Lots of really great points in this article. Fascinating how accounting can actively create an economic reality instead of simply representing it. The McGowen is a fascinating parallel to Walter Rathenau's Raw Materials Department on the German side of WWI. Another interesting thing is, it's so famous that Churchill converted the British Navy to oil before the war -- but did America's still run on coal? I guess so and I had not considered that before.
Rathenau is definitely the best parallel. I assume with your work on them you know that it was an IG Farben employee who basically prophesied national socialism and gave it that name in 1916, looking at his operation:
"A new type of state socialism is appearing, totally different from that which any of us have dreamed or thought of. Private economic initiative and the private capitalist economy will not be crippled, but will be regimented from the points of view of state socialism in that capital will be concentrated in the national economy and will be directed outwards with uniform impetus ... into national socialism ..."
I do hold the view that from the late 19th century up through the world wars socialism more or less triumphs as the basic mode of production, but that the same monopolists held political power in all the industrialized economies. Modern finance is a sort of compromise where everything can be gambled on virtually on the condition that the actual administration is basically socialized. berle and means etc etc
Its well written and interesting! The piece does a good job narrating how abstract processes and spatial-economic energy flows fed into the formation of the national economy. But in the specific context of the claim, “something like a national economy does not spring ready-made like Athena from the godhead”, the essay is way overstepping in its implying of structural inevitability while underplaying intentional political architectures, particularly the role of democratic institutional designs, for example, the Independent Treasury System (ITS). The ITS didn’t just respond to capital flows or abstract demands, it actively shaped economic geography and grounded liquidity in specific localities by direct disbursement, decentralized gold and silver handling, and the construction of durable, regionally based financial circuits.
And so thats not just result of state-capital connection alone; it was a deliberate Jacksonian intervention that constrained elite capital centralization and preserved participatory economic sovereignty, and that specific example lasted well into the late 19th century with lesser effects still lasting until 1913. But, importantly, thats not the only example, some of which overlap in time periods with the ITS, and the examples dont end at 1913, the original Fed itself was designed much differently the the one we have now and some some of the other prior examples, including some of those that overlap with the Fed in functions, persisted during the early decades of the Fed with a few lasting until the latter 1970s/early 1980s, the author risks attributing too much to abstraction and too little to politically derived structural designs.
To be clear my view is with regard to the latter half and most specifically the last quarter of the 19th century.
Its not that I don't acknowledge intentional political architectures, so much as that I think any "intention" of the state with regard to its own economy, taken as an integrated whole, will necessarily conform to the actual way in which that economy is integrated.
In the 18th century you had decentralized production and the philosophy was that the state (itself a set of balanced powers) should merely regulate out warps to this norm. But as you approach the 20th century and industrial-financial strength becomes a matter of national security, this naïve attitude toward capitalism can no longer meet the demands of its object.
And what I try to show here is that even the simple innocent collection of statistics about coal production reflects the fact that minimum threshold to what a state will consider meaningful from the standpoint of "national economy."
Thanks for the interesting reply and the clarification!!! But this actually helps sharpen the distinction I was pointing to. You're correct that by the late 19th c the idea of an integrated “national economy” began to take firmer hold, but I’d argue that it was still more an aspiration than a full reality until after WWII and I think theres a whole lot of observations to back that up.
The spatial fragmentation of capital markets, the durability of regional banking systems, the persistence of federal structures like the Independent Treasury System, and following that even early forms of the Fed and then after that during the the transformation 1956 Bank Holding Company Act’s reinforcement of interstate capital flow inhibitors, and then the dogged persistence of communal capital structures such as mutuals, S&Ls, credit unions (I never knew this, it turns out during the advent of the Neoliberal Era those bastards changed the laws on credit unions and they havent actually credit unions for fifty years!!!) all point to a world where the economy was still a patchwork, stitched together by contested institutional interventions, not an organically integrated system.
And very importantly, it was not until the post-WW2 decades, with the war economy, Bretton Woods, massive bond-financed federal programs, integration of scientific and engineering R&D, legal-regulatory harmonization, etc. that the national economy as an integrated whole truly solidified. So your point that state intention must conform to actual economic integration is valid, but, in my personal opinion, the actual integration, at the national level, was not a foregone development of capital's abstraction. It was a postwar political achievement, often contested by prior localist structures, not merely the accumulation of statistical knowledge or economic abstraction
Lots of really great points in this article. Fascinating how accounting can actively create an economic reality instead of simply representing it. The McGowen is a fascinating parallel to Walter Rathenau's Raw Materials Department on the German side of WWI. Another interesting thing is, it's so famous that Churchill converted the British Navy to oil before the war -- but did America's still run on coal? I guess so and I had not considered that before.
Rathenau is definitely the best parallel. I assume with your work on them you know that it was an IG Farben employee who basically prophesied national socialism and gave it that name in 1916, looking at his operation:
"A new type of state socialism is appearing, totally different from that which any of us have dreamed or thought of. Private economic initiative and the private capitalist economy will not be crippled, but will be regimented from the points of view of state socialism in that capital will be concentrated in the national economy and will be directed outwards with uniform impetus ... into national socialism ..."
I do hold the view that from the late 19th century up through the world wars socialism more or less triumphs as the basic mode of production, but that the same monopolists held political power in all the industrialized economies. Modern finance is a sort of compromise where everything can be gambled on virtually on the condition that the actual administration is basically socialized. berle and means etc etc
Its well written and interesting! The piece does a good job narrating how abstract processes and spatial-economic energy flows fed into the formation of the national economy. But in the specific context of the claim, “something like a national economy does not spring ready-made like Athena from the godhead”, the essay is way overstepping in its implying of structural inevitability while underplaying intentional political architectures, particularly the role of democratic institutional designs, for example, the Independent Treasury System (ITS). The ITS didn’t just respond to capital flows or abstract demands, it actively shaped economic geography and grounded liquidity in specific localities by direct disbursement, decentralized gold and silver handling, and the construction of durable, regionally based financial circuits.
And so thats not just result of state-capital connection alone; it was a deliberate Jacksonian intervention that constrained elite capital centralization and preserved participatory economic sovereignty, and that specific example lasted well into the late 19th century with lesser effects still lasting until 1913. But, importantly, thats not the only example, some of which overlap in time periods with the ITS, and the examples dont end at 1913, the original Fed itself was designed much differently the the one we have now and some some of the other prior examples, including some of those that overlap with the Fed in functions, persisted during the early decades of the Fed with a few lasting until the latter 1970s/early 1980s, the author risks attributing too much to abstraction and too little to politically derived structural designs.
To be clear my view is with regard to the latter half and most specifically the last quarter of the 19th century.
Its not that I don't acknowledge intentional political architectures, so much as that I think any "intention" of the state with regard to its own economy, taken as an integrated whole, will necessarily conform to the actual way in which that economy is integrated.
In the 18th century you had decentralized production and the philosophy was that the state (itself a set of balanced powers) should merely regulate out warps to this norm. But as you approach the 20th century and industrial-financial strength becomes a matter of national security, this naïve attitude toward capitalism can no longer meet the demands of its object.
And what I try to show here is that even the simple innocent collection of statistics about coal production reflects the fact that minimum threshold to what a state will consider meaningful from the standpoint of "national economy."
Thanks for the interesting reply and the clarification!!! But this actually helps sharpen the distinction I was pointing to. You're correct that by the late 19th c the idea of an integrated “national economy” began to take firmer hold, but I’d argue that it was still more an aspiration than a full reality until after WWII and I think theres a whole lot of observations to back that up.
The spatial fragmentation of capital markets, the durability of regional banking systems, the persistence of federal structures like the Independent Treasury System, and following that even early forms of the Fed and then after that during the the transformation 1956 Bank Holding Company Act’s reinforcement of interstate capital flow inhibitors, and then the dogged persistence of communal capital structures such as mutuals, S&Ls, credit unions (I never knew this, it turns out during the advent of the Neoliberal Era those bastards changed the laws on credit unions and they havent actually credit unions for fifty years!!!) all point to a world where the economy was still a patchwork, stitched together by contested institutional interventions, not an organically integrated system.
And very importantly, it was not until the post-WW2 decades, with the war economy, Bretton Woods, massive bond-financed federal programs, integration of scientific and engineering R&D, legal-regulatory harmonization, etc. that the national economy as an integrated whole truly solidified. So your point that state intention must conform to actual economic integration is valid, but, in my personal opinion, the actual integration, at the national level, was not a foregone development of capital's abstraction. It was a postwar political achievement, often contested by prior localist structures, not merely the accumulation of statistical knowledge or economic abstraction