Nietzsche and the German Historical School of Economics

5. Nietzsche: Social Justice and Welfare.

So what does Nietzsche’s socioeconomic construct actually look like? Most first-time readers of his works will approach the subject with a severely distorted ‘vision’ of a right-wing anti-Semitic Übermensch with Nazi sympathies, but even a preliminary study will uncover the fallacy of such a predisposition. It is on the Jews that he bestows the ‘capital of spirit and will’, and he argues:

The Jews should, in Nietzsche’s eyes, thus be respected as superior intellects, not defiled as racial inferiors. The further one reads, the further this castle of propaganda, started by Nietzsche’s sister Elisabeth, crumbles under the weight of the evidence. Nietzsche harbours a deep-seated respect for the individual, and while most scholars would trace this back to his Homeric legacy of individual greatness, Human, All too Human takes a different stance; “Like every organizing political power, the Greek polis resisted and mistrusted the growth of culture… it did not want to allow any space in culture and education for history or ‘becoming’ (Werden)” (Nietzsche 1995:256).¹⁶ The Greek polis did thus not supply enough cultural flux to allow for individual genius, a social condition that, as we mentioned earlier, only emerged in the Renaissance. The humanist veneration of the individual simultaneously explains Nietzsche’s violent reactions both against the social conditions surrounding him, and against the collectivist solutions presented by the communists. Individuality is a pivotal characteristic of Nietzsche’s state.

Nietzsche claims the greatest cost of government lies in the redirection of individual energy from personal creativity to macroscopic problem solving, but acknowledges a sacrifice has to be made to ensure public good. The 19^th Century Soziale Frage – worries that created the Verein für Socialpolitik in 1872 and the Kathedersozialismus – clearly weigh heavily on Nietzsche; “Every day, new questions and concerns about the public welfare devour a daily tribute from mental and emotional capital of every citizen” (Nietzsche 1995:263).¹⁷ There are several other instances where he seems incensed by issues of social justice, and he acknowledges the old truism that slaves were treated better than workers, as slaves had an inherent cost and a value to the owner:

Whereas everyone must concede that slaves live more securely and happily in every respect than the modern worker and that the work of slaves involves very little work compared with that of the ‘worker’ (Nietzsche 1995:246).¹⁸

While giving room for entrepreneurial activities, the liberal Laissez-Faire doctrines that emerged from Ricardian economics created a system of institutionalised abuse of the lower classes, a social imbalance totally unacceptable to Nietzsche. Following the above discussed decline of the state,¹⁹ we find that Nietzsche goes as far as distinguishing between a person and an individual: “The disregard for, decline, and death of the state, the liberation of the private person (I take care not to say: of the individual) is the consequence of the democratic concept of the state; herein lies its mission” (Nietzsche 1995:254).²⁰ An individual is unique, whereas a private person can be an undifferentiated part of the masses.

Nietzsche is fundamentally critical of the theoretical bases of liberal economics, of utilitarianism and of Spencer’s social Darwinism. He particularly engages himself against the ‘respectable but mediocre Englishmen: Darwin, John Stuart Mill and Herbert Spencer.’ ²¹ The passive adaptation – Anpassung – of Darwinism is fundamentally opposed to Nietzsche’s creative Will to Power as the driving force of history. To him it makes no sense to establish a secondary reactive adaptation at the core of the theory of human development, rather than the original force to which others then have to adapt.²² As with Adam Smith’s characterisation of human beings as dogs having learned to barter, English social theory again with Mill and Spencer leaves out Man’s creative spirit in the foundations for the social sciences. In this criticism Nietzsche is truly in the mainstream of 19^th Century German social science.

6. Nietzsche: Entrepreneurship, Gradualism and Uniqueness.

So was Nietzsche then in the end a ‘socialist’? Far from it. According to Nietzsche,

Again we find Nietzsche absorbed by the historical significance of the present, mirroring the German Historical School. Like the Kathedersozialisten, Nietzsche did, however, acknowledge the value of socialist ideals and the need for social justice, but he distrusted their motivation: “By contrast, the demand for equality of rights made by socialists of the subjected caste never flows from a sense of justice, but instead from greed” (Nietzsche 1995:243).²⁴ He thus argues that extreme anti-bourgeoisie sentiments are derived from a deep-seated jealousy of the more ‘successful’ castes, rather than any sense of social welfare.

Again, the principal reason for Nietzsche’s scepticism of extreme Socialism seems to be his opposite stance on the value of the individual. Nietzsche indeed claims Socialism strives for “the outright annihilation of the individual” (Nietzsche 1995:255), a goal quite contrary to his will to power. This remarkable distrust of the masses has clear Classical roots. Nietzsche’s Homeric legacy saw no ‘justice’ in Socialism, and from Thucydides to Livy, ‘mob’ was consistently presented as a derogatory term, as a screaming, angry, easily agitated and directed mass of drones. And this is exactly what Nietzsche argues people under Socialism would necessarily become. Socialism “pounds the word ‘justice’ like a nail into the heads of the half-educated masses in order to rob them completely of their understanding” (Nietzsche 1995:256),²⁵ and furthermore unduly influences its subjects: “Someone who has money and influence can make the public share any opinion”(Nietzsche 1995:241)²⁶ summons visions of George W. Bush and Silvio Berlusconi. Socialist masses may be free of their materialistic fetters, but sadly their spiritual capital is lost along with their monetary one. 20^th Century social democracy therefore saw mass education as a key task.

The bloody revolution proclaimed by the more ardent socialists also failed to convince Nietzsche, as his economic theory had no room for sudden revolts. Perhaps influenced by the ‘Reign of Terror’ following the French Revolution, as well as the general failure of the 1848 uprisings, he deeply distrusted limited truth in ‘spontaneous order’, both from the left and from the right:

Nietzsche’s goal and the need for a gradual approach to get there is not only stated clearly, but also presented as a mirror image of the Verein’s ideology:

While Nietzsche here agrees with the need for greater justice in the distribution of wealth, in his opinion, the socialist formulas were too simple-minded:

As contemporaries Marx and Nietzsche share a perception of a Zeitwende, of the end of an era and the start of a new one. However, while Marx sees history moving as a result of material factors, Nietzsche’s world is moved by the spirit and will of man. It may be argued, of course, that these are but two aspects of the same historical movement, at two different levels of abstraction: the material world being the result of Man’s inventiveness.

Nietzsche reports having read Marx in a letter from Bonn dated May 1865³⁰. This is two years before the first volume of Das Kapital is published, so the reference is likely to be to Zur Kritik der Politischen Ökonomie (1858). The Communist manifesto is unlikely to have qualified as a Werk, which is the term used by Marx. Other than in this letter, Nietzsche never refers to Marx by name. Nietzsche thoroughly dislikes the picturesque fanatics of history, those devoted to one single issue. To him these fanatics who appeal to the masses, he calls them ‘Epileptiker des Begriffes (‘concept-epileptics’)³¹, form the antithesis to the strong and free spirit. Although Nietzsche so clearly sees the basic point of the need for social justice, it is likely that he may have considered Marx as having fallen into this category.

An interesting parallel between the two is the analysis of institutional inertia that makes sudden change difficult. Nietzsche presents a poetic version of Marx’ idea of ‘institutional mismatch’: “The overthrow of institutions does not follow immediately upon the overthrow of opinions, instead, the new opinions live for a long time in the desolate and strangely unfamiliar house of their predecessors and even preserve it themselves, since they need some sort of shelter” (Nietzsche 1995:249-250).³² In this case Nietzsche’s ideas are far from utopian, as long as one can see through the masques of poetry that hide his realism.