V. Centrism and Decentrism

It is unlikely that this socialist would repeat today what he then propounded so passionately. The .American, on the other hand, would have every reason not simply to warn but to implore. It fol lows that the socialist was wrong on a matter of economic policy, while the American was right. The inflationary pressure which the latter feared has now become so obvious that even the socialists must subordinate all other considerations to the need for an effec tive barrier to inflation. But this is not what interests us in this context. The point I wish to make is the sharp and irreconcilable clash of two opinions on one of the most important questions of the economic and social order. It is difficult to think of a compromise between the two prin ciples here involved. Either it is right and desirable that monetary and credit policy should be operated like a switchboard by a gov ernment directly dependent upon a parliamentary majority or, worse still, upon some non-parliamentary group posing as the representative of public opinion. Or, conversely, it is right and desirable to counteract such dependence. Either it is wise to put all the eggs into one basket or it is not. It is perfectly obvious that the German professor's opinion, which rested on a characteristic though, as we know today, unfounded fear of deflationary policies on the part of the central bank, was as firmly grounded on pro found social convictions as was the ,American economist's contrary opinion.

We are in the presence of a case which reveals a fundamental cleavage of thought within social philosophy and economic policy. It teaches us how important it is to mark the dividing lines clearly in the everyday strife and conflicts of political opinion. The better we succeed in doing so, the more we may hope to understand the meaning of political differences and to reduce the conflict to an honest and generally recognized opposition of basic convictions. Not the least of the merits of such an undertaking is that it leads 223 A. HUMANE ECONOMY us to examine our own conscience and make our own choice. What are we, really? Liberals? Conservatives? Socialists? And if we are one or the other, why? And whither does it lead us? Our example suggests that we may begin with a contrast which, while not the most important, is closely connected with other and more profound contrasts. We might say that a man whom we would call an inflationist is here in conflict with another whom we might call adeflationist. There is some justification in putting things in this manner . Each of us obviously tends, by temperament, either to think that inflation is a lesser evil than deflation or vice versa; or, in other words, either to fear deflation more than inflation, or vice versa; or, in yet other words, to be quicker in recognizing the dangers either of inflation or deflation. The reader will, at this stage of the book, not be in the dark about the author's views. I would go so far as to deny the justice of calling anyone a defla tionist in the same sense in which his opposite number may be called an inflationist, for the simple reason that, as we know, there exists an asymmetry betwen inflation and deflation. Inflation is a poison whose initial effects are mostly pleasant and which reveals its destructive powers only later, while deflation is a process of general disadvantage from the outset; for this reason it is possible to want inflation, but deflation can at best be accepted as a possibly lesser evil. Hence we may speak of inflationism as an attitude not only of defending but possibly desiring inflation, and it is, in fact, a powerful and ancient current in economic history. Nothing of the kind can be said of deflation ism.

To examine inflationism and deflation ism in detail and to analyze their motives is a task which is as rewarding as it has hitherto been neglected. Let us look at some of the most important factors. First of all, inflationism has an exaggerated predilection for con tinuous growth, for rising figures (including the population fig ure), for quantitative progress~in short, it has a tendency to make sacrifices to expansion within limits which are too widely drawn. We are again reminded of Faust, in his old age this time: this kind 224 CENTRISM AND DECENTRISM of expansionism wishes, as, he did, to "see such a throng" and "furnish soil to many millions." It rejoices in steeply rising curves and is prepared to pay for them by letting the curve of the value of money go down, at least for longer than is safe. Such expansionism implies very many other things, too: if necessary, it is willing to sacrifice the more remote future to the present, whether its adher ents say, with the eighteenth century, "apres nous Ie deluge" or, in Kernes's more modern terms, "in the long run we are aU dead"; it has no feeling for those invaluable reserves of society which ought not to be used up as fuel to keep the boiler of expansion going, including one of the most precious reserves of aU, namely, respect for money and the inviola.bility of its value; it is against anything bourgeois, against the creditor,. against the rentier,. to whom, like Keynes, it wishes at best a painless death. Expansion ism is futuristic, optimistic, and much else besides; the deflationist, Of, as we would prefer to say, the anti-inflationist, is the opposite in all respects.

At this point of our argument we are anxious to probe deeper. We want to resolve the contrast between inflationism and anti- ' inflationism into a wider and more general one so that we may gain a vantage point from which to view the ultimate conflict be tween two social philosophies and two currents of economic policy. I have in mind the conflict between "left" and "right" in thought, between a tendency towards what I called "progressivism" and discussed in detail in my earlier book Mass until Mitte and one to wards "conservatism" -although I hardly like to use this expres sion nowadays because in most countries of the Western world it carries undesirable associations. In order to make the transition from our example to this more general and important dividing line, we recall once more that our unhappy socialist, expansionist or inflationist as he was, objected to the independence of the central bank and demanded that it be subjected to the will of "democracy." OUf American, on the other hand, who was, convinced that inflation is a danger which always 225 A HUMANE ECONOMY lurks in the background and now threatens us immediately, felt quite certain that a barrier must be erected against government domination of money. This was precisely the essence of the gold standard; after its demise, the only barrier remaining is the inde pendence of the central bank, and it must be defended all the more obstinately. One of our spokesmen wants to concentrate responsi bility for money in the hands of government and to subject it to politics; the other wants a division of power, an articulated system of checks and balances, decentralization, and hence the withdrawal of money from politics.

The first talks of the need to put money, the "democratic means of guiding the economy," into the hands of a government acting at its own discretion and according to a comprehensive plan, so that the government may conduct an economic policy which is called "progressive," guarantee "full employment" and thereby the power of trade-unions, and guide the course of the economy ac cording to the wishes of the "people." In advocating all this, our German professor expresses a certain social philosophy diametri cally opposed to that of his American counterpart. In this particu lar question, as in others, he takes a line common to the Jacobins of the French Revolution and all of their many spiritual heirs. The ideal of democracy is seen, not in a well-articulated state with balanced and therefore mutually limiting powers, but in centralized power of a kind which is unlimited in principle and can in practice be wielded all the more freely as it is supported by the fiction of the sovereign will of the people. This Jacobin excludes or repudiates the idea that, in so far as, like Montesquieu (Esprit des Lois, Book XI, Chapter 2), we attach more value to the freedom of the people than to its imaginary "power," democracy can derive nothing but benefit when power, of whatever origin, is split up and its mistakes and abuses thereby limited. A man who looks with suspicion upon a central bank which has not yet become a pliable tool of centralized state power reveals himself as one of those "eternal Jacobins" to whom any manifestation of independence and autonomy is a: thorn 226 CENTRISM AND DE CENTRISM in the flesh, whether it be the free market, free local government, private schools, independent broadcasting, or even the family it self.! Any institutions which still preserve some independence, whether central banks or pension funds or anything else, are, to repeat the simile, so many Bastille.swhich have to be razed to the ground.

Clearly, we are faced by two types of social thought to which most specific conflicts may be reduced without difficulty. We seem to be standing on a ridge from which we have a wide view into the valleys on both sides. Here is the parting of minds. Some are at tracted towards collectivity, the others to the members which com pose it. The former look at the structure of society from the top downwards, the latter from the hottom upwards. The first seek security, happiness, and fulfillment in the subordination of the individual and the small group to a deliberately and strictly or ganized community, which, from this point of view, is all the more attractive the larger it is; the others seek these benefits in the inde pendence and autonomy of the individual and the small group. The difference in social outlook closeJly resembles another difference between two modes of thought: one which has a strange predilec tion for everything contrived, man-made, manufactured, organ ized, and intricately constructed, for the drawing board, blueprint, and ruler; and another which prefers what is natural, organic, time-tested, spontaneous, and self-regulating, and which endures through long eras. Still another difference in outlook is connected with this. On the one side are those who believe that society and economy can be reconstructed froln above and without considering the fine web of the past. They believe in radical new beginnings; they are reformers inspired by an optimism that is apparently proof against any failure. On the other side are those who possess a sense of history ;;lnd are convinced that the social fabric is highly sensitive to any interference. They deeply distrust every kind of optimistic reforming spirit and do not believe in crusades to con..

quer some new Jerusalem; they hold, with Burke, that the true 227 A HUMANE ECONOMY statesman must combine capacity for reform with the will· to pru dent preservation. Before continuing with this attempt to characterize the two types of social thought, we must confess that while we are most anxious to find a name for them, the task is a somewhat embarrassing one. We tried to give a provisional indication with the expressions "progressivism" and "conservatism," but we had to desist at once because the label "conservatism" is too discredited, at any rate on the European continent. Even with all kinds of qualifications, tiresome misunderstandings would still be inevitable. We do not get much further by contrasting "individualism" and "collectivism" because this would imply some sort of exaggeration in both cases. Nor are "liberalism" and "socialism" the right words. They have both be come indispensable in the vocabulary of politics, but for this very reason they have become blurred by use and have collected so many shades of meaning and associations that they are useless for our purpose, especially since they signify something different in nearly every country. 2 What we need is a terminology which is not only new, fresh, and unburdened by associations but which also charac terizes at least some essentials of the great contrast. What we have said so far in this chapter suggests the solution of calling the Monta gues and Capulets of our play by the names "centrists" and "de centrists. "

It should be clear by now that we are in the presence of two con trary principles which determine and mark all aspects of social life-politics, administration, economy, culture, housing, tech nology, and organization. If we take both concepts in a broad sense and explore their implications to the end, they will be revealed as two principles which express what is perhaps the most general con trast in social philosophy. Whether our ideal is centralization or decentralization, whether we regard as the primary element in society the individual and small groups or the large community, that is, the state, the nation, and the collective units up to the uto pian world state-these are the questions which ultimately consti228 CENTRISM AND DECENTRISM tute the watershed between all the currents of thought and points of view which we have so far confronted with each other. 3 This is where federalism and local government clash with po· litical centralization. It is here that the friends of the peasantry, the crafts, and middle classes, and the small firm and of widely dis tributed private property and the lovers of nature and of the human scale in all things part company with the advocates of large-scale industry, technical and organizational rationality, huge associa tions, and giant cities. This is the moat across which the eternal dialogue goes on: on one side are those who think that the economy is best planned by the market, competition, and free prices and who regard the decentralization of economic decisions among millions of separate producers and consumers as the indispensable condition of freedom, justice, and well-being; on the other side are those who prefer planning from above, with the state's compulsory powers.

And so it goes on. The centrist is none other than the social rationalist, whom we met before. Seen from his central point, the individual is small and eventually dwindles to a statistical :figure,a building brick, a mathe matical magnitude encased in equations, something that can be "refashioned," in short, somethinl~ that may well be lost sight o[ We know with what optimism our social rationalist views the sue· oess of his constructions and refashioning. By contrast, the decen trist, who thinks in terms of hUlnan beings and also knows and respects history, is skeptical or pessimistic and in any case bases, his arguments realistically and unsentimentally upon human na ture. The centrist is doctrinaire, the decentrist undoctrinaire and unideologicaI. The latter prefers to hold on to established principles; he is swayed more by a hierarchy of norms and values, by reason and sober reflection, than by passions and feelings; he is firmly rooted in ultimate and absolute convictions for which he requires no proof hecause he would regard it as absurd not to believe in them.

We see also that the centrist is what we have called a moralist, a 229 A HUMANE ECONOMY moralist of the cheap rhetorical kind, who misuses big words, such as freedom, justice, rights of man, or others, to the point of empty phraseology, who poses as a paragon of virtues and stoops to use his moralism as a political weapon and to represent his more re served adversary as morally inferior. Since, again, he looks at things from on high, well above the reality of individual people, his moralism is of an abstract, intellectual kind. It enables him to feel morally superior to others for the simple reason that he stakes his moral claims so high and makes demands on human nature without considering either the concrete conditions or the possible consequences of the fulfillment of those demands. He does not seem capable of imagining that others may not be lesser men because they make things less easy for themselves and do take account of the complications and difficulties of a practical and concrete code of ethics within which it is not unusual to will the good and work the bad.

The "left" moralist all too often reaches the point where his big words of love and freedom and justice serve as a cover for the exact opposite. The moralist, with his lofty admonitions, becomes an intolerant hater and envier, the theoretical pacifist an imperial ist when it comes to the practical test, and the advocate of abstract social justice an ambitious place-hunter. These moralists are a world' apart from the decentrists' attitude, of which the hero's fa ther in Adalbert Stifter's Nachsommer says that man does not pri marily exist for the sake of human society but for his own sake, "and if each one of us exists in the best possible manner for his own sake, he does so for society as well." I used to know an old servant who had discovered this wisdom for herself; she always wondered why so many people kept racking their brains about how to do good to others, while, so she thought, it would surely be better if everyone simply and decently did his duty in his own station.

The centrist's moral ideal frequently enough amounts to a desire to make the world into a place where, to quote Goethe again, everyone is nursing his neighbor-which presupposes a centralized com pulsory organization. 230 CENTRISM AND DE CENTRISM The further we proceed with our analysis of the two modes of thought, the more we are led to assign each attitude to one or the other camp. The contrast between centrism and decentrism is, in fact, unusually comprehensive. In the economic sphere, the contrast is most clearly epitomized by monopoly and competition, and the collectivist economy corresponds to the centrist's ideal, just as the market economy corresponds to the decentrist's. Every economic intervention is a concession to centrism-made lightheartedly and in pursuit of his own ideal by the centrist and unwillingly by the decentrist. The latter demands strict justification for all conces sions, and the burden of proof is on their advocates. because it is his principle that there is always a presumption in favor of shifting the center of gravity of society and econonlY downwards, so that every act of centralization and every upward shift of the center of gravity requires convincing proof before the decentrist will con done such deviation from his ideal.

The position of equality and inequality cannot be in doubt. Equality and· uniformity obviously belong to centrism; inequality, diversity, multiformity, and social articulation to decentrism. This requires no further explanation, but there is a special problem here upon which we touched earlier (Chapter IV, Note 6), namely, the particular form of "equality of opportunity." This problem reminds us that life is not an equation which is soluble without a remainder; unless we are very careful, decentrism might involve itself in self· annihilating contradictions on this point. The ideal of decentrism, in common accord with one of the unchallenged aims of liberalism, certainly demands that individuals should try their strength against each other in free competition, and this implies that they start the race from the same starting line and on the same conditions. Is it, then, to be a continuous race of all for everything? Do we always have to be on the lookout for better opportunities, wherever they may appear? Do we always have to regret the opportunities we missed and always chase after those we think are better? This can· not be the true meaning of the ideal. If it were so, it would obviously be a dangerous ideal and one most uncongenial to the 231 A HUMANE ECONOMY decentrist, and to pursue it would cause general unhappiness. Our star witness, Tocqueville, observed long ago that the Americans, in whose country equality of opportunity always held pride of place, are so dedicated to the restless hunt after better opportunities that they end up as nervous and ever dissatisfied nomads. 4 An uncommonly impressive and at the same time repulsive sym bol of such a race of all for everything is to be found in the spec tacle that memorable day, more than half a century ago, when a part of the territory of the· present state of Oklahoma (the land had heen taken from the Indians) was thrown open to settlers. They were waiting at the· border, and at the shot of a· pistol they all rushed forward from this completely equal starting line to com pete for the best plots of land. Surely it must be obvious to every one that nothing could be more unwise or dangerous than to turn society into such a continual race. Even if the production of goods could so be maximized, it would not be worth the price. Men would he incessantly on the move; culture, happiness, and nerves would he destroyed by an unending to and fro and up and down from place to place, from profession to profession, from one social class to another, from "shirt sleeves" to a fortune of millions and back to "shirt sleeves." No, the deeper-we might say here the conserva tive-meaning of decentrism is that it behooves us to bethink our selves of the indispensable conditions for a sound and happy society. These are a certain stratification of society, respect for natural developments, a modicum of variety and of horizontal and vertical social articulation, family traditions, personal inclinations, and inherited wealth. From this point of view, it is, for example, by no means foolish if a country's townships or districts try to pre serve their character to some extent by not immediately granting every newcomer the same rights as are enj oyed by the original inhabitants.

It is not good if all the sons of peasants and bakers should be come, or wish to become, physicians, clergymen, or clerks. It is true, now as always, that it is highly desirable that men should 232 CENTRISM A:NDDECENTRISM have the happy feeling of heing in the place where they helong indeed, it is truer than ever in our age, when this feeling has he come so rare because of the ideal of the race of all against all. Frederic Le Play, the nineteenth-century engineer and sociologist, was not so stupid when he discovered an important mainstay of society in the familles-,souches, the families in which profession and economic and social position are handed down from father to son. 5 Finally, it deserves to he stressed that if equality of opportunity is to be achieved by socializing education, envy and resentment will only be acerbated. If everybody has the same chances of advance ment, those left behind will lose the face-,saving and acceptable excuse of social injustice and lowly birth. The weakness of mind or character of the overwhelming majority of average or below-aver age people will be harshly revealed as the reason for failure,and it would he a poor observer of the human soul who thought that this revelation would not prove poisonous. No more murderous attack on the sum total of human happiness can be imagined than this kind of equality of opportunity, for, given the aristocratic dis tribution of the higher gifts of mind and character among a few only, such equality will benefit a small minority and make thema ..

jority all the unhappier. In order not to stray from the right path, we must alwaysre .. member that the ideal of decentrism requires us to stand for variety and independence in every sphere. However, it would be equally wrong if we were to confuse decentrism with particularism or parochialism and with parish-pUlnp politics-that is to say, with a narrow-mindedness which can't see the forest for the trees. This is not what is meant. The decentrist must in all circumstances he a convinced universalist; he must keep his eye on a larger com munity which is all· the more genuine for heing structured and articulated. His center is God, and this is why he refuses to accept human centers instead, that is, precisely that which consistentcen trism, in the form of collectivism, intends to present him with.. This is how he understands the inscription placed on Ignatius de 233 A HUMANE ECONOMY Loyola's grave: "Not to be excluded from the greatest, yet to re main included in the smallest, that is divine." This, no doubt, is also what Goethe had in mind when he said: I am a citizen of the world, I am a citizen of Weimar. 6 The right spirit is one which enables us to combine an overall view with a sense of the particular. On the one hand we should cultivate a universal approach to all intellectual, political, and eco nomic matters and rejeqt narrow views and actions and, above all, intellectual, political, and economic regionalism and nationalism; on the other hand, we should prize variety and independence at all levels and in all spheres, on the basis of the common patrimony of mankind, which is beyond all levels and spheres.

Apart from many other insights which the centrist lacks, the decentrist also knows that it is always easier to centralize than to decentralize and to widen the powers of the state than to curtail them. There is yet another thing which the decentrist knows better, and this is that the centrist's path is bound to lead to regions where the air of freedom and humanity becomes thinner and thinner, until we end up on the icy peaks of totalitarianism, from which na tions can hardly hope to escape without a fall. The trouble is that once one takes this road, it becomes increasingly difficult to turn back. Centrism is in danger of encountering no check any more, least of all in itself. The obsession of uninhibited centrism can, like so many other things, be illustrated by a story from the world's store of legends. It characterizes with exaggerated symbolism both the direction of the march and the secret wishes of its leaders. I have in mind the story of Caligula, who is reported to have ex pressed the wish that the people of Rome might have but a single head so that it could he decapitated with one stroke. Caligula's wish has always remained the symbol of a kind of centrism which is tyrannical because it knows no limits and also a symbol of the inevitahleend to which centralization must lead.

The temptation of centrism has been great at all times, as regards 234 CENTRISM AND DECENTRISM both theory and political action. It is the temptation of mechanical perfection and of uniformity at the expense of freedom. Perhaps Montesquieu was right when he said (Esprit des Lois, XXIX, 18) that it is the small minds, above all, which succumb to this tempta tion. Once the mania of uniformity and centralization spreads and once the centrists begin to lay down the law of the land, then we are in the presence of one of the rnost serious danger signals warn ing us of the impending loss of freedom",humanity, and the health of society. A century ago, John Stuart Mill wrote: "If the roads, the railways, the banks, the insurance offices, the great joint-stock companies, the universities, and the public charities, were all of them branches of the government; if, in addition, the municipal corporations and local boards, with all that now devolves on them, became departments of the central administration; if the employes of all these different enterprises were appointed and paid by the government, and looked to the government for every rise in life; not all the freedom of the press and popular constitution of the legislature would make this or any other country free otherwise than in name. And the evil would be greater, the more efficiently and scientifically the administrative machinery was constructed."7 The Web of Human Relations The dangers and temptations of centrism are the more consider able because of their great variety. We must always be on guard against unwittingly making concessions to centrism or promoting it against our intentions. The world is full of centrists who neither want to be centrists nor realize what they are; these are the liberals or conservatives who reject federalism, the anti-collectivists who flirt with monopoly or government intervention in the economy, humanistic Europeans who support an economocratic organization of our continent, and many others.