Pre-Mercantile Economics

Othmar Spann (1878-1950)

I must give thanks to Cologero at Gornahoor for bringing to my attention the name of Austrian economist Othmar Spann in his article on the German Conservative Revolution, a somewhat Reactionary intellectual renaissance that blossomed during the Interwar Period. Spann was an interesting man, a lecturer on the higher education circuit who held a professorship at the University of Vienna. Unfortunately, being a staunch Catholic authoritarian and an early advocate of a spiritual concept of race (Evola’s trademark), Spann fell afoul of the Nazi authorities after Anschluss. Although he had supported the party’s rise against a backdrop of failing democracy, they came to view him as an internal threat. He was imprisoned and subsequently stripped of his professorship.

Much of Spann remains inaccessible due to a lack of translation-interest in right wing thought. Hopefully this is eventually remedied.

What I want to talk about is Spann’s exposition of pre-mercantile economics, an area of study which has interested me since I declare myself to be neither a capitalist nor a communist/socialist. I believe Evola was right when he said that both systems make the same fundamental error as when applied as practical theory they reduce a society to mere capital and then fight over what is to be done with this resource. When a society has as its guide, raw capital, it will invariably gravitate towards either the insurgency of individual power (through greed) or the insurgency of state power (through ideology). The power of blood ties and male headship, as well as the power of spiritual authority is shunted aside as autonomy and heteronomy lock horns in a degenerate battle of freedom vs. fairness. Which of these wins out essentially decides which economic system a country will live under. At times, there is a mutual understanding between the two, as we can see in the Social Democracy of the Nordic countries. At other times they are bitterly at odds creating either mass plunder as in Yeltsin’s Russia, or mass death as in Mao’s China.

It is therefore important that we ask what economics meant in the World of Tradition. Spann tackled the subject in his informative book, ‘Types of Economic Theory’:

“Neither in classical antiquity nor yet in the Middle Ages did there arise any finished systems of politico-economic thought. In those epochs, when the mind was directed towards the heroic and the suprasensual, the economic sphere of activity was regarded with little esteem – as always in periods with an organized economy. Only when, as today, the individual is left so exclusively to his own devices, and only when the forces of free competition are stimulated to an extreme, is civilized life crudely dominated by economic considerations to an extent which seems self-evident to us today.”

The first thing we must acknowledge when talking about economic theory and the World of Tradition is its absence. It is a field which has emerged in parallel to the Modern World because there is now demand for such study, for now the forces influencing economic realities within a nation and beyond are so incalculable, so disorderly and difficult to predict, states and private interests are in need of a ‘science of economy’, a way to quantify the new world in material terms for the purposes of maximum profit and efficiency. As Spann points out, in ages past, not only was a citizen’s economic activity less independent (note: this is not necessarily independence from government) and thus it seems less complex, but other concerns forced economics to take a back seat, these being the pursuits of male virility in heroism and asceticism. Priests and soldiers were needed. Economists were not.

“It would be erroneous to picture the course of economic development as though mankind had passed on simply from a self-sufficient natural economy (the self-contained domestic economy) to the feudal economy and the medieval urban economy, and has at length “advanced” to a nation-wide capitalist economy. At all times there have been lesser economic corporations, such as peasant economies, that formed integral parts of larger, nation-wide or world-wide complexes.”

international trade was booming in the Bronze Age
foreign commerce doesn’t have to entail strapping on an economic bomb vest

Spann points out the illusion of ‘progress’ in economics. Forms and particulars have changed over time according to supply and demand as well as other influencing factors, but even what were very much small-scale, local economies have always been tied in to other, in many cases larger transactions. He follows this by giving an example of the trade in bronze during the Bronze Age which displays a neat network of foreign commerce to acquire constituent elements of the metal, and move it to a desired locale. Furthermore, the prime signatures of both capitalism and socialism have existed throughout history, from systems of credit and bill-brokering to general strikes, but these were never developed into cohesive economic ideologies until the Modern World. Spann declares that in past ages, economies were more ‘puposively’ organized and this is the heart of the difference.

“Aristotle sees the essential nature of money in this, that it intermediates in the exchange of utilities, thus functioning as medium of exchange. He regards it, however, as sterile; it brings forth no children […]; it cannot of itself produce any goods. Consequently, interest is reprehensible. This dictum exercised a powerful influence throughout the Middle Ages.”

Slowly but surely, I am being convinced of the grand flaw of interest, beyond its mere immorality. It is surely interesting that this goes all the way back to Aristotle. Spann continues by looking at Thomas Aquinas’ view of compensatory justice:

“In the matter of price, justice is to be found in the equality of reciprocal compensation in an exchange. What determines income is not the supply and demand of labour (as the subsequent mechanist economics teaches), but a normative outlook, the customary and average mutual adjustments between all the individuals that exercise economic functions, objective purposiveness. “Wherever a good is to be found, its essence consists in its due measure.” Thus we get the idea of the income that is “suitable” or “proper” to a man’s station.”

This is a radically anti-Modern view, that income is or should be based on an inherent value of that which is produced, analogous here to one’s station in life since inter-class occupational movement was rare during this era. In other words, a brick maker would not see his wages drop because there were more people making bricks in the economy. The increase in the supply of this labor would not affect one’s income. Though it might be hard for someone educated in economics to grasp how this is possible, they must understand that while a nation may have something loosely termed a ‘brick making industry’, this is not a governmental department nor a corporate monopoly. Bricks are needed for a certain purpose. Certain people geographically close to this purpose, or a transit point, hold a certain station in life which allows them to create bricks, and a certain wage is to be paid for this kind of work. Nobody is calculating the nation’s brick supply. It may even be the case that nobody is counting the local brick supply, and they certainly are not concerned about exactly how many people have the skills to make bricks in the first place. It might seem a recipe for chaos, but its record is long and functioning, even if it is difficult to understand. You don’t need economists to fill in all the blanks.

my kind of board meeting

“The prohibition of interest or usury is fundamentally a measure falling within the domain of applied economics, being designed to hinder the development of capitalist forms of economy.”

 Whether this was known at the time is uncertain, but it is likely the negative. The illegality of banking practices common today prevented the rise of gluttonous lending institutions which would inevitably damage society particularly through their intervention in the political world for their own ends. Of the Middle Ages and what followed, Spann says the following:

“[…] its ideas were grounded upon the purposively organized economy of the period and upon the ethico-religious conception of life then dominant. Hence the ensuing developments of economic science aimed either, as in the case of the mercantile system, at the suppression of the old urban-economic ties, or else, as in the case of liberalism from the time of Quesnay onwards, at the inauguration of a perfectly unhampered individualist trading economy. In doctrinal matters, earlier writers were ignored; innovation was the order of the day.”

From the abandonment of a local and yet not necessarily isolated system of trade girded by systems of loyalty, purpose, blood ties, etc. the movement has been towards two extreme poles, either one indicative of radical autonomy or of centralization of economic power and organization. These two trends which lean to disordered focuses and structures have buried a Traditional economic order in a race that revolves entirely around material concerns and the occult motivation of progress. The first breakdown of the old order was towards centralization in the service of international competition . It is unclear if this is in fact the beginning or ‘root’ of caste regression manifest in the physical world, or instead part of an elaborate knock-on effect. Regardless, Spann correctly links it to the decline of nobility.

“Mercantilism, therefore, was not deliberately thought out and artifically created by any individual; it was a creation of the time spirit, or a spontaneous growth of that time. Oncken aptly termed it “a system of sovereign welfare policy”; it was a system of political absolutism and centralization in favor of the burgherdom of mobile capital, to the detriment of the nobility and the lords of the soil.”

we’d like our stuff back now

You can be certain that this is just a small taste of Spann’s work, and in my study of economics, I’m going to try to use him as much as possible. The main thrust of this article is to show that the dichotomy between capitalism and communism is a false one, just like the dichotomy of big government or small government. The question in both instances should always be directed at purpose. What is the purpose of the government? What is the purpose of an economic transaction in question? Applying blind theories is something our ancestors didn’t engage in much because it seemed self-evidently totalistic, inflexible, and unsuited to human nature and understandings of both morality and legitimate authority. Spann wished for an organic economic order that would have looked something like the stratified guild system of antiquity, which while recognizing the value of open trade, would direct labor towards the good of the state through a loosely connected system of personal economic arrangement. Such a system is the perfect fit for the hierarchical state that Reactionaries advocate, and thus fuels at least my interest in what economists like Spann have to teach us..


7 thoughts on “Pre-Mercantile Economics

  1. As time allows I have been turning my thoughts towards economics and I must admit looking at it in terms of Labor and Capital. Nice to know that there exists an alternative and look forward to reading more.


  2. Interesting, he was Von Hayek's teacher and yet has opposite views on Economics.
    I tend to agree with all you write whether here, on your blog, or at comment section of various sites that we both visit. However, I cannot agree that the dichotomy between Capitalism and Communism is a false one, and I think that Paleo-Reactionaries grossly err in their their claim that Capitalism was a [Classical] Liberal invention (red flags, pun intended, for Paleo-Reactionaries should be that most of their critiques of Capitalism are exactly the same as Marxian ones). The Austrian School of Economics itself has descended from the Late Scholastics and assertion that Economics didn't exist before isn't an argument against Economics. Modern Medicine, Engineering or Science also didn't exist before and yet no one would take seriously an argument that these increases in human knowledge and understanding of the world are bad. Late Scholastics weren't Classical Liberals, but the Liberals' vehement enemies. And yet both presented arguments for Laissez-faire (though from a different standpoints). However even before the Western Late Scholastics there was an earlier Far Eastern, Ancient Chinese tradition of Wu Wei, so in many ways Capitalism is far more reactionary and less artificial than Distributism and similar “Third Way” proposals (after all, it's based on organic Emergence, the Spontaneous Order).


  3. Thanks for penning such a lengthy response. A few things to note, in stating that communism vs. capitalism is a false dichotomy, I didn't intend to mean that the two are synonymous or that they represent a choice between things that are both bad in the same way. It is intended to say that like the arguments of big government vs. small government, this becomes a cast-iron conflict of vision which is entirely contained to the economic arena. Questions of what Spann deemed 'purposive' economics do not arise.Is the goal to generate as much capital as possible? At the expense of other things, this may not be virtuous or wise.

    Marxian critiques of capitalism in terms of practical effects rather than models for monetary success, have some truth to them, particularly with regards to industrialization (not so much agriculture). Evola essentially agreed that vast exploitation came along with the industrial revolution and caused a lot of the bitterness that would fuel the fire of political revolution, unionization, etc., and that to view this as a dandy expression of social darwinism was damaging to the society as a whole.

    The overarching theme appears to be thus:

    Marxism removes all personal connection between laborer and master, as the state becomes the master (the state is necessarily impersonal, it is heteronomic)

    Capitalism removes all personal connection between laborer and master, as the master becomes a faceless corporation once business expands beyond the local.

    The second is undoubtedly superior in functionality, but as Spann and Evola noted, pre-mercantile societies had values higher than monetary generation. Great wealth-creation was never implemented if it would somehow subvert the class system, damage local relations that were paramount to nation-wide cohesion, or fell afoul of religious diktats. The disagreement is perhaps more essence-based than policy-based. Spann certainly had more in common with Hayek than Keynes did.


  4. While I have fewer problems with Mussolini-esque economics than most, this kind of third position is not really what thinkers like Spann advocated. As I stated, they did not really want the state to be managing much of anything since it was demonstrably incompetent in the long term. They wanted free markets with little legal regulation and red tape. However, they wanted the economic to take a backseat to the stability provided by Traditional structures, today an overhaul of our entire individualistic way of living. They felt through an intricate system of loyalties, expectations both familial and geographic, and a rigid caste structure, the economic potential of men could be directed towards the good of the state without the state actually having to exert laborious and clumsy control.

    Again I stress, Traditional markets are free markets (certainly in comparison to ANY market existing today), but they operate within a framework of expectations that have little to do with money. They must submit to these superior concerns where necessary.

    The main argument is that both systems communism and capitalism view capital as the center of the state. While we can certainly blame socialism for the rise in dependency, laziness, and a good degree of racial parasitism, it cannot be blamed for the materialism and consumerism we see today, both of which are clearly degenerate. Shopping malls have become our temples. Women execute their own children due to financial concerns. Money runs our politics as never before. Remember, considering China, the Shang class was the lowest. The tradesmen had little restriction on what they could do, and many became admirably wealthy, but they held the lowest position in the caste pyramid because Traditional societies valued things beyond the economic. Being able to cut great deals was not necessarily a sign of a noble individual.

    Reactionaries have generally had a surprisingly good relationship with Libertarians, likely because we both want the central government to do very little. Some rightist libertarians will even begrudgingly acknowledge that a monarchy is really the only way to ensure such an arrangement. I'd hope we can dig into these issues in more depth in the future, and I want to present thinkers like Spann as charitably as I can without misunderstanding and thus misrepresenting their beliefs.


  5. While I agree with critiques of consumerism and disruptiveness I think that Paleo-Reactionaries go too far and throw the baby out with the bath water, so to speak (and propose a return to some sort of agricultural utopia that never existed except in Tolkien's fantasy books). I don't think that those bad things are a consequence of Capitalism in itself, but rather of the cultural milieu in which it is present, as Capitalism just amplifies the already existing culture, and we have individualist-hedonist culture, I think, as a consequence of bourgeois revolutions. If transition from Feudalism to Capitalism was allowed to come naturally instead of being forced through bourgeois revolutions I think that we would be seeing different picture – instead of welfare, consumerism and entertainment industry that we got in Liberal culture, in Traditional culture we would have seen wealth being spent on cathedrals, monasteries and great works of art and high culture. Marquis de Laplace, himself an Enlightenment figure, though he was apoliticial before and during the Revolution (he did not support nor oppose it) having witnessed the horrors of Revolution became a Conservative and formulated rationalist and scientistic argument for Conservatism, stating that any and all changes should be very slow and extremely careful:

    “Let us apply to the political and moral sciences the method founded upon observation and calculation, which has served us so well in the natural sciences. Let us not offer fruitless and often injurious resistance to the inevitable benefits derived from the progress of enlightenment; but let us change our institutions and the usages that we have for a long time adopted only with extreme caution. We know from past experience the drawbacks they can cause, but we are unaware of the extent of ills that change may produce. In the face of this ignorance, the theory of probability instructs us to avoid all change, especially to avoid sudden changes which in the moral as well as the physical world never occur without a considerable loss of vital force.”

    which is just an argument called Frost's Wall (or more famously Chesterton's Fence), only stated in a different way – we should keep Ancien Régime, because though it may seem unoptimal, it is very likely better than all the alternatives.


  6. That being said I don't think than what we now have is really Capitalism (and what Russians had under Yeltsin was even less so), I mean with fiat money, ZIRP, generous welfare and nigh infinite amount of regulations…


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