DRAFT: Review of "The Project-State & Its Rivals", by Charles Maier

Networks of cosmopolitan individuals seeking better governance; people hoping to become rich through ententerprise; declining resource empires; and project states—a new look at history

(1) Networks of cosmopolitan individuals seeking to make the world a better place through better governance; (2) networks of people hoping to become rich through entrepreneurship and the funding of enterprise; (3) declining and some rising powers based on control and exploitation of natural resources; and (4) states and government that see themselves not as mere administrations but on a mission from something, with a mandate to change people, change the world, and change history—these four categories of actors are the protagonists of The Project-State and Its Rivals: A New History of the Twentieth and Twenty-First Centuries <https://www.amazon.com//0674290143>, Harvard’s Leverett Saltonstall Research Professor of History and Weatherhead Initiative in Global History Director Charles Maier’s new history of the 20th and 21st centuries.Professor Maier’s protagonists are definitely not the politicians and ideologues leading democracies and autocracies; the social movement-generating classes and parties and status groups; or the cultural-psychological shifts that are the protagonists of your standard international political economy history book. And with new protagonists there inevitably become a new set of stories, a new set of Grand Narratives other than the standard stories: of victory over fascism, victory over communism, victory over colonialism, attainment of liberal market and democratic government near-utopia followed by the vicissitudes of a no-longer-popular neoliberalism.

Does it work?

I strongly and firmly believe that it does.

It is a very refreshing take on a history I thought I knew very well—especially because I had just published my own big book on the world during the same era, Slouching Towards Utopia: The Economic History of the Twentieth Century <bit.ly/3pP3Krk>. I wish I had had The Project-State and Its Rivals at my elbow when I was undertaking my final round of revisions.

The original resource empires fell during the age of decolonization. But the process of their fall was lengthy and directly shaped history for the first two generations of the period covered by Maier’s history. And their influence lived on: they left international legacies of racial and economic inequality that still cannot be ignored even as we try to peer into the future. And while OPEC was not exactly a resource empire, its stranglehold at key moments over world oil supply disrupted the trajectories that project-states and others attempted to put their countries on.

Before World War I do-gooders making appeals to value-neutral science and also to universal ethics were scarce on the ground. The effort at Den Haag to bind war’s cruelty by rules was one of a few such efforts. The overthrow of the personal rule of Belgian King Leopold in Congo (“Listen to the yell of Leopold’s Ghost/Burning in Hell for his hand-maimed host./Hear how the demons chuckle and yell,/Cutting his hands off, down in Hell”) was another. Perhaps the world socialist movement of the Second International was a third, and perhaps it was the Platonic Ideal of all future such movements—especially when they earnestly informed one and all that:

• just as the feudal economy had taught hierarchy and honor

• and the commercial-society economy had taught individualism, property, and representation;

• so the steampower economy was teaching solidarity and the value of human cooperation in the engine- and machine-powered division of labor,

• and soon it would be obvious to all that we should all wear identical blue overalls, call one another “comrade”, and rotate through the jobs administering things in our free and equal society of associated producers.

However, such movements exploded in number and influence in the years after World War I, and continue to grow to this day. Moral virtue and technocratic expertise are seen as readily able to trump even those politicians who are the elected representatives of the people, in view of politicians’ necessities of maintaining coalitions through political payoffs, and especially those tribunes of wealth and productive enterprise who guide the web of capital. To the idea of politics-as-struggle (often military), political-economy-as-trade, and politics-as-rule-of-law has been added the idea of governance-by-appeal: appeal to the moral sense, and to disinterested experts.

This has, perhaps, been the aspect of our civilization that observers from other times might find most strange of all. And they would be surprised at the many striking and substantial successes it has had—in the Mediterranean classical tradition, after all, Plato made a hash of his trips to teach the rulers of Syracuse, Aristotle did not succeed in teaching Alexander II “the Great” Argeadai of Macedon to be a philosophical king, and Seneca did even worse with Emperor Nero.

In my view, however, do-good social movements and empires profiting from resource control have been little more than footnotes compared to the main driving force of history since World War I: what Maier calls “the web of capital”. Every individual in the world, seeking wealth and income for themselves. Governments seeking economic prosperity as ultimately decisive for maintaining support and power internally. Governments seeking economic prosperity as the ultimately decisive sinews of war for defense and attack externally. All these strained many even if not every nerve to accommodate what they saw as the interests of capital, for all feared that in a globalized economy there would be somebody else not down the block but across the ocean willing to offer increasingly mobile financial power a more profitable deal. Fear of losing out, and conceptions and misconceptions about how to provide productive yet relatively docile labor forces plus effective communities of engineering practice both imposed constraints and offered opportunities throughout the hundred or so years covered by Maier’s history. He tells these stories very well.

But capital has not been all-powerful, not by a large margin.

Last, consider Maier’s category of the “Project-State”: World War I demonstrated how powerful the state could be, how much it could accomplish, and how similar the technocratic levers of control and influence were as all the belligerents adopting similar ways and means to deal with problems of supply and production. The web of capital could be chivied by law and regulation and made to sing in harmony with the government. What would not be possible if the state extended its reach? Vladimir Lenin was probably the most naïve in his belief that the Soviet Union could be run indefinitely and prosperously as if it were the German war economy of 1914–1918. But many others drew from World War I the lesson that the state could be used to construct “a land fit for heroes”. And the state could mold not just institutions and incentives but cultures, psychology, and desires. “Why socialize industries?” Adolf Hitler is supposed to have said. “We socialize human beings!”

The first generation of project-states were those that tried above all to remake their own societies, and in the years after World War I those were, in addition to Russia, such countries as China, Turkey, and Mexico seeking to shatter rural hierarchies and clientalist politics to join the modern world. The second generation was led by the United States as remade by Franklin Delano Roosevelt: the creation of what Gary Gerstle calls “The New Deal Order”, and what most call “social democracy” as a way of organizing an effectively democratic and liberal market economy for social welfare, in the context of the web of capital moving from its steampower and second-industrial-revolution configuration into one of boosting and supporting Fordist mass production.

But the New Deal Order did not outlast the 1970s. And the subsequent Neoliberal Order was constructed by the next generation of project-states, for both Reagan and Thatcher along with their ruling coalitions did believe that “there was considerable scope for applying the neo-liberal cleansing-agent to the encrusted hull of many a good ship ”mixed economy“ with beneficial results”, in the words of British communist historian Eric Hobsbawm. And Hobsbawm concurred in this judgment that “some of the ruthless shocks imposed… by Mrs. Thatcher had probably been necessary” as “even the British left was eventually to admit”. Not just right-wing devotées of Mount Pelerin, but left-wingers discontented with consumer capitalism and centrists fearing the triumph of bureaucratization, rent-seeking, and “demo sclerosis” applauded at least the partial dismantling of FDR’s New Deal Order. Thus by the 1990s, by and large, even the leaders of opposition left parties put themselves forward publicly as cheerleaders for largely untethered capital, even if in private they thought of themselves as unrepentant New Deal wolves in left-neoliberal sheep’s clothing.

The succeeding Neoliberal Order failed to deliver on promises of reinvigorated economic growth and a restored moral center of society. What it did do was to raise income inequality and create plutocracy. And it created a—justifiable—sense that establishment politicians were servants of élites in the form of capitalists and do-gooders—a Merchant Right and a Brahmin Left, in Thomas Piketty’s formulation—rather than leaders who listened to and understood the concerns of the people. Plutocracy and populism have turned out to be the nemesis to the hubris of neoliberalism

And I do have some bones to pick with—meaning I have a different analysis and understanding then—Professor Maier with respect to the end-topics of the book: populism and plutocracy.

This is as one should expect: History produces understanding, but rarely prediction. It is often possible to understand: to project back from an endpoint to see which threads woven earlier into Lachesis’s tapestry turned out to be crucial. But much of history is “causally thin”, in Robert Nozick’s phrase, and hence difficult to predict: other threads “nearby” could have turned out to be the crucial ones instead, and would have led to a substantially different outcome. Neither of us has our usual tie-downs to ground our analyses, in the sense of knowing what populism and plutocracy will wreak between now and 2040.

John Maynard Keynes thought that plutocracy would cease to be a problem when democratic governments that sought full employment as a primary policy goal gained and applied the technocratic knowledge of economic management his theories offered. A full-employment policy, Keynes thought, would inevitably be a low-interest rate policy. When interest rates were low, plutocrats had only two options: (1) shepherd and safeguard their wealth to keep it growing at a small rate by reinvesting all the interest, in which case the potential social power they normally exercised through their spending would be held in perpetual abeyance; or (2) spend down their capital, in which case they would then cease to be plutocrats. This was, as Maier notes, Keynes’s “euthanization of the rentier”, his prediction of the disappearance of dynastic wealth as a force exercising dominion over society.

In my view, Keynes went wrong in two aspects. His first error was that he missed the fact that, even in his day, most of plutocracy was not denominated as a capital Sam in dollars or pounds, but rather in a claim to an income flow from monopoly, ownership of resources, or a well-capitalized enterprise. Of these, only the third would not see its capital value rise, as interest rates declined. Plutocrats of the first and second type would find their power to shape society by deploying their incomes unchanged, and by deploying their capital greatly amplified, by the coming of Keynesian low-interest rate policies.

Keynes’s second error was that he could not foresee the large and persistent—right now it seems eternal—gap that would arise between the rate of interest on bonds and the earnings yield on stocks. For those willing to grab for risk, rates of profit have remained high on average even while rates of interest have become low. It is true that by taking outsized risks each individual plutocrat has a large chance of crapping out—of losing so much of their wealth that they are no longer a factor in shaping governance or capable of directly wielding much social power. But for the plutocracy as a whole outsized risk-taking is very profitable: the winnings of the small group who are truly lucky vastly outweigh the losses of the unlucky and so the shaping of governance done by and the social power exercised by plutocracy continues to rise.

The reflection of plutocracy turns into modern populism. With too much political voice in the hands of super-rich, Maier suggests, politicians soft-pedal class appeals to reforming the distribution of income. Political messages then become tuned either to enabling upward mobility by removing legacies of past injustice, on the left, or to the construction of a cross-class alliance based on the people vs. the strangers. As Maier writes:

Contemporary populist ideas [are]… that there exist… two sorts of people… a virtuous, usually ethnically uniform core and a collection of ultimately parasitic hangers-on, whether intellectuals or immigrants or politicians—a mass infestation of updated “caterpillars of the commonwealth.”… The “people” are summoned into life when the nonpeople, the exploitative outsiders, somehow fundamentally alien, are conjured into existence…. But populism involves a dipole in a further sense. It requires a people’s tribune or political entrepreneur, a would-be strong man, a leader waiting to summon the people or at least define it as a political group. Antiquity provided the model for Caesarism…

Maier calls this dipole both “essential” and “implausible”, and marvels at the strength in India of the forces that made Hindu-identified “economically successful… sign… on to a Hinduist movement whose rhetoric seemed designed to demonize them…”

Maier’s confrontation with modern populism ends with him fearing that he has written the wrong history: “the state and its projects might seem less important while the search for collective loyalties… might overshadow the states.” And once such a collective-loyalist group assembles, it:

mobilize[s] as mass counterweights to advocates of [techocratic] governance, and sometimes as critics of capital, though often its instrument…. provid[ing]… adherents [with] the satisfaction of counting for a cause, of carrying out assigned missions and obeying commands, of being good soldiers…. Such a still-possible outcome suggests that the historian think anew about the primal political impulses of the twentieth century, in particular the appeal of fascism….

Suppose that the really fundamental political impulses included the search for a leader, the longing to submerge individuality in the collective cause, or the need to strengthen vulnerable identities by sharpening the distinctions between men and women, those who generated wealth and the “parasites” who lived off them, those who belonged and those who didn’t: foreigners, immigrants, minorities…. Progressive politics and the aspirations of governance would [then] appear historically as fragile efforts to get beyond the unquestioning loyalties of tribe, race, and faith…

As I said, I do have some bones to pick here—meaning I have a different analysis. I see much more continuity between the Trumps and the Orbans and the Modis of our day and past “Caesarist” leaders—extending, as Charlie Maier says, from our day back to President Louis Bonaparte of the Second French Republic who became Emperor Napoleon III of the Second French Empire, to Andrew Jackson, and all the way back to Julius Caesar. Unifying a coalition of the non-rich behind a leader who, as Maier says, does not pursue a collectivist or redistributionist economic program but instead lowers the taxes of the rich—that has always been a delicate tightrope dance, requiring both personal magnetism on the part of the leader and an appeal to nonmaterialist values. It is easy for the charismatic leader to fall off the tightrope. And it is inevitable that the leader’s heirs and successors will.

No: loyalties of tribe, race, and faith are frequently questioned, and even when they are not require much stoking to make them politically powerful. The touchstones of political legitimacy are safety and prosperity, and perhaps a sense that your government is at the head of a truly worthwhile and valuable community. A democratic state committed to that project has a considerable edge over other types of régime, now and in the future.