Thursday, October 06, 2005

S.T. Coleridge on the Moral Effect of Economic Crashes

In 1817, as Britain languished in the post-war depression that followed the successful conclusion of her titanic struggle against first Jacobin and then Napoleonic France, Samuel Taylor Coleridge wrote his A Lay Sermon, describing the want and poverty that accompanied this depression, one of the many "panics" that would accompany the early development of capitalism.

Peace has come without the advantages expected from Peace, and on the contrary, with many of the severest inconveniences usually attributable to War . . . Where was has produced no repentance, and the cessation of war has brought neither concord nor tranquillity, we may safely cry aloud with the Prophet: "They have healed the hurt of the daughter of my people slightly, saying peace, peace, when there is no peace." (p. 103)

In it, he offered some reminders about the costs of boom-and-bust economic growth, and issued a reminder that economic growth should serve peoples' lives, not the other way around. Whether due to modern economic regulation and management or else due to the maturity of the new economic system, this boom and bust syndrome is vastly less violent today than it was. If the problems he describes seem like something from the past, then let's be grateful for the progress made, but if they seem like contemporary warnings, then let's pay attention:

Within the last sixty years . . . there have occurred at intervals of about 12 or 13 years each, certain periodical Revolutions of Credit . . . [that is] certain gradual expansions of credit ending in sudden contractions . . . For a short time this Icarian Credit, or rather this illegitimate offspring of CONFIDENCE . . . seems to lie stunned by the fall; but soon recovering, again it strives upward . . . Alarm and suspicicion [following the Crash] gradually diminish into a judicious circumspectness; but by little and little, circumspection gives way to the desire and emulous ambition of doing business; till Impatience and Incaution on one side, tempting and encouraging headlong Adventure, Want of principle, and Confederacies of false credit on the other, the movements of Trade become yearly gayer and gidier, and end at length in a vortex of hopes and hazards, of blinding passions and blind practices, which should have been left where alone they ought ever to have been found, among the wicked lunacies of the Gaming Table.

I am not ignorant that the power and circumstantial prosperity of the Nation has been increasing during the same period, with an accelerated force unprecedented in any county, the population of which bore the same proportion to its productive soil: and partly, perhaps, even in consequence of this system. By facilitating the means of enterprize it must have called into activity a multitude of enterprizing Individuals and a variety of Talent that would otherwise have lain dormant: while by the same ready supply of excitements to Labor, together with its materials and instruments, even an unsound credit has been able within a short time to substantiate itself. We shall perhaps be told too, tht the very Evils of this System, even the periodical crash itself, are to be regarded but as so much superfluous steam ejected by the Escape Pipes and Safety Valves of a self-regulating Machine: and lastly, that in a free and trading country all things find their level.

. . . It would be less equivocal and far more descriptive of the fact to say, the Things are always finding their level: which might be taken as the paraphrase or ionical definition of a storm . . . But Persons are not Things - - but Man does not find his level. Neither in body nor in soul does the Man find his level! After a hard and calamitous season, during which the thousand Wheels of some vast manufactory had remained silent as a frozen waterfall, be it that plenty has returned and that Trade has once more become brisk and stirring: go, ask the overseer, and question the parish doctor, whether the workman's health and temperance with the staid and respectful Manners best taught by the inward dignity of conscious self-support, have found their level again. Alas! I have more than once seen a group of children in Dorsetshire, during the heat of the dog-days, each with its little shoulders up to its ears, and its chest pinched inward, the very habit and fixtures, as it were, that had been impressed on their frames by the former ill-fed, ill-clothed, and unfuelled winters. But as with the Body, so or still worse with the Mind. Nor is the effect confined to the laboring classes, whom by an ominous but too appropriate a change in our phraseology we are now accustomed to call the Laboring Poor. I cannot persuade myself, that the frequency of Failures with all the disgraceful secrets of Fraud and Folly, of unprincipled Vanity in expending and desperate Speculation in retrieving, can be familiarized to the thoughts and experiences of Men, as matters of daily occurrence, without serious injury to the Moral Sense: more especially in times when Bankruptcies spread, like a fever, at once contagious and epidemic . . . Worst of all, in its moral influences as well as in the cruelty of suffering, when the old Laborer's Savings, the precious robberies of self-denial from every day's comfort; when the Orphan's funds; the Widow's Livelihood; the fond confiding Sister's humble Fortune are found among the victims to the remorseless mania of dishonest Speculation, or to the desperate cowardice of Embarrassment, and the drunken stupor of a usurious Selfishness that for a few months respite dares incur a debt of guilt and infamy, for which the grave itself can plead no statute of limitation. Name to me any Revolution recorded in History, that was not followed by a depravation of the national Morals. The Roman character during the Triumvirate, and under Tiberius; the reign of Charles the Second; and Paris at the present moment are obvious instances. What is their main cause? The sense of Insecurity. On what ground then dare we hope, that with the same accompaniment Commercial Revolutions should not produce the same effect, in proportion to the extent of their sphere.

But these Blessings -- with all the specific terms, into which this most comprehensive Phrase is to be resolved? Dare we unpack the bales and cases so marked, and look at the articles, one by one? Increase of human Life and increase in the means of Life are, it is true, reciprocally cause and effect: and both the Genius of Commerce and Manufactory has been the cause of both to a degree that may well excite our wonder. But do the last results justify our exultation likewise? Human Life, alas! is but the malleable Metal, out of which the thievish Picklock, the Slave's Collar, and the Assassin's Stiletto are formed as well as the clearing Axe, the feeding Plough-share, the defensive Sword, and the mechanic Tool (pp. 135-38; bolding mine).

Time has shown that indeed wealth can be increased far beyond what even Coleridge admitted should cause wonder. But it is worth emphasizing again that there is something other than more maximization of wealth at issue in the economy. What kind of character is bred by the economic situation as it functions? Is it the temperate, staid, and respectful character of one with a stable living or else the type of callous gambler or resentful rebel produced by too rapid economic ups and downs? This aim, this ideal of personality, is what should be at the forefront of our thinking about the economy: does it, to the extent that we can foresee, bring into existence the kind of person we want to be?