to have attained a similar level of development but if one of them suddenly changes in a radical manner, it is possible to look for the causes of that change in the factors that differentiate the two. Hence the attraction of comparing developments in Europe with those in East Asia. That the two parts of the world were strikingly similar was obvious already to the first European visitors to the East.2 As Jesuit missionaries and Dutch merchants agreed, China and Japan were at least as rich and powerful as ever Europe itself. East Asia was full of sophisticated religions, technologies and arts; people were ‘White and cultured,’ and lived orderly lives in societies with highly developed institutions.3 And although Francis Bacon was quick to take credit on behalf of his contemporaries for the invention of the printing press, gun-powder, and the compass, all three were of course Chinese inventions, long in use by the time the first Europeans arrived. Europe’s admiration for East Asia remained well into the latter part of the eighteenth century. Then, however, the assessments suddenly changed and travellers returned with far more negative accounts. What they now had discovered was the poverty of China, the antiquated traditionalism of Japan, and the despotic regimes maintained by all East Asian rulers. By the nineteenth century most European societies were already undergoing profound changes and the promise of ceaseless progress is what gave its inhabitants a new sense of selfconfidence. Europe had made a leap into an exciting world of economic prosperity and unprecedented technical mastery of nature; new hopes were connected to individualism, liberalism and democracy. In none of these respects had East Asia managed to follow. Looking at their own part of the world, the Europeans saw change everywhere; looking at the East they saw nothing but stagnation. While Europe was modern, China and Japan had failed to modernise. Compare the latter part of the twentieth century where a strange, inverted, echo of this discussion suddenly could be heard. Again the topic concerned modernisation and discrepancies between East Asia and Europe, but now the issue was not the failure of the East but instead its astonishing successes. Although it today is easy to forget, the economic situation in 1945 of countries such as Japan, Korea, and Taiwan was not radically different from that of other poor countries in, say, West Africa.4 As it appeared to international experts at the time, East Asia too would be in continuous need of outside support, not least if it was to be safe from the scourge of communism. In the end of course the Western experts were proven spectacularly wrong. Before long the ‘tiger economies’ of East Asia were growing at 10 per cent per year and their exports were growing by 20 per cent. Uniquely in the developing world, the countries of East Asia were modernising both successfully and extraordinarily quickly. Although it may have taken many observers by surprise this unprecedented catch-up represents, historically speaking, only a return to the traditional pattern.5 From the perspective of the twenty-first century, it was the nineteenth and the first part of the twentieth centuries that constituted the anomalies. This was the relatively short period during which developments in East Asia and Europe temporarily slipped out of synch. But after a hiatus of about 200 years, the two are now once again back on parallel tracks. East Asia and Europe are once again each other’s twins. This parallelism allows for two potentially promising comparisons. By looking at the differences between the two parts of the world, we can hope to understand why it was that Europe rather than East Asia was first to modernise. By looking at the similarities between the two, we can hope to understand why it was that East Asia, uniquely among all poor parts of the world, was able to catch up. Explanations for the failure To a contemporary observer such as John Stuart Mill the reasons for the backwardness of China were quite obvious.6 Although the Chinese once had achieved many great things, they had grown conservative over the years and lost their sense of individualism. In the West, people think for themselves, Mill explained, and they never hesitate to embark on new enterprises. In China, by contrast, ‘the despotism of custom is everywhere the standing hindrance to human advancement.’7 The minds of the Chinese are, like the feet of their 10 THE FAILURE AND SUCCESS OF EAST ASIA women, maimed by compression. The best hope for the East was instead that the West—through its colonies, its commerce and its church—would destroy the ancient social structures and rebuild them according to European principles. ‘[I]f they are ever to be further improved,’ as Mill argued, ‘it must be by foreigners.’ Karl Marx, for his part, reached strikingly similar conclusions.8 As he saw it, China was a feudal society ruled by a despotic emperor and a conservative bureaucratic elite. China was subject to an ‘Asiatic mode of production’ which followed entirely different rules from the capitalist economies of the West. As a result the country would never experience capitalism, and hence never Communism, unless helped along by Europe. With equal self-assurance, the German sociologist Max Weber declared that China was badly suited for capitalist development since Confucianism, in contrast to European-style Protestantism, lacked an existential tension between an earthly and a transcendental realm.9 Similarly, the technological determinism of Karl Wittfogel purported to show that countries such as China, where agriculture supposedly was dependent on large-scale irrigation works, necessarily would give rise to large, inefficient, bureaucracies.10 Japan, meanwhile, was treated with a greater degree of admiration but in the end no less condescendingly. At the turn of the twentieth century European collectors discovered the rarefied aesthetics of Japanese arts, and woodblock prints and Japanese ceramics soon lent sophistication to well-to-do European homes. With Gilbert and Sullivan’s Mikado, 1885, and Giacomo Puccini’s Madame Butterfly, 1904, playing to packed opera houses, the craze for things Japanese reached a peak.11 Japan corresponded to everyone’s dream of the exotic East, and the sexual imagery behind the exoticism was compelling. Japanese culture was regarded as fundamentally feminine and just as Asian women it was there to be admired, and dominated, by Western males. Today all such verdicts are profoundly embarrassing in their condescension and racial triumphalism, and even conclusions that supposedly are based on scientific evidence are often highly bogus. There is something deeply unfair about the way the comparisons have been set up.12 There is no reason after all why China and Japan should correspond to a set European pattern of development, and to fault them for not doing so is ridiculous. This is not to deny, however, that there is legitimate puzzle regarding how to explain the respective historical trajectories of the two parts of the world. Here a comparison is still surely legitimate. Rather than denigrating the historical experiences of China and Japan, what we need to figure out is what it is that made Europe different. Denying ourselves the right to make such a comparison is at least as foolish as presenting the European pattern as inevitable or universal. There are today at least four different explanations for these diverging paths, not counting assorted sub-explanations.13 The first explanation points to factors which are best described as environmental. According to this view, Europe was always far less exposed to natural disasters, earthquakes, contagious diseases, and to inclemancies of the climate, and this is what explains its superior THE LOGIC 11 economic performance.14 Geographical factors could also be included here: the importance of the Mediterranean and the Baltic as conduits of commerce or the great diversity of environmental conditions that existed across Europe which helped to encourage trade. In none of these respects, the argument goes, was East Asia equally blessed. Another set of factors is demographic.15 China and Japan have always had a far greater population than Europe, and while this testifies to the productivity of East Asian rice-paddies, it also serves as an inevitable drag on economic growth. Economic improvements in East Asia were always translated into higher birth rates and thus into stagnant, or even declining, incomes per capita. In Europe peasants were able avoid this trap since people married later, had fewer children, and experimented more successfully with various forms of birth control. A third set of factors is political.16 For much if not for all of their history, China and Japan were united behind one ruler who in his person combined both secular and religious authority. In Europe by contrast, power was always divided. In the Middle Ages there was a division between the Church and the Empire, and from about the sixteenth century an intense competition ensued between independent kings who all sought to defend the sovereignty of their realms. The need to prepare for war in order to guarantee security spurred technical innovations and forced each country to assure that businessmen and man-ufacturers could operate under favourable conditions. Only in this way could money be raised to pay for soldiers and guns. In China and Japan military security was far less of an issue and neither country engaged in the kind of military competition which provided incentives for technological or social change. A fourth set of factors concerns the quite different roles which the two parts of the world have played in the international political economy.17 Although Europe and China strongly may have resembled each other as comparatively late as in the year 1750, the Europeans were obviously the ones with the global ambitions. They had been ‘discovering’ the rest of the world for many hundreds of years already and gradually subjecting the societies they found to trade and to their colonial designs. The Chinese had been engaged in similar discoveries throughout South and Southeast Asia, and in the fifteenth century they travelled as far as to the eastern coast of Africa.18 By the fifteenth century, however, all such explorations had ceased. This difference in international position became crucial once East Asia and Europe in the eighteenth century both started running out of precious resources.19 In both parts of the world growing populations put pressure on food and on energy supplies, but only the Europeans were able to deal with these problems through overseas expansion.20 What made the Europeans unique was thus not their inherent ingenuity nor their domestic resources but rather the rapaciousness of their colonial greed. 12 THE FAILURE AND SUCCESS OF EAST ASIA Explanations for the success Turning next to the astonishing success of East Asia in the twentieth century, it is no less of a debated issue. And East Asia’s performance becomes all the more puzzling given the disappointing experiences of other parts of the world. For about fifty years by now, domestic elites and international agencies tried their best to develop—to ‘modernise’—the underdeveloped and poor parts of the world.21 As the experts would have it, the geographical distance that separated the ‘first’ and the ‘third’ world corresponded to a distance in time. Europe and North America were ‘far ahead’; they were ‘leading the way’; and everyone else was ‘following.’ The task of modernisation was consequently to find a way for the stragglers to ‘catch up.’ The goal was itself variously defined. Economic modernisation was equated with the introduction of markets, financial institutions and industrial production; political modernisation meant representative democracy and a multi-party system; social modernisation implied individualism, emancipation of women and urbanisation; religious modernisation meant secularisation, and administrative modernisation came to be understood as the reliance on formal procedures and on the due process of law.22 Unfortunately it was never very clear how to reach some or all of these goals. What aid agencies and international experts typically did was to think of modernisation as a question of a particular technique, institution or branch of industry. ‘This,’ the experts concluded, ‘this is what modernisation requires,’ and they would then proceed to implement their particular pet project. However, since the technique, institution or branch of industry often fitted quite badly with existing customs and ways of life, the hoped for modernisation did not take place, or it happened only partially and half-heartedly. And even when the European model was accurately copied, the spirit that animated it often seemed to be lacking, and as a result the transplanted copies came to operate in strange and unpredictable ways. Only a number of East Asian countries are unambiguous examples to the contrary. Here modernisation did indeed happen and these countries did indeed manage to catch up. However, the disconcerting fact is that East Asia’s success happened in blatant disregard of the kinds of policies which a majority of the modernisation theorists had advocated. When the development agencies suggested import substitution, the countries of East Asia embarked on export-led growth; when Western experts advocated democratisation and representative institutions, the countries of East Asia remained stubbornly authoritarian; when cultural and social change was taken as a prerequisite for economic take-off, East Asian societies remained strikingly traditional in a large number of ways. East Asia, in short, modernised in its own fashion; it modernised without ever fully Westernising. Before long the East Asian success story forced the experts to reconsider their views. Perhaps, some scholars speculated, traditional cultural and religious norms actually encourage rather than retard development. One commonly THE LOGIC 13 identified candidate here was Confucianism, which, it was now argued, instils norms regarding deference to superiors, frugality and hard work, all values crucial for economic growth.23 In addition, East Asian societies were often said to be uniquely cohesive. Culturally they are all more or less homogenous, and as a result people are ready to make sacrifices in the name of common goals. This means, for example, that corporations are able to operate in quite different ways than in Europe and North America. Relations in the workplace are more personalised, more consensual, and people subject themselves more readily to collective decision-making. As a result the workforce is more dedicated and fewer days are lost in industrial disputes. Other explanations focused instead on the role of the East Asian state.24 Throughout the region, the state has taken an active role in relation to the economy. In Japan, bureaucrats at MITI, the Ministry of International Trade and Industry, exercised a controlling influence over the direction of private enterprises; providing financing, foreign exchange, patents and coordinating research.25 In Korea, the entirely financial system was state owned, and in Taiwan all basic industries were nationalised after the Guomindang takeover in 1949.26 In all three societies, the aim was to use state power in order to channel resources away from stagnant sectors of the economy and into sectors of growth. A third explanation concerns instead the international context of the East Asian miracles. It is obvious, for example, that all countries in the region have benefited greatly from support from the United States.27 The US lent money, gave grants, and provided military security. Above all, the US guaranteed access to a capitalist world market where tariffs and customs duties constantly were being lowered. In the end it was consumers in North America and Europe who constituted the main market for East Asian oil tankers, cars, and all kinds of electronic consumer goods. Without the help of a surging world demand, and a US guaranteed peace, no East Asian miracles would have been possible. The secret Historians, including economic historians, are usually quite dismissive of general purpose explanations, we said. As they point out, general theories can usually explain few historical cases, and as such they are when it comes right down to it of little but academic interest. This is not least true of general explanations of economic growth. In practice there will always be a wealth of factors that intervene between the model and the world and confound the theoretically grounded expectations. The ceteris, in short, is never quite paribus. At most we can hope to draw some general conclusions from a comparison of successful, as opposed to failed, cases of economic development. However, from the point of view of an economist—or any other social scientist for that matter—historical knowledge of this kind will never be particularly convincing. The explanations that economic historians provide resemble long shopping lists: they are full of assorted items, some necessary and 14 THE FAILURE AND SUCCESS OF EAST ASIA together and to provide them with opportunities to exchange the products of their single-minded efforts. In this way the institution vastly magnifies the power of each individual contribution thereby multiplying the combined output. As a result, the institution taken as a whole soon becomes far more efficient than any of its constituent parts. Institutions also allow for the automation of individual tasks.10 By breaking activities down into ever smaller units, each task becomes increasingly easy to perform. In the end each person only knows, or does, one thing, and this thing is constantly repeated. This is the reason why modern society has nothing to do with the achievements of extra-ordinary individuals. Modern societies are highly sophisticated and complex but the sophistication and complexity are almost exclusively located at the level of institutions. As far as individuals are concerned, the tasks they perform have instead steadily become less complex and less sophisticated.11 In general, when less complexity and sophistication are demanded, less is supplied. Thanks to the sophisticated institutions they contain, modern societies can be operated by dummies, and strikingly often they are. This is not to say, of course, that all institutions necessarily produce change. On the contrary, many institutions are highly conservative and backward rather than forward-looking. Historically speaking, institutions that impede change are far more common than those that promote it. It is only in societies that we call modern that institutions explicitly operate to bring changes about. Only here are individuals given the kind of institutional support they need for continuous transformations to be possible. What makes modern societies modern is the fact that institutions are in charge of the three activities that make change possible. Change which in previous societies was down to individuals and good luck is in modern societies pursued by institutional means. In a modern society there are institutionalised ways of discovering the potentiality which exists in the actual, institutionalised ways of acting on this potential, and institutionalised ways of accommodating the new once it is actualised. Since the three prerequisites of change are institutionalised, change itself is institutionalised. What ultimately matters is not how these institutions operate by themselves, however, but rather how they operate together. When properly designed and calibrated, the three sets of institutions lock on to each other and work together much like the cog-wheels in a machine. The institutions of modern society constitute a piece of social machinery that constantly churns out new and unexpected products. As a result, change is not ad hoc, but automatic; not occasional, but permanent; change just happens without people thinking or worrying much about it and without anyone consciously trying to bring it about.12 And, most disconcertingly of all, although the modern machine is manmade, we are neither its designers nor its masters and for that reason change cannot be predicted, stopped or even properly controlled. Modern society is a kind of self-transforming machine from whose constantly changing output we both benefit and suffer. THE LOGIC 21 The origin of institutions If modern society is a product of a certain institutional environment, everything comes to depend on how this environment was created in the first place. The problem here is that the history of most institutions simply loses itself in time. There is, for example, no proper way of determining the origin of institutions like marriage, money or religion, and even a comparatively recent institution such as the state has a disputed provenance.13 As it turns out, surprisingly few institutions are consciously created, and even in the cases where they are, the motives of the creators are often obscure. Somehow institutions are just there, and there is where they always seem to have been. Differently put, institutions do not seem to have causes, if we by a cause mean that they were created at a particular time and for a particular reason. In fact, even if an original founder and an original intention magically could be unearthed, it would tell us preciously little about why the institution still is in place.14 Once an institution is established it quickly escapes the control of its makers. An institution that was created for one reason often survives for an entirely different—perhaps even a contradictory—reason. Parliaments were, for example, created in the Middle Ages as a way for the king to control the people but before long they instead became ways for the people to control the king. Much the same can be said about an institution such as the United Nations which was created by the Unites States as a way to exercise influence over poor countries but which for a while in the 1970s—if ultimately unsuccessfully— became an instrument through which poor countries sought to control the Unites States. An alternative is to explain the existence of the institution in terms of the functions it serves. According to this view, functions can legitimately be identified as causes.15 The existence of marriage could, for example, be explained as a result of the social needs it fulfils or a religious ritual could be explained as a result of religious needs. Capitalism, an economic historian might consequently say, has certain ‘functional requirements’ that institutions are created in order to serve.16 These functional requirements explain why the institution exists. This, however, is blatantly not the story of most institutions. While institutions often remain more or less unchanged for centuries, their functions tend to vary considerably over time. In fact, there are many institutions —consider the British monarchy—which remain in place although they no longer serve any clearly identifiable purpose. Just like the appendix, or nipples in males, the queen is still around mainly since she has not yet been abolished.17 The relationship between institutions and functions is rather the inverse of what functionalist explanations require. The institution comes first and the needs develop only later. Far from being functionally required, institutions, once in place, create the needs they then go on to satisfy.18 It is thus the existence of marriage that creates social needs rather than the other way around, and the existence of rituals that creates religious needs. Similarly, since the queen is 22 THE SELF-TRANSFORMING MACHINE there, various functions are invented to keep her busy. The functions are consequences of the existence of the institution, but consequences cannot be the causes of that of which they are the consequences. Instead most institutions must be understood as the eventual outcome of a large number of historical coincidence. Institutions evolve in a spontaneous, undirected and cumulative fashion. When people continuously do things over extended periods of time, rules and patterns spontaneously develop that organise these activities. Marriage, money and the state were not planned, instead they slowly emerged as the unintended consequences of one person reacting to the actions of another. Once created they maintain themselves by sheer momentum, not because they are ideally suited to perform any particular task. It follows that institutions are best explained in terms of the path through which they developed; that is, through the history of their evolution. If this is the case, the question of why a modern society came to be established can only be answered in the form of a story of how it happened; a story of how the institutions responsible for self-reflection, entrepreneurship and pluralism came to be established, how they developed and changed. This book Time to briefly recapitulate. What more than anything has characterised societies in Europe and North America over the last couple of centuries is their ability to constantly transform themselves. Some time after the year 1500 these societies became ‘modern’ and began changing in a continuous and relentless fashion. The question which this books seeks to answer is why. Why was it that some European societies suddenly became very different from their predecessors and very different also from societies elsewhere in the world? Why was it, for example, that China and Japan, which in the seventeenth century still could rival the power and wealth of Europe, in the nineteenth century came to be seen as hopelessly behind the times? To an economist these are questions concerning the sources of economic growth. What happened in Europe, he or she will explain, was that growth rates suddenly picked up and changes in the economy, in turn, brought about changes everywhere else in society. Probing a bit further, this explanation points to the importance of technological innovation. More than anything it is Europe’s ability to constantly invent new things that has set it off on a path of continuous economic growth. Not denying the importance of capitalism, or technology, we pointed out that these explanations are insufficient as they stand. Capitalism and technology certainly have a large number of far-reaching effects but they also have a number of equally far-reaching causes. Since there are no smoking guns or single culprits, the quest for the primum mobile of social change is likely to remain unsuccessful. Modernity for that reason has no cause. At this juncture we made a suggestion. Instead of looking for whatever it is that directly causes social changes to take place, an investigation should focus on THE LOGIC 23 what it is that makes social change possible. What we are interested in are not causal factors but rather what perhaps could be called the ‘enabling con ditions’ or ‘permissive environment’ of social change. How such conditions and environments developed is a historical rather than a theoretical question; they came about for a large variety of contingent reasons that only a historical account can do justice. And while such a historical investigation may sound like a less ambitious enterprise than the search for straightforward causes, it is also one far more likely to meet with success. The hypothesis presented in this chapter is that change is most likely to take place in an environment where reflection, entrepreneurship and pluralism are highly institutionalised. Reflection, entrepreneurship and pluralism are ways of making sure that the potentialities that exist in social life are converted into actualities. Everything else equal, the more such conversions that take place, the quicker the pace of change, and in a society where such conversions are highly institutionalised, change will take place continuously and automatically. A modern society, we said, is a society where change is institutionalised. The chapters that follow provide an investigation of this hypothesis. The aim is first of all to understand the role played by reflection, entrepreneurship and pluralism in the development of Europe, and to look for institutions that help people reflect, act, and sort out their differences. Once we have a better understanding of how Europe developed in these regards—including an understanding of the very considerable differences that exist between the historical trajectories of various European countries—we can turn to East Asia. The question here is to what extent, if any, social change in China and Japan can be understood with the help of this abstract model. How reflective, entrepreneurial and pluralistic were East Asian societies and to what extent and in what ways were reflection, entrepreneurship and pluralism institutionalised? 24 THE SELF-TRANSFORMING MACHINE Part II Reflection 4 The discovery of distance Consider first the notion of reflection. Derived from the Latin reflectere, to reflect is, etymologically speaking, ‘to bend or fold back’; it is the action of ‘returning,’ ‘restoring,’ or ‘diverting’ an object.1 In this sense the word has been used since classical times but in the seventeenth century the meaning became more specific as the term was adopted by the new science of optics.2 Here reflection came to apply to the way in which rays of light bounce off obstacles, change course, and go off in new and different directions. A ‘reflector’ is, for example, a telescope that uses a concave mirror to collect light. The seventeenth century was also when the first metaphorical use of the word appeared.3 To reflect in a metaphorical sense is to ‘go back in thought,’ to ‘consult with oneself’; it is to throw out an idea and let the mind try to retrieve it. Thus understood, reflection is an aspect of thinking, but to say that someone ‘reflects on a matter’ gives a particular emphasis to the technical aspects of the process of cognition. To reflect is not just to think but it is to put in motion what perhaps could be called the ‘optics’ of cognition. Just as reflections of light, reflections of the mind require a certain set-up: you need distance, a focus, and an appropriate point of view. Distance is no doubt the most basic requirement for a process of reflection to take place. It is only once you take a few steps back that you are able to see what something actually looks like. Distance is also required if we are to be able to reflect on ourselves. Somehow we need a way of seeing ourselves as others see us; from the outside and as objects among others in the world. Lacking such distance we will not become aware of ourselves as social beings and we will not develop a proper conception of who we are.4 Societies too differ in their ability to reflect on themselves. Some societies are more reflective than others. Everything else equal, modern societies are far more reflective than pre- or non-modern societies. But this is not because the inhabitants of modern societies somehow are more intelligent or imaginative than the inhabitants of other societies. In fact, the reflective capability of a society has next to nothing to do with the characteristics of individual human beings. The difference is instead entirely a matter of technology and social organisation. People in modern societies are more reflective since they have access to particular technologies and to particular institutions. How these technologies and institutions came to be established are the topics of the next two chapters. First, however, and in this chapter, consider some of the differences between reflection as it took place in medieval societies and as it takes place in the modern world. The fishbowl world of the Middle Ages The received view of the Middle Ages is of a society where creative thoughts were repressed and everyone was forced to conform with the official teachings of an all-powerful Church. Accordingly little by means of reflection was possible; radical ideas were suppressed, especially if there was a risk that the criticism would escape the small coteries of dissenters and have real social effects. And while this received view of the Middle Ages is a caricature, it is easy to see how it arose. To be too persistent in one’s questioning—to be too curious regarding the state of the world or the heavens—was regarded by the Church as a sign of vanitas and hence as a sin.5 St Augustine, for one, condemned the ‘unhealthy curiosity’ of men who are led to investigate the secrets of nature, which are irrelevant to our lives, although such knowledge is of no value to them and they wish to gain it merely for the sake of knowing.6 Obedience to God meant that man should refuse to go where his questions might take him. Some things were revealed, some other things were hidden; the latter were for man to praise, the former for God alone to know. You ate from the tree of knowledge only at your peril. Instead the answers to most people’s questions were taken off the Churchadministered rack of well-worn Christian dogma. Ordinary people’s everyday questions were dealt with by parish priests while more intellectually challenging attacks were addressed by theologians and philosophers. The things that man needed to know about life, death and eternity could easily be looked up in a small collection of authorised texts, mainly passages from the Bible and snippets of writings by pre-Christian authors. Once this material had been edited, annotated, and glossed by generations of scholars, the result was a body of knowledge which not only was surprisingly complete but also suspiciously coherent. The world has never been as well and as completely understood as in the thirteenth century. The official canon, and the Gothic cathedral which was scholastic philosophy, provided a total explanation of everything, everywhere. And yet, the received wisdom exaggerates the differences between the modern outlook and the medieval In fact, to perpetuate this exaggeration was always a conscious strategy of the ‘moderns,’ designed to put their predecessors in a bad light and to further their own careers. For a fairer assessment consider first of all what a great achievement medieval theology itself represented. The whole body of Christian dogma, from creation myths to apocalyptic visions, was nothing if THE DISCOVERY OF DISTANCE 27 not a glorious attempt to reflect on the human condition. By express ing these myths and externalising them in the forms of a body of set texts, the Church allowed people to see themselves sub species æternitas, as it were, from the point of view of eternity. The fact that the texts were standardised and read across Europe also meant that people everywhere were able to contribute to the same reflective enterprise. And even if it is true that Christian doctrine stifled as well as encouraged reflection, it is important to remember that the ideological hegemony of the Church never was complete. In all conceptual systems there are bound to be inconsistencies and when these are worked out quite different conclusions can usually be drawn even by people who fully accept the authority of the same dogma.7 As a result no conceptual system will ever be fully coherent. This was certainly true of the teachings of the medieval Church which in practice were quite an unstable mixture of Hebrew traditions and classical Greek influences. Instead of staying loyal to the simple faith of the mid-Eastern shepherds who founded it, Christianity soon incorporated the sophisticated Greek tradition of philosophising. The price to be paid for philosophical sophistication, however, was continuous philosophical debate. Throughout the Middle Ages, endless intellectual quarrels raged on a number of abstruse issues; that is, people were forced to reflect on the foundations of their own faith.8 But reflection could also take far less high-brow forms. Consider, for example, the carnival.9 Although medieval society was hierarchically organised, and ordinary men and women had few opportunities to change their lot, the carnival was an occasion when this rigid social order temporarily was suspended. The carnival was a monde à l’envers, a topsy-turvy world, where normal status hierarchies were inverted and different social rules applied. At the feast of fools, for example, the feudal lord was dethroned and the village idiot made king; in the parodia sacra, monks said the mass backwards and in pig Latin; at inductions at medieval universities, students mixed obscenities with parodies of the Bible and legal texts.10 The carnival was a time of laughter, and as such it contrasted sharply with the official seriousness of medieval culture.11 A text, a rule or a god that once had been thoroughly made fun of would never again be seen in quite the same light.12 Alternative social arrangements were explored also in the distinctly calmer setting of the medieval monastery. The monastery provided an institutionalised setting where nuns and monks could come closer to god, but also a place where they could get away from society. This half-way house between heaven and earth provided them with plenty of opportunities for reflection. Not surprisingly, monasteries were the leading intellectual centres of the age and medieval monastics were notorious visionaries.13 During a prayer, a monk would perhaps see a blinding light and temporarily take leave of his senses or a nun would be transported away to another world during her sleep. When they returned, they told stories of miracles and other amazing events; they had talked to God or to the dead. Often they had messages with them from the other side: admonitions to 28 REFLECTION sinners to repent but occasionally also demands for more general ecclesiastical or social reform. For the Church the problem was how to relate to such extravagant claims.14 If the visionary seemed sane and the demands acceptable, a new religious order could perhaps be established with the blessings, and within the official parameters, of the Church. But if the visionaries seemed crazy, or the demands too radical, no such compromises were possible. In this situation the visionary would sometimes make an appeal directly to the people, and in this way a number of millenarian sects were born.15 Once they found themselves in opposition to established society, the message would soon turn increasingly radical. Many sects abolished the priesthood or the sacraments of the Church, and in some of them earthly possessions, and even women, were held in common. Scholastic philosophy, carnivalesque antics, and the ecstasy of monastics, were all simple but powerful ways of reflecting on the world. They were means of establishing external points of view from which the existing social order could be better observed. And yet there were always limits to how much that could be seen from these alternative perspectives. The basic problem was above all a lack of distance. The medieval conceptual system, no matter how dynamic in its own terms, was in the end next to perfectly closed and self-referential; every part of it pointed to and supported every other part.16 The European Middle Ages was an inside without an outside, a fishbowl world where nothing was unknown or unexplained.17 Reflection was always restricted since there were no external points of view from which the system as a whole could be observed.18 As a result there were also definite limits to the kinds of criticism that could be formulated. Thus, although theological debates often were heated, the religious language itself could not be questioned or replaced. Similarly, while the world could be turned upside-down, it would not be taken apart and reassembled in some fundamentally different fashion. And for the same reason, the political programme of even the most radical millenarian movement was surprisingly unimaginative.19 Modern self-reflection began with the sudden and unexpected discovery of alternative worlds located outside of the medieval fishbowl. Three such breakthroughs were particularly important—the discovery by Humanist scholars of the heritage of classical Greece and Rome; the discovery by Spanish, Portuguese and Italian explorers of the Americas and other continents across the seas; and the discovery by astrologers-turned-astronomers of a universe which not only had the sun at its centre but which also was infinite in size. As a result of all three breakthroughs, enormous distances opened up together with a wealth of new perspectives. Placing themselves in classical Athens, in the Americas, or at a randomly given point in limitless space, the discoverers were suddenly in a position to view Europe, its habits and inhabitants, in entirely different ways. THE DISCOVERY OF DISTANCE 29 The view from Antiquity Take first the discoveries of the Humanists.20 Admittedly, the heritage of classical Greece and Rome never quite disappeared during the Middle Ages. The works of the medieval Church fathers incorporated occasional references to classical texts and quotes culled from Plato, Aristotle, Cicero and Ovid were used in textbooks at medieval universities. In addition, many ancient manuscripts existed in individual copies in monasteries scattered across Europe. Yet since the official canon did not include them, they were not read. The poet Francesco Petrarca and his friend Giovanni Boccaccio were among the first to collect these ancient manuscripts in a systematic fashion, but they were soon followed by others and by the end of the fourteenth century the search for old books had turned into a widely shared obsession. As one book after another was recovered, the body of classical works expanded rapidly. What the Humanists discovered in these texts was a world that was well known to them yet at the same time also curiously unfamiliar. On the one hand, what the classical authors described was Europe itself and its inhabitants. On the other hand, these were Europeans who obeyed alternative gods, had alternative traditions and social norms and were subject to alternative cultural standards. What the Humanists had encountered were their alter egos, their other selves located in a different time and place.21 It did not take long however before the Humanists began engaging their classical counterparts in conversation. Petrarca wrote letters to Cicero, introducing himself as his son and disciple, and Niccolò Machiavelli, out of favour with the Florentine government and desperate for company, turned to the classics for consolation.22 ‘On the coming of evening,’ as he described the scene, ‘I turn to my house and enter my study.’ Here, ‘I enter the ancient courts of ancient men,’ I am not ashamed to speak with them and to ask them the reasons for their actions; and they in their kindness answer me; and for four hours of time I do not feel boredom, I forget every trouble, I do not dread poverty, I am not frightened by death; entirely I give myself over to them.23 As a result of these and many similar conversations, the Humanists came to acquire an alternative view of themselves. They learnt new ways of expressing themselves in poetry, drama and in letters; they discovered how to describe natural sceneries and the history of their native cities; they received advice on military matters, on politics and oratory, on painting, medicine, law, and even on animal husbandry.24 The Christian religion too had to be reconsidered when seen from this alternative point of view. Some Humanists were highly impressed by the civic religion of the ancients while others started studying the Cabbala and magical Egyptian cults.25 And even the vast majority of scholars who stayed with 30 REFLECTION 5 The face in the mirror The discovery of worlds outside of the medieval fishbowl created enormous distances and alternative perspectives from which the Europeans could observe themselves. Although the reflective capability of medieval society never should be underestimated, the change was nevertheless profound. When looking at the world from these new points of view, a distinctly modern outlook gradually came to emerge. And naturally, the people most directly associated with these breakthroughs soon came to be regarded as heroic figures and as icons of the modern age. As generations of schoolbook writers have informed their impressionable readers, it was the discoveries of men like Petrarca, Columbus and Copernicus that created the modern outlook. But for their seminal contributions, we would still be living in the dark ages. This version of history, however, is a post hoc rationalisation which completely distorts the facts. When viewed up close, none of the alleged heroes turns out to be heroic or even particularly unique. The more we read of Petrarca’s own writings, the more of a traditional Christian he becomes; the more we learn about Copernicus, the more he turns into a brooding Renaissance alchemist; and Columbus is of course the very archetype of a lucky fool, arriving at the wrong place for the wrong reasons.1 There is no doubt that all three discoveries easily could have been achieved earlier and by others. The fact is of course that all three discoveries were achieved earlier and by others. Compare, for example, what usually is referred to as the Renaissance with what could be called the ‘pre-renaissances’—the ‘Carolingian Renaissance,’ or the ‘Renaissance of the twelfth century.’2 Already at the time of Charlemagne, Benedictine monks were busy editing classical texts in a way which strongly remind us of the Humanists’ painstaking labours, and already in the twelfth century there was a revival of long-lost Latin learning. Or compare Columbus with the Vikings. As archaeological evidence from Newfoundland shows, America was not discovered in the late fifteenth century by Italians, but instead in the late tenth century by Scandinavians.3 Or consider Nicholas Oresme, a teacher at the University of Paris in the fourteenth century whose ideas on cosmology in many ways predated those of Copernicus.4 The more we read about such ‘precursors,’ the more impressed we are likely to become and the more blurred the distinction will appear between a modern and a premodern outlook. On the level of individual achievements there is indeed little difference between the one set of accomplishments and the other. The Humanists were not really all that different from the Carolingian monks, and Columbus and Copernicus were not all that different from Oresme and the Vikings. The real difference between the two sets of achievements is instead social and technological. In the Middle Ages, there was no way of continuing the explorations that new discoveries made possible and for this reason alone whatever was accomplished perished with the individuals responsible. Before long the Carolingian empire fell apart, the Viking colony in North America succumbed to attacks by Indians and disease, and Oresme’s cosmological speculations were ignored by his successors. When the same breakthroughs happened a few hundred years later, however, everything was different. Or rather, two things were different. First the Europeans had access to new and far more sophisticated technological means through which their reflections could be pursued. Second, and crucially, institutions were in place through which the reflective activities of individuals could be magnified and far better coordinated. Technologies and institutions perpetuated the initial achievements, made them permanent and easy to build on by others. The new technologies is the topic of this chapter and the new institutions is the topic of the next chapter. Technologies of reflection Consider again the problem of reflection. Reflection requires distance, we said, but distance is difficult to achieve, especially if the object of our reflection is our own person or the society in which we live. Since we never can leave ourselves, we can never see ourselves from the outside, and while we physically can remove ourselves from our societies, this in itself does not provide a better point of view as Long as we do not also shed our society’s preconceptions. In order to get a better view of ourselves, we must find a way of extending ourselves, of making ourselves into objects available for observation. And while this may seem quite impossible to do, technical solutions often provide ingenious answers. Perhaps it is possible to talk about different ‘technologies of reflection’ One simple such technology is language. Language abstracts from and organises reality and provides a distance between the thing present and its representation in our minds. Moreover language allows us to express ourselves and in this way to turn our thoughts into objects in the world to which others, or we ourselves, can relate. Here, as always, the creation of distance allows new perspectives to open up. Re-reading an old diary, for example, or over-hearing a conversation behind our backs, we are suddenly able to see ourselves from the point of view of others. This may be a profoundly alienating experience but it is often also an enlightening one. In fact it is enlightening precisely because it is alienating. 38 THE FACE IN THE MIRROR Since technologies of reflection vary widely in their effects, the presence or absence of a particular technology will make a huge difference to the reflective capability of society. For purely technical reasons some societies are more reflective than others. Compare, for example, the advantages of writing over purely verbal communication.5 If a cultural heritage can be kept on paper instead of only in people’s minds much more of it can be recorded and the material can be preserved more easily and added to by each successive generation. A written tradition will for this reason always be richer than a spoken tradition, at least in quantitative terms. The written tradition is also easier to reflect on than the merely verbal and individuals can relate to it in a more independent manner. As long as you can read there is no reason to sit listening, attentively, at the feet of the village elders; you can break with the long-established customs of your society without jeopardising their existence. Given the impact of technology, it is possible to compare societies and to rank them according to their reflective potential. Everything else equal, the more and the better technologies, the more reflective a society. Note, however, that this is not a comment on the quality of the thought produced. While thought is best judged in terms of its content or its results, reflection is best judged in terms of technical criteria. In order to think well, that is, you should arrive at correct, interesting, or morally praiseworthy results, but in order to reflect well all you really need is access to a certain technological gadgetry. Although thought hardly can be said to have made much progress from Socrates or Confucius until today, reflection decidedly has. The best evidence for this thesis are two technologies, the Venetian mirror and the printing press, which in the fifteenth century revolutionised the ability of the Europeans to reflect on themselves. Today, hi-tech means of communication— radio, television, computers, the Internet—have continued that revolution and new technological breakthroughs are no doubt just around the corner. None of these inventions has made people in modern societies smarter than men and women in other times and other places, but for technical reasons they have made it easier for us to reflect on ourselves. In order to better understand the role of technologies of reflection, consider briefly the impact of those two early-modern inventions: the Venetian mirror and the printing press. The Venetian mirror A mirror is no doubt the most obvious example of a technology of reflection. Since human beings never can see their own faces, and since they have a highly distorted view of much of their own bodies, it is only with the help of a mirror that they ever get a chance to take a good look at themselves.6 An image in a mirror is an external object to which people can relate as they would to any other object in the world. We are here but also there—inside ourselves, but also on the wall in front of us—and the distance between the two is what makes reflection REFLECTION 39 possible. In the mirror we can see and reflect on ourselves without leaving ourselves. Mirrors made from polished stone or metal existed already in Mesopotamia and ancient Egypt but they were rare, of low quality, and reserved for religious purposes or for members of the elite.7 In the Middle Ages there were round mirrors made of glass but they were expensive and due to their small size and convex form they provided only a partial view. Ordinary people could perhaps catch their reflection in the still water of a lake, but such glimpses were infrequent, and besides it is both inconvenient and unsatisfactory to look at oneself from a horizontal position. As a result, strange as it may sound, before the modern era most people had little or no idea of what they really looked like. All of this changed with the invention of the modern mirror. Venetian mirrors —a flat sheet of glass covered with silver—were much cheaper than pre-modern mirrors and of vastly superior quality. From the workshops in Murato, outside of Venice, the new production technique spread quickly across Europe, and before long mirrors came into use not only among the rich but among most social classes. Looking into these glasses, the men and women of the Renaissance obtained for the first time a cheap, accurate, and vertical representation of themselves.8 Since people now were able to see themselves for the first time, it is not surprising that they became conscious of themselves in a new fashion. People began to worry about their appearance since they now were able to regularly inspect and control it. Faces could be checked for baggy eyes or running makeup and corrective counter-measures could speedily be applied. There was no reason not always to look one’s best. Although there is no doubt that our contemporary preoccupation with self-image and self-presentation have many diverse causes, the invention of the mirror was its precondition. The new self-consciousness had a number of far-reaching cultural consequences. Consider, for example, the autobiography, a literary genre which admittedly is of medieval origin but which came to flourish only once mirrors became readily available across Europe.9 Or take the Fürstenspieghel, the ‘mirror of princes,’ another medieval literary genre that received a boost once mirrors became common. In these books of political advice, the aim of the author was to hold up a metaphorical mirror to the ruler in which he could see himself and the conditions obtaining in his kingdom.10 By looking into the Spiegel, the Fürst was able to reflect on the requirements of statecraft. The most famous such book was Machiavelli’s The Prince, 1513, but Erasmus of Rotterdam, Julius Lipsius, and many other authors contributed to the same genre. The availability of mirrors also had broader cultural implications. Consider, for example, portrait painting.11 In the Middle Ages, no proper portraits were painted but human beings were instead depicted as representatives of given types. A picture could, for example, show two hundred saints who all displayed the same, rather blank, expression.12 With the advent of the mirror such stereo types became unacceptable. People knew what they looked like and they often took 40 THE FACE IN THE MIRROR considerable pride in their individual features. The artists responded with a new realism of representation and attention to detail. Soon every person who owned a mirror wanted a picture, and not only members of the elite were portrayed but ordinary individuals as well. The printing press The fifteenth-century invention that truly revolutionised reflection, however, was the printing press.13 Paper was imported from the Arabs in the twelfth century and by the end of the thirteenth century the Italians began making their own; wood-block printing started around 1380 and the technique was steadily improved. Once Johann Gutenberg had printed his bibles in Mainz in the 1440s, the new technology was quickly disseminated across Europe and already after a couple of decades most European towns had their own presses. An enormous amount of books were published in a short period of time: already before the year 1500 some 30,000 editions and a total number of 20 million volumes.14 Since the price of a printed book was radically lower than that of a hand-copied manuscript, the reading audience broadened and the number of books a person could afford increased dramatically. While a private book collector in the year 1300 had many books if he had 200, a private library in the year 1500 could contain several thousands of volumes.15 Literacy spread together with the cheap books, and books were more in demand since people increasingly were able to read. While hand-copied books had given reflective powers to the small elite who had access to them, the printing press helped empower far larger groups. And as more, better, and cheaper books began circulating across Europe, so did the ideas they contained. Printed books revolutionised reflection by creating a tension between the text and the context provided by the lives of its readers. That which is out of context is often comic, sometimes tragic, and occasionally it is simultaneously both. For an example of the comic consider the constant jokes made in the early modern period about scullery maids and man-servants who forgot their duties while engrossed in the reading of cheap romances.16 For an example of the tragic, consider the readers who committed suicide in solidarity with the hero of Johann Wolfgang von Goethe’s The Sorrows of Young Werther from 1774. For an example of the tragicomic, consider the life of the protagonist of Miguel de Cervantes’ Don Quixote, from 1605, who spent too much time emulating the lives of the characters of ancient chivalry books.17 Sometimes, however, the tension was resolved in the opposite direction. That is, instead of rejecting the text as out-of-context, the context was changed to correspond to the letter of the text. The best example of such a readjustment is the Reformation. In the Middle Ages, Bible reading had actively been discouraged by the Church since it wanted to protect its monopoly on the correct interpretation of the word of god. Yet such prohibitions made little practical difference at a time when books were rare and most people were unable to read. REFLECTION 41 In the Middle Ages, access to god was always mediated through the priests and the sacraments safe-guarded by the Church. The advent of printing changed this spiritual arrangement. Martin Luther’s translations of the Bible into German and his Small Catechism, 1529, were among the first best-sellers of the modern age.18 All that Martin Luther and the other reformers asked people to do was to read the Bible and to compare its teachings with the teachings of the established Church. The discrepancies that were encountered were such that the authority of the Church establishment necessarily was undermined. According to the Lutheran dispensation, salvation was mediated not by priests and sacraments but instead through faith in the printed word. As soon as they realised the subversive implications of the new technology, the Church authorities began censoring texts and restricting access to printed material. In 1559, the Catholic Church put together a list of banned authors, the Index librorum auctorum et librorum prohibitorum, which over the course of the years came to read as a compendium of European civilisation and thought.19 The Index comprised Catholic, Protestant, Jewish and Muslim heresies but also authors as diverse as Erasmus of Rotterdam, Niccolò Machiavelli, Voltaire, Emanuel Swedenborg, Immanuel Kant, and in the twentieth century, Henri Bergson and Jean-Paul Sartre. The Index went through 300 editions and was abolished only in 1966. But not only the Church felt threatened by the power of the printed word. Texts could also come into tension with the demands of political authorities. The seventeenth century in particular was a time of intense political pamphleteering both on the Continent where the Thirty Years War was pitting Protestants against Catholics and in England where the Puritans gathered their forces against the Stuart monarchy. In order to restrict access to subversive material— in order to limit reflection and protect public peace—the state too relied on censorship. Even classical authors were occasionally singled out as targets. As Thomas Hobbes explained in Leviathan, 1651: by reading of these Greek, and Latine Authors, men from their childhood have gotten a habit (under a false show of Liberty,) of favouring tumults, and of licentious controlling the actions of their Soveraigns; and again of controlling those controllers, with the effusion of so much blood; as I think I may truly say, there was never any thing so deerly bought, as these Western parts have bought the learning of the Greek and Latine tongues.20 Public opinion People who communicate with the help of the same medium often form communities, and the kind of community that is formed will vary depending on the technology employed.21 Literate societies tend for example to be far larger than illiterate societies since the existence of writing makes it possible to communicate with many more people than with those few who can be reached by 42 THE FACE IN THE MIRROR a person’s voice. The advent of printing vastly magnified this advantage. Through print people communicated far more efficiently, more widely and more often, and as a result much larger and more tightly knit communities could be formed. Communities became virtual; that is, they no longer depended on the physical proximity of their members. People felt close not only to those few others they met in person but also to those they had been acquainted with only indirectly as readers of the same texts. Consider, for example, the new intellectual communities that were created.22 A person who can read can think and people who read together, even at a distance, are in a sense thinking together, they are pondering the same problems and contributing to the same on-going debates. Although the first generations of Humanist scholars relied heavily on letter-writing—many of them wrote more letters than most people today write emails—print technology vastly improved the opportunities for scholarly discussions. As a result intellectual movements could form more quickly and have greater impact. But much the same applies to communities of scientists. From the sixteenth century onwards, news of scientific discoveries was more widely disseminated and as a result experiments could be repeated more often and confirmations or refutations of research results more accurately reported. In this way, the printing press allowed a new form of collective intelligence to emerge, a considered judgement which belonged not to any particular individual but to the scientific community taken as a whole. Another example are national communities. Once texts began to be printed in the vernacular they brought together all those who understood the same language while those who did not effectively were excluded.23 Before long these communities of language specific readers came to constitute a collective ‘We’ radically set off from the ‘they’ made up of people reading in a different language. As a consequence people came to see themselves as belonging together even though they often had little more in common than a particular vernacular. The label most commonly used for these communities of readers is a ‘nation.’ The newspaper was particularly important in this respect.24 Newspapers are cheap, widely disseminated, and published on a daily basis. The first papers, appearing in the seventeenth century, were simply printed sheets with information about commercial opportunities or reports on major events such as wars. Gradually, however, the occasional pamphlets expanded their coverage and developed a more permanent readership. This was particularly the case in England and Holland.25 Once pre-publication censorship was abolished in England in 1695, newspaper sales increased dramatically. The first daily paper, the Daily Courant, appeared in 1702 and a number of other papers soon followed. The annual sale of newspapers in England reached 7.3 million in 1750 and 50 years later it had more than doubled. Most readers belonged to the ‘middling classes’: manufacturers, merchants, professionals, shopkeepers, farmers and small free-holders. In Paris the staunchly pro-government Gazette de France was first published in 1631 and until the Revolution it was the only REFLECTION 43 newspaper which was officially permitted.26 In Scandinavia and parts of Germany the press developed in a more independent manner, although the audiences were small.27 The oldest newspaper still being published is Post- och Inrikes Tidningar which began appearing in Sweden in 1650. For their readers the newspapers served a dual function. While they reflected the affairs of a particular community, they also allowed a particular community to reflect on its affairs. In these respects newspapers were exactly analogous to mirrors, and this mirroring function was often obvious already from the paper’s name. Among many similar titles, there appeared publications such as the Mirror of the Times, London, 1796; The Columbian Mirror and Alexandria Gazette, Alexandria, Virginia, 1792; Political Mirror, Staunton, Virginia, 1800; Daily Mirror, London, 1903, and Der Spiegel, Hamburg, 1947. Reflection was also the obvious task of The Spectator, London, 1709, The Observer, London, 1791, and the Christian Science Monitor, Boston, 1908. And the same can be said for newspapers who in their name preferred to emphasise the reflective function of the voice—The Echo, Edinburgh, 1729; L’Écho de Paris, Paris, 1884, or L’Écho de la bourse, Brussels, 1881. Looking into these mirrors—or hearing these echoes—the readers were able to learn many new things. Here they obtained news and financial information, learned who had been born, married or died, and picked up useful tips on anything from the affairs of the heart to the pickling of herring.28 From the middle of the eighteenth century onward all major events—revolutions, wars, discoveries and inventions—were quickly and extensively reported in the pages of the press. From the end of the eighteenth century, parliamentary debates were extensively reviewed in British newspapers and the proceedings of revolutionary bodies in their French counterparts.29 And from the middle of the nineteenth century, regular bulletins reached European readers from the most exotic of locations: Japan, the darkest heart of Africa, the battlefields of the American civil war. Relying on these widely shared reports, people began reflecting far more efficiently together. In the press a range of different views were expressed but also subject to scrutiny, critique and restatement. This was the forum where political agitators, Schriftstellern and philosophers propagated their ideas, attacked the authorities or each other. Participating in these public debates, as readers if not as contributors, people gradually acquired the ability to reason coherently about common affairs; they developed views which were increasingly well informed and responsible. The eventual result of such exchanges was the notion of an opinion publique, a ‘public opinion,’ defined not as an aggregate of individual opinions but instead as a verdict reached only after an extensive period of collective deliberation.30 Originally the word ‘opinion’ had designated a point of view which was subjective and uncertain; opinion was the flickering light of ‘mere opinion’ as opposed to the brightly shining light of irrefutable reason.31 Yet understood as a verdict reached as a result of collective deliberations, the opinion of the public came in the eighteenth century to be regarded as a formidable force. In France 44 THE FACE IN THE MIRROR the opinion publique was the tribunal before which all writers, artists and philosophers had to present themselves before they could make a name for themselves in society.32 In England, by contrast, public opinion was concerned above all with political matters and the tribunal in question passed its verdicts primarily on the actions of statesmen and politicians. Much the same came to be true in other parts of Europe. At least from the end of the eighteenth century onward politicians would ignore public opinion only at their peril.33 As the editor of the German paper, Deutsche Nation, put it in 1785: the invention of the newspaper is incontestably one of the great beneficial acts of the European nations. By that invention, an enormous step has been taken towards Enlightenment. The general spirit of participation in all public matters, which the English call public spirit, has thereby been transmitted from nation to nation.34 REFLECTION 45 6 Institutions that reflect It would be a mistake, we said, to give named individuals—Petrarca, Columbus, Copernicus or anyone else—the credit for the new perspectives that suddenly opened up in Europe around the year 1500. Although individuals make history, they never make it in the manner of their own choosing and, above all, without access to technologies of reflection even the most imaginative person will have little impact. Yet technology in and of itself is never enough. In order to make a difference, the technology must first be put to efficient use and this can only be done if it is embedded in a social organisation of some kind. The technology must be institutionalised, as it were. It was institutions in the end rather than individuals or technical gadgetry that made reflection into an automatic, sustained and self-perpetuating, activity. Institutions picked up on the discoveries of classical scholars, geographical explorers and natural scientists and routinised and formalised them. Institutions provided the means of gathering, combining and comparing perspectives; they supplied procedures to follow and ways of coordinating individual contributions. Institutions made it possible for people of different backgrounds to meet to exchange information and points of view; institutions supplied the infrastructure, the material, the funding, the archives, the laboratories, the jargon, and the ways of judging contributions. And perhaps most importantly, institutions allowed for vast increases in the intellectual division of labour.1 Just as modern factories, reflective institutions allowed tasks to be ever more narrowly defined and performed by ever more skilled people. As a result the production of knowledge and new ideas expanded rapidly although no individual had a grasp of more than an infinitesimal portion of the process in which they were involved. Although there are many different institutions which engaged in reflective activities in the early modern era, three were particularly important: universities, scientific academies, and parliaments.2 While universities and parliaments are of medieval origin, they came to play quite different roles in the sixteenth century, and academies are pure seventeenth-century inventions. The aim of this chapter is to briefly discuss the reflective activities of all three. together in order to make decisions on matters of common concern. Ideally the parliament should mirror the composition of the people and its interests; there should be representatives of different social groups, political ideologies, cultural outlooks and religious and sexual inclinations. Yet the representatives should not only reflect the interests of the people but also reflect on the interests thus represented. Parliaments should re-present the wishes of the voters—make them ‘present once again’—and consider them from as many perspectives as possible. The job of parliamentarians, in short, is not only to make decisions, but also to reflect on the decisions they make. Arguably this deliberative function is at least as important as ever the task of electing a government or passing legislation. Derived from the Latin fabulare, ‘to talk,’ parliaments are ‘talking shops’ by definition. ‘I know not,’ as John Stuart Mill pointed out in 1861, ‘how a representative assembly can more usefully employ itself than in talk.’ A place where every interest and shade of opinion in the country can have its cause even passionately pleaded, in the face of the government and of all other interests and opinions, can compel them to listen, and either comply, or state clearly why they do not, is in itself, if it answered no other purpose, one of the most important political institutions that can exist anywhere, and one of the foremost benefits of free government.32 Or as Walter Bagehot, editor of The Economist, pointed out in 1867, the diversity of the opinions expressed in parliament ‘makes us hear what otherwise we should not.’33 Parliaments just as universities have their origins in the Middle Ages.34 While medieval kings often had forceful personalities, they rarely had enough power to impose their will on the people nominally subject to them. For one thing kings were chronically short of information. Since communications were rudimentary at best, it was always difficult to know what was going on in remote parts of a country or even in the next town. In addition the lack of an administrative machinery and a standing army made it difficult to raise taxes, and since tax revenues were low bureaucracies and armies were difficult to pay for. As a way to deal with these problems the kings asked representatives of the people to come to their courts to provide them with both information and tax revenue.35 The result was a parliament understood, simultaneously, as a forum where views were exchanged and financial commitments negotiated. Understood as a setting for reflection, however, medieval parliaments left much to be desired. Parliaments met only infrequently—perhaps once every few years—the sessions lasted only a couple of days, and the debates were clearly stage-managed by the kings. Yet the mere fact that a forum was established where public deliberations could take place was itself significant. As long as the parliaments met the kings had to give reasons for their actions and inactions and persuade rather than simply to force people to follow them.36 Although medieval INSTITUTIONS THAT REFLECT 53 parliaments had nothing to do with the modern conception of democracy, they established the first outline of what later would come to be referred to as a ‘public sphere.’ With the rise of the state as a sovereign political entity the parliament’s role as an information gathering device gradually became less important and some kings were also able to raise revenue without asking the representatives of the people for help.37 In rich and centrally located countries such as France, Spain and Austria, where the rulers acquired their own sources of income, the parlia ments lost dramatically in importance or were entirely abolished. In poorer and more peripheral countries—England, Sweden, Poland and Hungary—the kings never gained this measure of independence and the parliaments remained in place. In fact since constantly escalating wars required constantly increasing revenues, the kings here became more rather than less dependent on their subjects. What emerged was thus a division of the political map of Europe between so called ‘absolutist’ regimes and those of monarchia mixta, or ‘mixed government.’38 In this latter set of countries, parliaments, initially established by the king to control the people, increasingly became a way for the people to control the king. And yet, according to the most commonly held theory of representation, the point was never simply to reflect the wishes of the people but also to reflect on the wishes which the people expressed. The Members of Parliament were there to deliberate on the choices before them rather than slavishly to follow the popular will. Only in this way would it be possible to make sure that the decisions reached were the best ones, corresponding to the enlightened longterm interests of the people at large. ‘Your representative owes you, not his industry only, but his judgement,’ as Edmund Burke warned the voters of Bristol in 1774, ‘and he betrays, instead of serving you, if he sacrifices it to your opinion.’39 Yet the relationship between representation and deliberation was never straightforward. The two principles are most easily combined in cases where the franchise itself is broadened. The better the parliament reflects the views of the people, the more, and the more diverse, material will go into the deliberative process and the better the decisions are likely to be as a result. Medieval and early modern parliaments failed abysmally in this respect and in the nineteenthcentury parliaments were still seriously unrepresentative. As Walter Bagehot pointed out, land owners were over-represented among MPs and industrialists were under-represented. As a result the British parliament ‘gives too little weight to the growing districts of the country and too much to the stationary.’40 John Stuart Mill made the same point in support of female suffrage.41 To exclude women from parliament is not only undemocratic, he argued, but it is also to make society as a whole less reflective than it otherwise would be. There are, however, also situations in which the demands of representation and deliberation contradict each other. As we all know good discussions are often difficult to sustain if there are too many, and too many different, people involved. The more intimate the context, and the better we know the other participants, the more likely we are to consider an issue carefully and on its merits. Before the 54 REFLECTION introduction of universal suffrage in the early twentieth century parliaments came close to this intimate ideal. Parliaments were gentlemen’s clubs filled with the members of an upper-class who all knew and trusted each other. As a result MPs were less inclined to exaggerate the rhetoric and more ready to honestly contemplate each case.42 Thus, although the restricted membership seriously reduced the range of perspectives available, nineteenth-century parliaments reflected very well within those exceedingly narrow limits. To broaden the franchise was to admit more points of view but also to make honest exchanges of views more difficult.43 Much the same can be said regarding attempts to make parliaments ‘more accountable’ by giving media access to the proceedings. Already when the British Houses of Parliament were opened up to journalists after 1771 it became obvious that the speakers began ‘playing to the galleries’ rather than debating with their colleagues.44 And much the same complaints have been heard in recent years when TV cameras have been let into various parliamentary chambers. While increased public scrutiny may make the representatives more accountable it may also make it more difficult for them to change their minds or to appear as something less than fully partisan. For the sake of the quality of the deliberative process, it could be argued, representatives must be shielded from the people they represent, at least to some extent. This is one reason why plenary debates seem to have lost in importance in recent years and why debates held in committee rooms have gained.45 Committees are in the end where the actual parliamentary work takes place; committees are smaller, more intimate, settings and as such better places to reflect. In addition, the committee structure allows Members of Parliament to specialise in particular subject areas and a committee membership provides them with the opportunity to develop their own expertise. The committees usually have the right to call witnesses, to conduct research, and to commission reports by outside experts. Moreover, by interacting with committees, interest groups and lobbying organisations have a way of influencing these deliberations. For an example of the trade-off between deliberation and representation consider the constitution of the United States.46 When the founding fathers were drafting the constitution in 1787, they were able to consider the way in which various state legislatures had operated during the ten years that had passed since independence. As they agreed these experiences left much to be desired.47 Controlled by majorities who behaved selfishly and short-sightedly, a number of states had embarked on foolish projects: outlawing banks, for example, or causing inflation by printing too much money. As James Madison put it in the Federalist Papers, 1788, the mild voice of reason, pleading the cause of an enlarged and permanent interest, is but too often drowned, before public bodies as well as individuals, by the clamors of an impatient avidity for immediate and immoderate gain.48 INSTITUTIONS THAT REFLECT 55 The question was how such short-sighted immoderation could be avoided in the federal constitution and ‘the mild voice of reason’ given a chance to be heard. The answer, everyone agreed, was to design the institutions in such a way that public reflection would be both protected and encouraged.49 As an example consider the terms of the representative mandate.50 If representatives were instructed by their constituents to vote in a particular fashion there would be no room for independent deliberation. The same was true if the representatives could be recalled during an on-going session, given new instructions, or dis missed by the electorate. The length of the mandate also mattered As the founding fathers argued, the longer the politicians spend in office the less frequent will be the pressures of re-election and the freer they will be to make their own decisions. This was also why the electoral districts were made fairly large.51 Since a large district is likely to contain many different kinds of people its representative is likely to be freer from the pressure of any particular interest group. What the framers of the American constitution explicitly designed are features that have evolved more or less spontaneously in other Western political systems. Reflection in the end is what most parliamentary procedures are about. There are set ways of conducting debates and procedures for making sure that everyone has a chance to speak and a chance to be heard; there are rules for how new legislation should be proposed and voted on. Representatives often have immunity from prosecution in order to protect them from pressure from the executive. To the extent that this reflective machinery operates smoothly the personal qualities of individual MPs are not particularly important. Everything else equal, it may be preferable to have highly intelligent and dedicated representatives, yet an efficient institution can cope even with MPs who are stupid and self-serving. All the reflective capacity is built into the institution and less is required of individual MPs. 56 REFLECTION Part III Entrepreneurship 7 Origins of the entrepreneurial outlook But reflection alone is never going to be enough. Change requires a changer, a someone who acts in order to alter the way things are. This someone could be called an entrepreneur. Today entrepreneurship is usually associated with economic activities, and entrepreneurs are typically defined as anyone who owns or directs a company. But there is no good reason why a definition of the term should be this narrowly constrained. Entrepreneur, from the French entreprendre, ‘to embark upon,’ ‘to set out on,’ ‘to undertake,’ is simply anybody who embarks on or undertakes activities not embarked on or undertaken by others. Or in the vocabulary introduced above, an entrepreneur is somebody who acts on the potentialities that reflection has revealed; somebody who brings things into the world which previously did not exist. Thus understood, entrepreneurship is not limited to the field of economics but can be found in any walk of life. Surprisingly enough, neoclassical economics—economics as taught by contemporary textbooks—has next to nothing to say about entrepreneurs and what they do.1 As so often is the case in the sciences, this silence is theoretically induced. A common assumption of neoclassical theorising is that economic actors have perfect information, that they know everything that all other economic actors know.2 Given this assumption, supply will always smoothly adjust to demand, producers will always receive their expected returns, and the utility of consumers will be maximised. Under such conditions of universal and automatic satisfaction of desires there is simply nothing for entrepreneurs to do. In the world outside of the neo-classical model, however, few of these assumptions apply. On the contrary, information is often of poor quality and is usually highly unevenly distributed.3 And such asymmetries are precisely what entrepreneurs rely on in order to make a living. Their job is to look for price and quality differences between markets and to buy in places where things are cheap and sell in places where things are expensive. But in addition entrepreneurs also create new demand; they sell new products, in new ways, and to new customers. Defined in this fashion, the entrepreneurial function is something quite different from the managerial function required of most owners of businesses.4 While managers are content to make money from ever-decreasing profit margins in ever more mature markets, entrepreneurs are bent on improving markets or on creating new markets where previously none existed. Thus understood, entrepreneurship is not restricted to the economic field but can also comprise for example political, cultural or religious activities. A political, cultural or religious entrepreneur is someone who takes policies, artistic expressions or beliefs from one social setting and introduces them into another social setting. To the extent that such transpositions are successful, policies, expressions, and beliefs will become more widely distributed. In addition, however, the entrepreneur is also someone who comes up with policies, expressions or beliefs which people previously did not know existed and which they perhaps did not even know they craved. Regardless of the field in which they operate, entrepreneurs are today commonly regarded as individuals of unique insights and abilities. Entrepreneurs are seen as the creative agents of change, and in a society where change is worshipped the entrepreneur becomes a hero. Yet such hero-worship is quite misplaced. Far from being all-powerful, there is next to nothing that individuals can do by themselves. This is true also of entrepreneurs of a truly worldhistorical stature. They too—or they in particular—always require the support of others in order to carry out their plans. Entrepreneurs need vehicles for their activities that amplify their powers; they need ways of making people work together for common goals. More than anything, entrepreneurs need the support of institutions. They need institutions that provide them with resources and with an independent capacity to act, and they need institutions that reduce insecurity and lower the risks of engaging in new enterprises. The question is consequently how it came to be that modern individuals began thinking of themselves as personally responsible for social change. There is a history of entrepreneurship that can be retraced and retold. And as we will see, this history is intimately connected to the development of a particular definition of what it means to be a human being. Human beings are not naturally entrepreneurial, in other words; it is not the case, as market enthusiasts like to believe, that entrepreneurship will thrive as long as all external obstacles— government regulation—are removed. Rather, the entrepreneur is a distinct social type and as such the product of a distinct social and cultural outlook. The question to be addressed in this chapter is how this social type first was created. In the next chapter the modern conception of the entrepreneur will be discussed in more detail, and in the subsequent chapter we will look at how institutions helped make entrepreneurship into an automatic and self-perpetuating activity. Medieval obstacles Let us once again use the Middle Ages as a foil for our discussion. As should be obvious from a visit to any Gothic cathedral or from reading books about the Crusades, the Middle Ages had plenty of extraordinarily resourceful entrepreneurs. In addition there were many less spectacular projects— ORIGINS OF THE ENTREPRENEURIAL OUTLOOK 59 applications of the waterwheel and the windmill, the opening up of mines or the invention of crop rotation techniques—which had revolutionary long-term consequences although they cannot be connected to named individuals.5 And yet it seems that people in the Middle Ages became entrepreneurs for rather different reasons than today; that they had other conceptions of what it was they could accomplish and other kinds of resources available to them. For example: people in the Middle Ages never seem to have thought of themselves as able to radically break with tradition. Consider the role of a medieval artist. Medieval works of art were all considered as parts of a canon, from the Latin kanon, denoting the wooden pipes of a hydraulic machine. Through the canon, accepted interpretations, models and techniques were transmitted—‘pumped’ as it were—from one generation to the next. As in all hydraulic machines, it was important to minimise loss and leakage; the heritage of the past could only be preserved if it was faithfully conveyed. Hence the obvious repetitiveness of the statues, icons and altarpieces.6 As all artists knew, it was the common heritage that was to be presented and not any particular individual’s view of it. For this reason, it mattered little that a certain work was executed by one artist rather than by another.7 While the artists concerned no doubt were proud of their craftsmanship, there was no reason to sign the work once it was completed. A signature could easily have been interpreted as a sign of vanitas, the empty ambition of someone bent on punching a hole in the canonical machinery. This relative lack of individual assertiveness was reflected also in the way people thought about social life.8 The vast majority of people occupied one or another of the few recognised positions that existed in medieval society. Basically everyone was either a member of the clergy, a peasant, a craftsman, a merchant or a knight. The lives of these characters were quite different to be sure but within each type there was little variation. The truth about a person was determined from the outside as it were, by social convention, by a rigidly hierarchical feudal order, and ultimately by god himself. In the Middle Ages, people were subjects to the extent that they subjected themselves to these authorities. This conception of the person is well illustrated by medieval literary genres such as the epic, the fairy tale and the saga.9 Here the protagonists—like modernday cartoon characters—were all equipped with the same easily recognisable features. There was no character development through the course of the narrative and the protagonists rarely stopped to reflect on themselves and their actions. Even biographies such as those told about the saints provide highly conventional stories about how a life of sin and sloth was converted, through the grace of God, into a life of piety and faith.10 In the Middle Ages there was nothing unique about a person and for that reason individuals had little by means of individuality.11 The fact that each person was a particular someone no doubt mattered enormously to him or to her but it had little social significance. 60 ENTREPRENEURSHIP Given this outlook there were definite limits to what most people could do to improve their lot. Like the characters in a fairy tale, the best they could hope for was to find a treasure or to be married off to a handsome prince. Barring such unlikely changes in fortune they were bound to die in the same social position into which they had been born. In addition, the collective action required for entrepreneurial projects to be successful was exceedingly difficult to organise. Since people were poor and illiterate, and often lacked effective means of communicating with each other, it was difficult to get them to unite behind common goals. This was particularly the case for projects that went against the interests of the elites. To alter the established order of things was to invite chaos, and anyone who tried was regarded as a troublemaker and dealt with as such. The social ideal was the contemplative life, the vita contemplativa, of the monastic. There were also a number of more specific hurdles to overcome. As tales of the fabulous wealth of particular individuals make clear, the hoarding of money was not an unknown activity in the Middle Ages. And yet there were not all that many opportunities to make money and greed was, officially at least, condemned as a sin. In general what mattered for most people was not profit maximisation but instead the ability to provide for themselves and their dependants.12 For society as a whole what mattered most was fairness. Since there was little by means of economic growth—at least little economic growth perceptible to the naked eye—economics was thought of as a zero-sum game where one person’s gain necessarily meant another person’s loss. Hence the easily drawn analogy between profit-makers and thieves. Since the economic pie was of a given size, you could increase your slice only at someone else’s expense. This outlook explains such medieval oddities as the doctrine of the just price and the prohibition on usury. According to the idea of the justum pretium, prices should be dictated by moral considerations rather than by the interplay of supply and demand.13 Just prices were customary prices universally agreed on, and to charge more than this was to take advantage of arbitrary shortages for personal gain. To lend money against interest was also to benefit from someone else’s predicament and was as such condemned in the strongest possible terms by the Church.14 In practice there were always numerous ways around such prohibitions —and the Church itself was often the first to spot them—yet even when the obstacles were avoided they served to increase the cost of capital and to promote corruption and fraud.15 In the Middle Ages money had no temporal dimension and as a result long-term investments were difficult to justify. With the emergence of towns from the eleventh century onward, new centres of economic activity were created yet this did not automatically translate into a new spirit of entrepreneurship. The medieval economy, also in the town, continued to be heavily regulated. Craftsmen and merchants had to belong to guilds before they could practise their trades, and guilds controlled working hours, prices and wages, as well as the number of workers and tools that could be employed in each workshop.16 The effect of these regulations was to restrict ORIGINS OF THE ENTREPRENEURIAL OUTLOOK 61 entry into each trade and thereby to reduce competition. Although the negative economic impact of the guilds has been exaggerated, they did little to spot changes in consumer demand. The guilds reduced risks and protected their members but they also penalised anyone ready to embark on new enterprises. To later advocates of free markets such as Adam Smith, the guilds were the very symbol of the anti-entrepreneurial ethos of the age.17 Marginal activities The best counter-examples to this picture of relative stagnation are provided by people who were active on the margins of European society. In general terms this is easy to explain. It has long been noticed that entrepreneurs often occupy a marginal position in relation to the mainstream of the society in which they live.18 Often they have one foot in another culture, another set of conventions or another social class, and this in the end is how they get their new ideas. In the Middle Ages a number of particular advantages were added to these general ones. On the margins of European society the influence of the Church was usually more diluted and the guilds were weaker or non-existent. This was also where the best business opportunities presented themselves. By acting as middlemen between the centre of Europe and its periphery, new groups of entrepreneurs emerged who both accomplished great feats and made plenty of money. To be more precise, it may be possible to talk about both a social and a geographical margin to European society. On the social margin were people who for one reason or another failed to fit into the structure of the medieval order. These landless farmhands, members of the urban proletariat, or the minor sons of impoverished nobility were more easily recruited for collective enterprises. One example were the weavers and dyers working in the cloth factories of Flanders and northern France who were the first to join the new millenarian sects that sprung up from the twelfth century onward.19 Another example were the superfluous members of the elite who joined the great religious reform movements started by Saints Francis and Dominic. A third example were the urban poor who in large numbers joined the Crusades.20 The social margin was also occupied for example by the Jews.21 Jews were not full citizens anywhere in Europe but neither were they full aliens, and while they never enjoyed the protection of the Church they also did not have to follow its prohibitions. This ambiguous position opened up a host of opportunities. Jews mediated between people separated by wars, creeds, allegiances and levels of culture. They also engaged in activities regarded as dishonourable by mainstream society; they were tanners, tax collectors, doctors and money lenders. While the section of the Old Testament that outlawed usury applied equally between Jews, it did allow loans from Jews to Gentiles.22 But there was also a geographical margin to European society where the continent shaded over into non-European lands. One such region was the Baltic 62 ENTREPRENEURSHIP 8 The age of the demiurge The outcome of all this mythologising was the modern conception of the entrepreneur. In contemporary society where change is ever-present, the entrepreneur is the hero. The entrepreneur is the maker of rules and the breaker of rules; it is he or she or it who destroys the old and creates the new thereby making the future possible.1 As we have seen, in previous times such extraordinary qualities were more often associated with gods or demiurges than with human beings. Today, however, divine forces are no longer actively intervening into the world and human beings are left to their own devices. Today society is understood as an artefact that human beings have made and which they for that reason are uniquely qualified to change.2 Considering ourselves independent of the social, cultural and natural contexts that determine us, we take ourselves to be free to settle our own fates. No longer acted upon, human beings become actors who can change the world in accordance with their own wishes. Abandoned by the gods, we are now our own star demons and our own demiurges. Yet all such talk of heroism and entrepreneurial dare-devilry is of course only so much hyperbole. In practice entrepreneurs are never as powerful as they think they are. When acting alone there is next to nothing that even the most entrepreneurial among us can do to have an impact on the world. The question is thus how to account for this discrepancy between the belief in our omnipotence and the reality of our next-to complete impotence. The mystery is how we can be so oblivious to the truth about ourselves. The answer, in short, is that individuals can sustain the entrepreneurial illusion since they have access to social resources of various kinds. First of all they have numerous informal ways of collaborating with others, thus making sure that the skills and industry of one person are added to those of another. Second, there is a plethora of institutions that provide the entrepreneurs with all the resources they require. What these institutions are and how they operate are the topics of the next chapter. First, however, the modern notion of entrepreneurship will be described in some more detail. Robinsonian entrepreneurs A good way to learn more about contemporary entrepreneurs is to read any of the many novels that have been written about them.3 The very emergence of the novel as a literary genre is itself an indication that a shift that has taken place in how human beings think of themselves. The novel is a genre written for and about modern individuals. Compared to medieval genres such as the epic or the saga, novels are not about heroes, cartoon characters or typecasts, but instead about ordinary men and women. As ordinary people they have ordinary names and think and do ordinary things; they live in actual places and are born and die in historical time. The protagonists of the novel are in charge of their destinies not just fulfilling their predetermined fates, and they act in their interests rather than out of social obligation. Compared to the literary genres of the Renaissance there is nothing theatrical about the characters of a novel. We identify with them not because they are largerthan-life but on the contrary because they are exactly life-sized. If they are actors they are performing not on the ‘stage of the world,’ but instead above all on a stage constituted by their own consciousness. As readers we are privy to their inner-most thoughts—they are indecisive, of mixed emotions, torn between conflicting goals—and they change and develop in response to their experiences. In all these respects, the protagonists of the novel resemble the readers for whom they were created. Daniel Defoe’s The Life and Adventures of Robinson Crusoe from 1719 is a good example of the new genre, in fact it is sometimes considered as the first novel in the English language. As every reader of Defoe’s book knows, Robinson left his family in the north of England to look for adventures and riches in foreign lands. He made a good start on a plantation in Brazil but soon his quest for higher profits took him on a voyage to Africa to buy slaves. A storm and a shipwreck later he landed on the island which was to be his home for the following 28 years. Completely alone and initially without water, food or shelter, Robinson should have faced real danger, yet as it turned out both his physical and social needs were surprisingly easy to satisfy. He found plentiful supplies on the wrecked ship and for company he had his animals and his Bible. As he discovered, [t]his made my life better than sociable for when I began to regret the want of conversation, I would ask my self whether thus conversing mutually with my own thoughts, and, as I hope I may say, with even God Himself by ejaculations, was not better than the utmost enjoyment of humane society in the world.4 Robinson’s self-sufficiency is only the most extreme form of what has become the social ideal of the modern age. Like Robinson we are supposed to live withdrawn from the world and to manage without the support of others.5 Today 70 ENTREPRENEURSHIP we are no longer subject to the all-too-predictable rules of the medieval world, nor to the all-too-unpredictable verdicts of fickle Renaissance audiences. Not determined by others, human beings are for the first time free to determine themselves.6 Man is a subject only since he is subject to his own judgement and his own independent will. Well, thus far the rhetoric. This conception of the individual has obvious implications for the work of entrepreneurs.7 Defined as the masters of their own fates there is suddenly nothing we cannot do; no longer determined by our environments we are free to follow our own inclinations. And Robinson Crusoe is of course the relevant role model. As Defoe makes clear, Robinson saw his insular predicament not as a threat but rather as a challenge. As soon as the initial drama of the shipwreck was over, the book turns into a long catalogue of the various entrepreneurial projects he embarks on. Robinson built a home, storage rooms and a summer cottage; he planted corn and rice, caught and domesticated goats, dried grapes and baked bread. Where Defoe obtained the inspiration for his creation is no mystery. At the turn of the eighteenth century England was going through a period of intense entrepreneurial activity.8 This was when the great overseas trading companies, the Bank of England, and a long-range of joint-stock companies were founded, and when many more or less hair-brained schemes sought financial backing at the London stock market.9 Defoe himself was one of these entrepreneurs, and at various times he had made a living as a hosier, a merchant trading with Portugal and Spain, and as a tile manufacturer.10 At the time entrepreneurs were known as ‘projectors,’ and as Defoe pointed out, he was himself living in ‘the Projecting Age.’11 Not all projectors were necessarily such pleasant characters. A mere projector, then, is a contemptible thing, driven by his own desperate fortune to such a strait that he must be delivered by a miracle or starve; and when he has beat his brains for some such miracle in vain, he finds no remedy but to paint up some bauble or other, as players make puppets talk big, to show like a strange thing, and then cry it up for a new invention; gets a patent for it, divides it into shares, and they must be sold. Ways as means are not wanting to swell the new whim to a vast magnitude.12 But there were also, Defoe makes clear, projectors of a far more appealing disposition: the honest projector is he who, having by fair and plain principles of sense, honesty, and ingenuity brought any contrivance to a suitable perfection, makes out what he pretends to, picks nobody’s pocket, puts his project into execution, and contents himself with the real produce as the profits of his invention.13 THE AGE OF THE DEMIURGE 71 Defoe himself never struck it rich on any of his projects. His business acumen never rivalled his ability to turn a phrase. Exploiting his comparative advantages he instead wrote profusely—altogether some 500 works—and most of the titles are not novels at all but rather tracts on political and economic matters. In one of the pamphlets, An Essay upon Projects, 1697, Defoe praised the work of his fellow projectors and suggested various ways in which their activities could be better promoted. What motivated these projectors was by now quite clear. What the projectors wanted above all was money, and by Defoe’s time money-making was a respected activity which required no additional justification.14 The search for profits had also been the initial inspiration for Robinson Crusoe’s travels. Once alone on his island, however, money suddenly comes to mean nothing and it is instead the quest for dignity that occupies most of his time. By recreating the trappings of civilisation he turned the alien, tropical, environment into a setting fit for an Englishman; through ceaseless activity he ensured that he controlled nature rather than nature controlling him. For these purposes it was actually very fortunate that he was alone. As Defoe points out, Robinson was not only legislator and judge but also king in his own kingdom; ‘[t]here were no rivals, I had no competitor, none to dispute sovereignty or command with me.’15 This was the perfect political community in that it allowed its single inhabitant the complete freedom to organise life entirely in accordance with his own wishes.16 Just like the alternative world once visited by More’s Hythlodæus, Crusoe’s island is a utopia. Robinson was not the last person to stand up for these values. Rather all modern political entrepreneurship has taken place under the same banners. For the last 250 years, politics has more than anything been a matter of defending the dignity and sovereignty of modern individuals. As political pamphleteers constantly have reiterated, it is dignity that is undermined by the lack of political rights, by dehumanising working conditions or by inequalities between races and genders. And it is sovereignty that is denied whenever democratic institutions are suspended or whenever a country is occupied by foreigners. The most successful political entrepreneurs—from the French Revolutionaries to Mahatma Gandhi and Nelson Mandela—have all rallied people in support of such causes. The question is only how dignity and sovereignty can be upheld outside of the utopian location of a Robinsonian island. The ideal of dignity requires a political system where every person can exercise sovereign over him or herself, yet there are obvious problems how to organise this in a setting where people are forced to live together with others. This is the central puzzle of all modern political theory. Reading Defoe, Jean-Jacques Rousseau suggested one set of solutions to the problem; reading Rousseau’s reading of Defoe, Immanuel Kant suggested another solution, and assorted philosophers have discussed the same problem ever since.17 What is required, but so devilishly difficult to organise, is a Robinsonism suited for a social setting. 72 ENTREPRENEURSHIP Problems of collective action But as we said, the story of Robinson is a modern myth and so are the stories told about modern entrepreneurs. As individuals we are never as autonomous as we think we are and as entrepreneurs we are never as powerful. The fact that Robinson Crusoe is a fictional character is not a coincidence after all. In the end only a fictional character—someone who does not exist—can fully live up to the conceptions that people in modern society are supposed to have of themselves.18 What successful entrepreneurship requires is not an individual but instead a collective effort. It is only by joining forces together with others that we actually can accomplish what we set out to do. Yet in modern society collective efforts have become exceedingly difficult to organise. The reason is that Robinsonian individuals are supposed to think only of their own interests and to care little for the collective interests of the groups to which they ostensibly belong.19 In fact, Robinsonians are unlikely to volunteer their contributions even in cases where they stand to gain from the outcome which the collective action would produce. As long as everybody is in a position to enjoy the results regardless of their efforts, they will always be better off free-riding on the contributions of others. When everyone reasons in this manner, collective actions will not take place. But this is itself a puzzling conclusion. We may indeed wonder why it is that the myth of the modern entrepreneur has become ever more pervasive in contemporary society while the collective actions which alone could lend credibility to this myth have become ever more difficult to organise. Perversely, the demiurge seems to be emasculated by his own hubris. And yet it is obvious that collective action problems can be and continuously are being solved. Look at the way in which an average entrepreneur spends his or her average working day. Most of it is taken up by tasks such as the managing of staff, the negotiating of contracts or the persuading of political or religious supporters. That is, much of what entrepreneurs actually do is to prepare the ground for and to organise collective actions. Similarly, looking at contemporary society what we see are not all-powerful and self-sufficient individuals but instead a plethora of organisations, associations, clubs, fraternities, federations, unions and movements of all kinds. In practice collective action problems are solved in either of three ways: through legal contracts, through side payments or through the establishment of trust.20 Legal contracts allow you to force others to cooperate with you or to suffer the legal consequences; side payments allow you to bundle the public good of cooperation with a private good which only can be consumed by those who chose to act collectively; trust makes it possible to convince others that you will help them if only they first help you. Of these three trust is probably, historically speaking, the most important mechanism, and yet, as we know, trust is often exceedingly difficult to establish. This is the case in all societies but the problems are exacerbated in a situation where most social interaction takes place THE AGE OF THE DEMIURGE 73 between self-sufficient strangers who never know when they next will meet. As Edmund Burke complained in 1770: Where men are not acquainted with each other’s principles nor experienced in each other’s talents,…no personal confidence, no friendship, no common interest, subsisting among them; it is evidently impossible that they can act a publick part with uniformity, perseverance, or efficacy.21 Somehow the trust which fails to materialise by itself must be artificially created. A way to do this is to force people to interact with one another on a continuous basis. Having met once or twice, the idea is to make them expect another meeting and to consider cooperative strategies which can benefit them all in the long run. In this way a network of social relations will be superimposed on the barebones logic of the rational interaction. The more knowledge the potential cooperators have of each other, the easier it is to decide whether to collaborate or not. The most obvious setting in which this problem is solved is the family. Since family members live together and interact on a daily basis, they will, whether they like it or not, come to know one another very well indeed. Exit from the family is impossible during childhood but even after that it is often surprisingly difficult to fully achieve. Since family members interact repeatedly over time, they have an incentive to behave fairly towards each other, and since they interact closely, it is easy to detect and punish free-riders.22 As a result transaction costs are considerably lower within the family than in relation with strangers, making the family into a powerful entrepreneurial unit. Not surprisingly the first businesses were usually family-run.23 The fledging banking industry of the Renaissance is the most striking example. At a time when credit was dear or simply unavailable, and when there was little by means of legal protection against highway robbers—or for that matter against the arbitrary actions of feudal lords—family members were often the only people who could be relied on. The first Italian banks were all owned and operated by families rather than by individuals: the Scoti of Piacenza, the Salimbene, Buonsignori and Gallerani of Sienna, the Frescobaldi, Pucci, Peruzzi, Bardi and Medici of Florence.24 But family enterprises have continued to be important into our own era.25 As the aspiring entrepreneurs of the Industrial Revolution quickly realised, children and wives provide a good source of free labour, and the hope of seeing the business flourish usually made family members acquiesce in the most blatant forms of exploitation. Already by the end of the sixteenth century, however, much business in continental Europe took place on the basis of commissions.26 A business based on commissioned agents is in many ways preferable to a business based on family members since agents allow far more flexibility in adjusting to changes in market conditions and make it possible to form much larger organisational units. The only problem is how trust can be created. A thriving business requires 74 ENTREPRENEURSHIP loyalty, scrupulousness and respect for instructions. In the early modern era such values were often easiest to uphold among members of the same ethnic community. Hence the thriving businesses made up entirely of Sephardic Jews, of Italian ‘Lombards’ or Armenians.27 But religious organisations such as the Knights Templars could fill the same purpose. Exploiting trans-European connections originally formed in the Crusades in the twelfth century, this secret brotherhood served as bankers among others to the king of England.28 The first public corporations, the join-stock companies, founded in the seventeenth century brought people together on the basis of shared economic self-interest rather than family connections or bonds of ethnicity or religion. The Dutch VOC, the Verenigde Oostindische Compagnie, started in 1598 is perhaps the most celebrated example.29 This corporate setting is the world described by Defoe and the place where we would expect to find his Robinsonian projectors. And yet it is striking how also these more impersonal business ventures tried their best to mimic the trust-inducing practices of family firms and brotherhoods. From the Latin corpus, meaning ‘body,’ a corporation was a body of which investors and employees were the constituent parts; or, changing the metaphor, it was a ‘company,’ from the Latin cumpanis, denoting ‘someone with whom one shares bread.’30 In either case, however, it was the responsibility of the enterprise to organise feasts throughout the year and to provide its stakeholders with everything from emergency loans to help with weddings and funeral expenses. The first employees were often considered as ‘brothers’ and their wives as ‘sisters,’ and the company never hesitated to regulate their personal conduct also outside of the workplace.31 Often clerical staff would live with the merchants for whom they worked, eat at their table and join in the family prayers. The alternative strategies for inducing cooperative behaviour among selfregarding individualists—legal contracts and side payments—are more fully compatible with Robinsonian ideals. Parties to a contract, or people who cooperate only in order to reap private benefits, need far less by means of social glue to keep them together. Since Defoe’s time both mechanisms have become more important as the fiction of the self-sufficient individual has come to be more widely believed. As a result there is less emphasis on trust-inducing activities today than there was in the early modern era.32 And yet it is clear that personal relationships still matter enormously to the success of our projects, and that also contemporary projectors spend much of their days ‘networking’ and ‘teambuilding.’ Relying only on contracts and on lawyers to keep our collective actions going is often prohibitively cumbersome and expensive. The new consumerism The illusive nature of the self-sufficiency of Robinsonian individuals is never better illustrated than through the new consumerism that appeared in the course of the eighteenth century. The more individuals came to think of themselves as self-sufficient and free, the more they turned themselves into slaves of fashion.33 THE AGE OF THE DEMIURGE 75 They increasingly began buying things not because they actually needed them but because others already had them and because it was the fashionable thing to do. Above we saw how Renaissance elites obsessively sought to impress each other and their social inferiors by surrounding themselves with extraordinary objects of all kinds. By the eighteenth century such ostentation had been universalised, democratised, and turned into a requirement for anyone aspiring to social status. It is surprising how little time economists spend on questions of consumption; while they have much to say about the origins of supply, they have next to nothing to say about the origins of demand.34 The discussions of the sources of economic growth is a case in point. As economists all firmly believe, economic growth must be explained in terms of supply-side factors. The origins of the Industrial Revolution is a case in point.35 Factory-based industrial production took off, they will say, above all as a result of a series of remarkable technological inventions of which steam engines and spinning machines are the most celebrated. Making labour more productive and goods far cheaper, the inventions opened up new opportunities for entrepreneurs. This, according to the economists, is how modern economic growth began, and markets have expanded ever since. There are, however, some historical facts that go against such an economistic interpretation. For one thing, consumption seems to have risen well before most, or even all, of the celebrated technological inventions were made. This at least was the case in England, Holland and northern France.36 Here there were welldeveloped markets in prestige items for the elite already in the sixteenth century and for ordinary people there were burgeoning mass markets in everything from knitted stockings, felt hats and cooking pots to glass bottles and pewter ware.37 By the early eighteenth century large swathes of the middle class, and even many farmers and labourers, began emulating the consumption habits of the elite, and by the end of the century everyone seemed to have followed the same fashions. Before long consumption had become, contemporary moralists complained, ‘an epidemical madness’ and a ‘universal contagion.’38 The problem for economic theorising is that since this rise in demand took off well before the inventions associated with Industrial Revolution the inventions cannot explain the rise in demand. Instead, as many cultural historians have argued, the causal relationship should be turned on its head.39 The Industrial Revolution was demand rather than supply-driven. It was demand not supply which expanded the markets, triggered technological inventions and produced economic growth. Reading contemporary sources there is certainly plenty of views in support of this interpretation. ‘Fashion,’ as the English projector Richard Barbon pointed out in his A Discourse on Trade, 1690, ‘occasions the Expence of Cloaths before the Old ones are worn out.’40 Or, in the doggerel of Bernard de Mandeville’s Fable of the Bees, 1714: Luxury employ’d a Million of the Poor 76 ENTREPRENEURSHIP And odious Price a Million More. Envy it self, and Vanity Were Ministers of Industry; Their darling Folly, Fickleness In Diet, Furniture and Dress. That strange ridic’lous Vice, was made The Very Wheel, that turn’d the Trade /// Thus Vice nursed Ingenuity, Which join’d with Time, and Industry Had carry’d Life’s Conveniences, Its real Pleasures, Comforts, Ease, To such a Height, the very Poor Lived better than the Rich before.41 At the time, Mandeville’s shameless apologia for self-indulgence was widely regarded as scandalous but later in the century his views had become firmly established as commonsensical.42 In 1776 Adam Smith stated categorically that ‘[c]onsumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.’43 This maxim, Smith concluded, ‘is so perfectly self-evident, that it would be absurd to attempt to prove it.’ There are, however, problems also with this account. Above all it fails to explain where the new demand originally originated. It is not clear why people suddenly started asking for these fashionable items and it is not clear how they found the money to pay for them. In fact, looking at incomes for the period concerned it seems real wages may have been lower in the early eighteenth century than they had been in the fifteenth century, and although incomes subsequently improved somewhat the recovery was cut short after 1750 by rampant inflation.44 And the intermediate 50 per cent of the population—that ‘middling sort’ which was supposed to constitute the vanguard of the consumer revolution —seems to have been particularly badly hurt. Combining these conflicting facts, the result is puzzling: there was indeed a consumer boom but it is unclear where the increased purchasing power came from.45 The answer is that although individual per capita incomes hardly improved in the course of the eighteenth century, household incomes decidedly did.46 This happened above all as families mobilised a number of previously under- or nonutilised resources. And just as the cultural historians have argued, this happened well before the Industrial Revolution itself and above all in western and northern Europe. Here an ‘industrious revolution’ preceded the industrial.47 People started working far harder—longer hours in a day and many more days in a year —and they also brought new land under cultivation.48 As a result English farmers could harvest up to four times as much grain as their medieval predecessors had done with roughly the same input of capital and technology. THE AGE OF THE DEMIURGE 77 Women and children too increasingly began working for a wage. The flourishing Verlagsverein or ‘putting-out system’, whereby farming families completed assorted piece-work for itinerant entrepreneurs, made sure that all family members always had something to do and stayed productively employed.49 As a result of this new-found industriousness, the supply of labour increased dramatically and the aggregate income of families rose. The question is only what the families intended to do with the money. Before the modern era, as we pointed out above, the predominant rule of the household had been to make sure that everyone’s needs were adequately met.50 The aim was to assure a certain target income but once this income was reached there was no reason to go on working. Thus if wages went up, the target could be reached sooner and as a result people would work fewer hours than before. Although this may seem strange and irrational to us, the opposite is the case. It is perfectly rational to stop working when one has enough and quite perverse to go on working beyond this point.51 We are the ones whose behaviour is in need of an explanation. Somewhere along the line something strange seems to have happened to our schedule of preferences. For economic markets to go on expanding indefinitely, demands must be limitless; enough can no longer be enough. In medieval society intemperance of this kind had been universally condemned, but in the course of the seventeenth century the same attitude came to characterise the archetype of a new human being. Man, as Thomas Hobbes explained, has a ‘perpetuall and restlesse desire’ which ‘ceaseth onely in Death.’52 Obviously, if desires are insatiable, there are endless opportunities for markets to expand and endless opportunities for entrepreneurs to make money. The ‘spur to Trade, or rather to Industry and Ingenuity,’ wrote the English Puritan Dudley North in his Discourses upon Trade, 1691, ‘is the exorbitant Appetites of Men, which they will take pains to gratifie, and so be disposed to work, when nothing else will incline them to it.’53 For this new archetype to become firmly established, a shift was required in the definition of human needs. The needs officially acknowledged in the premodern era were above all physical ones.54 Yet there are necessarily limits to physical needs since human beings only require so much food, drink, shelter and rest. From the latter part of the seventeenth century, however, the needs that really mattered were social ones. The consumption through which social needs are satisfied is a way of identifying ourselves to others and comparing ourselves with them. What matters is not how much we consume, but rather how much we consume in relation to others.55 As long as others have more and better items than we have, we are unlikely to ever be completely satisfied. For this reason social needs know no bounds. What we find is consequently that the history of the development of consumption runs in close parallel with the history of the concept of the person as it developed from the Renaissance onward. The aggressive self-promotion of Renaissance elites corresponded perfectly to the aggressive nature of their demand for goods and services. Consumption was more than anything a vehicle 78 ENTREPRENEURSHIP potential for high profits, the risks involved in such enterprises made it difficult for entrepreneurs to raise capital. The solution, first institutionalised by the Venetians in the late Middle Ages, was to allow investors to buy parts of a cargo or parts of a ship, but before long the merchant companies themselves became objects of joint investment.29 From the eighteenth century onward the corporate form spread to other risky and financially demanding sectors of the economy such as canal building, breweries or mining. Risks were further reduced in the nineteenth century through the introduction of limited liability whereby investors would stand to lose no more than they originally had invested in the business. As always, the more the risks were restricted, the more capital was ventured. A more direct way of dealing with risks, already implied by these solutions, is insurance.30 Instead of asking all partners to an enterprise to share the risks, they can be sold to a company that specialises in managing them. Shipping was the first field where this institution developed, again because so much money was at stake and because the risks were high. The Genovese operated a system of maritime insurance already in the twelfth century and an ordinance issued in 1435 by the magistrates of Barcelona regulated the sale of similar policies.31 The earliest Italian law on the subject dates from 1523. At the Beurs in Amsterdam insurance rates were publicly posted for a large number of different destinations in Europe and beyond, and in London, Edward Lloyd’s coffee-house had their own tariffs.32 After the great fire of London in 1666, fire insurance became popular with investors and in 1696 the first life insurance policies were sold.33 Buying a risk may perhaps itself be considered as a rather risk-filled venture, but this was less and less the case. Modern insurance companies pooled risks just as self-help societies always had done but in addition they also calculated them with unprecedented precision. Risks are necessarily difficult for individuals to assess, and this is particularly the case when it comes to risks associated with events that happen only rarely such as fires, shipwrecks or deaths. As it was discovered in the latter part of the seventeenth century, however, such calculations are easily undertaken by institutions. Institutions can assemble far more statistical data and draw conclusions which, although never true in individual cases, nevertheless are true in the aggregate. While no one knows at what age they will die, insurance companies know exactly at what age a person with a certain income, medical history and lifestyle is most likely to do so. The first such calculations were compiled by the English projector John Graunt in his Observations on the Bills of Mortality, 1662, and in 1671 the statesman Johann de Witt used actuary tables to construct the annuity schemes used to raise money for the Dutch state.34 The most accurate calculations, however, were carried out in Sweden in the course of the eighteenth century, mainly as a result of the excellent statistical records maintained by the official, state-run, church.35 While these insurance schemes dealt with natural disasters and cases of forces majeurs, there still remained plenty of purely commercial risks that could hamper investments. A way of dealing with these was to buy patents and monopolies. Today patents and monopolies are talked about in quite separate ENTREPRENEURSHIP 85 terms. Patents are generally regarded as beneficial to enterprise since they reward inventors and allow entrepreneurs temporary protection while developing their products.36 Monopolies, on the other hand, are considered as bad for enterprise since they allow companies to ignore market forces. In early modern Europe, however, patents and monopolies were initially taken as the same thing and both were above all ways for the state to raise money.37 The attraction for the king was that he by selling monopolies could bypass the parliament and raise revenue quickly to fund for example the participation in a war. From the point of view of the person buying the patent the attraction was that commercial risks could be reduced.38 Buying a monopoly he would buy himself the assurance that there were no competitors in a certain market Although the consequences for consumers no doubt were negative, the existence of monopolies made it possible for entrepreneurs to undertake projects which otherwise would have been difficult to undertake. This was, for example, the case with the high-risk business of overseas trade. All the European East India companies—including the VOC—operated under official charters which guaranteed them a captive domestic market in exotic produce. This, in the end, was how the European commercial empires came to be created. Monopolies, one could say, were market expanding even if they meant that resources were less than perfectly efficiently allocated.39 In the end, however, they did not escape the biting critique of the proponents of market forces. ‘Such exclusive companies,’ said Adam Smith, are nuisances in every respect; always more or less inconvenient to the countries in which they are established, and destructive to those which have the misfortune to fall under their government.40 The idea of the patent faired much better. As we have come to use the term, a patent covers not the production or sale of a commodity but instead to the exclusive use of a certain technology.41 In this case the trade-off between market creation and efficient resource allocation is firmly resolved in favour of the former. Few complain when inventors get what is regarded as their just desert and society as a whole is assumed to profit by providing entrepreneurs with attractive incentives. In Venice individual inventors were granted such privilegi already in the fourteenth century and in 1474 the Senate passed a general law protecting those who had registered ‘any new and ingenious device, not previously made within our jurisdiction.’42 Later this protection was extended also to copyrights on printed material. Similar laws were set up in the Dutch Republic and, with the Statute of Monopolies of 1624, in England. In France the connection between patents and monopolies remained closer and inventors often obtained not only exclusive commercial rights but also support in starting a business and perhaps a state pension.43 An in many ways easier solution is to let the market deal with the problem. You can deal with risks, that is, not only by selling them to a specialised 86 INSTITUTIONS THAT GET THINGS DONE institution such as an insurance company but also to whoever cares to purchase them. Again it seems unlikely that anyone willingly would gamble in this fashion and yet this clearly depends on the returns a gamble may bring. Whenever there are risks there are profits to be made and the temptation of making a profit will always attract speculators as long as the price is right.44 While some people are risk-adverse by nature or by professional training, others are more risktolerant, even risk-inviting. The trick is to somehow make it possible for the nongamblers to sell the risks to the gamblers. A futures market is a solution to this problem.45 In a futures market the person who wants to avoid risks can buy the right to sell a product in the future at a price decided on in the present. The person who sells this right to buy will then take all the risk and all the potential profits derived from any changes in the price. In contemporary markets futures are bought and sold in the form of so called ‘derivatives’ which have become financial products of great sophistication and complexity.46 And yet the idea itself is far older. Already in the 1550s Dutch merchants traded in future deliveries of Baltic grain and North Sea herring, and at the Amsterdam Beurs future contracts were concluded for a long range of products including pepper, coffee, tulips, cacao, saltpetre, brandy, whale oil and whale bones.47 Clearly the people who bought these contracts never had the intention of actually taking possession of the products. All they cared about was the speculative gain derived from changes in the value of the papers themselves. Financial support Above we briefly discussed the creation of markets in land and labour, but in addition entrepreneurs also need access to money. Money is required for commercial or industrial ventures but equally for political or religious ones, and in practice fund-raising often takes up more of the entrepreneur’s time than the entrepreneurial activities themselves. The question is only where one can get one’s hands on the stuff. If we are lucky we may perhaps have the money ourselves, and many entrepreneurial projects have indeed been self-financed.48 If we do not have it, however, we have a problem, but in modern societies this problem is addressed by financial institutions. We go to the institution and ask them to support our project and if we qualify the money will be given to us. Support is given according to rules and it does not rely on the magnanimity of individuals— this, at least, is the theory.49 At the same time there are many different kinds of financial institutions and they operate in rather different ways, giving money to different kinds of projects and on rather different terms. The spread of the money economy from the twelfth century onwards led more or less spontaneously to the creation of the first banks.50 There were bigtime merchants who made exorbitant profits which they needed to recycle; there were money-changers who helped out with foreign payments; there were goldsmiths who took people’s metals for safekeeping in return for receipts; and together they developed the various functions of a modern bank: loans, transfers, deposits and ENTREPRENEURSHIP 87 credit creation. A particularly important instrument was the bill of exchange, basically a check which allowed entrepreneurs to engage in long-distance trade without any of the risks or hassle of actually paying in specie.51 Italian bankers were active at the fairs in Champagne and Lyon in the twelfth and thirteenth centuries, and as they spread their off-spring around the Continent they established branch offices in places like Bruges, Antwerp and Amsterdam. In London the Italians were known as ‘Lombards’ and Lombard Street was for a long time the centre of the financial district of the city.52 The first public bank not connected to a particular family was the Wisselbank, the Bank of Amsterdam, established in 1609.53 A great concern of its founders was to replace the multitude of debased coins issued by assorted rulers with a common currency in which everyone had confidence and which merchants could use in expanding their trade. But the Wisselbank also attracted deposits and before long merchants across Europe opened their own accounts. Since figures now could be moved between the columns of the same accounting books, transfers and payments were easy to effectuate and virtually costless. In 1683 the bank began to accept deposits in silver and gold, and the receipts the depositors received in return were readily transferable and tradable as money.54 Another Dutch institutional invention which was widely copied across Europe was the Beurs built in 1611.55 As we briefly discussed above, corporations had already for a long time financed themselves by issuing stocks. What was new, however, was the creation of a market where these papers could be traded. At the Beurs shares were bought and sold by people less interested in the activities of the company and the profits they could bring than in the movements of the share price. The existence of this secondary market made investments more liquid and this provided entrepreneurs with better terms; people were more likely to buy shares since they knew they easily could dispose of them. In addition, the Beurs was a clearing house for everything from government bonds, insurance and foreign exchange to freight services and assorted commodities. And while many of these services had been available also at the medieval fairs, the Beurs had the advantage of continuously being in session. It was a ‘one-stop-shop’ for entrepreneurs, and throughout the seventeenth century it was the nerve centre of the entire world economy. At the end of the seventeenth century all these institutions—collectively referred to as ‘Dutch finance’—were imported into England and the result has gone down as ‘the financial revolution.’56 In 1694 the Bank of England was established and in the following year the Royal Exchange, but stocks were also traded at Garraway’s and Jonathan’s coffee-houses on Exchange Lane in the centre of the city.57 While the Bank of England lent money to the government and pursued a conservative policy, institutions such as the Sword Bank lent money liberally and to the broader masses. This combination of easy money and the prospect of speculative gain led to a number of financial upheavals of which the South-Sea Bubble in the summer of 1720 is the most notorious. ‘It seemed at that time as if the whole nation had turned stock-jobbers,’ as Charles Mackay 88 INSTITUTIONS THAT GET THINGS DONE described the scene in his Extraordinary Popular Delusions and the Madness of Crowds, 1841. ‘Exchange Alley was every day blocked up by crowds, and Cornhill was impassable for the number of carriages,’ innumerable joint-stock companies started up every where…. Some of them lasted for a week or a fortnight, and were no more heard of, while others could not even live out that short span of existence. Every evening produced new schemes, and every morning new projects.58 Even though this particular bubble was rather brusquely deflated, the universalisation of credit in the eighteenth century continued to fuel demand for stocks as well as for consumer items. In the end it was liberal credit and not just the fact that people worked harder which boosted the fashion industry at the end of the eighteenth century. The universalisation of credit had far-reaching social consequences.59 When everyone was given access to credit it was suddenly possible for people without any social standing to borrow money, to invest it, and in this way to rise in the world. As one would expect, traditional elites reacted strongly to this possibility, even if the critique largely was phrased in terms of moral admonitions.60 The fear was that people would start living on borrowed money; spend it extravagantly—especially when egged on by their wives—or engage in overly risky business ventures. But as its defenders strongly insisted, credit did not encourage recklessness at all but rather frugality and hard work; once gained credit had to be maintained and if at all possible augmented. Credit, as Defoe pointed out, ‘will keep Company with none but the Industrious, the Honest, the Laborious, and such, whose Genius, the Bent of their Lives, tends to Maintain her good Opinion.’61 Yet this did not mean that all obstacles were removed. Even if credit had become more common it was not as widely available as some would have wished. Poor but brilliant entrepreneurs, as Defoe bitterly pointed out, were still given a hard time by the bankers.62 And credit could also be restricted by state regulation, such as the time-honoured rulers which determined ceilings on interest rates. Artificially restricting rates, as the British government did until the early nineteenth century, was as Jeremy Bentham explained in his pamphlet Defence of Usury, 1787, a great obstacle to projectors. Truly entrepreneurial projects can bring great rewards only at the cost of great risks, he argued, and for that reason they require high interest rates if they are to find a financial backer. If rates are restricted, many projects will never get funded: it condemns as rash and ill-grounded, all those projects by which our species have been successively advanced from that state in which acorns were their food, and raw hides their cloathing, to the state in which it stands at present: for think, Sir, let me beg of you, whether whatever is now ENTREPRENEURSHIP 89 the routine of trade was not, at its commencement, project? whether whatever is now establishment, was not, at one time, innovation?63 An entrepreneur of particular importance is the state. The state famously lays claims to a monopoly on the legitimate use of violence, and as such it potentially wields an awesome power. The machinery of the state can be used for guaranteeing the security of the citizens, their right to independence and selfdetermination, or for any of a long range of assorted social goals.64 Naturally all of this costs money and the question of how to finance the activities of the state has always been a prominent political concern. Taxes are the easiest answer, but taxes take time to raise—and are for that reason difficult to rely on in an emergency—and they are often highly unpopular. An alternative is to borrow money, but potential creditors are often reluctant to lend to the state since, as a sovereign power, it can cancel its debts at its own convenience.65 New financial institutions addressed this issue as well The creation of a central bank put public finances on a new footing. The Swedish Riksbank was founded in 1656, the Bank of England as we said in 1694, and the various Dutch cities all established their own banks in the course of the seventeenth century.66 The basic idea was simple enough: a group of creditors got together a large sum of money which they lent to the state; in return they were given shares in the bank and the shares could be sold in the stock market. The advantage for the state was that its debts in this way could be permanently funded and at a lower interest; the advantage for the creditors was that they could get their money back whenever they wanted. As if by magic, a large, long-term, loan had been constituted from many small sums of money lent on a short-term basis. 90 INSTITUTIONS THAT GET THINGS DONE Part IV Pluralism 10 A world in pieces For change to be possible, we said above, self-reflection and entrepreneurship are not enough, neither alone nor when taken together. Once the world is reflected on from a number of alternative perspectives it will necessarily come to seem hopelessly diverse. The visions do not relate to each other in any straightforward fashion and many contradict each other as well as the established orthodoxies of the age. The universe cannot, for example, simultaneously have the sun and the earth at its centre. Likewise it is not possible for all entrepreneurs simultaneously to realise all of their projects. Once they start putting their ideas into practice, space, time, and other scarce resources will quickly start to run out. Contradictions and competing claims on resources both have a tendency to produce conflict. New visions are often highly seductive and the people who have them are unlikely to forget what they have seen. Naturally they will insist that they are right and that people with competing visions are wrong. Similarly entrepreneurs have a tendency to fall in love with the projects they pursue and insist that they be given priority when it comes to the distribution of limited resources. The question is how such conflicts can be resolved without resorting to violence. Somehow society has to be protected and disagreements worked out by peaceful means. A modern society needs a way of dealing with the problem of pluralism. A first instinct—historically, and perhaps also psychologically—has been to repress pluralism in the name of peace. In this way the European civil wars of the sixteenth and seventeenth centuries were dealt with by sovereign states that drastically sought to reduce the diversity of social life. Similarly, in the middle of the twentieth century, many leaders of newly independent states concluded that although democracy perhaps was a good idea in theory, it was, given the diversity of the societies concerned, also a ‘luxury’ that they could ill afford.1 And the instinct to repress pluralism has not gone away. Unity, we are still constantly told, is better than division; united states, nations or farm workers are said to be strong, divided ones are said to be weak. The fact that unity requires conformity to a common norm and hence the repression, or at least silencing, of diversity is less often mentioned. Hence also the peculiarly modern temptation of fundamentalism. Instead of learning to live with contradictions, the fundamentalists choose, deliberately, to restrict themselves to only one single view. Instead of celebrating the death of god, the fundamentalists recreate religion, literally, or in one or another of its many secular versions. Since they cannot allow truth to coexist with error, fundamentalists are compelled to silence those who hold alternative, that is inferior, views. The result is a world filled with fanatical Protestants, Muslims, Communists, Freudians, and defenders of furry animals. In the end neither repression nor zealotry is going to work. Pluralism can only be contained to the extent that reflection and entrepreneurship can be contained, and in a modern society where both activities are thoroughly institutionalised this cannot be done. Instead all modern societies have come up with some way of dealing with pluralism. Somehow pluralism must be translated from a violent competition into a competition carried on by some other means. Easy as such a solution may appear, it has as far as Europe is concerned taken an excruciatingly long time to arrive at. During the last 500 years wars and repression have been far more common than toleration, and fundamentalism has constantly reappeared in one or another of its ever mutating guises. The aim of this chapter is to briefly tell the story of modern pluralism as it emerged after the year 1500 and to discuss the repressive reactions to it. The aim of the subsequent two chapters is to discuss the solutions which the Europeans eventually arrived at. The unity and diversity of the Middle Ages To an observer from a neater and more rationally organised era, medieval Europe necessarily appears as a confusing place, full of idiosyncrasies and exceptions. There was a diversity and colour to social life which no later age has been able to rival. And yet this was also a time of extraordinary religious and cultural homogeneity. The Church imposed the same creed, the same rituals, and the same set of values on all societies everywhere. Both pictures are consequently correct. It is possible, depending on how one adjusts one’s analytical lenses, to describe the medieval world either as one or as infinitely many. There was unity but also diversity; homogeneity coexisted with the most far-reaching particularism. Surprisingly given this tension, the social order of the Middle Ages was extraordinarily resilient, lasting for close to 1,000 years. The origin of European unity is best traced to the Roman empire and its institutional legacy.2 At one time or another most parts of the Continent had been a Roman province, and even once the empire was long gone many continued to claim some form of descent from the populus romanus.3 Hence it is not surprising that when Charlemagne in the eighth century briefly united large parts of Europe, he did so in the name of ‘Roman emperor,’ and that Otto I took the same title when he in 962 brought various German speaking territories into the same political structure.4 From the fifteenth century onwards this creation came A WORLD IN PIECES 93 to be known as the ‘Holy Roman Empire of the German Nation,’ or simply as ‘the Empire.’ Above all, however, it was the Church that constituted the great unifying force of the Middle Ages. During the decline of the Roman empire the Christian religion gradually gained in strength and when Rome eventually fell the Church was the only institution left standing. The medieval Church had pretensions that were both universal and all-embracing. Uniquely among all European institutions it also had the means to carry out these intentions. In canon law, based on Roman imperial law, the Church had an instrument through which it could enforce its claims to secular power; and in Latin, the only written language, it had an instrument through which it could exercise a monopoly on elite culture and learning.5 Organisationally speaking the Church resembled a gigantic business corporation.6 It had its headquarters and a CEO in Rome, regional offices and middle-level management in cathedral towns throughout Europe and sales representatives in branch offices located in each parish. The products marketed by this corporation were remarkably uniform and its sales figures were impressive; the Church was a monopoly-holder operating in a captive market. Or, in the jargon of the time, Europe formed a single res publica Christiana, a commonwealth of Christians which included everyone except the Muslims outside the gates of the republic and the Jews in its midst. Despite its ideological control and its impressive organisational resources, the Church never attained a position of complete hegemony. If nothing else its claims had to be reconciled with the counter-claims of that other universal institution: the Empire. In matters of religious doctrine the Church may have ruled supreme but the emperor had serious pretensions to political power, especially in Germany.7 The confrontation came to a head in the so-called ‘Investiture Conflict’ concerning the appointment of bishops and other higher clerical officers. According to the agreement reached in Worms in 1122, the emperor retained an important influence over appointments in Germany while the pope reasserted his rights in Italy and Burgundy. Yet medieval life was not only surprisingly homogenous but also profoundly heterogeneous. Roughly speaking it was on the universal level that Europe was all the same and on the local level that Europe was all different. In the end of course the far larger part of medieval life was local. Since there were few means of communication and since news travelled slowly and human beings often not at all, every valley, even every village, came to evolve more or less according to its own logic.8 As a result local customs, folklore, languages and laws were to a large extent unique. People were not only rooted in a particular place, however, but also in a particular social position. Medieval society was steeply hierarchical and social groups were rigidly separated. The life of a peasant had little in common with the life of a nobleman, a burgher or a priest.9 With each social position came a unique set of duties, even a unique way of dressing, carrying 94 PLURALISM declared war on diversity and replaced the conflicting wills of conflicting groups with the imperatives of its own superior reason. As a result, from the latter part of the seventeenth century onward all countries became less rather than more diverse. Consider first the notion of raison d’état. According to writers such as Niccolò Machiavelli and Giovanni Botero there were imperatives of statecraft that rulers ought to follow regardless of whichever policies they privately favoured. The most important such principle concerned military preparedness. Only by strengthening its armies and assuming the worst could the state defend itself effectively against its enemies. Understood as a principle which could be calculated in a calm and methodical manner, raison d’état contrasted sharply with the passions that guided the many enthusiasts of the era. Far from following reason, these partisans and sectarians acted on impulse and as a result they did short-sighted and foolish things. Avoiding all enthusiasm, statesmen should instead, as Machiavelli explained, combine the ferocity of a lion with the slyness of a fox.33 This was also the way to assure domestic peace. According to the raison d’état doctrine, whatever maintained the peace was good and whatever threatened the peace was bad. This was the case even if the actions required by the prince in no way corresponded to the traditional precepts of morality. Sometimes the prince was required to break his word, to lie, or even to commit murder. In relation to other states princes could legitimately resort to violence and in relation to their own subjects they could resort to repression. In the end the only way to secure peace was to make sure that the interests of the parts were replaced by the interests of the whole; that the state imposed itself on the warring factions and disarmed them. Unappealing as repression may appear to people from a more tolerant era, it had an obvious attraction to those who had lived through the turmoil of the religious wars. One such person was the French jurist and philosopher Jean Bodin. As he argued in Six livres de la république, 1576, peace required that all powers be vested in one person. Sovereignty is indivisible and the first prerogative of the ruler is to lay down the law to his subjects. If the people are allowed to dictate their own laws they will no longer be subjects and they will no longer obey; if power is shared it will immediately be contested and contestation will mean war.34 ‘I conclude then that it is never permissible for a subject to attempt anything against a sovereign prince, no matter how wicked and cruel a tyrant he may be.’35 In England Thomas Hobbes—he was also a civil war veteran—arrived at similar conclusions. What is needed, he explained, is a state with sufficient power to stop people from killing one another. He called this state ‘Leviathan,’ and he compared it to a ‘mortall God’ who maintained the peace by keeping men ‘in awe.’36 Sovereignty could not be divided, Hobbes agreed with Bodin, ‘[f]or what is it to divide the Power of a Common-wealth, but to Dissolve it; for Powers divided mutually destroy each other.’37 For this reason all factions should be A WORLD IN PIECES 101 banned and no parties or intermediary groups should be allowed that could gather in opposition to the state or to each other. Instead of being members of factions, men found themselves alone and it was alone—as one man to another— that they were to be reunited in and through the state.38 As Hobbes knew, however, repression was not likely to be enough. For peace to be secure people had to learn to accept their powerlessness and their subjugation. To this end Leviathan had to manipulate people’s minds not just their bodies. The state had to control which books that were printed and what people read and in this way to pre-empt sedition. In addition, Hobbes suggested, Leviathan should embark on a programme of education.39 He envisioned weekly assemblies where people would get together to praise God but also the state and where the laws of the country would be read and the duties of the subjects expounded on. In this way, Hobbes hoped, the people would learn to love Leviathan and never ‘to argue and dispute his Power, or any way to use his Name irreverently.’40 Although no European ruler ever quite lived up to these absolutist ideals, peace was eventually restored more or less in the manner which Bodin and Hobbes had suggested. In France the Edict of Nantes of 1598 had given the Huguenots the right to practise their religion but when the liberal king Henri IV was assassinated in 1610 the policy of toleration came to an end.41 Under the influence of the cardinals Richelieu and Mazarin the agreement was progressively whittled down until in 1685 it finally was completely revoked. From this time onward France was a country which at least in the official propaganda was united behind un roi, une loi and une foi. In Germany the Reformation had not only pitted the many small statelets against one another but also divided them internally. Here there was no strong central state that could impose a uniform religious creed on the warring factions and instead the power to homogenise the population was itself decentralised. In 1555 the Treaty of Augsburg established the principle of eius cuius, eius religio, according to which the religion of the people in any given territory had to follow the religion of their ruler. It did not matter what people believed, in other words, as long as they all believed the same thing. Those who did not freely conform to this demand were either expelled or converted by force.42 Meanwhile in Austria the Habsburgs moved in a similar direction. Despite sizeable Protestant communities among mine workers, craftsmen, and among the Czech nobility, the emperors enforced an increasingly pro-Catholic line. During the Thirty Years War Vienna was the leading proponent of the Counter- Reformation and in 1658 the emperor Leopold I took it as his personal goal to root out all non-Catholic heresies.43 As a result some 100,000 Protestants fled, much to the economic detriment of the country. Jews too were expelled and the synagogue in Vienna was turned into a church. By the year 1700, there were only Catholics in Bohemia, Moravia and Austria. In northern Europe the kings basically followed the same modus operandi. Here one version of Protestantism was elevated to the status of official state 102 PLURALISM religion and all rival creeds outlawed, including rival Protestant ones. In England the Act of Supremacy of 1549 made King Henry VIII into the head of the Anglican church and forced his subjects to pray to god according to a state authorised ritual. When during the reign of his daughter the question of royal succession came to be defined as a matter of religious allegiance, to belong to the wrong sect was not only to commit a religious but also a political crime. The solution was similar in Sweden.44 Here all clergymen were on the state’s payroll and all the king’s subjects were forced by law to attend church. Not surprisingly the Sunday sermon proved to be an indispensable instrument of state propaganda and as such quite close to the educational ideal which Hobbes had envisioned. In fact, in addition to overt repression, all European states began dabbling in Hobbesian style indoctrination. Although it only paid off in the slightly longer term, the moulding of minds was likely to be less costly than the controlling of bodies, and eventually also more successful. Through education, a love of king and country was to be instilled and people convinced to put aside their differences and instead to look at the many things they had in common. A popular strategy was to elevate one particular way of life to ‘national’ status while making other ways of life ‘provincial’ and thereby of lesser worth.45 In most cases the national culture came to be the one associated with the political elite in the capital city. Languages were unified in the same manner as scholars began compiling national dictionaries and grammars. Suddenly there was a linguistic standard that the state could insist on and traditional ways of expressing oneself were no longer just different but grammatically and socially incorrect. New institutions were put in place to police these new cultural standards. In 1635 for example the Academie Française was established with the aim of restoring order to the French language. In the patent granted to the academy by the king, the parallel was explicitly drawn between the confusion brought about by religious and political diversity and by the diversity of languages.46 By making all people talk in the same manner, the hope was that they would come to think the same way. Following the French lead all European countries established a number of similar, homogenising, institutions: cultural academies, theatres and museums, and, in the nineteenth-centurym also systems of public education.47 The eventual result of this combination of repression and indoctrination were countries that were far more homogenous than they ever previously had been. At the same time, however, Europe as a whole became far more diverse. From the seventeenth century onward pluralism was banned from each state but it reappeared instead in the interstices between states.48 Within each unit power was supposed to be absolute but between them power was definitely relative. The Treaty of Westphalia signed in 1648 symbolised this solution. Simultaneously rejecting the universalism and the localism of the Middle Ages, the states were declared sovereign but also powerless in relation to each other. During the following 350 years inter-state wars raged more or less continuously across Europe. Instead of people dying for their personal beliefs as they had A WORLD IN PIECES 103 during the religious wars of the sixteenth and early seventeenth centuries, they now died for their countries. As the kings and the many apologists for the state insisted, this represented real progress. 104 PLURALISM 11 The polite alternative The eventual solution to the problem of pluralism was to provide individuals with rights that were institutionally protected and policed. Once institutionalised, conflicts between competing claims could be adjudicated through rules which were procedural rather than substantive. By never consistently favouring any one party, the rules convinced people to play fairly and to act tolerantly. People were loyal not only to themselves but also to the institutions through which their conflicts were resolved. Although this solution may seem obvious enough, it took an exceedingly long time before it became universally accepted. Throughout Europe state repression and indoctrination continued well into the nineteenth century and it was only in the latter part of the twentieth century that all authoritarian regimes finally were discredited. But even today not everyone is a pluralist and, as we discussed, fundamentalism constantly reappears in one or another of its ever mutating guises. Since this institutional answer seems obvious to us it is tempting to believe that it was inevitable. It is the most reasonable solution to the problem of pluralism after all, and since we like to think of ourselves as reasonable people we are not surprised that this is the solution we eventually arrived at. And yet as we discussed in the introduction, institutions do not emerge simply because they are needed. Institutions develop for all kinds of reasons, most of them completely unrelated to the functions that eventually come to justify their existence. Thus even the most reasonable of institutions can be the product of processes that have no rational pedigree. And as far as the reasonableness of the Europeans themselves is concerned, the causal relationship is most likely the inverse. Our institutions are tolerant not because we are, but rather, we have come to be reasonable because our institutions have taught us tolerance. The aim of this chapter is to provide a more acceptable historical explanation of the emergence of these institutions. This is essentially the story of politeness and of the political culture of polite society, especially as it developed in the course of the eighteenth century. Machines vs. organisms In the eighteenth century a resistance movement of sorts developed among members of the new middle classes, although the aristocracy too played a prominent part. Considering the dominant socioeconomic position of these groups, combined with the fact that they were almost completely excluded from political power, the demands of this movement were surprisingly moderate. Often no political demands at all were expressed. If one had eavesdropped on one of their gatherings, one would instead have heard a mixture of society gossip, impromptu reviews of the latest opera or play, and occasional attempts at philosophical witticisms. Conversations on such topics were the preoccupation of what at the time was known as ‘polite society,’ and it was through their very socialising rather than through any explicit political activities that they came to constitute a radical alternative to the repressive state. The location of these gatherings is itself significant. Members of polite society met in coffee-houses, Masonic lodges, reading rooms and secret societies or in the drawing-rooms and salons of the haute bourgeoisie.1 What places such as these had in common was an ambiguous social position somewhere between the public arena of the state and the privacy of the home. They were public in the sense that they allowed people to socialise outside of their immediate families, but they were private in that they were located outside of the purview of the state. They were places where people could meet up with strangers but in an informal, even intimate, fashion. Here people could reach out to each other without exposing themselves to intimidation; they could talk politics and make friends without the state ever finding out. They were protected above all by the fellowship created through the conversations they managed to strike up. Etymologically speaking, ‘politeness’ is derived from the Italian pulitezza or politezza denoting ‘cleanliness,’ but in the Renaissance the word increasingly came to refer to the kind of ‘polish’ a person would acquire as a result of rubbing shoulders with people of manners and good breeding.2 However, those who lacked the opportunity to learn directly from their social superiors could learn polite behaviour from books.3 One example is Il Cortegiano from 1528 in which Baldesar Castiglione provided extensive advice on how young men and women should carry themselves if they ever were to find themselves at court.4 Another example is Erasmus of Rotterdam’s De civilitate morum puerilium from 1530, where the children of the upwardly mobile middle-classes were taught everything from table manners to the importance of controlling the body, its movements and urges.5 To have mastered these rules was to be ‘civilised,’ from the Latin civilis, derived from civis, meaning city.6 Just as city-dwellers often think of themselves as superior to country bumpkins, members of civilised society thought of themselves as superior to uncouth peasants and the urban poor. In addition the word civilis was full of references to classical Greek and Roman ideals.7 To be civilised was necessarily, as Aristotle and Cicero had taught, to exist with and 106 PLURALISM for others; it was to be a social being rather than an atomised individual sufficient onto oneself. And politeness was the code which made such a social existence possible; a knowledge of the code allowed people both to get along and to get ahead. Today politeness and sociability are not commonly regarded as subversive qualities but in the eighteenth century they were, and the reason is that they highlighted the stark differences that existed between the ethos of civil society and the ethos of the repressive state.8 From the point of view of the authorities, associations of whatever kind were potential threats to the social order and sociability was for that reason regarded with utmost suspicion. Sociability meant concerted action and concerted action, as the history of the sixteenth and seventeenth centuries had demonstrated, meant civil war. The repressive solution was thus to break up all associations, to isolate individuals from each other and to reunite them only in and through the state. As the members of polite society saw it, however, this was no life fit for a human being. ‘[A] life without natural affection, friendship or sociableness,’ as Anthony Ashley Cooper, third Earl of Shaftesbury, put it in his Characteristics of Men, Manners, Opinions, Times, 1711, ‘would be found a wretched one, were it to be tried.9 Nothing is so delightful as to incorporate. Distinctions of many kinds are invented. Religious societies are formed. Orders are erected, and their interests espoused and served with the utmost zeal and passion…the associating genius of man is never better proved than in those very societies which are formed in opposition to the general one of mankind and to the real interest of the State.10 What we have are thus two competing conceptions of what it means to be a human being. Or perhaps better put, one official version and one subterranean. The official conception which Hobbes and Bodin presented—and which Defoe popularised and Rousseau and Kant further developed—saw man as autonomous, self-sufficient and utility-maximising. The subterranean version, advocated by Shaftesbury and by the members of polite society—as well as by all enthusiastic members of eighteenth-century consumer society—saw man as fundamentally sociable, always dependent on others, and ready to defer to the common judgement. And people today are of course still torn between the same two conceptions. Curiously, however, we rarely notice the tension between them and manage somehow to simultaneously embrace both.11 Formally we sign up to the official version but secretly we know that our lives would be unbearable unless we based them on the subterranean. In this respect members of polite eighteenth-century society were more consistent. They rejected the Hobbesian individual as a superficial exaggeration and they despised the Hobbesian state. The problem with the repressive solution as they saw it was that it was far too mechanical.12 People were combined by THE POLITE ALTERNATIVE 107 means of legal obligations enforced by an all-powerful state machinery but as a result their union lacked any form of sympathy or social commitment. The choice of metaphor was not coincidental. In the seventeenth century there was a great interest in mechanical devices of all kinds and it was common to compare the state to a ‘clockwork.’13 In several respects this metaphor simply replicated the worldview conveyed by the traditional metaphor of society understood as a body. Just as a body, a clock was a unified entity which consisted of many hierarchically ordered parts, each one with its separate functions. In contrast to the body however the clockwork was a mechanical device rather than an organism and as such it was fully determined by physical forces.14 The state-as- machine was far more repressive and more ruthless; it had no willpower and no soul and it was impossible to appeal to or reason with. As the apologists of the mechanical state made clear, all subjects of the king were parts of this machine and they were forced to carry out their duties with perfect precision or the clockwork would immediately break down. As far as the king himself was concerned, he was the machine’s master yet as such he was nothing like the arbitrary rulers of the previous era. The king too was constrained by mechanical imperatives; he was, as Frederick the Great of Prussia had said about himself, ‘merely the first servant of the state.’15 Or to be more precise, the king was the operator who serviced the machine, polished its parts and applied oil to any wheels that happened to be squeaking. To successfully carry out such tasks he had to become something of an expert in mechanical engineering.16 While statecraft in the Renaissance had been a matter of stagecraft, it was now, according to this interpretation, all a matter of political technology. The rules according to which the mechanical state operated were exclusively those of raison d’état. Understood as a mechanical device, the state had no particular purpose or agenda apart from the one overriding aim of keeping the peace. The one obligation on the part of the ruler was to make sure the clock kept ticking and whatever action that served this purpose was considered acceptable. Yet the state was amoral rather than immoral; it advocated no particular ethical standards and was in theory at least neutral between competing political and religious goals.17 In this way public actions came to be sharply separated from private beliefs and the power of the state came, often quite explicitly, to be based on hypocrisy. From the point of view of the king it never really mattered whether people were Catholics or Protestants as long as they were one or the other and as long as they united, faithfully, behind the crown. In the end people could even be free to disagree as long as they never acted on their convictions. ‘Argue,’ as Frederick the Great put it, ‘but obey!’18 In all these respects polite society constituted a radical contrast. Polite society was not understood as a mechanical device at all but instead as an organic unit. Its members were not united through contracts but instead through natural affinities and shared social bonds. Far from being sufficient onto themselves, individuals were only something when acting and interacting together with their fellows. Instead of lies and hypocrisy, polite society was a realm of honesty and 108 PLURALISM truth, and instead of moral blindness there was moral purpose. In addition to pleasant company, sociability cultivated a sense of civic virtue.19 Given the obvious appeal of these many honourable qualities, it is easy to understand why the representatives of the mechanical state were worried. As far as resistance movements go, polite society was of course extremely badly organised and its political programme was nothing if not diffuse. Instead its power lay exclusively in the alternative it provided and the example it set. By merely meeting and talking together it highlighted the shortcomings of the mechanical state. At the same time, since the meetings took place in private— or, as with the Masons, in secret—they were impossible for the state to control.20 Shielded from the repressive power of the state, people were free to speak their minds on whatever topics they wished. The way these conversations were conducted embodied a new vision of social life. Although polite society was understood as an organic unit, it was not a hierarchically ordered entity like the medieval metaphor of the body. Instead the members were all on an equal footing; among friends in the salon or the coffee-house everyone was a brother and a friend.21 In all these respects—embracing the notions of liberté, egalité and fraternité—polite society became a model for how society could be organised if only the mechanical state somehow could be overthrown.22 When towards the end of the eighteenth century the demands for change became increasingly vocal, and when the anciens régimes eventually fell, it was in the image of the polite alternative that the new states were erected. Learning how to get along Although freedom, brotherhood and equality are attractive qualities, they do not by themselves make the problem of pluralism go away, and polite society was always at least as exposed to the threat of conflicts as ever the mechanical state. The way this threat was dealt with was, however, far more sophisticated. The most obvious difference concerned politeness itself. To be polite is to know how to get along with others and how not to do or say things that might offend. To be polite is to recognise others as worthy of respect and to listen to their opinions even though one profoundly may disagree with them.23 Politeness, that is, requires acceptance; in polite society dissent was not repressed but tolerated. Consider for example the informal rules that govern the art of conversation.24 As a participant in a conversation there are certain things you can and cannot do. For example: you are supposed to make other participants feel at ease, to include those who sit silent, and if at all possible to give everybody the sense that their particular contributions matter above the rest. It is impolite to interrupt others when they are talking and you are not supposed to monopolise the topic of the conversation or to take it in a direction where others are unwilling to go. For the conversation to flow smoothly it is important not to give offence but it is equally important not to take offence too easily. Everybody should have a chance to talk and everybody should be obliged to listen. THE POLITE ALTERNATIVE 109 Since the members of polite society spent such a lot of their time talking, they were naturally all familiar with such rules. And those who failed to follow them were given social rather than physical punishments. No heavy-handed repression was required, a raised eyebrow or a humorous reproach would usually be enough to set the offender straight.25 But for the most part, the rules were self-policing. Conversations resemble games and just as games they force their participants to develop a double set of loyalties. You are required, simultaneously, to assume a particular and a general point of view.26 On the one hand, participants in a conversation want to express their opinions and make their points as forcefully and persuasively as they possibly can. They want, in short, to win the argument. On the other hand, they also want to make sure that the conversation keeps going and that the other participants do not fall silent or walk away. To cheat in a game is to deceive your fellow players but it is also in a sense to deceive yourself And exactly analogously, to win an argument by breaking the conversational rules is to undermine the very notion of a victory. From a conversational perspective, pluralism is not a problem or a threat but instead something of a requirement. For a conversation to really take off, it must include different kinds of people with different kinds of experiences and outlooks on life.27 If everybody sees things the same way after all there are no views to exchange and nothing to talk about. All good conversationalists are aware of this fact and adjust their contributions accordingly. If the conversation matters to you, your own—‘real’—opinions matter less than whatever opinions you are required to express by the situation in which the flow of the conversation places you. Often you will end up playing the devil’s advocate or gently disagreeing just to make the exchange more engaging. But just as often self-regulation operates in the opposite direction. Instead of exaggerating their opinions, people moderate them; complete disagreement is after all just as much of a threat as complete agreement. Those who care about the conversation will consequently calibrate their views to prevent both outcomes. In the vocabulary of the eighteenth century, this moderated, calibrated, opinion came to be known as a sensus communis, the considered judgement—the ‘common sense’—of a community taken as a whole.28 As the participants in polite society went on to explain, common sense also provided protection against the kinds of enthusiasm that had overcome people in the seventeenth century. From a polite point of view, the partisans, sectarians and ideologues had not been wrong as much as uncouth and badly mannered. Since they already knew the truth, they had no reason to listen to others or to exchange views, and a conversation was understood only an opportunity to convince others of the correctness of their own firmly held positions. This made them strident, judgemental and preachy; enthusiasts were quick to walk off in a huff and they never cared if they gave offence. Socially they were bores and politically they were fanatics. As the members of polite society concluded, bad manners and fanaticism were both the results of an insufficient exposure to social life.29 It was only sad and 110 PLURALISM famous self-regulating device, however, was the governor that controlled the speed of the steam engine. Here, as the rotation of the engine increased, weights attached to the shaft made sure that the supply of steam was cut, effectively reducing the engine’s speed. From kubernetes, the Greek for ‘governor,’ the term ‘cybernetics’ was eventually coined for this science of communication, feedbacks and control.9 Understood as a metaphor the self-regulating system had obvious advantages over the metaphor of the clockwork.10 The clockwork was at the same time too deterministic and too static; it left far too much power to the original clockmaker and not enough power to the clock’s constituent parts. The clock was always prone to breakdowns, and when they occurred it was never quite clear what to do. Once society came to be understood as a self-balancing device, however, much more freedom was given to individuals and groups. There was no need for a central authority that directed social life and repressed diversity in the name of peace. People could act passionately, even selfishly or aggressively, as long as the passion, selfishness and aggression of one party was counter-acted by that of another. The differences complemented each other or cancelled each other out and the aggregate pattern that emerged was one of concord rather than discord. In a conversation, we said, participants are guided by two ostensibly contradictory goals. While they want to make their points, they also must make sure that the conversation continues. In an exactly analogous manner, rights can only successfully be defended by people who acknowledge the validity of the system of rights as a whole and the authority of the courts to enforce it. Successful conflict resolution will in this way always presuppose a double set of loyalties: both to oneself and to the system as a whole. Such double loyalty would never come naturally to Robinsonian individuals who never considered anyone else’s interests but their own but to the civilised members of polite society the requirement was obvious.11 While the ingeniousness of this solution never was in doubt, the question was whether actual examples of self-regulating devices could be put together and, if they could, whether they really would work. There are two prominent examples both launched at the end of the eighteenth century: a system of self-regulating politics and a system of self-regulating economics. A system of politics In politics the idea of cybernetics was first applied to relations obtaining between states. Ever since the state began making claims to sovereignty the question had been how to deal with the problem of competing sovereignties. Raison d’état required each state to look after its own interests but as a result there was no one looking after the interests of the system taken as a whole. The result was a perpetual threat of war, all too often replaced by actual cases of warfare. PLURALISM 117 The solution first discovered among the many small city-states of northern Italy was to balance the power of one state against the power of another.12 By concluding alliances and by pooling resources with others one’s enemies could be convinced to refrain from attack. In this way peace could be maintained without common decisions, central direction or overt repression. Peace was instead the unintended result of states pursuing their own interests.13 If a state suddenly began to grow too powerful, the logic required the relatively less powerful states to gather together to oppose it. Or if a state suddenly began losing power, the logic identified it as an increasingly attractive partner in an alliance. And while the balance of power thus understood failed to prevent some wars, the assumption was that there were far more wars that it prevented. In this way, during the Thirty Years War in the seventeenth century—a conflict ostensibly fought for religious reasons—Protestant Sweden joined together with Catholic France to oppose the armies of the Habsburg Empire. In fact the Swedish king went as far as holding talks with Muslim leaders about an anti-Austrian alliance. And by the time of the peace treaty concluded in Westphalia in 1648, the balance of power was a universally recognised principle of statecraft. Half a century later, the Treaty of Utrecht, 1713, was explicitly dedicated to ordering and stabilising the peace and tranquillity of the Christian world through ‘a just balance of power.’14 Yet balances of power could also help preserve the peace within a country, and proposals to this effect had already been suggested by the ancients. As both Aristotle and the Greek historian Polybius had argued, power had to be divided so as not to end up in the hands of only one social class.15 In Aristotle’s preferred scheme—known as the politeia—a strong middle-class would moderate the inevitable opposition between the rich and the poor, and in Polybius’ monarchia mixta, the aristocracy maintained the balance between the king and his subjects.16 Polybius in particular was widely read in the Renaissance and he was a direct inspiration when the Venetian statesman Gasparo Contarini in 1543 described the constitution of his native city as ‘equally balanced, as it were with a paire of weights.’17 In seventeenth-century England references to a ‘balanced constitution’ were common among monarchists and republicans alike and even in Sweden classical authors provided intellectual support for a ‘mixed’ regime.18 And yet what these classical references and their domestic applications referred to was not actually a self-regulating device.19 A scale after all does not balance itself. Lacking a feedback loop and an equilibrating mechanism, scales have to be balanced by someone or by something. In its rhetorical use the metaphor would thus often simply imply that one social class should be given more power at the expense of another. This is why apologists for unlimited monarchy also occasionally used the same language.20 After all, if a society really was ‘off balance,’ a king may be the only person capable of bringing it back to equilibrium. Contrast this with the way the mechanism worked in relations between states where balances were supposed to be achieved automatically and without the intervention of a balancer. 118 INSTITUTIONS DEALING WITH CONFLICTS It took a long time before notions of self-regulation began to be consistently applied in the domestic arena. Instead well into the eighteenth century traditional metaphors describing the state in terms of a body or a clockwork continued to dominate. Politically speaking, self-regulation must have appeared as a thoroughly perilous project. Self-balancing did away with the notion that people and groups had a given place in society and that social positions were hierarchically ordered. As decentralised and independent of each other, individuals and groups were instead each other’s equals. Self-balance also seemed to imply that society was rife with divisions and that no unity or consensus could be reached. Indeed, self-balance seemed to require conflicts and thus to create more problems than it solved. This is how we best should understand the perennial fear of parties. The etymology of the word illustrates what was at stake.21 Derived from the Latin partire, ‘to divide,’ a party was a part, a faction, or a section of the whole. And while parts of course had existed in both bodies and in clocks, they had always, when properly assembled and directed, functioned together with other parts. The whole was prior to the part and the part had no function except as a part of the whole. Parties by contrast were partisan, they seemed to care little about the common good and instead only about their own interests. Not surprisingly, parties were universally condemned by the voices of the establishment. In England, Jonathan Swift defined a party as ‘the madness of many, for the gain of the few,’ and Viscount Bolingbroke referred to them in his pamphlet The Idea of a Patriot King, 1749, as ‘numbers of men associated together for certain purposes and certain interests, which are not allowed to be, those of the community by others.’22 Actually anti-establishment groups were often equally critical Even the most utopian of political tracts, such as those written by the Diggers, Levellers and other seventeenth-century radicals, defined the good society as one without parties.23 And while settlers in the North American colonies became revolutionaries in 1776, they were partisan only on behalf of the unity of their new republic. When he addressed the convention assembled to ratify the new constitution in 1788, Alexander Hamilton hoped ‘to abolish factions, and unite all parties for the general welfare.’24 Similarly George Washington devoted a large part of his farewell address of 1796 to solemnly warn his people against ‘the baneful effects of the spirit of party.’25 Come to think of it, ‘bipartisanship’ is still considered a great virtue in an American politician. And yet as Aristotle had declared, and as members of polite eighteenthcentury society constantly reiterated, man is a social animal and it is for that reason surely impossible to suppress the desire to associate with others. In Lord Shaftesbury’s words, the spirit of faction ‘seems to be no other than the abuse or irregularity of that social love and common affection which is natural to mankind.’26 While we would like to identify with universal goods or with the interests of society as a whole, this is in practice next to impossible to do. Instead we identify more easily with others the smaller and more intimate the group. PLURALISM 119 This is how we end up as party members. Or, as even Washington was forced to concede, the spirit of parties ‘unfortunately, is inseparable from our nature, having its root in the strongest passions of the human mind.’27 Having reached this point, a common conclusion was to praise one’s own sociability while condemning the sociability of one’s opponents. Thus the members of polite society would always see themselves as above partisanship and guided only by the general interest while everyone else—the uncouth and the impolite—were defending their own narrow points of view.28 Similarly, leading politicians would sometimes dream of establishing a party that would unite everybody under its banners and once and for all do away with the need for parties.29 Needless to say the problem of pluralism could never be resolved in this fashion. The disinterested opinion of one group would inevitably be contradicted by the opinion of another group, claiming to be equally disinterested. And the party to do away with all parties never remained unopposed for very long. Society was thus facing a dilemma. Parties were not only evil but also necessary, and from the end of the eighteenth century it was as necessary evils that they came to be discussed. By this time, however, people were far better acquainted with practical examples of self-regulating devices and, as it seemed to many, the cybernetic metaphor could indeed be applied also to domestic political life.30 Although parties could not be abolished, they could be pitted against one another and in this way their noxious consequences could be rendered harmless. All each party needed to do was to try to maximise its own power. If the radicals came to power, they would be opposed by the conservatives, and if the conservatives came to power they would be opposed by the radicals. Parties would continue to clash but only within the framework of a system of parties which itself remained in balance. In the course of the eighteenth century a rudimentary party system of this sort came to be established for example in Sweden.31 Here one party, the Hats, was associated with the court whereas another party, the Caps, was associated with the liberal opposition. Between 1719 and 1772 the two parties took turns controlling the executive. In Britain too there was an increasingly orderly succession between Whigs and Tories.32 And once the constitution of the newly independent United States came to be written, the idea of self-regulation was enshrined as a basic principle of government.33 Afraid of repeating what they saw as European mistakes, the founding fathers divided the power of the state between the executive, the legislature and the judiciary. In this way the power of one branch of government was to be balanced against the power of another, and the state would never be powerful enough to encroach on the freedom of the individual. Or, as later critics asserted, the government would never be powerful enough to effectively respond to popular demands.34 In all these cases self-regulation implied the same kind of double-vision as the conversations maintained in polite society. Each party, indeed each individual, had simultaneously to be guided by self-interest and by the interests of the 120 INSTITUTIONS DEALING WITH CONFLICTS political system taken as a whole. While they all fought to gain power, this could only be done in accordance with rules which themselves were more important than any temporary political victory. Thus, if they lost, it made far more sense to bide one’s time, gather one’s forces and to try again. The idea of a ‘loyal opposition’ captures this tension. The job of the opposition was to oppose, but only loyally so, that is, within the generally accepted rules of the political game. A system of economics The economic sphere represents what to many is the most obvious example of self-regulation. Today we are repeatedly told that government interference with market forces leads to inefficiencies and waste.35 The state should keep its hands off the economy and leave the market participants to their own devices. Since economic actors know their preferences far better than any central authority, a well-functioning economy will require individual, local and moment-to-moment, decisions. If only supply is allowed to meet demand, markets will clear at the most efficient level. In addition, however, this laissez-faire system can also be understood as a conflict resolving device. Instead of trying to reach common decisions, the decision making can be left to the market.36 When the market decides, the difficult issue of who to support and why will never become the subject of political debates. Instead those perspectives and entrepreneurial projects for which there is a demand will be supported and the rest will be rejected. Conflicts will be resolved in an automatic and decentralised manner as a result of individuals pursuing their own self-interest. As long as everyone agrees on the rules of the market economy those who fail to attract a sufficient number of customers have only themselves to blame. When considering this proposition it is worth pointing out that it only was towards the end of the eighteenth century that ‘the economy’ came to be seen as an independent sphere of social activity.37 Before this time economic pursuits had always been given a moral or social significance. People looking mainly to their own profits had been condemned by medieval Aristotelians and in the eighteenth century they continued to be vilified by the polite elite.38 In England the new class of projectors that appeared at this time was often compared to the religious fanatics who had wreaked such havoc in the seventeenth century. Both groups consisted of enthusiasts and both were guided by their private passions rather than by considerations for the common good. The single-minded pursuit of profits made them crass and egotistical, and if they ever took a moment off to sit down and talk, they would surely only talk about themselves. And yet as eighteenth-century writers like Baron de Montesquieu began to argue, the pursuit of profits could also have a mellowing and softening effect on human passions.39 People who are trying to make money for themselves cannot after all simply follow their most immediate impulses but must also learn to plan ahead and make compromises and trade-offs between competing goals. Far from PLURALISM 121 making people dogmatic, profit-making encouraged flexibility and rewarded those who were able to defer gratification. By defenders of commercial pursuits such as Montesquieu this was understood as a self-regulating device which balanced short-term interests against long-term interests. In this manner man’s greed came to be moderated and rendered less noxious to society at large. Once each person had been pitted against him or herself it was a short step to start pitting people against each other. Bernard Mandeville may have been the first to explicitly do so in his The Fable of the Bees, 1714.40 Mandeville had little time for politeness and made fun of the curious customs of the gentlemanly elite. Civic virtue was rare, he pointed out, and if politeness was required in order to bring about peace, society would constantly be at war. The answer is instead to take human beings as they are and to look for ways of using their self-interest to achieve common goals. And yet Mandeville himself never quite arrived at the idea of self-balancing. Instead, as he saw it, any balancing would require some kind of external intervention. It did not take long, however, before a number of self-balancing mechanisms were discovered also in the economic realm.41 David Hume, for one, found such a device regulating the flow of specie across borders.42 Imagine, he said, that four-fifths of all money in Britain were destroyed, what would the consequences be? Surely it would mean that the price of labour would go down in equal proportion. But this in turn would lower prices and as a result foreigners would start buying more British-made products. In this way money would before long start flowing back into the country. The contrary effect would take place if the British money supply suddenly was multiplied: things would become dearer and money would flow out. Or, as economists have argued ever since, the economy is always ‘aiming towards equilibrium.’43 In his Essai sur la nature de commerce en general, 1755, Richard Cantillon, an Irish banker living in Paris, took the example of a hat maker: If there are too many hatters in a city or in a street for the number of people who buy hats there, some who are least patronized must go bankrupt; whereas if there are too few, it will be a profitable enterprise, which will encourage some new hatters to open shop there; and it is in this way that entrepreneurs of all kinds proportion themselves to the risk in a state.44 All that remained was for Adam Smith to put these scattered references together into a coherent doctrine of the economy understood as a self-regulating system. Ironically, he wrote in The Wealth of Nations, 1776, self-interest is better at serving common goals than any amount of selfless dedication. Economic development requires the clashes between conflicting goals. Competition keeps prices down, qualities up, and assures a steady stream of innovations: 122 INSTITUTIONS DEALING WITH CONFLICTS It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love.45 The individual said Smith, invoking a metaphor he already had employed decades previously, ‘is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.’46 A precondition for this solution to work was only that the delicate selfbalancing mechanism would not be tampered with. The state in particular, Smith believed, should carefully avoid all interference with the free interactions of consenting adults. As a result many of the state’s traditional preoccupations could be dismissed as irrelevant or even as detrimental to a successful society. Instead of forcing people to get along and cracking down on those who did not, the state should simply step back and let people find their own way of working out their differences. A successful economy could be maintained as long as everyone involved stuck to the rules of the game. It all seemed too good to be true, and to some extent it certainly was. In the end of course there were still plenty of people who failed to play by the rules. Most obviously this was the case with all those who had relatively few things to trade. For the poor and the disadvantaged self-regulation was an insult since they knew that their contributions never would weigh very heavily in the overall balance. And yet, as the leaders of various reformist parties explained, what was unfair was not the self-regulating economy per se but rather the vast discrepancies in resources it both produced and legitimated.47 Redressing such discrepancies required periodic redistribution and redistribution required intervention by the state. In this way an active balancer was reintroduced, if for social rather than for strictly economic reasons. Once again common decisions had to be made regarding common goals and once again there was conflict. In the end the self-balancing economy could only be accepted if regulated by the self-balancing political system. PLURALISM 123 Part V European paths to modernity 13 Institutions and revolutions The previous chapters have documented the ways in which reflection, entrepreneurship and pluralism were institutionalised in Europe from the Middle Ages onward. This was how the non-modern era gradually came to give way to the modern; this is how modernity happened. A modern society, we said, is a society which always changes, and change is a result of the translation of potentiality into actuality. Change is the outcome of people discovering new things and acting on their discoveries but it also presupposes a way of dealing with the conflicts that reflection and entrepreneurship inevitably produce. In modern societies all three moments are institutionalised and by combining the one set of institutions with the other, a piece of social machinery is put together which is able to overcome the inertia inherent in all social life. Change takes place automatically, relentlessly and progressively not because someone wished it or consciously sought to bring it about but because change is institutionalised. Admittedly this is a gross simplification of a historical process which was infinitely more multifaceted and complex. This is the world as described by a historical sociologist rather than by a proper historian. If we really wanted to be serious about history, it could be argued, we should ‘let the facts speak for themselves’ and refrain from putting them together into a picture of such high level of generality. And yet there is no need to apologise too profusely. We are indeed less interested in the facts than in what the facts mean but this is inevitable as long as we are trying to understand a large-scale historical process. People in modern societies have always wanted to know how they came to be the way they are, and the preceding chapters presented an answer. There is another shortcoming, however, which we at least could begin to address. Until now we have talked about ‘Europe’ as though there really was an entity by that name which easily could be described through a few overall characterisations. To some extent no doubt this is indeed the case. European societies—including the extra-European colonies in North America—certainly have a lot of features in common. From the legacy of the Roman empire and the Catholic church to the various reactions to the Reformation and the Enlightenment, the Scientific and the Industrial Revolutions, European societies have been influenced by much the same forces. In addition, the military and economic competition between them have operated as a socialising mechanism. Since they constantly have been at war with each other, European countries have always been forced to copy the most successful practices of their neighbours.1 But of course there is also considerable variation. Today all European societies may be modern but this is not to say that they all have modernised at the same pace or in the same manner. On the contrary, some societies have continuously changed while others have remained far more stagnant; in some countries change has been automatic while in others it has come in short, revolutionary, spurts. As we would expect given the framework of this book, the road to modernity has been smooth wherever there have been plenty of institutions able to accommodate change, and the road has been far more bumpy —or temporarily blocked—in cases where such institutions have been lacking. The aim of this chapter is to provide a sense of this variation. The smooth path As a way to separate the dynamic societies from the less dynamic, consider what at first must appear as a rather questionable method.2 If it indeed is the case, let us say, that change has happened smoothly and without major upheavals, one would expect many features of a society to appear rather old-fashioned. The traditional institutions stay in place since they still serve identifiable purposes or since there simply is no reason to abolish them. In his book The English Constitution from 1867 Walter Bagehot made this point in relation to the remarkable longevity of the House of Lords. The puzzle for Bagehot was why this obvious remnant of the Middle Ages had managed to survive into the modern era.3 The answer is that it never constituted an obstacle to change, and the fact of its survival proves the point. ‘So long as many old leaves linger on the November trees,’ he says, you know that there has been little frost and no wind; just so while the House of Lords retains much power, you may know that there is no desperate discontent in the country, no wild agency likely to cause a great demolition.4 Perhaps we could call this the ‘November Tree Principle,’ according to which the institutional structure of a society is more modern, more transformative, the more remnants of old institutions it contains. And conversely, the more up-to date the institutions, the more urgent the need must have been to replace their predecessors. In countries with a lot of old institutional leaves, in other words, we would expect change to have been smooth, while in countries where all leaves are brand new, we would expect a far more turbulent history of modernisation. For an example of the former process consider England. To early modern Continental authors, England was a curious case—it was ‘a government stormy 126 EUROPEAN PATHS TO MODERNITY development of American society was also similar to that of England itself. Ironically for a regime set up to recreate the past, in the United States change began happening rapidly, relentlessly and automatically.40 INSTITUTIONS AND REVOLUTIONS 133 Part VI China 14 Reflection Although largely ignorant of each other until the early sixteenth century, the history of Europe and the history of China have always run in close parallel.1 On opposite sides of the Eurasian landmass the two parts of the world have developed in remarkably similar ways. The Warring States period corresponds both in time and in character to ancient Greece; the Han dynasty resembles the Roman empire; and the Ming dynasty, ideologically dominated by Neo- Confucianism, reminds us of the European Middle Ages, ideologically dominated by the Church. As the first European travellers to China discovered, China was at least as prosperous, powerful and sophisticated as their own continent and as such radically different from other parts of the world. Although the parallels seemed to have stopped when Europe in the nineteenth century suddenly surged ahead, China has been busy catching up ever since. Despite much contemporary American triumphalism the twenty-first century may yet turn out to belong to the Chinese. The puzzle to be considered in this and the subsequent three chapters is why these parallelisms obtain but also how to account for the many differences. The question is why China managed to change much in the same manner as Europe but also why Europe was first to modernise and the first to go through developments such as the Industrial Revolution. The hypotheses are the same as in the chapters above. What determines the pace of social change, we will argue, are reflection, entrepreneurship and pluralism, and the degree to which these three are institutionalised in society. Developments in Europe and China well resemble each other to the extent that reflection, entrepreneurship and pluralism are equally encouraged and equally institutionally embedded. They will differ to the extent that there are differences in these regards. Obviously an inter-continental comparison of this nature imposes some rather particular demands on our investigation. It would for example be completely out of order to make Europe into the standard by which Chinese developments are measured.2 A Eurocentric perspective is singularly inappropriate for understanding world history and only Europeans whose self-confidence is matched by their historical short-sightedness can convince themselves that this is not the case. As far as our investigation is concerned this means that we must open our eyes to different alternatives. What we are interested in are reflective, entrepreneurial and pluralistic functions but clearly such functions can be carried out in quite different ways in different historical settings. As we saw above this was the case within Europe and it is even more likely to be the case when comparing Europe and China. As a consequence we will in this and the subsequent two chapters discuss the Chinese case without constantly drawing parallels with Europe and European developments. Only in the subsequent chapter will the two parts of the world be properly compared. Potentiality and change The question of change has been a constant preoccupation of people throughout Chinese society. Already the I Ching, the Book of Changes, dating from around the fifth century BCE, showed a world in a perpetual state of motion.3 And as next to all subsequent Chinese philosophers, scientists and social reforms have agreed, the I Ching and its 64 hexagrams describes all possible states of affairs obtainable in nature and society as well as all possible alterations between them. What accomplishes the move from one state of being to the other is the transformative power generated by the tension between yin and yang, between Heaven and Earth.4 It is this interaction of opposing forces that brings forth all life, all patterns, ideas, systems and cultures. Tao produced the One. The One produced the two. The two produced the three. And the three produced the ten thousand things. The ten thousand things carry the yin and embrace the yang, and through the blending of the material force they achieve harmony.5 This was an outlook shared by Daoists, Confucians, Moists, Legalists and even by Buddhist scholars. Not surprisingly given this precocious interest in questions of change, people in China have from the earliest times onward been preoccupied with reflections on the potentialities inherent in life, in Chinese known as shi.6 The object of philosophical speculation has not been what things are as much as how they came to be; that is, which disposition of shi that produced them. And the philosophers have been joined by people of a more practical bent—statesmen and businessmen for example—who have wanted to know how best to benefit from whatever situation they have found themselves in. What they have tried to discover, that is, is how shi could be manipulated to their own advantage.7 This is why the I Ching from the beginning was used as a manual of divination. By learning about the potentiality of things, one would learn about one’s fate but also hope to learn how to control it. 136 CHINA However, the way in which investigations into the potential were carried out in China differed considerably from the way they were carried out in Europe. In China change was always regarded as a creative process which was inherent in nature itself and not as something which happened as a result of outside intervention. Change was never the responsibility of a transcendent god and it was not something for which human beings could be held responsible. Instead change simply happens by itself; nature and society are pregnant with propensities which continuously and quite automatically come to reveal themselves. All human beings need to do is to learn how to read the situation in which they find themselves and to adjust themselves to the configuration of shi it contains. This understanding of the potential permeates also Chinese æsthetics. A common aim of calligraphy, landscape painting, poetry and drama is to point to the propensities inherent in nature or in society.8 This is why a good work of art never is self-sufficient, never closed or completely finished. Chinese art has few straight lines and few straightforward plots, instead curves are always meandering, mountain ranges are always craggy and poems take unexpected twists and turns. Or compare the Chinese fascination with the motif of the dragon which, just like life itself, has no determined form, cannot be grasped or penned in, but unfolds and coils up according to its own logic.9 What is captured by a painting or a poem is not an image of what things are as much as a trace of an ongoing movement, and to the extent that the work is successful the movement should continue in the mind of the audience that perceives it.10 ‘When the feelings are stirred,’ as the seventeenth-century artist Wang Yüan-ch’i put it, ‘a creative force arises,’ and when that force arises, it is manifested as rules and order. The fruition [of this process] never goes beyond the original perception, but has the potential for inexhaustible change.11 This understanding of change explains the remarkable this-worldliness of Chinese culture.12 Since all sources of change are taken to be internal to the existing, there is no need to speculate about external sources. There is for example little need for a belief in a transcendental being who created the world and who actively intervene in it. Although such a notion of god did exist in the Shan period, some 4,000 years ago, it disappeared already in the first millennium BCE. Ever since there has been no proper notion of a personal god to whom people can turn with prayers and sacrifices.13 Instead the supernatural has constantly been naturalised and the metaphysical reduced to a matter of physics. This this-worldliness has also meant that Chinese culture has had remarkably little to say about ultimate questions.14 ‘If we do not yet know about life,’ as Confucius put it, ‘how can we know about death?’15 Rather than as an otherworldly location inhabited by gods or by dead human beings, heaven was REFLECTION 137 understood only as a regulative principle. Heaven is the necessary counterpoint to an earth with which it constantly is in creative tension. The natural point of view While all Chinese schools of thought can be said to share in this general outlook, there are still fundamental differences between them. For the Daoists, for example, the focus was always squarely on the propensities inherent in nature.16 For this reason Daoist monks and scholars spent a lot of time contemplating natural sceneries, and painters and poets inspired by Daoist themes never stopped portraying the life of birds, trees and mountains.17 Landscape paintings had a particular philosophical significance since they were thought to show something akin to a snapshot of the forces of creation at work. A good painting should not portray nature realistically, from the outside as it were, but instead show the ‘Vital breath’ which animated it from within.18 Similarly, in geomancy—the feng shui of Hollywood fame—the point was above all to locate the ‘lifelines’ running through a landscape where the forces of creation were thought to reveal themselves most vigorously. Not surprisingly, shi, potentiality, was the name the Chinese gave to these lines. The naturalist perspective on life meant that many Daoists took an active interest in minerals, wild plants, animals and parts of the human body. They also engaged in alchemical experiments, in sexual therapies, and made several pathbreaking scientific discoveries.19 In addition the natural perspective equipped them with alternative views on society, and usually they were highly critical of what they saw. The Confucians, the Daoists complained, focused too much on social conventions and not enough on human nature and its relation to the natural world. And the imperial state in its hierarchical authoritarianism deviated radically from the natural egalitarian order which the Daoists believed had preceded it.20 Throughout Chinese history, from the revolt of the Yellow Turbans in the third century CE to the Taiping rebellion of the nineteenth century, social rebels were often inspired by Daoist ideals.21 The physical location of many Daoist critics facilitated such reflections. They usually thought of themselves as outsiders; often they were former civil servants who had been dismissed from their posts or who voluntarily had resigned in protest against some official policy.22 Sometimes they would live out their days as hermit scholars, engaged in meditation and æsthetic pursuits. A favourite motif in the ink paintings they composed, with an obvious reference to their own predicament, was the defiant old tree, scraggly and withered, which survived against all odds on some barren mountain-side.23 For additional protection, the Daoists would often cultivate various eccentricities. The poet and philosopher Ruan Chi of the third century CE was for example commonly regarded as ‘mad.’24 When he was not engaged in ‘pure conversation’ with his friends in the bamboo groves outside of the capital 138 CHINA he stayed shut up in his room studying books of several months on end, without ever going out; sometimes he went up into the mountains or to the waterside, forgetting for several days to return home…. He was a great drinker, an accomplished performer on the lute, and skilled in whistling. While he was following out a train of thought, he would quite forget about the outside world.25 Under the impact of Daoism even the Confucians were eventually forced to start considering the world from more of a natural point of view. In the eleventh and twelfth centuries in particular the doctrines first formulated by Confucius in the fifth century BCE were reformulated into the grand synthesis known in the West as Neo-Confucianism.26 Yet nature as the Neo-Confucians understood it was always curiously abstract. What mattered to them was above all the basic principle, li, underlying the cosmic order—‘the Great Ultimate’— and not messy empirical facts. And this abstract understanding of nature reinforced a very conservative theory of statecraft. As the Neo-Confucians explained, the Emperor had a personal responsibility for maintaining the balance between Heaven and Earth and the responsibility of everyone else was to subject themselves to the imperial rule. From this time onward most of the emperor’s time was taken up with various rituals designed to assure this end.27 Astronomy was an interest which Daoists and Confucians shared and for both schools alike the study of celestial phenomena was a way of reflecting on politics.28 The Confucians studied astronomy in order to discover whether a given government was organised in accordance with the requirements of Heaven. To this end the state maintained a team of imperial astronomers whose only job it was to keep their eyes on the evening sky. Unusual sightings were immediately identified as portents and vested with huge political significance. Astronomy was for this reason regarded as a political science and as an arcanum imperium, a secret of the state.29 Soon however the official science found its counterpart in a subversive astronomy guided by anti-establishment motives and often pursued by renegade Daoist monks.30 Just as the official astronomers they kept their eyes on the sky, but what they wanted to know was rather how long a particular emperor was going to last or whether an uprising they were planning was likely to succeed. If Heaven was seen to grant its approval, the rebels were ready to strike. Naturally the imperial state did everything it could to hide such astronomical knowledge and ordinary people were for this reason banned from making observations.31 The historical point of view In general however the Confucians were always far more interested in social than in natural phenomena.32 For them the regenerative principles of Heaven and Earth were most obviously on display in the unfolding of society over time. Hence history was always their primary object of reflection; by investigating the REFLECTION 139 past, they believed, they could investigate the shi inherent in the present. This is why, once a new dynasty was established, a group of historians would start working on a history of the previous regime.33 In this way it was hoped they would learn the secrets of its rise and decline and avoid the mistakes which became its undoing. Yet the past was not only studied but also thoroughly idealised, and in China this idealisation began before most other societies had even accumulated much by means of a history. Already in the first millennium BCE personages from previous eras exercised an extraordinary power over the collective imagination. One constant point of reference were Yao and Shun, the semimythological founding fathers—the ‘Sage Kings’—of the first Chinese dynasty.34 In the eyes of the Confucians, Yao and Shun had been paragons of virtue and good government. Similarly, in the case of the arts, painters and poets were from the earliest times advised to emulate the examples of ‘the ancient masters.’35 The highest praise imaginable was to say that a painter’s work perfectly mimicked the style of some illustrious predecessor. Old cultural practices had the same canonical status. Already in the third century BCE, the Confucian moralist Xunzi would for example repudiate all institutions, rituals, food, utensils, music, colours or garments not explicitly prescribed by ‘the ancients.’36 To Europeans, particularly from the nineteenth century onward, such constant harkening back to a remote past has been taken as proof of the inherent conservatism and stagnation of imperial China. And yet there is no doubt that the historical consciousness of the literati constituted a powerful source of creativity.37 The long and well-documented unfolding of Chinese history contained a vast storeroom of examples with which the present could be compared. Such comparisons were never mindless or automatic since the historical examples always had to be carefully chosen and alternative interpretations considered before they could be refuted. Rather than slavishly following precedent, history was always reflected on before it was used. The point, said Confucius, is to ‘review the old so as to find out the new.’38 Echoing these words, Chairman Mao 2,500 years later agreed that ‘[w]e have to learn from the past to serve the present.’39 Take the example of the Spring and Autumn Annals, a chronicle of the state of Lu covering the period from 722 to 479 BCE, and once thought to have been compiled by Confucius himself.40 In and of themselves these chronicles provide only the most basic information—short sentences mainly, recording the precise events of individual reigns—and as such they have about as much literary or philosophical merit as an average telephone directory.41 Yet their skeletal structure is precisely what made them useful for later interpreters. Rather than laying down any precise teachings, the annals yielded their lessons only once creatively reimagined. To scholars of the Song period, for example, they demonstrated the importance of ‘revering the emperor and expelling the 140 CHINA barbarians,’ while in the nineteenth century the same texts yielded a doctrine of limited, constitutional, government.42 Rather than proving the conservatism of imperial China such creative use of the past demonstrates how political discussions necessarily must be framed in a society where history is free from the metaphysical illusion of progress.43 Chinese utopias were never located in the future or in other non-Chinese places but instead always in the remote past. For this reason it is difficult to make a clear separation between a return and a renewal Radical opinions and alternative political programmes were necessarily couched in terms of the example set by some ancient ruler and revolutionary action was conceived of as a restoration of an earlier era rather than as a break with the past. Consider the case of Huang Zongxi, a Confucian scholar of the early Ch’ing dynasty.44 Huang, like so many of his predecessors, saw a reestablishment of the institutions of the Sage Kings as the only model for a virtuous government, but far from making him into an arch-conservative this historical awareness turned him into a radical critic. The Sage Kings had ruled in the interest of the people and at their own expense, Huang explained, but recent emperors had inverted this principle. To restore the past would thus necessarily be to break with the imperial tradition. Among the reforms he advocated was the establishment of a universal public school system where people could come to form opinions about political matters and learn to participate in public discussions.45 Similarly, Huang continued, under the Sage Kings there had been no private ownership but land had instead belonged to the king who had distributed it equitably so that everyone had had enough to meet their needs. How very different were the contemporary rulers who allowed some people to grow immensely rich while others were starving.46 There were however also those who were far more sceptical of this reliance on history examples, above all the Legalists, a group of scholars of the third century BCE who have become notorious for their defence of authoritarianism.47 To make himself omnipotent, they explained, the power of the emperor must always be greater than the power of the past. And yet, given the way in which political discussions were framed in imperial China, even the Legalists were often forced to make their points in terms of historical examples. To them history demonstrated above all how a Confucian obsession with ‘humanity’ and ‘benevolence’ allowed far too much room for dissent.48 Rather than being kind, an emperor could maintain himself in power only through the harshest of laws and the most draconian of punishments. The Sage Kings, the Legalists argued, were the first illustrations of this thesis. As the Legalist scholar Li Si explained: That the wise rulers and the Sage kings were able to long maintain their exalted position, hold on to awesome power, and monopolise the benefits of the world was not due to any exotic methods but by making decisions alone, implementing careful supervision, and instituting harsh penal punishments.49 REFLECTION 141 In his official capacity as Prime Minister of the first imperial dynasty Li Si had ample opportunities to practise what he taught.50 The most infamous policy, implemented in 212 BCE, was to bury hundreds of Confucian scholars alive and to burn all the books in the country, except the official chronicles of the current dynasty and select technical treaties. As Li Si explained in a memorial to the emperor Qín Shi Huángdì: Those who dare to talk to each other about the Odes and Documents should be executed and their bodies exposed in the marketplace. Anyone referring to the past to criticize the present should, together with all members of his family, be put to death.51 Incidentally emperor Qin Shi Huangdi is reputed to have been the long-standing role model of Chairman Mao Zedong, proving that in China even the most revolutionary of leaders can be influenced by figures from the remote past.52 Technologies of reflection As far as technologies of reflection are concerned China was well provided for. For example, already in the earliest times divinations were carried out with the help of oracle bones.53 Tortoise shells were heated over a fire and the configuration of cracks that appeared on the surface was then interpreted for signs regarding the disposition of Heaven and Earth. In the first millennium BCE, sticks made out of yarrow stems were used for the same purpose. Depending on the combinations of odd and even stems, continuous or broken lines could be drawn and these patterns eventually formed the basis of the hexagrams which made up the I Ching. Reflection on these basic patterns was the starting point of all of the sciences and all philosophy in the Chinese speaking world. From early on in its history China was also a literate society. The first ideographs appeared about 4,000 years ago and in the first millennium CE more Chinese people than any others were able to read and write.54 The existence of writing was a precondition for the unification of the country. Since people were literate they could communicate over long distances and in this way efficiently co-ordinate their activities. But writing also facilitated reflection. Just as in Europe, but in contrast to societies in Africa and the Americas, arguments, ideas and proposals could be written down and thereby spread both across time and space.55 The first compilations, such as the Spring and Autumn Annals and The Odes—the latter a compilation of speeches, harangues, oaths and descriptions of ritual dances—go back as far as to the eighth century BCE.56 Other European technologies of reflection were present in China as well—or rather, in most cases, they were Chinese inventions in the first place.57 The mirror is one example.58 Large bronze mirrors were manufactured as early as 1200 BCE, and already in the fourth century BCE technical manuals explained the differences in the optical qualities of plane, convex and concave mirrors. In 142 CHINA Madison, James, Alexander Hamilton and John Jay, [1788], The Federalist Papers (Harmondsworth: Penguin, 1987). Madrick, Jeff. 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BIBLIOGRAPHY 253 Index absolutism: abolition of parliaments and 56–7; civil rights and 117; European and Chinese compared 175; limits to Chinese 149, 162; repression and 106–7 academies: distance created by scientific 55; in France 108; organisation of 54–5; publications of 55; private Chinese 149; reflection and scientific 53–5; scientific method of 54 alchemy: Daoists and 142; entrepreneurship and 71–2; scientific academies and 53; statecraft and 72 Ancients, the: compared with the Moderns 4–6; conversations of Humanists with 33; entrepreneurship in China and 153–4; Hobbes on 45; reflection in China and 143–6; universities and 50 astronomical observations: arcanum imperium and 173; Confucians and 143; in Europe 37–9; rationalism and 38–9; reflection and 37–9, 143; by renegade Daoist monks 143; statecraft and 173 Bank of England 75, 92–3, 94, 131 banks: Italian 70, 78, 91; financial revolution and 75 Beurs (Amsterdam): futures markets and 91; as insurance broker 89; stock-market 92 Buddhism: Chan and landscape painting 147; in Japan 186; mirror as metaphor in 146; potentiality and 140 bullionism 70–1; Hume on fallacy of 125 bureaucracy: academies and Chinese 149; examination system and 147–8; factionalism within Chinese 162–3; reflection and Chinese 147–8, 150 canon: astronomical observations and 38–9; break-up of medieval 33–4; Chinese conception of 144–6, 148–9; Chinese and European conceptions of compared 17; creativity of Chinese conception of 144–5; in European Middle Ages 30–1, 65–6; examination system and 148 capital: financial markets and 91–4; futures 90–1; markets in 85 254 legal system: antipathy towards of Confucians 148; Germany 86; Holland 86; international law and 103–4; Legalism and 163–4; lex mercatorum as 85–6; medieval 100; see also privileges Legalism: Bodin and Hobbes compared with 175; fear of chaos and 163; potentiality and 140; ‘rectification of names’ and 165; repression and 163–4; view of history of 145; wu wei doctrine and 154–5 literacy: in China 146; in Japan 185–6; printing-presses and 44 literature: autobiography 69; medieval and conceptions of the person 65–5; novels 73–6 loyalty: in conversation 113–14; of opposition 123–4; self-regulation and 120 machine: self-transforming 22; state as 109, 111–12 mandate: heavenly, defined 155; reflection and 57–9; theories of representative 57; United States constitution and 58–9; withdrawal of heavenly 160–1 markets: economic, development of 85–6; efficiency of 84–5, 87; of factors of production, and property rights 84–5; financial 91- 94; futures 90–1; politics and 126; problems of 126; property rights and 84–7; self-interest and 124; see also laissez-faire May Fourth Movement: cultural flourishing and 169–70; as a period of chaos 169–70 Meiji: entrepreneurial institutions and 195–6, 198; institutional imports and 194–6; invented traditions of 191–2, 197; Japanese emperor and 188; nationalism and 192, 197; pluralism and 196–7; reflective institutions and 195; reinvention of the emperor 192; restoration 190–1, 193–8 mercantilism: bullionism as 70, 125; scientific academies and 54 metaphor: body 100–1; chain 100; conversation 119; huntsman 163–4; ladder 100; machine 109, 111–12; mirror 146; musical 164, 167–8, 197; self-regulation 120 metaphysics: mutability and 141; shi and 141; social change and 171–2; thisworldliness of Chinese 141 Middle Ages: break-up of unity of 101–3; carnivals in 31; contemporary return of 213; definition of 4; economic conditions in 85–6; entrepreneurship in 64–7; mediation in 44–5; Ming dynasty compare with 139; mirrors in 43; monasteries in 31; INDEX 261 obstacles to entrepreneurship in 66–7; parliaments in 56; pluralism of 98–101; reflection in 30–2; stability of 100; unity of 98–101 Ming dynasty: bureaucracy of 150; consumer culture of 158–9; European Middle Ages compared with 139; examination system in 148–9; reflective institutions in 150–1; state finances during 158 mirror: Chinese 146; distance and 42; newspaper as 46–7; parliament as 55–6; of princes 43; of princes in China 146; representation and 55–6; Venetian 42–3 modernisation: East Asia and 14–15; globalisation 208; lessons from Japan for 194, 197–8; lessons for the rest of the world 208; obstacles to 208–9; scope for future 213–15; theory of 14–15, 210 modernity: Chinese failure to reach 144; definition of 4–6, 210; economic sources of 6–9; emptiness at the heart of 210; enabling conditions of 17, 210; entrepreneurship and 63–83; the failure of Argentina and 209–10; fundamentalism and 97–8; internal critique of 213–15; mechanics of 22, 129–30, 207–8; North Sea character of 212; pluralism and 95–126; post-modernity and 211–13; reflection and 29–59; revolutions as a misunderstanding of the logic of 135, 210; Singapore as example of 209; United States as example of 213–15 monopoly: adaptive efficiency and 7–8; efficiency and 89–90; entrepreneurship and 89–90; patent and 89–90 Muslims: Chinese relations with 156–7; unity of Europe and 99 needs: capitalist development and 23–4; financial, of entrepreneurs 91–94; social as opposed to physiological 82– 3; see also demand Neo-Confucianism: science and 176–7; view of nature 143 newspapers: in China 147–8; as mirror 46–7; public opinion and 47–8 November Tree Principle: Confucianism and 173; institutional longevity and 130; Japanese emperor as example of 201; social change and 130–6 painting: Daoism and 141–2; landscape 141; portraits 43; as technology of reflection 146–7 parliaments 55–9; committees of 58; medieval 23, 56; as mirrors 56–77; as ‘talking-shop’ 56 parties: fear of 122; inevitability of 122; pluralism and 122; self-regulation and 123–4; system of 123–4 patents 89–90; 262 INDEX entrepreneurship and 90 person, conceptions of the: medieval 64–5; Renaissance 68–69; Robinsonian 73–6, 84; sociability and 111–13 pluralism 19–20, 95–126; chaos and 168–70; in China 162–70; contradictions, ability to live with 166; conversation and 114, 119; economic system and 124–6; entrepreneurship and 97, 101; ethnic 162; European and Chinese compared 178– 9; European conflicts and 103–5; in Japan 191–2; of languages 101–2, 162; in the Middle Ages 99–101; laissez-faire 124; metaphorical representations of 100–1; modernity and 97–8; peace and 106–7; political system and 120–4; reflection and 97, 101; religious 166; self-interest and 125; self-regulation and 119–20, 125–6; state and repression of 105–8; unity and 108, 162–3 polite society 109–17; civil rights and 116–17; conversation and 113–15; cultural specificity 115–16; gentlemanly culture of 109–13; physical location of 110; politeness, defined 110; reason of state and 112–13; subversive quality of 112–13 potentiality: actuality and 18; Aristotle on 18–20; art and 141; in Chinese thought 140–3; immanent quality of 140–1; metaphysics and 141; mutability and 141; shi as 140–3; social change and 20–5 printing-press, the 44–5; in China 147–8; communities and 45–7; in Japan 186, 195; literacy and 44; newspapers and 46–7; Reformation and 44–5; rise of vernaculars and 101–2; scientific discoveries and 46 probabilities 88–9; calculation of 88–9 property rights 84–7; in China 158; constitution and 87; entrepreneurship and 86; lex mercatorum and 85; medieval conceptions of 85; the state and 86–7 Prussia: legal system of 87; model for Japan 188 public opinion 45–8; Japan and 187, 195; newspapers and 47–8 reason of state 105–6; balance of power and 121; repression and 112–13; selfregulation and 121 recognition: of the person in the Middle Ages; 64– 5; of the person in the Renaissance 68–9; Robinsonian individuals and 73–6; sociability and 111–13; state and 70; war and 70 reflection 19, 29–59; art and 146–7; astronomical observations and 37–9; Censorate and 150–1; China and Europe compared 172–3; Daoism and 141–3; definition of 29; distance and 29–30; INDEX 263 in European Middle Ages 30–2; examination system and 148–9; geographical discoveries and 34–7; history and 143–6; Humanists and 32–4; Imperial Remonstrance Office and 150– 1; individual, futility of 41; institutions and 49–59; in Japan 186–8; Legalist repudiation of historical 145–6; nature and 141–3; in parliamentary reflection continued committees 58; parliaments and 55–9; public opinion and 47–8; quality of 58; representative mandate and 57–9; scientific academies and 53–5; technology 41–8; trust and 57; universities and 50–3 Reformation: the devil and the 72; pluralism and 102–3; printing-presses and the 44–5 Remonstrance Office, Imperial: as reflective institution 150 Renaissance, the: Carolingian 40–1; compared to ‘pre-Renaissances’ 40–1; conception of the person in 68–9; entrepreneurship in 68–72 representation: deliberation and 55–6; theories of 55–6, 57–9 repression: within Chinese family 160; Hobbesian style 108; informationgathering and 150–1, 153– 4; Legalism and 163–4; peace and 106–7; pluralism and 97–8; religious 107–8; state and 105–8; wu wei doctrine and 154 revolution: China and 198–201; England 5; excesses of 125–36; French 5, 134–5; institution-building and 136; as misunderstanding of logic of modernity 135, 211–13; modern and pre-modern idea of 5–6; November Tree Principle and 134; United States 5, 136; see also financial revolution rhetoric: in universities 51–2; versus logic 51–2 rights: ‘ancient, of an Englishman’ 135; in China 158–9; civil society and civil 116–17; constitution and 87; dignity and human 76; lex mercatorum and 85; of property 84–7; of Spain in the Americas 35; see also property rights risk: aversion 87–8; calculations of 89; dealing with 87–8; end of Chinese geographical discoveries and 155–6; futures markets and 90–1; institutions and 87–91; joint-stock companies and 88–9; mutual societies and 88; pooling of 88–9 rituals: avoidance of fundamentalism and 167; Confucianism and 165; harmony of social order and 164, 167– 8; impossibility of criticising 168; means of maintaining social order 153– 5; orthopraxy versus orthodoxy 166–8; ritualism 164, 167–8 Robinson Crusoe: conversation and 114–15; 264 INDEX entrepreneurship and 73–6; individualism and 73–6, 120; Kant and 76; Rousseau and 76; utopia and 76 Royal Society 53, 54–5, 119; Bacon as inspiration of 55 Sage Kings: Confucius on 155; Huang Zongxi on 145; reflection and 144–5; wu wei doctrine and 155 scholasticism: medieval universities and 50–1; reflection and 31, 32; scientific academies and 53 scientific discoveries: Daoist scholars and 142; journals and 55; printing-presses and 46, 147; scientific academies and 53–4 self-consciousness: mirrors and 43; the novel and 74 self-interest: in conversation 113–14; laissez-faire and 125; self-regulation and 120–1 self-regulation: in conversation 114, 119; difficulties implementing metaphor of 122; intervention and 121, 126, 197; laissez-faire and 125; as metaphor of society 120; political parties and 123–4 Shan dynasty: notion of personal god in 141 shi: feng shui and 142; immanent quality of 140–1; as potentiality 140–3 Shintoism 186; as invented tradition 192 sociability: Aristotle on 110, 122; Cicero on 110; civil rights and 116–17; eighteenth-century 110–11; entrepreneurship and, in China 160–1; guanxi networks and 160–1; Hobbesian state and 111–13 social change: palternative explanation of 15–17; alternative model of 18–20, 207–8; capitalism as source of 6–9; chaos and 168–70; Chinese and Japanese compared 200; difficulty of bringing about 20, 209– 10; enabling conditions of 17, 24–5; Europe, summarised 129–30; Europe and East Asia compared 10–15, 171–82; functionalism and 23–4; immanent quality of 140–1; individualistic fallacy and 16; institutions and 20–2; internal and external sources of 183–4, 209–10; logic of 18–20; November Tree Principle and 130; revolutionary path 134–6; smooth path 130–4; stagnation and 171 social structure: alleged harmony of in China 164; body metaphor and 100–1; chain metaphor and 100; Chinese 148; decentralised control over 167; Middle Ages 99–101 Song dynasty: art of 146–7; cultural flourishing and 169; economic boom of 169; examination system in 148–9; infrastructural investments and 155, 169; as a period of chaos 169; private academies in 149; reflection on history and 144 sovereignty: Bodin on 106; INDEX 265 Hobbes on 106–7; Italian city-states and 102–3; repression and 106–8 Spain: geographical discoveries of 34–7; international law in 36 stage: actors and 69–70; entrepreneurship and 70; statecraft and 70; world as a 68–70 state, the: as actor 70; bullionism and 70–1; censorship and 45; examination system and the Chinese 149; finances of the Chinese 158; Hobbesian 111–13, 117; Japanese 189–90; loans to 93–4; parliaments and 56–7; political entrepreneurship and 70; property rights and 86–7; repression of pluralism and 105–8, 112; scientific academies and 54; sovereignty of 102; universities and 51–2; worship of 105–7 statecraft: alchemy and 72; arcane imperii 72; examination system and 149; language and 165; Spring and Autumn Annals and 144; stagecraft and 70 stock-market: Amsterdam 92; London 75 Sweden: banking in 94, 133; constitution of 87; dominant role of the state in 135–6; limits on pluralism in 134; newspapers 46, 133; November Tree Principle and 132–3; party system of eighteenth century 123, 133; religious repression in 107–8; social development of 132–4 Tang dynasty: openness to the world during 156 technologies of reflection: art as 146–7; China 146–8; divination as example of 146; Europe 41–8; hi-tech 42; institutions and 49–50; Japanese, Chinese origin of 186; language as example of 41; mirror 42–3, 146; newspapers as 46–7, 147–8; printingpress as 45–6, 147–8; writing as example of 42, 146 technology: Chinese 172; Chinese and Europe 199; Daoism and 176; economic impact of 8–9, 16; fallacy of 172; institutions and 172; patents and 90; reflective 41–8 Tokugawa period: daimyos in 190–1; dialogue with the court 190; ‘Dutch learning’ and 187; economic policy of 189; national learning encouraged in 186–7; reaction of the shogunate toward foreigners 189–90; reforms during 189–90; revival of Confucianism in 188; role of daimyos in 190 toleration 19, 97–8; in conversation 113–14 trade: Confucian view of 158; European demands for free 184; openness to foreign 157–8 trust: 266 INDEX Chinese and European versions of compared 178; Chinese family and 159–60; collective action and 77–9; corporations and 79; credit and 93–4; reflection and 57 United States: balance of power and 123; constitution of the 58–9, 123; economic growth in 8; party system of eighteenth century 123; social change in 135; universities in 52 unity: of Europe 98–9; of Europe destroyed 103–5; European and Chinese compared 179; failure to restore 103; Japan and 197; pluralism and 108, 162–3; political fragmentation and 168; repression and 105–8 universities: ancient learning and 50; Humanist learning and 51–2; medieval subjects of 50; pedagogy employed by 50–1; as reflective institutions 50–3; state and 51–2 upper-class: consumption of 82–3; polite society and 115–16 usury: financial revolution and 93–4; medieval prohibitions against 66 utopia: as reflective device 36–7; Robinson Crusoe’s island as 76; Solomon’s House as 54; Thomas More’s 36–7 Venice: joint-stock companies in 88–9; patent laws of 90; production of mirrors in 42–3 Vikings, the: and the discovery of the Americas 40– 1; heroic ethos of 68; as medieval entrepreneurs 67–8 war: Chinese philosophy of 153–5; civil 105; Japanese, with China and Russia 193, 197, 199; Japanese with China and the United States 201–3; lack of direct confrontation in 153–4; pan-European 103–5; religious, lack of in China 166–7; Sun Zi on 153–4; see also chaos Warring States period: ancient Greece compared with 139; Confucianism and 169; cultural flourishing and 168–9; as a period of chaos 168–9 working-class: enthusiasm and 116; Japanese, and industrial conflicts 196; polite society and 116 writing: Chinese society and 146; as technology of reflection 47 wu wei, doctrine of: Daoists on 154; entrepreneurial ideal of 153–5; laissez-faire contrasted with 153–5, 178; Legalists on 154; ritualism and 143, 164 INDEX 267