In the Common Interest

In an influential 1943 essay, Polish economist Michał Kalecki staged a contest between capitalism’s pursuit of profit and its pursuit of power. While the benefits of government-sponsored full employment would benefit capitalists economically, Kalecki argued, it would also fundamentally threaten their social position—and the latter mattered more. If wide sections of the country came to believe that the government could replace the private sector as a source of investment and even hiring, capitalists would have to relinquish their role as the ultimate guardians of national economic health, and along with it their immense power over workers. Kalecki thus saw how the desire to maintain political dominance could override purely economic considerations.

This analysis finds a striking illustration in historian Ariel Ron’s award-winning new book Grassroots Leviathan, which advances a major reinterpretation of the contours of U.S. political economy and the origins of the U.S. developmental state—the government institutions that have played an active role in shaping economic and technological growth. In Ron’s revisionist account, the groundwork for the rapid economic development in the second half of the nineteenth century was less industrial and elite than agricultural and popular. “Despite the abiding myth that the Civil War pitted an industrial North against an agrarian South,” he writes, “the truth is that agriculture continued to dominate the economic, social, and cultural lives of the majority of Americans well into the late nineteenth century.” This central fact—at odds with familiar portraits of a dwindling rural population in the face of sweeping urban industrialization—carried with it shifting attitudes toward the state and the economy, dramatically altering the course of U.S. politics. Far from intrinsically opposed to government, a consequential strain of agrarianism welcomed state intervention and helped developed new ideas about the common good.

Read more from the RGK crew at the Boston Review here.

Published by tiltingatM3

Nic Johnson is a PhD Candidate in the History Department at the University of Chicago, researching the intellectual history mid-century Keynesianism and the Federal Reserve. Prior to joining the University of Chicago, Nic was ABD in economics, specializing in monetary theory.

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