DRAFT: Consequences of the Revolutions of 1848: Élite Recognition that "If Everything Is Going to Stay the Same, Everything Has to Change..."
A meditation on the 1848 chapter of Harold James's "Seven Crashes: The Economic Crises that Shaped Globalization". I really wish he had written "Seven Crashes" before I published "Slouching Towards...
A meditation on the 1848 chapter of Harold James's Seven Crashes: The Economic Crises that Shaped Globalization. I really wish he had written Seven Crashes before I published Slouching Towards Utopia, because this below would, I think, have fit perfectly into the book as a motivation for and tied together all of my references to the Pseudo-Classical Semi-Liberal Belle Époque Order…
Harold James, in Seven Crashes: The Economic Crises that Shaped Globalization, identifies the 1840s agricultural crisis and the political Revolutions of 1848 as the initial push into something like modern globalization. It was a moment of conjoined shocks: famine, epidemic disease, financial collapse, and political upheaval. These events, James argues, formed a polycrisis, one aspect of which was a supply crisis of a particularly disruptive sort, one that destroyed traditional subsistence structures and rendered evident the insufficiency of the ancien régime's political economy. In Ireland, for example, the confluence of potato blight, doctrinaire laissez-faire policies, and an underdeveloped fiscal and relief apparatus led to what Amartya Sen would later call a man-made famine. In Germany and France, grain and bread riots cascaded into deeper confrontations with sclerotic state authority.
But the 1840s crisis and the 1848 revolutions in Europe failed. Old Régimes did regain control. But the response was not, as it had been after the 1815 final defeat of Napoleon, the attempted clock rollback of reaction.
No, the Revolutions of 1848 did not produce the descent from Heaven of an New Jerusalem.
However, there was, after 1848:
a Europe-wide questioning of how policy could be more effective, and how the poor might be helped…. Better, more competent institutions were needed…. Governments needed to reinvent themselves so as to see their relationship with commercial prosperity in a new way….. The events of the 1840s laid the foundation for a wave of productive institutional adaptation…. Reaction is [not] really the best way of describing the… governance that emerged in the 1850s and 1860s… ambiguous figures like Louis Napoleon (Napoleon III) and Bismarck: modernizers who built a world in conformity with a new logic…
They did, however lead “governments… to reinvent themselves… [and] their relationship with commercial prosperity in a new way…. a wave of productive institutional adaptation…” That is Harold James’s summing-up of one of the true gems in his treasure that is his book Seven Crashes: The Economic Crises that Shaped Globalization.
The 1848 crisis truly was a catalyst for profound global economic and political transformation—reorienting trade relationships, accelerating industrialization, and prompting shifts in political ideologies, all of which pushed the pace of globalization forward, and reoriented mid-1800s globalization in a market-dominant and bourgeoisie-dominant rather than a reactionary landlord, aristocratic status-group, and clerical-authority direction. “If everything is going to stay the same, everything has to change” is what young Tancred told his uncle the Prince of Salerno, as Tancred headed off to join Garibaldi. And Napoleon III and Prince Bismarck and many other élite power holders knew that as well.
Thus the aftermath of the Revolutions of 1848 did mark a profound inflection point in modern economic and political development. Barricades fell. Revolutionaries found themselves crushed: killed, imprisoned, or exiled. But élite policymakers quietly digested the implications of crisis. And what emerged in the 1850s and 1860s was adaptive governance. Yes, it was born of fear and necessity. But the response to the god and goddess Phobos and Ananki laid the institutional foundation for what Keynes would later call the "economic El Dorado" of 1870–1913. What it did was it produced the pseudo-classical semi-liberal Belle Époque order, which gave the world more peaceful, more productive, and more prosperous years that had ever been seen before.
The 1848 crisis catalyzed a rethinking of the state’s role in economic coordination. For elites, the uprisings were both a warning and a spur. Rulers liked their positions, and for their positions to be secure everything had to stay the same. But ongoing technological revolution and the first true waves of Schumpeterian creative-destruction meant that things that stayed the same needed very different, and very changed, underpinning. Figures like Louis Napoleon and Bismarck did not embrace liberalism in its pure form. Rather, they engineered what might be termed regimes that harnessed market energies, encouraged industrial capitalism, and facilitated globalization, all while preserving elite authority and social hierarchy.
They called themselves—or, rather we call them, “classical liberals”. But they were not. They called for increasing laissez-faire in the marketplace: the breaking-down of all time-honored customs and rights that provided people with societal and market power not firmly based in fee-simple real property or absolute chattal personal property. But there was a big asterisk: ownership of the property that carried societal power was to be concentrated into a combination of an old landed-bureaucratic aristocracy annealed to a new industrial plutocracy.
Thus this Belle Époque Order could only be pseudo-classical, because rather than being time-honored it was brand new. And it could only be semi-liberal for two reasons: First, it both retained and gloried in a great deal of not freedom but hierarchical and cultural subordination. Second, because its major point was to use the mechanism of property and its grossly unequal distribution meld together an economic upper class of entrepreneurship and industry from the coming of explosive Schumpeterian creative-destruction Modern Economic Growth with the political-social upper class of landlords and functionaries that SteamPower Society had inherited from the past of human Agrarian Societies of Domination.
Louis Napoleon Bonaparte, later Emperor Napoleon III, is emblematic.
Initially dismissed by liberal opponents as a mediocrity or a “sphinx without a riddle,” Napoleon III pioneered a form of economic statecraft that brought modern finance, infrastructure, and managed liberalization under the aegis of state authority. He supported the creation of institutions like the Crédit Mobilier, which mobilized savings for infrastructure development. He encouraged free trade—notably through the Cobden-Chevalier Treaty with Britain in 1860—while simultaneously investing in nationalist and imperial prestige projects. His rule embraced what James calls a “Bonapartist approach,” where economic modernization and social control were yoked together.
Bismarck, the Iron Chancellor of Prussia and later of the German Empire, followed a different but related path. He suppressed radical socialism while simultaneously instituting social insurance schemes that would become the blueprint for modern welfare states. He unified Germany through “blood and iron,” yes—but also through a deeply pragmatic embrace of railroads, tariffs (and then free trade), and financial modernization. He too understood that only by delivering economic dynamism based on the rapid introduction and diffusion of the classic industrial-revolution Steampower Society technologies could the aristocratic elite maintain legitimacy in an age when the bourgeoisie and the proletariat were becoming politically conscious actors.
What emerged by the 1870s, then, was a Europe increasingly ruled by “modernizers who built a world in conformity with a new logic.” That logic saw trade, capital mobility, and managed migration not as threats but as instruments of national power and prosperity. The gold standard—initiated in Britain in 1844 and adopted widely by the 1870s—provided a rules-based framework for international finance. International exhibitions, like the Great Exhibition of 1851, celebrated industrial advancement as a shared, almost spiritual project. Tariff walls were lowered, transatlantic shipping boomed, and a new class of global financiers arose to orchestrate the flow of capital from London, Paris, Berlin, and Vienna to Buenos Aires, Bombay, and New York.
This was the Belle Époque, the long peace and prosperity between 1871 and 1914 that Keynes would later describe with barely concealed nostalgia in The Economic Consequences of the Peace. “The inhabitant of London could order by telephone, sipping his morning tea… the various products of the whole earth… and reasonably expect their early delivery upon his doorstep.” It was, Keynes wrote, “an economic El Dorado.” But this El Dorado had been built not in the sunshine of unbroken progress, but in the shadow of revolution, famine, and financial panic. It was a direct descendant of the 1848 crisis—a child of chaos, tamed by adaptation.
Indeed, one of the most important consequences of 1848 was the recognition that neither laissez-faire liberalism nor neofeudal paternalism could contain the economic volatility and mass aspirations of an industrializing Europe. The states that thrived were those that found institutional ways to mediate rising capitalism—through public banks, stock exchanges, social policy, infrastructure investment, and legal reform. As James notes, the rise of new institutions like the limited liability corporation and the expansion of central bank functions marked a decisive shift in the economic architecture of the West.
Of course, the contradictions of this order would eventually prove fatal.
The very same flows of capital, people, and goods that made the Belle Époque dynamic also made it fragile. The interconnectedness of the gold standard, for example, turned financial panics into transnational events. Imperial competition, encouraged by economic rivalries, intensified after the 1880s. Social Darwinism rose to justify internal-society inequalities on a modern “scientific” rather than on time-honored religion or custom. But to say that life is struggle for advantage brought fuel that could be lit into the bonfires of world wars. And labor movements, increasingly global in outlook, began to demand not just suffrage but redistribution and justice. As SteamPower Society shifted into Applied-Science Society as the technologies of the 2nd Industrial Revolution hit, what dynamic stability had been created after 1848 became unstable.
In 1914, the system catastrophically lost its balance.
Yet some of the legacy of the 1848-induced institutional turn endured.
For one thing, immediately after the war all kinds of people were desperate to resurrect the pseudo-classical semi-liberal Belle Époque order. One such was John Maynard Keynes, who wrote in 1919 that that system that had generated “economic Eldorado… [relative] Utopia'“was worth restoring and must be restored. A failure to restore would inevitably, he said, bring on:
that final civil war between the forces of Reaction and the despairing convulsions of Revolution, before which the horrors of the late German war [WWI] will fade into nothing, and which will destroy, whoever is victor, the civilization and the progress of our generation…”
And even after the collapse of the gold standard and the carnage of World War I, elements of the Belle Époque order were a guiding star. Much was resurrected in the post-World War II liberal order: the emphasis on multilateralism, the role of central banks, the celebration of managed globalization. This New Deal Order fit the Mass Production Society of its day even better than the Belle Époque order had fit the Steampower Society of its. And the new kind of statecraft—the pragmatic, semi-liberal, adaptive statecraft of post-1848 is part of the lineage, paradoxical and improvised, that has made the modern world much less of a shitshow than it might be.
And so in the final analysis today's debates about globalization’s winners and losers, about populism and élite adaptation, are distant echoes of the same dilemma Louis Napoleon and Bismarck faced: how to harness the dynamism of capitalism without succumbing to its chaos.
Seven Crashes: the 1848-relevant pages:
References:
DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books. <http://bit.ly/3pP3Krk>.
Engels, Friedrich. 1895. “Introduction to Marx’s Class Struggles in France, 1848–1850”. In Marx and Engels: Selected Works in One Volume, 100–112. Moscow: Progress Publishers. <https://archive.org/details/classstrugglesin00marx>.
James, Harold. 2023. Seven Crashes: The Economic Crises That Shaped Globalization. New Haven, CT: Yale University Press. <https://books.google.com/books?id=xwqNEAAAQBAJ>.
Keynes, John Maynard. 1923. A Tract on Monetary Reform. London: Macmillan and Co., Limited. <https://archive.org/details/tractonmonetaryr0000keyn>.
Keynes, John Maynard. 1923. The Economic Consequences of the Peace. London: Macmillan and Co., Limited.
di Lampedusa, Giuseppe Tomasi. 2007 [1958]. The Leopard. Trans. Archibald Colquhoun. New York: Pantheon Books. <https://archive.org/details/leopard00lamped>.
Sen, Amartya. 1981. Poverty and Famines: An Essay on Entitlement and Deprivation. Oxford: Clarendon Press. <https://archive.org/details/povertyfamineses0000sena>.
Thoukydides of the Athenai. 1910 [ca. -400]. The History of the Peloponnesian War. Trans. Richard Crawley. London: J. M. Dent; New York: E. P. Dutton. <https://archive.org/details/pelocrawleyr00thucuoft>
And here are the references in Slouching:
Throughout the long twentieth century, many others—Karl Polanyi, John Maynard Keynes, Benito Mussolini, and Vladimir Lenin serve as good markers for many of the currents of thought, activism, and action—tried to think up solutions. They dissented from the pseudo-classical (for the order of society, economy, and polity as it stood in the years after 1870 was in fact quite new), semi-liberal (for it rested upon ascribed and inherited authority as much as on freedom) order that Hayek and his ilk advocated and worked to create and maintain. They did so constructively and destructively, demanding that the market do less, or do something different, and that other institutions do more. Perhaps the closest humanity got was the shotgun marriage of Hayek and Polanyi blessed by Keynes in the form of post–World War II North Atlantic developmental social democracy. But that institutional setup failed its own sustainability test. And so we are still on the path, not at its end. And we are still, at best, slouching toward utopia…
Two currents of thought emerged after World War I that sought not just alteration but fundamental transformation of the pseudo-classical semi-liberal order. They were to gain flesh and rule, bloodily and destructively. They were Vladimir Lenin’s version of really-existing socialism, and Benito Mussolini’s fascism, both of which you will see later at great length…
In this book I can only trace two currents of thought and action: first, the current we have seen before, for which Friedrich von Hayek (born in Vienna in 1899) is a convenient marker (that all that needed to be altered was that market-economic institutions had to be purified and perfected, and supported by an anti-permissive social and cultural order) and the current we have seen before for which Michael Polanyi’s older brother Karl, born in Vienna in 1886, is the convenient marker (that the market recognized only property rights, and a society made up of humans who insisted that they had more rights for that would react—left or right, sensibly or stupidly, but powerfully—to that failure of recognition). And I will trace how they could be shotgun-married to each other, with the blesser of the wedding being John Maynard Keynes. That, I believe, is the principal grand narrative, or at least it is mine. Could the clock have been turned back to 1914, and then set to ticking again as if World War I had just been a bad dream? Was the restoration of the pseudo-classical semi-liberal order, and a post-1918 that went again like 1870–1914, a road humanity could have taken in 1919, had just a few key decisions gone differently? Whether or not there was a fork, and a better path that realistically could have been taken, the history of the post–World War I era tells us that it was not taken at all…
The unique American advantage was greatly reinforced by the fact that in the United States, the period of explosive prosperity set in motion around 1870 (also called the Belle Époque, the Gilded Age, or the economic El Dorado) lasted without interruption longer than elsewhere in the world…
This pseudo-classical semi-liberalism remained an ideal for many in the 1920s and for a view well into the 1930s. Rolling back the changes of the World War I era and the Great Depression, and returning to this Old Order, was the express desire of a large but waning political and governmental coalition in the global north. To his last day in office, Herbert Hoover kept trying to bind his successor to balancing the budget and maintaining the gold standard. But by the middle of the 1930s, the numbers and confidence of those who were committed to rollback had dwindled to very few indeed. In the middle of the Great Depression, few be lieved that liberalizing markets could deliver enough economic growth and enough redistribution to keep society’s most powerful groups from concluding that it was time to overthrow the political game board. Better, in the view of many, to get in on the winning side than to go down supporting attempts to reconstruct a system that manifestly did not work…
At the core of fascism as a movement was a contempt for limits, especially those imposed by reason-based arguments; a belief that reality could be altered by the will; and an exaltation of the violent assertion of that will as the ultimate argument—indeed, the only kind of argument that mattered. At the core of fascism as an ideology was a critique: semi-liberal industrial capitalism and parliamentary government had had its chance, and had failed. The failures had become manifest in several different ways, but all were linked together. The ideology was secondary, but it was not important. Why should someone choose to submit their will to that of some fascist leader? The ideology had to resonate with them for that to happen. So let us look at the failures that fascism ascribed to the pseudo-classical semi-liberal order that establishment politicians were attempting to rebuild after World War I. And make no mistake: the failures were real…
Rightist neoliberalism was much harder edged. A much steeper slope in the distribution of income and wealth was not a bug but a feature. The top 0.01 percent—the job creators, the entrepreneurs—deserved to receive not 1 percent but 5 percent of national income. They deserved to have societal power, in the form of the salience given to their preferences in the market’s semi-utilitarianism, over the direction of human beings’ time and effort that gave them not 100 to 1,000 times but 500 to 250,000 times the national average income. And to tax them even after they died was not only impolitic but immoral: theft. This revived and restored form of pseudo-classical semi-liberalism was earnestly supported by a plutocrat-funded network of think tanks and “astroturf” interest groups. (“Don’t tell me that you are speaking for the people”, I heard treasury secretary Lloyd Bentsen once say, “I am old enough to know the difference between the grassroots and astroturf.”) This network’s central claim was that social democracy was one huge mistake, and if only the governments of the world got rid of it, we could move swiftly to a utopia. The makers wouldn’t have to carry the takers on their backs, and the takers would shape up—and if they did not, they would suffer the consequences, and it would serve them right!…
A superb riff on 1848 and its aftermath. You are, first and foremost, a wonderful historian.
One decision by Napoleon III is not of much import economically, but was revolutionary for art history, was his approval of the Salon des Refusés, which allowed the Impressionists to publicly exhibit their paintings for the first time.
Allen kamp