From The Young Hegel, Georg Lukacs 1938

2.5 The first studies in economics

HERE, at the decisive point in Hegel’s intellectual biography, where we might have hoped to clarify the concrete relations between his dialectics and his study of economics we find ourselves baulked by the utter failure of our sources and we are compelled to rely almost entirely on hypotheses. We may think ourselves fortunate that Rosenkranz has at least preserved the bare fact of the date when Hegel first took up economics.

All the material that Rosenkranz possessed in toto has since been lost. It is certainly no accident that this section of Hegel’s papers has vanished without trace, of his immediate pupils there was not a single one who had even the slightest comprehension of economic problems, let alone of their importance in the evolution of Hegel’s system and methodology. They did not even notice the obvious evidence of such studies in the published works (the Phenomenology, Philosophy of Right, etc.)

The backwardness of German society was such that even in the case of Germany’s greatest philosophical genius, Hegel himself, the intellectual reflection of social antagonisms appear, in an inverted, idealistic form.

In the case of his pupils, whose formative years fell, for the most part, in the period of the Restoration, there is an utter failure to comprehend the problems of economics and their significance for an understanding of the problems of society. And this blind spot is as much in evidence on the reactionary right-wing of the Hegelians as in the liberal centre and on the left. The timidity with which the Liberals of the 1830s tackled the great social issues of the time is reflected also in their utter blankness in the face of economic problems. Not until the early 1840s did the intensification of the class struggle awaken a certain interest in economic issues in the ranks of the Hegelians, and even then we find a lack of knowledge and serious study that compares very unfavourably with Hegel. The philosophical arrangement of the economic categories of both the classics and the utopians at the hands of the Hegelians among the ‘True Socialists’ and also by Lassalle scarcely advanced beyond a superficial formalism.

Not until the early works of the founders of dialectical materialism, of Marx and Engels, do we discover not merely a profound and thorough-going investigation of the problems of political economy, but also the conscious realisation that this was the realm in which the great problems of dialectics were to be studied, that here was the great task of taking the material accumulated, but not worked out dialectically, by the classics of bourgeois political economy and by the utopians, of discovering its underlying laws and principles, and advancing from there to an analysis of the dialectical laws of movement in society. As early as Engels’ brilliant writings in the Deutsch-französiche Jahrbücher, the connection between economics and dialectics- stands clearly in the foreground. Shortly after that Marx himself devotes his full attention to the problem in the Economic and Philosophic Manuscripts, the last section of which contains his critique of Hegel’s The Phenomenology of Mind. In this Marx, notwithstanding his incisive and crucial criticism of Hegel’s idealism, uncovers the important and positive role of economics in the formation of the Hegelian dialectic, in particular his use of the category of labour in which he follows in the footsteps of the English classics. This work is then succeeded by a series of important polemical writings against Bruno Bauer, Max Stirner, Proudhon, etc, which contain a large number of profound and illuminating observations on these issues.

It is typical of the opportunism of the Second International that a large proportion of these writings gathered dust in the archives, their value recognised by no-one. The development of opportunism coincided with the disappearance – of any understanding of dialectics and the rampant growth of metaphysical shallowness then created an atmosphere in which it was easy to twist and distort the clearly formulated propositions of Marxist economics.

Only the Bolsheviks consistently fought against this opportunism on all fronts. Lenin, despite the disadvantage of not having access to a large part of Marx’s work on this topic, was the only one to have grasped their full importance.

‘It is impossible completely to understand Marx’s Capital, and especially its first chapter, without having thoroughly studied and understood the whole of Hegel’s Logic. Consequently, half a century later none of the Marxists understood Marx!

Rosenkranz, a moderate liberal and an adherent of the so-called Hegelian centre at the time of the break-up of the school, naturally had no idea of the importance of Hegel’s economic studies. To give the reader an idea of the thoroughness with which the documents have been mislaid we propose to quote everything that Rosenkranz has to say on the topic in his biography; later biographers have merely copied from Rosenkranz. The discovery of Hegel’s manuscripts in recent decades has greatly increased our knowledge of Hegel’s study of economics in Jena, but about the years in Frankfurt we are as much in the dark as ever.

Rosenkranz states that Hegel’s interest in economic questions began in Frankfurt, and that it was primarily conditions in England that excited his curiosity. He regularly read the newspapers and made detailed notes from them (which have of course been lost). In Rosenkranz’s words:

‘At the same time he moved closer to the immediate arena of political events and found his interest in it greatly increased. Above all he was fascinated by the relations of commerce and property especially in England, partly no doubt in accordance with the general admiration which the previous century felt for the English constitution which was regarded by many as an ideal, and partly perhaps because no other country of Europe could boast such a variety of the forms of commerce and property as England, and nowhere else was there such a great variety of personal relationships as a result. As h is excerpts from English newspapers show, Hegel followed with great excitement the parliamentary debates on the Poor Law, the alms by means of which the nobility and the aristocracy of wealth attempted to appease the rage of indigent masses.

This passage is followed by a much more detailed account of Hegel’s interest in the Prussian prison system.

Unfortunately Rosenkranz mentions no dates. This is highly regrettable, especially as the reader of this book can see that he has misinterpreted Hegel’s attitude to England. We do not possess a single remark by Hegel that would lend support to Rosenkranz’s view that Hegel was ever a great admirer of the English constitution or that he regarded it as a model. Understandably enough he did not concern himself closely with England. On the contrary, the annotated translation of Cart which was written shortly after his arrival in Frankfurt and its sharp criticism of the reactionary policies of England seems to have arisen as an echo of the French Revolution. Thus Hegel’s interest in England seems to have grown in connection with his research into the nature and laws of bourgeois society during his stay in Frankfurt. It would be both important and interesting to discover the precise moment at which Hegel took up these studies since, in view of the relatively swift changes in Hegel’s views during the years of crisis in Frankfurt, a knowledge of the exact dates is very necessary.

But Hegel’s interest was not confined to the English economy; he also took up the study of economic theory. With reference to this Rosenkranz states:

‘All of Hegel’s ideas about the nature of civil society, about need and labour, about the division of labour and the wealth of the estates, about poverty, the police, taxation, etc, are finally concentrated in a commentary on the German translation of Steuart’s book on political economy which he wrote between. 19 February and 16 May 1799, and which has survived intact. It contains a number of magnificent insights into politics and history and many subtle observations.

Steuart was a supporter of the mercantilist system. With noble passion and a host of interesting illustrations, Hegel attacked the deadness of this system and sought to preserve man’s soul (das Gemüt) in the midst of competition, the mechanisation of labour and of commerce.’

We need not waste words on these jejune, uncomprehending remarks. But even from this meagre summary we can see what an important document we have lost. It is perfectly obvious that Hegel approached the problems of economics from the point of view of his critique of dead positivity and we would have a much clearer picture of his early attitudes to bourgeois society if only we still possessed these first investigations into economic theory.

Another factor here is that Rosenkranz’s account poses an insoluble problem. In the last sentence Rosenkranz claims that Hegel sought to save man’s soul amidst the mechanism of capitalist society. This would suggest that Hegel’s thoughts were running on similar lines to those of the reactionary Romantics. In view of Hegel’s later development and the general character of what we have seen of his philosophical and social attitudes, this sounds highly improbable. It is true enough that it was only later on that Hegel made his famous remark that the rational is real and the real is rational- but in a general sense it may be said to constitute the unconscious leitmotiv of all his thought from Frankfurt onwards. In the course of our examination of Hegel’s economic notes in Jena we shall have occasion to remark on his closeness to the ‘cynical’, the ruthlessly truthful views of the English classical economists who were perfectly willing to expose all the horrors and scandals of capitalist society, while asserting that capitalism was essentially progressive. For this reason we believe that Rosenkranz simply misunderstood Hegel. However, since we can offer no irrefutable proof of our assertion, and since it is an abstract possibility that Hegel aid for a short time incline towards Romantic economics, we can only regard our rejection of Rosenkranz’s interpretation as a hypothesis. Nevertheless, we believe that the reader who has followed the entire development of Hegel’s thought will agree that our hypothesis is correct,

It is not really possible to estimate the influence of Steuart’s particular economic principles on Hegel. Not only because the commentary has been lost and we cannot know which sections impressed Hegel, which he agreed with and which he rejected, but also because his reading of Steuart did not lead to any immediate attempt to apply the newly acquired economic principles to bourgeois society. What we have said earlier on about the discontinuities of the Frankfurt period applies with particular force here. Having spent three months on the problems of economics Hegel simply turned to his chief work in Frankfurt, The Spirit of Christianity. Of course, as we shall see, this essay does not neglect the problems of society, but its immediate theme is different and the change in his socioeconomic views only makes itself felt in a few places and even then in the most general philosophical terms. Not until the period in Jena do we come across manuscripts which directly concern themselves with social problems and among which economics are given an explicit and prominent position. Nor can we know with any certainty just how important economic problems were in Hegel’s last work in Frankfurt, the Fragment of a System of 1800, since as we shall see, only two small fragments of this work have survived. But in the Jena manuscripts there is evidence that in addition to Steuart Hegel had read the works of Adam Smith. And given the great abstractness of Hegel’s statements about economics, his exclusive interest in the great, universal problems, it is hard to show the impact of details.

All the same, it is highly probable that the study of Adam Smith was a turning-point in Hegel’s evolution. The problem which reveals the striking parallel between Hegel’s thought and the classical English economists is the problem of work as the central mode of human activity, as the chief method by which the identity of the subject-object (to use Hegel’s terminology at this time) can be achieved, as the activity which annuls the deadness of objectivity, as the driving force of the process which turns mankind into the product of its own activity. And it is highly probable that this problem emerges for the first time in the course of reading Adam Smith, since neither a study of the German economy which was so backward in the context of the development of capitalism, nor a reading of Steuart could really provide the necessary stimulus.

However, this is another issue which finds us reduced to hypotheses and guesswork, and we give our view in the full awareness that it is no more than a hypothesis. The first documentary evidence that Hegel had read Smith is contained in the manuscripts of some lectures given in Jena in 1803/4 and which were published not long ago. Hegel refers here to Adam Smith’s statements about developing the forces of production through the division of labour in the factory and he wrote the name of Smith in the margin. But as early as 1802, in the System of Ethics, a similar, if, as we shall see, a less well-developed attitude towards work, the division of labour etc., occupies a central position. It is therefore almost certain that Hegel was acquainted with Adam Smith right from the beginning of his period in Jena and that he had therefore overcome, at least in part, some of the limitations and defects of Steuart’s theories.

Now it is our belief that Hegel’s interest in classical English economics actually dates from an earlier period, namely from the time when he was already working on the Fragment of a System. It is perfectly true that that work gives us no help at all, at any rate not directly, since the surviving fragments contain only very meagre references to economic problems and we have no idea how Hegel had thought of the structure of the whole essay, nor indeed how far it was from completion. But in the course of some very obscure reflections on the philosophy of religion there is a very remarkable passage which may help to throw light on an extremely dark section of Hegel’s intellectual evolution.

In this fragment Hegel deals with the place of religion in man’s life, with the annulment of objectivity, of dead positivity in relation to men and things. The social and philosophical problems that this discussion provokes must be postponed for our detailed analysis of the entire fragment. We wish here to emphasise only one moment. Hegel writes:

‘But it is necessary that he [man] should also put himself into a permanent relation with objects and thus maintain their objectivity to the point of completely destroying them’.

In the Frankfurt manner already familiar to us, Hegel analyses man’s relation to property and hence to the dialectics of positivity and life. In this fragment he finds a solution in a very curious and highly mystical theory of sacrifice. He continues:

‘Man would still be unable to unite himself with the infinite life because he would have kept something for himself, he would still be in a state of mastering things or caught in a dependence upon them. This is the reason why he gives up only part of his property as a sacrifice, for it is his fate to possess property, and this fate is necessary and can never be discarded.... Only through this useless destruction, through this destruction for the sake of destruction, does he make good the destruction which he causes for his own particular purposes. At the same time he has consummated the objectivity of the objects by a destruction unrelated to his own purposes, by that complete negation of relations which is called death. This aimless destruction for destruction’s sake sometimes happens, even if the necessity of a purposive destruction of objects remains, and it proves to be the only religious relation to absolute objects.’

At first sight this passage is certainly obscure enough. Sacrifice is thought of as a religious way out of the necessary ‘fate’ of the world of property, of bourgeois society. What is of interest to us is the distinction between sacrifice which is viewed as ‘useless destruction’, ‘destruction for destruction’s sake ‘ and a concept of ‘purposive destruction’ which remains utterly unexplained in this context. The fragment from which we are quoting is the last sheet, i.e. the conclusion of Hegel’s manuscript. If Hegel falls even to hint at what he means by what is obviously an important concept, this can only be explained by arguing that it must have been elucidated in the earlier parts of the essay, now lost. But enough has been said to indicate that ‘purposive destruction’ refers to the normal, everyday relation of man to the world of objects. The point of the sacrifice is precisely to raise man beyond that realm.

We must postpone for the time being our discussion of the meaning of sacrifice for Hegel. Our subsequent analyses, especially of his Jena theory of society, will show that the concept is not a religious or mystical one but that it is intimately connected with the illusions Hegel cherished at this time about the possibility of resolving the contradictions of bourgeois society. What interests us here is rather the concept with which it is contrasted, viz. the ‘purposive destruction’ of the objects. In order to decipher this apparently no less obscure notion we must have recourse to the System of Ethics written two years later in Jena. It is evident that the idea is connected with work. Hegel defines work in the System of Ethics in language reminiscent of Schelling’s, as is much in the first part of his in stay in Jena, as the ‘destruction of the object’, and indeed as its purposive destruction. The first dialectical triad from which his thought proceeds is: need, work, enjoyment. Work is then defined as follows:

‘The destruction of the object, or of intuition (Anschuauung), but as a moment (i.e. not finally and absolutely) so that this destruction is replaced by another intuition or object; or else it establishes the pure identity, activity of the act of destruction; ... it does not destroy the object as object in general, but in such a way that another is put in its place ... this destruction, however, is work.

Admittedly, this definition does not contain the word ‘purposive’, but if we follow Hegel’s line of thought carefully here and see how he moves from work to the tools of work and from tools to machines, it is evident that the idea is present and only the word is missing, and the word is only missing because it is supererogatory in this context. The connection between work and purposiveness remains henceforth a basic fact of Hegel’s thought. Even in his treatment of theology in the Logic work continues to play an extraordinarily important part, as Lenin has expressly pointed out in various notes.

We believe, therefore, that the conception of work which is so essential a category in the Jena System of Ethics was already present in the lost parts of the Frankfurt Fragment of a System. And this makes it extremely probable that Hegel studied Adam Smith’s Wealth of Nations as a preliminary to the latter work. (We must add in passing that the works of both Steuart and Smith were available in Germany at this time in various translations.)

In the circumstances it is exceptionally difficult to isolate the influence of particular English economists on particular ideas of Hegel’s. However, we may draw attention to a number of elements in Steuart which undoubtedly had a lasting effect. Above all, Steuart was, as Marx shows, the real historian of economics among the classics; he was more interested in the social origins of capitalism than its inner workings which he grasps less well than his successors. And at this stage in Hegel’s career, when he was concerned to establish the historical necessity of bourgeois society, the sheer volume of information in Steuart’s work and the constant comparisons between ancient and modern economics must have made a deep impression on him.

Beyond that, however, it can be argued that Hegel may have found it much easier to accept certain retrograde elements in Steuart, which had been superseded by Smith’s much clearer and more radical insights. No doubt, Hegel fought dead positivity wherever he found it and this would have led him to sympathise with Smith’s efforts to eliminate certain obsolete elements of the old economics, with its wholesale fetishisations. But such outmoded views may have deep roots in the economies of backward nations. The relation between the economy and the state, for example, could only be analysed consistently in England, in the works of Smith and Ricardo. Marx has frequently shown how French economists of the Napoleonic era clung to all sorts of outmoded attitudes on that very question. This was even truer of Germany, and the very much slower growth of economics in Germany meant that misconceptions about the economic role of the state lasted well beyond Hegel’s day. (One need think only of Lassalle and Rodbertus.) When in addition we remind ourselves that Hegel in his Jena period entertained many false hopes about the possibilities of resolving the antinomies of bourgeois society along Napoleonic lines, it is only too easy to understand why Hegel should have leant more towards Steuart that Smith on this issue.

But there is one further respect in which Hegel never departs from a view held by Steuart, and never reaches the point of understanding the great advances made by Adam Smith and Ricardo in formulating the laws underlying capitalist economics. We refer to the problem of surplus labour and surplus value. Marx, in his critique of Steuart’s economics, makes the point that Steuart remained imprisoned within the old theory of making a ‘profit upon alienation’. It is true that Steuart does distinguish between positive and relative profit. The latter is profit upon alienation. Marx says of the former:

Positive profit arises from “augmentation of labour, industry and ingenuity.” How it arises from this Steuart makes no attempt to explain. The further statement that the effect of this profit is to augment and swell “the public good” seems to indicate that Steuart means by it nothing but the greater mass of use-values produced in consequence of the development of the productive powers of labour, and that he thinks of this positive profit as quite distinct from capitalists’ profit – which always presupposes an increase of exchange value.’

When we come to consider Hegel’s economic views in Jena we shall see how deeply entangled he is in ideas of this sort which were so retrograde by English standards. The more progressive ideas that he had gained from a study of Adam Smith and a greater awareness of the facts of the English economy do indeed enable him to perceive certain economic contradictions in capitalism, particular antagonisms between capital and labour and he is able to discuss these frankly. But he never succeeds in unveiling the mystery of real capitalist exploitation, indeed he never approaches as close to it as the English bourgeois economists. This is a barrier he will never surmount and the reason is not far to seek: his knowledge of the conflict between capital and labour only comes to him from reading about international economic relations, not from his own experience, from a real insight into capitalism in ordinary life. That is to say, the barrier here is an intellectual mirror of the primitive economy of Germany.

Naturally, the size of the barrier is even further increased by Hegel’s own idealism, in particular by his inversion of the relationship between law and the state on the one hand and economics on the other. But, as we have shown, his idealism is itself rooted in the same soil. Thus the economic backwardness of Germany does not have any single direct influence on Hegel, nor does it directly distort many of his most brilliant insights into bourgeois society. Its effects are various, complex and often impinge on his thought in unexpected ways.

We shall discuss Hegel’s economic views in detail when we come to analyse his attempts to systematise them in Jena. For the present it is enough if we briefly indicate the immediate effects of Hegel’s study of economics and the nature of his approach to the problems of bourgeois society. The decisive moment is contained in the long passage from the Fragment of a System already quoted: from this point onwards Hegel regards economics, the economic life of men, their determination by their economic relation to each other and to things as an inexorable ‘fate’. (The Hegelian concept of fate will be analysed fully in the next chapter.) We have already seen the seeds of this view in the first notes of the Frankfurt period when Hegel made a number of complex observations on the possibility of harmonising property relations with love.

But the idea was only treated sporadically there; here it becomes a crucial issue. Earlier on it was just one of the problems of subjective love, here we find it defined as fate and opposed to the highest representative of religion, Jesus. Part of Hegel’s conception of fate in Frankfurt is the idea that to struggle against a hostile power has the same consequences as to evade it; this is in fact the expression of the inevitability of fate. However mystical many of Hegel’s utterances sound on this point, they yet contain a much more realistic core of truth about history and society than is to be found in the other German philosophers of this time: namely his rejection of the very common idea, still prevalent among intellectuals, that a man can stand above his age and his society, that he can take up a theoretical or practical position from a standpoint ‘external’ to his society.

In this sense property is treated in the Spirit of Christianity as an ineluctable fate. Since in that essay Hegel’s reflections concentrate on the possibility of realising the teaching of Jesus in society, it is natural that he should keep returning to the passage in the New Testament about the rich young man whom Jesus advised to dispose of his property to gain salvation. We may remember that Hegel had already referred to this passage in Berne (p. 63), but there he had confined himself to the observation that it illustrated his argument that Christianity is concerned exclusively with ‘private individuals’. At that stage he was not interested in the economic implications.

Only now does he focus on the latter, but he does so with a vengeance. in the plan for The Spirit of Christianity he is only concerned with Jesus’ escape from economics. Since property and possessions cannot constitute ‘a beautiful condition of life’ Jesus turns away from them. The next step in Hegel’s development is that he tacitly dismisses the various subjective compromises with which he had experimented. He says:

‘The kingdom of God is a condition in which God rules, and all determinations and rights are annulled; hence his words to the young man: go, sell that thou hast – it is hard for a rich man to enter into the kingdom of God; – hence, too, Christ’s renunciation of all possessions and all honour – these relations with father, family, property cannot become beautiful, therefore they should not exist at all, so that at least the opposite state of affairs might not exist either.

No further consequences are deduced in the plan.

But the corresponding passage in the text of the full manuscript speaks a very different language. We shall see that Hegel has a much closer, more approving attitude towards Jesus in this work than he ever had in Berne. Despite this the Berne writings never contained such scathing comments on Jesus’ teaching as this one. (In Berne Hegel’s satire had been aimed more at Christianity than at the church.) Hegel reverts to the parable of the rich young man and says:

‘About the command which follows to cast aside care for one’s life and to despise riches, as also about Matthew XIX, 23: “How hard it is for a rich man to enter the kingdom of Heaven,” there is nothing to be said; it is a litany pardonable only in sermons and rhymes, for such a command is without truth for us. The fate of property has become too powerful for us to tolerate reflections on it, to find its abolition thinkable. But this at least is to be noticed, that the possession of riches, with all the rights as well as all the cares connected with it, brings into human life definitive details whose restrictedness prescribes limits to the virtues, imposes conditions on them, and makes them dependent on circumstances. Within these limitations, there is room for duties and virtues, but they allow of no whole, of no complete life, because if life is bound up with objects, it is conditioned by something outside itself, since in that event something is tacked on to life as its own which yet cannot be its property. Wealth at once betrays its opposition to love, to the whole, because it is a right caught in a context of multiple rights, and this means that both its immediately appropriate virtue, honesty, and also the other virtues possibly within its sphere, are of necessity linked with exclusion, and every act of virtue is in itself one of a pair of opposites. A syncretism, a service of two masters, is unthinkable because the indeterminate and the determinate cannot retain their form and still be bound together.’

We can see here that Hegel has gone far towards recognising the necessity of bourgeois society, even though his insight is still clothed in the mystical terminology of his view of fate. We see also, harking back to the last chapter, that his attack on Kantian ethics, his assertion that a conflict of duties is inevitable is closely bound up with the conception of society now slowly crystallising. We shall now see, in the course of our analysis of the longest manuscript of the Frankfurt period, that on the basis of this conception the tragic conflict of values now reaches right into Hegel’s view of religion and affects his attitude towards Jesus himself, even though it was Jesus Hegel had looked to, in Frankfurt above all, to resolve all these conflicts. We shall also see that we are dealing with a contradiction which runs through Hegel’s entire idealist dialectic, one which he will later attempt to resolve at a much higher level, but without any greater success.

Further reading:

Hegel’s First System, Herbert Marcuse, 1941
Marx’s Theory of Alienation, Istvan Meszaros, 1970
Hegel Theory of the Modern State, Shlomo Avineri, 1972