Unlike most economic determinists of the nineteenth century, Brooks Adams was not an apologist for the processes he described. His first and most important book, The Law of Civilization and Decay, reveals, according to Ezra Pound,
. . . a consecutive struggle against four great rackets, namely the exploitation of the fear of the unknown (black magic, etc.), the exploitation of violence, the exploitation of the monopolization of cultivable land, and the exploitation of money.1
Adams is drawn to two great nineteenth-century preoccupations: puzzles and immutable laws:
Only very slowly did a sequence of cause and effect take shape in my mind. . .whose growth resembled the arrangement of the fragments of an inscription which cannot be read until the stones have been set in a determined order. Finally. . . I perceived that they fell into a series which seemed to correspond, somewhat closely, with the laws which are supposed to regulate the movements of the material universe. 2 (bold face mine)
The “laws” which he discovered governed the unity of energy and its inevitable exhaustion. Brooks did not take up Gibbs’ Second Law of Thermodynamics, as did his brother Henry, but the implications for human destiny were much the same:
The theory proposed is based upon the accepted scientific principle that the law of force and energy is of universal application in nature, and that animal life is one of the outlets through which solar energy is dissipated.3 (bold face mine)
This law was supplemented in human history by the action of two emotions preeminent in Darwin’s Natural Selection: fear and greed. These governed a cyclical contraction and expansion, each in turn producing its own peculiar pattern of social organization:
Fear, which by stimulating the imagination, creates a belief in an invisible world, and ultimately develops a priesthood; and Greed, which dissipates energy in war and trade.4
The turning point was reached when surplus energy (stored, as we have noted, in the form of money) accumulated sufficiently to gain control over productive energy. From that moment history tended toward the increasing domination of the “economic type” and toward that centralization of control which the free flow of trade both permitted and demanded. Ultimately the energy of the “economic type” was exhausted and the society stagnated, until the infusion of “barbarian blood” brought imagination and fear to the forefront again.5
It’s easy to shoot holes in Adams’ “law”, which, in macrocosm, is the plot of many a Victorian novel. It is all you usually get of Adams in the histories of ideas,6 perhaps because it is so concisely outlined in the introduction to The Law of Civilization and Decay. (Pound’s summary is arguably more accurate than Adams’ own.)
Unfortunately, this doesn’t remotely do Adams justice. The quality of his perceptions when he is dealing in some detail with the effect of usury on the productive sectors of an economy, or the coincidental flow of monetary and cultural exchange, is lost in such a bare précis. It says much for Ezra Pound and Charles Olson that they were able to see beyond the faulty premises, which Adams shared with his contemporaries, to his unique insights.
Adams’ chosen time-span begins and ends with the same arc of the cycle: the collapse of the Roman Empire and the threatened collapse of Western Civilization. Without subscribing to the inevitability structure inherent in cyclical theories of history, one nevertheless reads Adams’ description of societal fragmentation in Rome with a certain feeling of déjá-vu: the accelerating centralisation of money7 and agriculture;8 the dependence of status on wealth;9 the impoverishment of the small farmer;10 and especially the migration of the poor to the big cities.11 If you substitute the growth of automation for the influx of foreign slaves, the points of similarity with modern America are particularly striking. Both slaves and. machines provide a cheap, depersonalized energy source, whose productivity enriches the entrepreneur rather than the worker who has been displaced.a
Adams had no illusions about the relationship between law and justice:
. . . as [the usurer] fed on insolvency and controlled legislation, the laws were as ingeniously contrived for creating debt, as for making it profitable when contracted. . . As the capitalists owned the courts and administered justice, they had the means at hand of ruining any plebeian whose property was tempting. 12
Nor was Adams’ perception of the nature of law confined to ancient Rome. He was able to see, clearer than his contemporaries, that it is no mere coincidence, nor a lex naturae, that the modern legal system is concerned mostly with the protection of property rights:
Abstract justice is, of course, impossible. Law is merely the expression of the will of the strongest for the time being, and therefore laws have no fixity, but shift from generation to generation. As competition sharpens . . . religious ritual is supplanted by civil codes for the enforcement of contracts and the protection of the creditor class.
The more society consolidates, the more legislation is controlled by the wealthy, and at length the representatives of the moneyed class acquire that absolute power once wielded by the Roman proconsul, and now exercised by the modern magistrate. 13
Thus the modern legal system is infinitely subtle, and its enforcing officers equally efficient, in punishing those forms of theft which are not practiced by the ruling class; but robbery in the market-place is governed by primitive controls which lag far behind the sophisticated mechanisms which company lawyers contrive to circumvent them. One measure of a society is the problems it chooses to solve.
Rome’s ruling class was unable to restrain its rapacity, even in its own ultimate interest. Adams saw what liberals are rarely willing to admit—namely, that a system based on corrupt practice cannot be saved merely by tinkering with it.
The stronghold of usury lay in the fiscal system, which down to the fall of the Empire was an engine for working bankruptcy. Rome’s policy was to farm the taxes; that is to say, after assessment, to sell them to a publican, who collected what he could. The business was profitable in proportion as it was extortionate, and the country was subjected to a levy, unregulated by law, and conducted to enrich speculators.14 (bold face mine)
Thus the laws applied to selected areas chosen by the ruling class, leaving them free to plunder without legal restraint. In the nineteenth century this would be known as laissez-faire, the operation of the free market in accordance with the iron law of supply and demand.
Usury, as we observed in the previous chapter, depends not only upon the scarcity of goods, but also the scarcity of that substance which is chosen as a medium of exchange, e.g., gold or silver. The latter scarcity may result from any number of factors, including (1) an expansion of trade, (2) the exhaustion of the mines, (3) a “lack of confidence” which leads speculators to withdraw their capital, or (4) the deliberate manipulation of the money market. One of Adams’ virtues as a historian is his close attention to these economic factors and their decisive effect on the evolution of Western Civilization. At each critical stage, for instance, he notes the expansion or contraction of the currency as revealed in the changing policies of coinage.15
The explosion of trade which the Italian bankers were able to bring about by manipulating the Crusades to their own advantage can hardly be overestimated as a causative factor in ending the supremacy of the church. Adams devotes an entire chapter16 to the techniques by which Dandolo transformed a predominantly religious war against the heathen into a war for profit which reached its climax in the sacking of Constantinople. This both whetted a European appetite for luxury and immeasurably increased the gold supply whereby the taste could be gratified.
Adams notes two points at which the discovery of new mines brought a sudden rise in prosperity. The first is the discovery of Potosi in 1545, which made a decisive contribution to the prosperity of England under Elizabeth I.17 The second is the influx of gold in the middle of the nineteenth century from California and Australia.18
The first three factors can also be made to interact among themselves to the advantage of those who understand their operation. In two of the Money Pamphlets Pound quotes a favourite passage from the Law:19
Perhaps no financier has ever lived abler than Samuel Loyd. Certainly he understood as few men, even of later generations, have understood, the mighty engine of the single standard. He comprehended that, with expanding trade, an inelastic currency must rise in value; he saw that, with sufficient resources at command, his class might be able to establish such a rise, almost at pleasure; certainly that they could manipulate it when it came, by taking advantage of foreign exchange. He perceived moreover that, once established, a contraction of the currency might be forced to an extreme, and that when money rose beyond price, debtors would have to surrender their property on such terms as creditors might dictate.20
To Pound, “the greed for monopoly is a fundamental evil.”21 Here is one of the ironies of money manipulation. A monetary system is based on confidence, but that very confidence can he used against the people who make it function:
The insidiousness of banking has always followed the same road—abundance—any kind of abundance tends to create optimism. This optimism is exaggerated, usually with the help of propaganda. Sales increase; prices of land, or of shares, rise beyond the possibility of material revenue. The banks that favour exaggerated loans, in order to manoeuver the increase, restrict, recall their loans, and presently panic overtakes the people.22
The indispensable means of creating credit evolved side by side with the techniques for manipulating it against the public good. Aristotle outlined in passing the method whereby the philosopher could make himself rich if he concerned himself with such trifles. In anticipation of a rich olive crop, he quietly acquires the rights to all the presses, making it necessary for the growers to pay him whatever price he may demand for their use.23
Pound distinguishes among three types of fraud.24 We have been describing one of them: “the swindle of raising the value of the monetary unit”. Another, which we will consider later in some detail, is “forcing a nation to purchase commodities (often useless) for twice as much as they are worth.”
The third, which Pound considers to be fundamental and in many ways the most serious, is “enjoying interest on money created out of nothing”. A turning point in Western economic history was the foundation of the Bank of England in 1694. When William and Mary came to the throne after the Revolution of 1688 the monarchy was bankrupt. William Patterson and a group of backers proposed a privately owned national bank, from which the crown would borrow the sum of £1,200,000, instead of going to the extortionate money-lenders. The bank was given the right to print that amount of paper money, for the loan of which it would receive eight per cent interest plus £4,000 per year to cover “expenses”. The money would be backed by a guarantee of coin, if required, from public taxes. The bank soon exceeded the stated limit of issuable paper money, but the crown was unable to protest, being so heavily in debt that it feared the loan might be recalled.25
Patterson was aware that he had engineered a gigantic confidence trick. Pound quotes him in the Cantos: the bank
Hath benefit of interest on all
the moneys which it, the bank, creates out of nothing26
Thus, as we observed earlier, one man’s liability became another man’s asset, the bank, consolidating its position and multiplying its profits by unilaterally raising the national debt!
But the creation of money cannot go beyond the point where the public cease to honour it. In a time of prosperity, if precious metals are the ultimate standard of reference, then the supply must somehow be increased. When no legitimate source is available, and the inflation of paper has reached its upper limit or is out of favour, the alternative is prodigious theft. According to Adams the two greatest periods in English history, the Elizabethan Age and the establishment of the Empire, were founded on this bold expedient.
“Like the Venetians,” says Adams, “the British laid the basis of their high fortune by piracy and slaving.”27 Following the Spanish discovery of the Potosi mines, Sir Francis Drake and his followers robbed the Spanish fleet of a vast treasure. John Hawkins added to the flow of wealth by capturing the slave trade from the Spaniards and supplying the labour-hungry colonies in the West Indies. Together they monopolized Spanish silver and brought Elizabethan England to the status of a world power.28
An expanding trade with the East gradually depleted this new supply of silver. The foundation of the Bank of England provided a temporary respite through the creation of paper but, by the middle of the eighteenth century, coin was again dangerously low. South American silver had been travelling steadily by way of Europe to India, where it accumulated in the vaults of the ruling princes.
This flow was suddenly reversed when the East India Company, under the military leadership of Robert Clive, turned from trade to plunder. Millions of pounds were taken back to England, where they provided the financial impetus which led to the industrial revolution and the British
Adams realized that such massive military operations were extensions of the normal means whereby the moneyed classes maintained their power. One hopes that Adams compiled his own index, for it contains one of the book’s pithiest comments: War: see Police”.30 Here lies another crucial difference which he sees between the Middle Ages and the ascendancy of the “economic type”:
The basis of the secular society of the early Middle Ages was individual physical force. . . With the spread of the mercantile type, however, a change began—the transmutation of physical force into money.
Thus, from the time when the economic type had multiplied sufficiently to hire a police, the strength of the State came to depend on its revenue, and financiers grew to be the controlling element of civilization.31
Through this process the bourgeoisie gained another valuable monopoly—that of physical force. The armed men whose salaries they paid protected their interests under the laws which they created. There were local pockets of resistance under surviving feudal lords, but these were gradually subdued.
In the study of history, Adams thus provided a shift of focus from the succession of kings to the economic groups which used the monarchy as a means to centralization. The latter have been largely passed over, for, unlike a monarch, a banker’s power was apt to be in inverse ratio to his notoriety. Fame and Glory are not words often heard in the Exchange.
If armed force is a monopoly, it can not only be used to protect vested interests—it can also be made to turn a profit. Since Adams wrote the Law, manipulation of international conflict has become a fine art. This demands a thesis in itself, but Pound’s references to the practice deserve a brief mention.
Canto 38, in particular, cites the manipulations of Metevsky (Sir Basil Zaharoffb ), Akers (Vickers), and Herr Krupp. All three were munitions manufacturers who were able to sell huge quantities of armaments to both sides in a conflict by encouraging them to surpass each other in destructive potential—a game which combined the most exciting features of a Dutch Auction and Russian Roulette.
But wars not only boost sales, they can also prevent goods from becoming so abundant that they fall in price:
When there is danger of abundance of any, or almost all, commodities, then the usurocracy unleashes a war in order to diminish purchasing power.32
What better way to neutralise abundance than to concentrate production in goods which are ceremonially destroyed, as in a primitive potlatch? Of coarse, now that total war has become an anachronism, the ceremony must take place within a limited area.
Such practices are difficult to document, since all evidence is classified in the interests of “national security”. Even the Pentagon Papers tell us more about the relatively public world of government than the private world of finance. But G. William Domhoff, in his important and meticulously documented book, Who Rules America?, offers powerful evidence that industry is the dominant partner in America’s military-industrial complex.33 And, according to George Thayer in The War Business,
The government officials who sell arms today have power that Zaharoff never dreamed of, they are protected to a degree that no private entrepreneur of old ever enjoyed, and they operate with less restraints upon them than even those few imposed on the master arms merchant himself two score years ago. 34
Under the rule of the single standard, even the arts are affected. In a letter to Brooks Adams, his brother Henry summed up the Law in three sentences:
All Civilization is Centralization.
All Centralization is Economy.
Therefore all Civilization is the survival of the most economical or cheapest.35
Brooks apparently agreed. In the last chapter he described the architecture of the Romans with great perception:
The Roman, though vulgar and ostentatious, understood business. . . Therefore they first ran up a cheap core of rubble, bricks, and mortar, which could be put together by slave labour under the direction of en engineer and a few overseers; and their squalid interior they afterward veneered with marble, adding, by way of ornament, tier above tier of Greek columns ranged against the walls.b That gaudy exterior had nothing whatever to do with the building itself, and could be stripped off without vital injury.36
Which, of course, is exactly what has happened. In the end. even the architects’ legitimate protest against false ornament is made to serve the destruction of value. The facade is torn away, revealing, in the words of Norman Mailer,
. . . blank skyscrapers forty stories high, their walls dead as an empty television screen, their form as interesting as a box of tissue propped on end. They are buildings which reveal nothing so much as the deterioration in the real value of the dollar bill.37 (bold face mine)
Pound even went so far as to insist that
. . . an expert, looking at a painting . . . should be able to determine the degree of the tolerance of usury in the society in which it was painted.38
In Canto 45 he explains why:
with usura. . .
no picture is made to endure nor to live with
but it is made to sell and sell quickly. . .
with usura the line grows thick
with usura is no clear demarcation39
Adams anticipates Pound in the last chapter of the Law: The substitution of the fresco for the mosaic is one of the most typical devices of modern times.” Ultimately even the fresco is discarded in favour of art which, like money, is portable: “. . . the presence of the portrait demonstrates the supremacy of wealth.” 40 But it is not only portable; it is also “manufactured to suit a patron’s taste. . . . The artist, like all else in society, has become the creature of the commercial market.”41
Art today, of course, is one of the most popular forms of investment. The well-balanced portfolio is apt to include a few sound painters who will no doubt appreciate in value. Some artists have rebelled against this perversion by creating objects which are self-destructive; it is ironic that, in avoiding the perfect investment, they have created the perfect product.
AND FINALLY, the corruption of the word. Pound reserves a special place in his hell for the “betrayers of language”: “the press gang”, “Flies carrying news”; the pedants, “obscuring the texts with philology”; “the mouthing of orators, / the arse-belching of preachers. . .”42
But all these are sub-species of the fundamental corruptors: “the perverts, who have set money-lust / Before the pleasures of the senses. . .”43
We have touched briefly on the concept of Money as Religion. At this point we must come back to it as the primum mobile of our social structure. For behind the money for spending and the money for productive investment stands the real money. David Bazelon, who spent years as a corporation lawyer, knew it well:
It will never buy anything except more money or more profitable money. It feeds on itself in a narcissistic ecstasy. . . It exists only because of the spending, but it is not itself spent; it is a charge on all spending by others. . . [It] insists on its return whatever else happens, and it doesn’t care where the return comes from, just so it comes. . . In our day it is particularly made up of old paper—inflated capitalisation and debt. . . It is, in effect, the clammy hand of history on our shoulder. The history of all our paper excesses. The greatest surviving form of ancestor worship in the world today.44
This is approximately where Major C.H. Douglas, a Canadian engineer, arrived after the experience of managing an aircraft factory. As a possible way out of economic bondage, he evolved his theory of Social Credit, which, says Pound , “was the doorway through which I came to economic curiosity.”45 In the next chapter we will consider the prescriptive elements of Pound’s thinking, together with Robert Theobald’s proposals for a Guaranteed Income.
a There are differences, of course, between ancient Rome and the modern world. It is now more profitable, in most cases, to seduce a poor country than to rape it.
b It is not surprising to learn that Zaharoff was “never a man to make friendships easily, or to establish permanent friendships, which he tended to view as an encumbrance and restricting in personal freedom.” (McCormick, Peddler of Death, p.207)
c Pound: “’how the hell can we get any architecture / when we order our columns by the gross?’” (Canto 78/129-30)
1 Pound, A Visiting Card, p.8
2Adams, The Law of Civilization and Decay, p.viii
3 Ibid., pp.viii-ix
4 Ibid., p.ix.
5 Ibid., p.ix
6 Ibid., See, e.g., May, The End of American Innocence, p.184; Ziff, The American 1890s, p.219; and Hofstadter, Social Darwinism in American Thought, pp.186-7
7 Adams, Op. cit., pp.12-3
8 Ibid., p.20
9 Ibid., p.15
10 Ibid., p.21
11 Ibid., p.16
12 Ibid., p.5
13 Ibid., p.165
14 Ibid., p.5
15 See the index entries in Adams, Op. cit., under Coinage, Currency, Gold, Money, Silver
16 Ibid., Chapter V, “The Fall of Constantinople”, pp.124-51
17 Ibid., p.207
18 Ibid., p.325
19 Pound, Gold into Work, p.6; A Visiting Card, p.10
20 Adams, Op. cit., 315
21 Pound, Gold and Work, p.8
22 Pound, An Introduction to the Economic Nature of the United States, p.15
23 _____, America, Roosevelt, and the Causes of the Present War, p.8
24 _____, A Visiting Card, p.24
25 Davis, Vision Fugitive, pp.85-6
26 Canto 46/27
27 Adams, Op. cit., p.288
28 Ibid., pp.288-92
29 Ibid., pp.305-12
30 Ibid., p.393
31 Ibid., p.164
32 Pound, America. . ., p.18
33 Domhoff, Who Rules America?, pp.115-126
34 Thayer, The War Business, p.306
35 Quoted in Donovan, Henry Adams and Brooks Adams, pp.126-7
36 Adams, Op. cit., pp.372-3
37 Mailer, Cannibals and Christians, p.234
38 Pound, A Visiting Card, p.25
39 Canto 45/9, 11-12, 17-18
40 Adams, Op. cit., p.380
41 Ibid., p.381
42 Canto 14, passim
43 Canto 14/28-9
44 Bazelon, Op. cit., pp.71-2
45 Pound, A Visiting Card, p.13