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Kalos: What is to be done with our World.
By Alfred de Grazia


PART TWO: Plutocrats and Taxocrats


Types of Regime

Man has experienced and altered systems of government for as long as he has existed. No system has been satisfactory for long. Invention proceeds, but trouble marches apace. Every decade witnesses serious violence in most systems, and the rape of personal rights and freedom practically everywhere. Yet man works like Sisyphus, forever pushing his rock up the mountain only to see it fall.

Governments were not invented for the good of man. They are natural things, which means they are both good and evil. Systems of government have been magical concoctions and cancers-a debris of power, greed and lust floating upon the primitive nightmares of the race. They have at the same time been the normal means of coping with problems beyond the scope of personal abilities.

Even though we can now see a future that is dazzling and poignantly happy in prospect, we need to realize how intelligent we must become to escape the curse of Sisyphus. We are still where Ralph Waldo Emerson put us, over a century ago:

We think our civilization is near its meridian, but we are yet only at the cock-crowing and the morning star. In our barbarous society the influence of character is in its infancy. As a political power, as the rightful lord who is to tumble all rulers from their chairs, its presence is hardly yet suspected.1

He spoke largely of America, but we can speak thus of all the regimes of this world. We need activists persons of republican and Kalotic character, tutors everywhere.

To talk of political systems requires naming them. A 2500-year-old classification calls systems of government by the names of "democracy, aristocracy, and monarchy." This is about as useful today as dividing the elements of physics into earth, air, fire and water.

There is a partial validity in Herbert Spencer's division of societies into "industrial and military," and in Karl Marx' "feudal, bourgeois and socialist" as well as Gaetano Mosca's "feudal, liberal, and bureaucratic." Marx and Mosca are in agreement, actually (both are correct, too, in relation to socialist-bureaucracy as the final stage of the three.) Modern scholars have used these, and added other terms: "authoritarian" for countries like Spain, "traditional" for countries like Morocco. Some have used "free and totalitarian," especially if they are government propagandists.

All classifications have their uses and abuses. But in reforming the behavior of states and groups, the major shaft of analysis has to be their characteristic drive. What force infuses and suffuses them? What is their dynamic tendency? where are they headed?

Our goal is Kalotic Revolution; improvement on any considerable scale is impossible without modeling society after some large objectives bearing upon the lives of its people. Man requires and adequate material base for existence (emos), a fullness of opportunity and spirit (pneumos), and a regular legal order (dikeos). We sum them up in the term, Kalos. These needs must be found through large-scale and rapid change of revolutionary proportions, by means which, if not violent, must be forceful.

In the end, a Kalocracy is what is sought--a regime driven throughout by and effective desire to bring to its own people; and to the people of the world, their primary goods. Kalocracy, then, must be that regime predisposed toward both the good toparchy, or local order, and the good cosmarchy, or world order; It is a regime whose hallmark is the controlled acceleration of basic social change, that is, Kalotic Revolution.

Most states of today are dystrocracies, that is, misorganized for modernity from the viewpoint both of the inhabitants and of the outside world.2 Distinguishable from dystrocracies are many countries whose regimes have some special drive that is ungovernable thus far, but that removes them from the materially hopeless position of the dystrocracy. These are the force-dominated state, the stratocracy; the dogmatically-ordered state, the taxocracy; and the wealth-consumption dominated state, the plutocracy; These four types of regime, each in its own way outrageously incompetent by Kalotic standards, have to be reorganized and brought in relation to one another.

To a large degree every country is a dystrocracy: the U.S.A., although a prominent plutocracy, is also a dystrocracy, whose principal problem is the mismanagement of its wealth. The U.S.S.R. is a prominent taxocracy and is also a dystrocracy, whose principal problem is the mismanagement of offices and personnel.

The Drive to Consume

Plutocracies are regimes dominated by the urge to acquire and spend wealth. They may not in fact succeed and may not provide a kalotic life, any more than a dystrocratic country does. Yet, whether we speak of the luxuriating Central European countries before World War I, or of Western Europe, the U.S.A., and Japan today, what engages us is the immense energy and ability going into the accumulation and disposal of goods. It is what impressed Karl Marx also a hundred years ago, and the process has gone on unabated. Modifications have been introduced: the character of property, of occupations, of services, and of relations with other regimes have changed; but the drive to wealth is incessant and piles up consumer goods into silos, warehouses and stores that dwarf the grandest monuments of the ancient world.

Some say that this aggrandizement of commodities has occurred because of the underlying principle of laissez-faire, but we must not overlook the propensity of the bourgeoisie, as Marx said, to call upon state intervention when its interests required.

S.M. Lipset, sociologist turned historian for the occasion, has made quite clear the continuous and manifold activity of the state during the peak period of `laissez-faire" ideology in America.3 The First New Nation was definitely not a hands-off nation. In fact, never was the primacy of politics over economics surrendered;4 politics went underground and the underground river hummed an economic tune.

Recent times speak more emphatically. Typical was the partial nationalization of Italian industry in the 1930's by Mussolini, which Norman Kogan calls.

socialization of the losses (viz.failing industry) with the full and enthusiastic support of the private industrialists and bankers, who were saved at the expense of the taxpayers. The Fascist Government followed the policy of retaining the firms's old corporate identity, their old management, and their old policies.5

Politics is by no means capable of subjection to a narrow economic ideology. The political system incorporates and reissues the economic dogma in its own ways. Thus, although a people also possesses other motives, the wealth-producing drive carries all manner of impedimenta, whether hurtful or helpful to the poor or to other lands, down its rushing stream-bed like so many bits of twig and leaf. Taxocracies are exclusive; stratocracies are pugnacious; plutocracies thrive upon on another and upon dystrocracies;

So effective have been partial applications of the principles of science to the production and distribution of goods for mass markets that the mainstream of plutocratic societies has grown more and more swollen, while taxocratic ideologies and policies have sought to dry up "free enterprise." And to science must be added the private motivation.6 In the U.S.S.R., for example, much of the food consumption depends upon the several million persons, mostly women, who privately grow and market produce, either full time or part time,7 An estimate in communist China declares that the 4% of the population privately engaged in farming produce 20% of the total consumption.8

Unexpected Changes in "Capitalism"

No one today is waiting for capitalism (an old-fashioned and largely inapplicable term given the economic system of plutocracy) to fail because of monopoly, business depressions, the creation of class conflicts, and the grinding down of the poor. On the contrary, in all of these respects, plutocracy is much changed today and therefore stronger than it was century ago. Only by employing new and fanciful standards of what, for instance, is "poor," or of what is "exploitation" in workshops, can plutocracy be claimed to be as bad as it ever was.

Indeed, while there were many intimations of the real problems of plutocracy many years ago, they were deemphasized by the taxocrats. For instance, numerous critics lamented the noise, ugliness, the alienation of man from his crafts, and urban crowding of the machine age, but they were regarded as queer, conservative and irrelevant.9 The main attack and defense took place on the front of government versus private ownership of means of production.

Relations between rich and poor in today's plutocracies are not generally hostile. This fact, strange to the 19th century and up to the world War II, is accounted for in large part because of the decline in morale of the rich as rich and of the poor as poor-in other words, the decline of class morale. More characteristic of today's plutocracies is the absence of life goals among both rich and poor, producing a classless society in a grand irony. Both work towards immediate material goals, without natural enthusiasm or vision.

The basic problem in this country today is political confusion. People don't know who their enemies are; they don't know who their friends are. They don't know whether to be afraid of the right or of the left. They don't know whether they themselves belong on the right or on the left.

So writes Eldridge Cleaver, who is himself left and right in the 360 War10 He is no economist, but the confusion he speaks of pervades economic affairs.

Tour de Force on Some Economists

Frank H. Knight11 criticized the reknowned A.C. Pigou, father of welfare economics, for a "weakness" that "is one frequently met with in economic theorizing, namely that the assumptions diverge in essential respects from the facts of real economic situations." But this fallacious practice goes on and on. Nor does Knight express the worst of the problem. Not only are theories supported by non-empirical factual statements, but they are also converted to applications without realization of the hidden standards contained in them.

Adam Smith, like most theorists, had both scientific and practical purposes in mind. In his Wealth of Nations he wished to generalize reality and to influence public policy. But as the laws of the sociology of science teach us, each purpose affected the other, and we received a partial (in the logical sense) new knowledge of human relations and a partial (in the ethical sense) public policy.

His account (or is it rather a parable?) of the division of labour in the manufacture of pins is exemplary. This story has infiltrated thousands of courses and millions of minds. It goes as follows: men who fabricate whole little pins are not expert at every stage of the process; they make few pins. If organized as a factory, with each man making only portion of a pin, many more pins will be produced. This "division of labor" promotes dexterity; it reduces the loss of manufacturing time because a man no longer changes ("saunters," says Smith) from one task to another; it encourages the invention of machinery because a special machine can be afforded for each different operation.12

Smith does not relate the disadvantages of centralized factories, nor of the more disagreeable routines imposed on people, nor of the reduced "general dexterity" or all-around character of the workers. He is impressed chiefly by the increased number of pins produced by seemingly the same number of hours of work on this job. Productivity becomes a mono-mania, but it is productivity whose consequences and costs are strictly limited to the perspectives of kind of businessman who takes both other men and nature as having utility only insofar as they have facets that pay him a profit. Everything else about man and nature is nobody's business.

Indeed, the task of the government is to assure that most of what is good about man and nature remains nobody's business. It was precisely in this spirit, in the 1840's, that certain leaders of the British government, then the richest country of the world could refuse to intervene to help their Irish colonials, living a few miles away, four million or one third of whom were starving to death from a potato famine, and four million of whom were in desperation fleeing their hearths and families for America.

We turn to another economist, Wassily W. Leontieff, working two centuries later. A massive experience with capitalism and state socialism has intervened. The machine age dominates day by day ever more of man's life. Now it is widely believed that to rule the modern state-to tax, to regulate, and if not to manage, then to help others to manage business- we need powerful instruments for surveying the economy. The new theory of Input-Output Economics was fashioned.

Input-output economics asks "who supplies what to whom" and prepares gigantic tabulations of whole national economies to this end. It demands the kind of painful questionnaire survey and exquisite computer machinery that can exact from each business group such as leather goods and motor vehicles what it buys from every other industry and what it sells to them. It calls for ever more "detailed and up-to-date tables" for the "realization of its potentialities for informed and rational decision-making at the levels of economic life."13

Nevertheless the biases of this age are no better than of times past. In place of the analysis of the division of labor, we are given the analysis of volumes of transactions. Then, instead of inspiring a public policy of privately conceived profits, we are influenced to a public policy of publicly conceived productivity; The cannibalized corpse of Smith's man is bloated up and set floating on a sea of garbage by the new economists. The subversion of human values of work and of the goals of work are common to the misapplied science of Leontieff as well as Smith. Economics remains the most inhuman of behaviour sciences.14.

Input-Output Analysis, also called now National Accounting, can serve plutocratic and taxocratic elites. It refuses to pass judgment on what production is good and what bad. The services of any clerk equal the services of Edison and Marconi. A $50 straw hat goes into the accounts at 100 times a 50 cents loaf of bread. The sum total of outputs, calculated one way, gives the notorious GNP, This Gross National Product, for all that its creators care, could be composed partly of chits given fifty million men to couple with fifty million women. And to double the same sector of the GNP would require only printing and distributing the same number of chits to the women.

Somewhere beyond that GNP which is exalted in public debate and this parody lies the kalotic GNP. Kalotic National Accounting can be a powerful tool for appraising the transactions of economies. What is in fact produced has to be reevaluated in terms of what should be produced. We ask "what is best to produce for the Kalotic way of life; how can it be produced at minimal cost to all the kalotic features of life?" And to the question: "Who is to manage all of this and how?" we say, "We are not such fools as to fall into this trap! Kalotic constitutions and organizations, operating by kalotic methods, led by kalotic tutors. They can be created. They will be explained in due course." Until economists, and all who deal with economic affairs train their science upon Kalos, they will suffer a due share of social futility.

1. "Politics," in Works, Vol. I,p.217.
2. Cf. Samuel Huntington, The Political Order in Changing Societies (New Haven: Yale University Press, 1968); Edward Shils, "Political Development in the New States," comparative Studies in Society and History (1960), p.279; and D. C. McClelland, The Achieving Society (Princeton; Van Nostrand, 1961).
3. New York: Basic Books, 1963.
4. Sebastian de Grazia, The Political Community (Chicago: U. of Chicago Press, 1948).
5. The Government of Italy, p. 133. On America, cf. e.g., A. W. McDonald and A.W. McCoy, "Pan Am: Victory Through Air Power," Hard Times || 62 (January 26, 1970), pp. 1-4, tracing various airline-government mutual aid techniques.
6. This "private" motivation is often also "altruistic." As Kenneth Boulding said well, "There is nothing in the institution to prevent everyone in a market economy from being-actutated by the loftiest altruism. It may be true that the institutions of the market economy do not by themselves generate altruism, and it is probable that altruism is generated in the home, church and school rather than in the bank or the counting house. It is also true that prisons are poor generators of altruism!" The Organizational Revolution (New York: Harper, 1953, p.252 See also H. van der Haas, The Enterprise in Transition: An analysis of European and American Practice (London: Tavistock, 1967), e.g., Chapter 17on "transition from the concept of economic man to the concept of pluralistic motivation.
7. The Soviet advisers were trying in 1969 to get the Egyptian government to relax its laws in order to permit part-time farming and marketing .
8. Turnbull.
9. See Benjamin Lippincott's Victorian Critics of Democracy (Minneapolis: U. of Minnesota Press1938.)
10. Post-Prison Writings and Speeches (New York: Randon House, 1969.
11. "Some Fallacies in the Interpretation of Social Cost," first printed in 1924, p. 215 in Arrow and Scitovsky, see below, page 24, fn.2.
12. Wealth of Nations (1776; New York Modern Library Edition, 1937), pp 4-5.
13. "The Structure of the U.S. Economy," 212 Scientific American (1965), 3, p. 13.
14. If anyone disbelieves this statement, he need only glance through the pages of a collection of the "best works" on welfare economics, collected by committee of leading economists under the auspices of the American Economic Association" Kenneth J. Arrow and Tibor Scitovsky, eds., Readings in Welfare Economics (Homewood, Ill." Richard D. Irwin, Inc., 1969). And the selection was performed by "new liberals," who neglected some famous early heroes of "the dismal science!"


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