Jeffrey Sklansky The Souls Economy Introduction This book traces a shift in American social thought that played

a defining part in the development of industrial capitalism Story begins in the early 19th century with rising dissent against conventional views of selfhood and societyamong Romantic writers in industrializing New England, economic theorists in the metropolitan Middle Atlantic, and proslavery polemicists in the plantation South; It continues through the cultural crises wrought by large-scale industrialization after the Civil War, seen in popular demands to reform the monetary system, elite attempts to reorganize the system of poor relief, and especially efforts across the political spectrum to reconceive the system of political economy born of the Revolutionary Era; It culminates at the centurys end in the creation of the professional disciplines of psychology and sociology, along with a new social economics and a new view of the common law (1) Origins of book in recent eventslimits of public discussion about economic inequality, esp. re: neoliberalism (1) A central premise of this book is that nineteenth-century concerns about property and sovereignty amounted to something more than fear of progress, while twentieth-century notions of interdependence and social selfhood represented something less than an unambiguous advance upon outdated ideals (4) Sklansky focuses on shifting conceptions of human nature and the nature of society, conceptions rooted in the Enlightenment quest for the universal laws that govern human affairs (5) Amid the expansion of northern wage labor and southern slavery in the antebellum era, the revolutionary ideal of independence proved increasingly divisive, even explosive (6) Sudden collapse of the midcentury economic boom in the 1870s threw the fields of social science and social reform into crisis: political economy practically split in two (7) Henry George and William Graham Sumner: both sought to repair the broken bond between labor and property, in opposite ways; George called for confiscating and redistributing rent in order to free the landless from starvation or slavery; Sumner, by contrast, demanded an end to redistributive taxation in order to stop paupers as well as plutocrats from extorting the fruits of others industry (8) From opposite ends of the political spectrum, their parallel moves reflected a broader change in the terms of public debate, defined by a new kind of social science: twin birth of modern psychology and sociology in the late nineteenth century (8)

Founding of the American Economic Association (1885)for the founders, the market was not just a mechanism for the exchange of wealth among self-interested individuals, but rather the social source of economic values and interests to begin with; Like their German mentors, American social economists reconceived the market as a medium of common culture rather than social contract (9) Chapter One The Political Economy in Revolutionary America Revolutionary Americamost enthusiastic audience for Smiths work (14) the name commonly given that synthetic science by Smith and his contemporaries was political economy, by which they meant the study not solely of the production and distribution of wealth, the main focus of Smiths masterpiece. Political economy concerned as well the basis of social order broadly conceived to comprise psychology and ethics, law and politics, the subjects of Smiths earlier lectures and writings. In this inclusive sense as the science of human nature and society, political economy provided the foundation for late eighteenth-century Anglo-American political thought (14) Political Economy presupposed a few core concepts: the basic unit of life was the individual, endowed with natural capacities of rational willpower and productive labor, variously motivated by the dictates of passion, self-interest, and conscience; social relations were constituted through control of land, labor, and the wealth they together produced; political power was therefore founded upon property rights, which were themselves rooted in land and labor (14) Political economy not the only source of authority in Revolutionary AmericaChristianity, the family economy (15) Benjamin Rush and other Revolutionary writers drew much of their understanding of human nature from the faculty psychology most fully developed by Scottish moral philosophers such as Dugald Stewart, Lord Kames, and Thomas Reid; for the American apostles of the Scottish Enlightenment, reasoncomprising both prudence and conscience, both self-interest and virtue, reigned supreme (17) Reason represented for Revolutionary thinkers the power of psychological self-government, the ability to master ones irrational passions (17) interesta central concern of Revolutionary social thought, meant more than the calculated pursuit of purely economic ends; it encompassed as well the desire for wealth, power, and eminence (18) Central to Revolutionary Era ideology: labor theory of value; and basis of property (19) The natural rights of the fruits of labor became a ubiquitous theme in Revolutionary writings, often drawing explicitly upon Locke or Smith (20)

In the 1790s, the labor theory of property became especially prominent in the democratic opposition to the Hamiltonian program of taxing middling Americans in order to fund the public debt held by wealthy creditors (20) Identification of proprietorship and selfhood in Revolutionary Era; meant unfreedom, dependence, subordination for servants and slaves, wives and children, apprentices and tenants, who made up the bulk of the working population of every region at any given time in eighteenth-century America (23) For the English Whig tradition of which Harrington and Locke were the founding theorists, Americans learned to equate ownership of the means of subsistence with the freedom, virtue, and independence of the autonomous individual, the master of his household (23) Contract theory (24) The ideal of popular sovereignty entailed a vision of representative government as an arena of competing class interests, which were defined by ownership of different productive resources (25) Inevitable conflict of rich and poor (25) The most thoroughgoing objection to the individualistic model of the social contract came from orthodox Calvinism; e.g. Rev. Nathaniel Niles, Two Discourses on Liberty (1774) proclaimed God the original owner of all things whose creation remained a common property (26) The paramount political issue of the early republic was the relationship between public policy and economic development (27) The family remained the basic unit of production in manufacturing as well as farming (29) The new nation was swiftly drained of specie, setting off a chain of debt collection leading from coastal merchants to inland shopkeepers and finally to the farmers doorsearing political struggles of the 1780s manifested a widening social conflict between, on one side, smallholders demanding paper money and debt relief, and, on the other, merchants and bankers insisting debts be paid in full and at face value (29-30) Political economy informed both sides of the debate over economic development in the 1790s: those who followed Alexander Hamilton (concentration of capital and rise of a cash economy) and those who favored Jefferson and his yeoman republic (30) Beginning in the antebellum era, influential American writers joined their Romantic counterparts abroad in condemning classical political economy as an amoral, antisocial science of inhumanity rather than humanity, of crass materialism disguised as reason, of selfish individualism paraded as a natural right (31)

*** The Romantic portrayal of economic man as a soulless automaton presented a devastating reflection of the emerging ethic of industrial capitalism, but it grossly caricatured the classical social science of the agrarian-commercial republic. The self-governing individual, endowed with the natural faculties of rational will and productive labor, entitled to the natural rights of property and popular sovereignty, indeed embodied male privilege, white supremacy, and the close identification of private wealth with public welfare. But under the banner of the rights of man, schooled in the Smithian science of wealth, Americans also joined their Enlightenment counterparts in Europe in espousing a radically egalitarian understanding of human nature and society, premised upon the universal needs of security and subsistence along with the universal powers of ownership and self-governance. If political economy concealed essential aspects of social life, it also revealed the material basis of commercial society in ways that proved more effective in inciting rebellion than in promoting the harmony and stability of the new social order. Over the course of the nineteenth century, the incendiary implications of the classical social science brought forth a cultural counterrevolution, ultimately resulting in the breakdown of political economy and the creation of a new master science of market society in its place (31) Ch. 2 Ch. 3 Antebellum Origins of American Sociology When the sociologists of slavery overturned labor power as a natural endowment and natural right inhering in individuals, they overthrew individual willpower as well. They denied the capacity of slaves for rational will, not by excluding black people from the human species, but by redefining human nature itself (98) People, for Fitzhugh and Hughes, were by nature neither rational nor willful; human nature was passionately social (98) In place of judgment or willpower, F and H argued for the primary place of irrational desire in governing human affairs (98) Private propertynot an individual entitlement but a public trust (99) warranteeism (99) Reciprocity vs. equality (100) Hughes and Fitzhughs creation was not just a science of slavery, but a sociology for the South, a science of social relations among rich and poor, gentry and commoner, as well as master and slave (101) The origins of American sociology, in the South as in the North, lay less in the contrasting methods of exploitation peculiar to each section than in the common conflict between the owners

of the means of production and the direct producers, and in the potential of political economy to reveal the competing interests at stake (103) Ch. 4 The Postbellum Crisis of Political Economy: Henry George and William Graham Sumner WG Sumner (1840-1910); HG (1839-1897) Along with the abolition of chattel slavery, the most enduring economic consequence of the Civil War indeed proved to be the redistribution of wealth into the hands of financiers and manufacturers who largely bankrolled the spectacular industrialization of the postbellum era. At the same time, the rapid growth of the working class brought the tension between the agrarian ideas of American political economy and the realities of proletarianization to the forefront of national attention. The dissolution of the household economy and the rise of a new industrial order changed the status of labor in thought and culture as well as in factories and fields (10506) The wrenching class struggle that marked the protracted depression of the 1870s, 80s, and 90s threw political economy itself into crisis, as evidenced in the dueling polemics of the best-known contemporary writers on social science, George and Sumner (106) Georges classic, Progress and Poverty (1879) became an unofficial manifesto for many American workers and their bourgeois allies in the nascent labor movement, while Sumners What Social Classes Owe to Each Other (1883) made him the schoolmaster of big business Yet even as George as Sumner pulled political economy in opposite directions, their strikingly parallel revisions of the embattled science of wealth signaled the rise of a different kind of social science, affording a new ideological basis for class harmony in the age of industrial capitalism (106) Popular demand for a growing money supply; the money question came to center upon the national currency system established during the Civil War (107) Henry Carey, most influential of theorists on currency for greenbackers; most influential advocate in the postbellum labor movement was Alexander Campbell, author of The True American System of Finance (1864)argued for harmony of interests of workers and employers, blamed bankers and financiers for economic and social distress Drawing on Edward Kellogg, the pioneering exponent of fiat currency (108) interconvertible bond scheme formed the centerpiece of the labor reform movement of the 1860s and 1870s (109) --vision of cross-class cooperation at the heart of the greenback movement was informed as well by the principles of the American Social Science Association, founded in 1865 as an organization of New England lawyers, physicians, ministers, and academics committed to the

dual advancement of social science and social reform; bourgeois reformers and crisis of urban poor relief (109) Drawing upon the organicist understanding of society in Comtean sociology, the members of the Association envisioned a natural harmony of individuals, classes, races, and sexes, in need only of proper coordination by an educated elite (110) In the mid-1870s, the rapid expansion of regional, national, and international markets propelled the capitalist world into a quarter-century crisis (112) Despite their opposing political perspectives, recent scholarship has examined the remarkably similar ways in which Sumner and George grappled with the profound tension between the old science of wealth and the new industrial order (113) Each sought to discover the cause of rising economic inequality that increasingly imperiled the social order; George called the problem poverty and Sumner pauperism; each described it as a new form of slavery that threatened to bring on a new civil war (113) Poverty was the dividing line for Sumner and George in several ways: the historical boundary between the Jeffersonian republic of self-employed farmers and artisans and the emerging industrial society, the rising wall between what George called the House of Have and the House of Want (113) Both understood that the vital bond between production and distribution had been broken; but from their crucial difference over the significance of the new poverty, they took the science of agrarian capitalism in opposite directions (113) Each repudiated a central feature of classical political economy; Sumner rejected the revolutionary principle of natural right and natural liberty in favor of a deeply organicist, historicist vision of freedom; George overthrew the doctrine of natural scarcity and the wealthproducing powers of land and labor (114) The sinful secret of poverty lay for George not in wage labor but was rooted in rent (116) Sumner was povertys warmest admirer No one argued more forcefully that the suffering of the poor was a blessing for society (116) Villainization of paupers (118) Sumner voiced the widespread sense of siege among propertied Americans of the Northeast and Midwest, who saw the enormous rise in public spending and public debt during and after the war as a revolutionary expropriation of their savings to benefit a handful of heavily subsidized industrialists and a rapidly multiplying mass of propertyless urban workers (118)

Like Stephen J. Field, Sumner regarded the redistributive use of taxation as a violation of basic rules of free enterprise and the neutral state (118) Sumners rhetorical figurethe Forgotten Man, slave of the pauper system (119) Influence of physiocrat Quesnay on Henry Georgesingle tax on ground rent (120) Anticipating Turner, George anticipated rising rents and falling wages; did not regard rising rents as a natural consequence of population growth outpacing the availability of land; rather , it was the result of the conversion of the public domain into a system of private property that allowed wealthy investors to monopolize the natural resources upon which everyone else depended; since no one could earn a living without access to land, rent became the price the propertyless were forced to pay landowners for life itself (120-21) --innovative analysis of the nature of class privilege in industrial societywhere George made his truly pathbreaking revision of the science of wealth George contended that land remained the main means of productionbut had been transformed into a new kind of resource (121) Ross Social Control Modern society, according to Ross, required a new kind of control rooted in the command of psychic rather than physical force. He addressed himself to teachers, clergymen, editors, law-makers, and judges, who wield the instruments of control. Those instruments included the traditional tools of the state and the law. But the burden of his argument was that even those venerable institutions would only continue to be honored to the extent that they made use of modern methods of social control, or control through the feelings instead of control by sanctions. (203) In a series of books, he centered his analysis upon two forms of psychosocial democracy, or what he called the edict of the mass: the crowd and the corporation, mob mind and corporate association (203) Ch. 7 Corporate Capitalism and the Social Self: Thomas Cooley and Charles H. Cooley Charles H. Cooley (1864-1929) one of the founding theorists of American social psychology --cultural revolution of the turn of the century, in which older understanding of self and society was decisively undermined; earlier conception: of a society of essentially autonomous households whose political rights and responsibilities derived from their independent ownership of productive resources; sovereign self rooted in republican ideology; versus modern business corporation (205-06) Charles Cooleys father, Thomas McIntyre Cooley (1824-1898), leading exponent of the federal judiciarys sustained effort to apply the classical principles of private property and free enterprise to a society increasingly dominated by corporate capital (207)

Along with Justice Field, Cooley the elder was a principal author of substantive due process by which the constitutional protections formerly reserved for individuals were conferred on business corporations (207) laissez-faire constitutionalism; the sovereign self, torn from its roots in the early republic of freeholders, found a new home in the synthesis of economic individualism and corporate property (207) As the traditional ideal of the independent proprietor was transformed into a defense of the rights of corporations, Charles Cooley and like-minded social scientists constructed a rival model of the relation between self and society, predicated upon the principle of interdependence as opposed to independence; critique of economic man (207) In sharp contrast to the logic of laissez-faire and the competitive market, the younger Cooley and his cohorts envisioned a society bound not by contractual relations among property owners but by a common current of desires, values, and ideas that he called the stream of communication (207-08); By elaborating a psychosocial conception of selfhood, he joined in the Pragmatist movement that provided the philosophical framework for Progressive reform (208) In striking ways, the two Cooleys appear to articulate the central ideological divide in modern American social thought between a corporate conservatism informed by neoclassical economics and a reformist liberalism guided by the communitarian vision of the founders of social psychology A rereading of their work reveals fundamental continuities underlying the apparent conflict between them; like Oliver Wendell Holmes, Jr. elder Cooley found in the common law an organicist vision of a society founded upon customs, habits, values; from it he derived a new, sociological basis for the regulatory state; Thomas Cooleys expansive formulation of the state police power to regulate corporate conduct formed the essential counterpart of his recognition of new corporate property rights, and it marked a pivotal departure from the individualistic conception of property and society in classical political economy (208) Charles Cooley social psychology wedded in complex ways to the logic of corporate capitalism (209) 1868Thomas Cooleys Treatise on the Constitutional Limitations Which Rest Upon the Legislative Power of the States of the American Union (1868)