CounterPunch Exclusives

CounterPunch Exclusives

Capitalism’s Organic Intellectuals

Photograph by Nathaniel St. Clair

When we were fighting the IMF and World Bank-imposed structural adjustment or austerity programs in the 1980s and 1990s, many of us thought that we were up against a strategy that had been formulated mainly as a response to the social democratic compromise with capital in the Global North and to state-led developmentalist initiatives in the Global South. Of course, we knew that the intellectual inspiration for neoliberalism came from nineteenth-century classical free-market-oriented economics.

What few of us realized at the time was that the neoliberal counterrevolution that took off in the late 1970s had an earlier manifestation in the early part of the twentieth century, and this had provided a theoretical and policy arsenal that the later movement drew upon.

Clara Mattei’s The Capital Order: How Economists Invented Austerity and Paved the Way for Fascism is a masterful fusion of archival research, ideological deconstruction, and political economy that captures the post-World War I era, which was marked by acute class conflict. Although the revolution in Russia is quite familiar, less well-known is the situation in Western Europe, where there was a revolutionary challenge to capitalism, though of a less violent sort. Mattei is convincing when she documents how the role of the state in controlling all dimensions of the economy for the war effort led unwittingly to a “denaturalization” of the market economy, that is, to an unmasking of the “laws of the market” as really a political project benefiting a few that provided workers with a glimpse of a possible alternative order.

Reconstructionists and L’Ordine Nuovo

Focusing on the situation in Britain and Italy, Mattei details the two key responses to the revolutionary ferment. The “enlightened reconstructionist elite” sought to buy social peace by having the state take an active role in providing workers with better housing, social insurance against old age and disabilities, and greater educational opportunities, all of which entailed expansive budgets. The reconstructionists were not a homogenous grouping, nor did they seek to dismantle the hierarchical order. Yet they shared “a revulsion to competitive individualism and laissez-faire capitalism,” thus “profoundly disputing the economic doctrine that for centuries had stood as the cornerstone of capital accumulation.” In many ways, they were the ideological predecessors of the Keynesian economists of the post-World II era.

The reconstructionists triggered a process that saw a “mutually enhancing relation between reforms and working-class consciousness,” so that “ironically, the reformists, who had bent the iron laws of the market to avoid a revolution, had actually contributed to sparking another one.” The leading force in this radical offspring of the reformists was the Turin-based L’Ordine nuovo group whose key movers were the young Antonio Gramsci, Palmiro Togliatti, and Angelo........

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