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Hegel’s Emigrating Rabble and Export of

Institutions of Civil Society1

Tomas Kristofory23

October 2015

Historians treated Hegel’s analysis of rabble in the Grundlinien der

Philosophie des Rechts (GPR) as an inherent contradiction of his theory of

civil society. They believe that unlike other categories in his system, rabble is

not sublated. Consequently, it serves some as the enter-place for Marxism into

Hegel’s system. However, this widely held interpretation is quite un-Hegelian.

This paper gives it a try to treat Hegel’s rabble in a more Hegelian way, ashaving a sublation within his system. It collects Hegel’s dispersed quotes on

rabble and reconstructs his argument, especially from par. 243-248 of the GPR.

Our method is different from alternative readings in that we read his argument

in philosophical rather than economic way, which was typical for Marxist

readers. Rabble emerges as a consequence of the growth of population and

economy, because jobs of some the farmers or artisans are no more needed in

agriculture or industry which they however prefer. Part of them might remain

rabble in their own country. However, we then find the key argument for the

sublation of rabble in migrating to colonies in an organized way through

police. Unlike alternative interpretations, we find that Hegel didn’t offer themigration as a means to alleviate poverty, but as a means of export of

institutions, of moral structure of the civil society to the colonized country.

This is the world-historical role of commerce identified by Hegel and

unaccounted for by alternative interpretations. By analysing Hegel’s example

of British migration to the North America in his Lectures on the Philosophy of

History, we find Hegel’s mechanism for this institutional change growing from

the morals of immigrants. There is still plenty of free land to satisfy rabble’s

desire to make a living through the preferred means. Both colonizing and

colonized country grow richer and ultimately, colonies will achieve

1 I thank the Faculty of Economics, University of Economics in Prague for granting me

a stay in the Hegel-Archiv in Bochum. I thank Norbert Waszek for sending me his books on

Hegel. Jan Pavlik inspired me to adopt topics in Hegel’s Philosophy of Right and spent a lot

of his time discussing my slowly developing ideas. Petr Specian and Josef Montag

encouraged me to publish and made valuable remarks. Usual disclaimer applies.2

Faculty of Business and Economics, Mendel University in Brno.3 e-mail: [email protected]. Tel.: 00420777977042.

mailto:[email protected]:[email protected]:[email protected]:[email protected]

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independence because of the morals emigrants carried there from their country

of origin. Here the circle of Hegel’s argument reaches its end and rabble is

sublated within Hegel’s system. Further, we find that Hegel predicted the

process to repeat, since in the civil society of USA, rabble would emerge once

again. Hegel predicted the world-historical role of the USA would perhaps be

in the future to lead the war with Latin America and colonize it. Logic of the

export of institutions through migrants repeats another time, and more nations

will acquire institutions of civil society in the end. The implication we deduce

is, that Hegel’s stance was that civil society and its institutions will gradually

displace competing institutional structures by the means of rabble.Key words: Hegel, rabble, migration, colonialism, export of institutions. JEL codes: B15, B52, F22, F54, O17.

IntroductionThe importance of Hegel’s theory of estates for the institutional economics has already

been recognized (Boyd 2015). However, what has yet not been understood, is the precise

reason, why the estates have the role Hegel attributes to them. While it is clear that for Hegel

the estates should mitigate the rabble with the help of police, it is less clear, but still

understood by some, that the police’s role is to establish institutions that would prevent the

problem from arising (Ruda 2011). Since the surveyed unit for Hegel is the nation and its

nation state, these reforms should be taken up on the level of the respective country’s

parliament. While policies always come from the nation’s centre, this runs against Hegel’s

aim of spreading the morality (Sittlichkeit) internationally, especially if rabble is the only

‘suspect’ category of the Philosophy of Right where the mechanism of the export of moral

institutions could be found. Moreover, analytical residing just at the national level runs

against the belief of Ruda’s predecessors in socialist internationalism.

Ruda’s argument runs also against the belief of much of this secondary literature in the

international socialism. For such conclusion the argument is supplied often that Hegel was

inconsistent and that we choose another institutional level than he chose. But if the evidence

is displayed that Hegel wasn’t inconsistent at all and that the mechanism he suggests for the

institutional change caused by the internal factors in the outside countries, such conclusions

will be considered arbitrary and unsubstantiated, at least with respect to Hegel. The aim of

this paper is to provide such evidence. Quite unlike other market economist interpreters of

Hegel, we doesn’t draw Hegel’s ideas on the invisible hand of the market primarily from the

§189 of the Philosophy of Right, where Hegel approves of the teaching of Smith, Say and

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Ricardo (Waszek 1988). It is quite clear Hegel adopted from the Scots their method of

positive feedback mechanism in his Logic albeit in a more rationalistic way (Pavlik 2004).

We find such positive feedback mechanism in §243-8 of the Philosophy of Right in

Hegel’s treatment of Hegel. The reason for this consists in the Hegelian intuition that we

should not just suppose unsystematic mistake in Hegel, which would break down the system

ultimately, since he aimed at being as systematic as possible. While numerous authors

maintain that Hegel was unsystematic in this aspect, all evidence they provide is the early

notion of the business cycle, which Hegel is supposed to have adopted from James Steuart

(Ruda 2011; Chamley 1963). While we admit the relevance of such argument, we are not

content with the fact that the possibility of the argument for Hegel’s consistence hasn’t even

been considered.

The argument runs as follows: Hegel argues that civil society, when left alone, tends to

increase both wealth and number of people. Improvements in productivity make some of the

farmers superfluous. As a consequence, they cannot find employment in the traditional way

they prefer. Part of them will be integrated into industry, but some will remain rabble in their

own country. At this point our interpretation starts to differ from the traditional one. Rabble

travels to colonies in an organized way through police. There is plenty of free land to satisfy

their demand for make a living through traditional means of farming there. Both colonizing

and colonized country grow richer. Despite colonizing country initially wants to exploit

colonized country, later on colonizers realize, that they will be better off if they let them free.

The final effect for the colonizing country will be growing of its productivity and population.

Here the circle of argument reaches its end. Rabble is sublated, productivity and population is

growing. What about the colonized country? We learn Hegel’s opinion on the future from the

Vorlesungen über die Philosophie der Geschichte. He predicts there that USA will grow by

internal western colonization. After these possibilities wash out, a non-agricultural civil

society will be established in the USA. The implication we deduce is, that Hegel’s stance wasthat the institutions of civil society will gradually displace competing institutional structures

both in colonizing and in colonized countries. We draw these conclusions by reconstruction of

Hegel’s argument from more of Hegel’s writings.

Literature review

To make a comprehensive literature overview on Hegel’s rabble is the extremelycomplicated task, since the enormous interest the philosophy and social sciences has had the

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last 200 years. Although it’s a near impossible task for non-specialist, we still feel that there is

some gap in the literature which we consider so substantial that it encourages us to approach

to the problem and fill the gap in the literature. We will try here to identify the gap and to

delineate the way, how do we want to fill it.

The first of key differences is that unlike we, both philosophers and economists treat

Hegel’s explanation of rabble in economic terms. We suggest that Hegel’s analysis of rabble,

though relying on reading of some economics literature, is not economic in principle, but

philosophical. This needs more elaboration. Birger Priddat, who is an economist, spends a lot

of space in his wonderful book on the intriguing problem of Hegel’s economics explaining the

status of economics in Hegel and provides evidence that Hegel preferred the term

‘staatsökonomie’ (Priddat 1990: 13-5), which is the german cameralist label of their style of

economics, which was distinct from what political economy meant in Britain. And he is quite

right at that. Hegel’s economic interests were built in Germany. Although we have now

evidence Hegel knew Adam Smith closely (Waszek 1985) and although he resembles

classical political economy on numerous occasions, he certainly doesn’t sound like a classical

political economist. He sounds much more like a cameralist. There is no doubt on our side on

whether cameralists had enormous influence on him. However we consider the literature

particularly wrong on the reason why did Hegel rely on German cameralists rather than

immediately follow classical political economy. While the literature has it, that Hegel ‘stood

on the standpoint of the modern economics’, we argue that Hegel was a philosopher and as

such, denounced merely understanding (Verstand) character of British political economy as

opposed to reasoning (Vernunft) character that was potentially available at hand in German

cameralist tradition, but which needed his, philosopher’s reasoning reworking. We argue that

‘modern political economy’ served him as the material basis for such reasoned argumentation.

Let’s elaborate this point.

Priddat starts from the premise that Hegel had a special field of economics: “Marx's judgment that Hegel take the view of the modern economy, i.e. on the political economy of

his time, has been preserved to the present interpretations” (Priddat 1990: 9). Priddat’s aim

was to tackle the previous literature’s view of the school of economic thought that was

Hegel’s source of political economy. When he then portrayed the complex argument depicting

that German cameralist sources of Hegel were understudied at that time, he was

unintentionally led by Marx’s judgement to think in the first place, that Hegel had such a field

of study as a political economy. In this we disagree. He was an economizing philosopher.

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Therefore, we have to understand Hegel’s remarks on economics in the light of his more

general philosophy.

Not being able to free himself from the notion that Hegel was partly an economist,

Priddat arrives at conflict between ‘Hegel’s economics’ and ‘Hegel’s philosophy’ at some

places. The most striking for us here concerns Priddat’s reflections on Hegel’s export solution

of diminishing the problem of rabble (par. 246-8 of GPR): “But the export is only an

economical solution and it's not Hegel's concern to clarify its meaning and purpose. It is

introduced to show that civil society is not able to solve its economic problems sui generis as

a bourgeois society, but only by externalization. For a solution it requires a moral

reorganization, which the bourgeois society can find in its corporate self-organization (Priddat

1990: 137)”, which he offers later in the book. The confusing premise on ‘Hegel’s economics’

led Priddat here to understand Hegel’s argument in a more economic way that was typical for

Hegel, although he linked there rightly to Hegel’s philosophical argument of corporations

mitigating part of rabble. What is missed here is a key argument for us. There is another

philosophical argument of Hegel’s that still remains unaccounted for in the literature on

Hegel’s treatment of the export solution of rabble (par. 246-8 of GPR) - at least in the

literature we are aware of - and it’s that in the inevitable turn of the civil society to export and

colonization it reveals the world-historical role of commerce. Priddat comes close to

elaborating it in his analysis, when he says that “industrialization, more precisely: capital

accumulation (which includes the pension capital) is linked to the ability to create new

markets - which in turn enables 'the acquaintance with other nations, (...) one of the most

important moments in the formation of the modern world'” (Priddat 1990: 136). As far as I

remember, Priddat doesn’t inquire, what is then the world-historical role of international sea

commerce and of systematic colonization. As we will see, we identify this in exporting the

moral institutions of modern civil societies abroad. And this is how the category of rabble is

immediately sublated philosophically within Hegel’s system. Philosophical sublation of thecategory of rabble means the transition to the immediate following category. Rabble is not the

same as the poor for Hegel and analysis of rabble doesn’t have as its (immediate) aim the

solution to the civil society’s poor. Reading this (par. 246-8 of GPR) in economic way

precludes the understanding of Hegel’s aim with the category of rabble.

The immediate aim of the category of rabble we identify later is its world-historical role.

As far as we know, this is the first time world-historical role of rabble and commerce through

international sea trade is attempted while believing it’s inherently compatible with the rest ofHegel’s system. Ruda, who wrote a substantial book directly inquiring Hegel’s rabble from

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philosophical standpoint, identified 7 possible ways of mitigation of rabble: “The seven

solutions are: 1. the treatment of the poor by civil society itself; 2. public begging; 3. the right

of distress; 4. colonization; 5. redistribution of labor; 6. the corporation and its ethics (of

responsible consumption); 7. the police, and in combination with it, religion (in the form of

charitable institution)” (Ruda 2011: 15). Which one of these serves the auxiliary role in the

world-historical role of commerce? We are not told so.

Ruda deals with colonization just on the one half page and it’s said philosophically

there, that the colonization solution to rabble is ‘a bad infinity’: “colonization of other

peoples, due to its internal logic, offers no more than a temporal retardation of the problem of

poverty. Hence it leads into a logic of bad infinity because it does not represent a solution to

poverty as such but rather a temporary postponement. It generates an eternal return of the

same problem in the framework of bad infinity that can be deduced from the extension of civil

society itself. It is nothing but a postponement of the same problem” (Ruda 2011: 20). We

have here similar problem as above: awaiting the a good infinity, the immediate philosophical

sublation of the category of rabble, while seeking economic rather than philosophical

meaning. The immediate philosophical sublation lies in the world-historical role of emigrating

rabble, along with international sea trade. We shouldn’t forget that in England, where a lot of

rabble is generated (par. 245), there remains in the end no rabble, because in order to become

part of rabble, one must claim “right without right” (Ruda 2011: 61) and “in England, even

the poorest man believes he has his right” (Hegel 1991: 266; §244). English rabble, which

Hegel studies here predominantly, is sublated by emigration to colonies, along with the

international sea trade. One further note on this. Economic way of understanding Hegel awaits

a final solution to poverty. First, rabble is not the same as poverty. Poor are always among

rabble, but not all the poor people. And not all the poor people become rabble. If by

‘colonization offers no more than a temporal retardation of the problem of poverty’ Ruda

means here the final solution to the problem of poverty within the civil society, he’saddressing the problem that wasn’t Hegel’s interest at that place.

With the economic approach to Hegel, there is another problem with awaiting absolute

solution, absolute sublation to a negative category which is not the penultimate category of

Hegel’s system. However, other than penultimate category of Hegel’s system doesn’t have the

absolute sublation (in concept, Begriff). Other categories each have either immediate

contradiction or immediate sublation. For example, Philosophy of Right distinguishes the

whole section of “wrong” (par. 82-104). Does wrong have to cease to exist in order forHegel’s philosophy to be inherently compatible? No, the ‘wrong’ has immediate sublation,

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therefore it’s inherently compatible with the rest of the system. Analogously, we claim rabble

has immediate sublation. It’s also certain, that the final solution to poverty is more important

for us than for Hegel. He wasn’t that presumptuous as we are sometimes.

So if we want now Hegel to say something on the ultimate solution to poverty, we

should be aware that establishing of the civil society is immediately beneficial to alleviating

poverty: if left unregulated, it leads to the growth of riches and population. Unequal

distribution of riches leaves some poor. Some people, not just poor, will become rabble, who

claim ‘right without right’, which are unlawful. They seek to be lawful in emigration, where

they settle new civil society and become lawful as happened in the USA. Here the Philosophy

of Right should be linked to Lectures on the Philosophy of History, where Hegel says some

positive things on the present developments concerning growing riches and population there

and at that they have at this time beneficial institutions, while civil society will emerge there

later according to Hegel. We will get to that in more detail later, here we would just like to

allude to Priddat, who made that key link between analysis of rabble in the Philosophy of

Right with the analysis of American developments (Priddat 1990: 136). But ultimately, it

might be objected, civil society will emerge in the USA as well, so what will happen next to

the rabble and to the poor? Well, as we show later, Hegel predicts rabble to emerge in the

USA at one point in future, and the consequence will be, that it perhaps wages war against the

South America. I deduce, that the war was to be waged in order for the establishment of

colonies. The further deduction is that after civil societies emerge there as well, new colonies

will be established elsewhere, until - in principle - the institutions of civil society are spread

all over the world. That sounds pretty Hegelian end.

Well, now finally to satisfy the reader, who is eager to read something about the

ultimate solution to the poverty, which is the question recurring often in the literature. This

has to be based on conjectures, since no textual evidence exists. Firstly, this is a future

problem, and as we will see, future didn’t concern Hegel that much as ‘History’ and‘Philosophy’. It’s young-Hegelian developments that tried to extrapolate Hegel’s arguments

to future (Cieszkowski 1838). In order to understand Hegel, we shouldn’t put that much

emphasis on future. Second, colonies won’t last forever for Hegel. Hegel says (par. 248 of

GPR) that letting colonies free was more beneficial to former imperial countries than was

keeping them colonized. I deduce that the reason is the growing volume of international trade,

which helps riches to grow and mitigate some part of the problem of poverty. Third, if we

might assume that Hegel knew Ricardo (he mentioned him in par. 189 of GPR), Ricardo had atheory of economic growth which led to the diminishing growth rates until the production and

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consumption per capita would stagnate. If this point in time just predates the point in time

when the whole world acquires institutions of civil society, then the problem would be solved,

since there will be no more production exceeding the volume of consumption. Conflicting

suggestions for the solution of poverty came at that time from Malthus, Ricardo, Say, Saint-

Simon and emerging socialists, plus Malthus’ theory of overpopulation was too young then

and wasn’t yet rejected definitely. It’s almost certain that Hegel knew at least some of

mentioned authors’ theories. We wanted to introduce even this extremely unlikely scenario,

because we wanted to provide the present reader with the notion that even for the political

economy of Hegel’s time the final solution of poverty was far from clear. If they weren’t clear

about it, how could Hegel ? Again, for Hegel it’s the problem of future. For a commentary, in

an interesting book by Hegel’s biographer Rosenkranz, written from a perspective of almost

40 years after Hegel’s death, Rosenkranz says that what he understood as Hegel’s prediction

of future poverty wasn’t materialized: “The progress of time has actually transcended Hegel

in very many points, e.g. in that of the political culture of the masses; but in its chief features

the Hegelian state remains still the most rational and the expression which it attained in

Hegel’s presentation, the most beautiful” (Rosenkranz 2009: 62).

One of the other gaps concerns missing explanation of Hegel delineating the future

development of non-germanic civilizations. Avineri approaches the problem in his classic

work from 70s and almost reaches the solution: “Remarks about Russia and America,

preceding by several years Tocqueville's famous dicta, clearly indicate that while Hegel

considered history as having attained its apex as the march towards man's self-consciousness

in his own age, he was well aware that the future was still open in terms of the emergence of

new cultures" (Avineri 1974: 237), but in an attempt to delineate Hegelian way of

development of non-Germanic civilizations he shrugs that "texts themselves are obscure"

(Avineri 1974: 237). The reason why Avineri wasn’t able to depict the future developments of

non-European civilizations lies once again in the fact that he doesn’t recognize the immediatesublation of the category of rabble in the world-historical role of commerce. : “What is

conspicuous in Hegel's analysis [in theory of pauperization], however, is ... a basic intellectual

honesty which makes him admit time and again - completely against the grain of the

integrative and mediating nature of the whole of his social philosophy - that he has no

solution to the problems posed by civil society in its modern context. This the only time in his

system where Hegel raises a problem - and leaves it open” (Avineri 1974: 154). Again, the

problem is the economic, rather than philosophical point of view. Hegel doesn’t want to solve poverty here.

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Buck-Morss also evaluates Hegel's notions of colonialism and also comes close to

solution, but falls just short: "Commerce is borderless; its place is the sea. Strictly speaking,

the economy and the nation are incompatible (Smith saw the colonial economy as distorting

the national polity). The economy is infinitely expansive; the nation constraints and sets

bounds. Hegel ultimately resolves this opposition between the force of society and the force

of the state, which produces the Janus-faced individual as bourgeois/citoyen, by the

introduction of a political constitution as a different form of interdependency, providing an

ethical corrective to social inequalities through laws so that each aspect, civil society and the

state, enables the other through their mutual opposition" (Buck-Morss 2009: 9). She as well

falls to the mistake of understanding Hegel in economics terms here. Moreover, she’s lacking

the knowledge of Hegel’s abolishing of Fichte’s sole framework of analysis of the closed

state. Hegel analyzes the closed state (civil society), but also transcends it (see Campagnolo

2012: 42-9). Emigrating rabble serves just this role. The view of Hegel’s take on colonization

would drastically change as a consequence: it has a world-historical role.

Herzog shrugs at the supposed fact that "Hegel does not give a reason for why some

poor individuals would turn into 'rabble' and others not" (Herzog 2013: 108). Hegel gives one,

it's whether he or she is content with the job or the job change he is undergoing and

consequently contention (or not) with the society. This also depends on the availability of

abundant land (if one prefers agriculture) and consequently on the possibilities of migration to

such places. All of this we inquire later.

Rose affirms in commenting par. 244 that "poverty dehumanises man. It opens him up

to the will of others as their 'means merely', he becomes the vehicle of an alien will so that he

may survive and is reduced to a status no better than the slaves" (Rose 2007). But poverty is

not the same as rabble.

Mowad radicalizes impacts of colonization on colonized country’s rabble in a book

edited by Buchwalter: "nation-state cannot eradicate systematic poverty but only displace itthrough war (colonization): colonies provide a captive market for domestic goods that would

otherwise be in surplus, impoverishing part of the population (because a surplus renders their

labor worthless). Thus the nation-state avoids producing a rabble within itself only by making

another country into its rabble" (Mowad 2015: 74). In similar way, in the same book

Buchwalter says Hegel "details as well how problems in the functioning of individual market

economies trigger a colonizing search for new markets that not only replicates original

pathologies but promotes worldwide conflict and bellicosity" (Buchwalter 2015: 3). So that

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bellicosity and rabbling of other countries is the Hegelian world-historical role of

international sea trade and rabble?

Hegel’s rabble is still treated in a young-Hegelian fashion. This problem has a historical

reason and starts with Eduard Gans, Hegel’s successor in the Lectures on Philosophy of

Right. What is remarkable - as opposed to later interpretations - Gans believes rabble is not

necessary, there is some sublation, but not absolute: “Is the rabble necessary? Must it remain?

In rabble is the need, which lies in the negative. The state will not bring the people there to

have any nasty emotions. But he must ensure that spreading the industriousness and that

whoever wants to work can find work. The rabble must be pushed away. The Saint-Simonians

wanted these proletarians rise to a moment of society. But the negative is necessary in human

society” (Gans 2005: 195). Important here is the notion, that we can’t wholly prevent the

rabble from emerging. If they can go away, it admits that they emigrate, but Gans is sees here

the problem of unemployment and is persuaded of the Saint-Simonian solution thereof: “Is it

not the duty of the state, those yeast or crust of the society that is not found in the countryside,

but in the cities, it is a precipitation that does not supersede. But it can be reduced. The state

may establish work institutions where everyone can work. This is a gold grain of Saint-

Simonians, which can lead to the cure of this disease of society” (Gans 2005: 195). Saint-

Simonian solution to rabble is analyzed in Waszek (Waszek 1987). We might add, that Hegel

is probably one of the last philosophical offshoots in the German philosophy of the 19th

century who was under positive influence of the political economy of german Smithians of

the reform era of the Stein-Hardenberg reforms. After him, growing socialist notions in

political economy, as in Saint-Simon, captivated the interest of german philosophers (compare

with Hayek 2013). Gans probably missed the link here with the sublime quotes on colonies in

North America in the Lectures on the Philosophy of History, which he edited for publication

after Hegel’s death. This Gans’ stance that rabble can be mitigated partially within the state

marks the beginning of misunderstanding. His stance towards rabble was even named milderthan was Hegel’s stance towards rabble (Hegel 1991: xxii). Gans saw the problem of rabble as

the problem of unemployment, and this marks the beginning of economic understanding of

that paragraph. Moreover, he made a quick transition from the word rabble towards the word

proletariat. He made the young-Hegelian aim, which was to use Hegel’s system against

himself by finding a place, where they could breach into system and overthrow it afterwards

simpler than it had to be. Such a place was found in the rabble. But it was Gans’ choice and

we must respect the course of history that followed. So what you can read of Hegel’s rabble isnot Hegel himself, but that, what Hegel became after his death (Breckman 1999). Marx

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crowned this development in a way when he said Hegel’s stance is that of the modern

political economy. Nobody asked afterwards, what might be the world-historical role of

overseas trade and emigrating rabble other that socialist revolution. In order even to ask that

question, one has to attempt to get rid of a lot of socialist notions that we are accustomed to

use in connection with Hegel.

There is another source of our difference from the dominating literature. It’s Hegel’s use

of the word Ueberfluss (Hegel 1821: 233, 234) in connection with rabble. In the English

edition of the Philosophy of Right that we like to use, it is translated once as ‘overproduction’

and once as ‘surplus’ (Hegel 1991: 267-8; §245-6). We find ‘surplus’ a better translation.

First, if one runs ‘overproduction’ and ‘surplus’ on google application ngram,

‘overproduction’ is virtually nonexistent until 1880s and even afterwards, it is constantly well

below ‘surplus’. This difference is significant. If you translate it as surplus, it enables you to

link this to the classical political economy’s simple notions of surplus production in their

robinsonades. Such use of the word surplus begins perhaps with John Locke, who says, that if

in a natural state in the absence of other people you start to produce, you can produce huge

surplus beyond what you need to consume, be it some berries or Locke’s nuts. In such

analysis, if you find another man with surplus, you can swap it and if you are accustomed they

will accept some medium of exchange, emergence of money is explained. Such analyses

became respected especially through Adam Smith’s Wealth of Nations, which Hegel knew

(Waszek 1985). If Hegel meant such surplus by his Ueberfluß, then there is no necessary link

to the underconsumption theories, because, as we will see, Smith wonders on one place what

would be the ultimate consequences of the civilized nations exchanging their surpluses with

colonies. We theorize it was Hegel’s aim to put the reason (Vernunft) to Smith’s just

reasoning (Verstand) on the ultimate civilizational effects of trading surpluses. This

interpretation of the word Ueberfluß enables us to find Hegel’s philosophical notion of the

world-historical role of overseas trade and of emigrating rabble.On the other hand, if you translate is as overproduction, it can very easily lead your

interpretation of Hegel’s rabble to economic interpretation. You then won’t inquire, what on

earth might be that world-historical role of overseas trade along with emigrating rabble as is

the case of famous American Hegelian, Charles Taylor: “The creating of this rabble goes

along with the concentration of wealth in a few hands. This in turn sets off a crisis of

overproduction. The under-privileged can be maintained on welfare. But this contradicts the

principle of the bourgeois economy whereby men should work for their living; or they can be

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provided with employment by the state; but this will increase the crisis of overproduction”

(Taylor 1977: 436).

At the end of this by no means complete literature overview we should link to the

‘institutional challenge’ of economics in the studies of Hegel. Here the economic reasoning

might help philosophers concentrate on the right things in Hegel’s oeuvre to identify. Then

economists might explain seemingly illegible paragraphs of Hegel. But we must here revert

first to a philosopher, who demanded such institutional analysis of Hegel: “On the cusp of this

modernity Hegel seemed to affirm what has appeared to many as the old powers that had

disappeared in the formation of the modern state – the Stände. For many he thereby turned his

political thought into an apparent anachronism. This dissertation, however, will argue that

Hegel’s thought remains fundamentally modern and not at all anachronistic in its affirmation

of the Stände. On the contrary, it is only through an examination of the concept of the Stände

in Hegel’s thought, that one can fully understand the essentially institutional focus of his

politics” (Boyd 2015: 4). He wasn’t able to provide us with such analysis because of his too

deep debt to economic interpretation of Hegel, for example Ruda with respect to rabble.

So we now finally come to Gilles Compagnolo, tho affirms, that for Hegel sounds much

like Smith’s invisible hand in that institutions of civil society, they for example “existed as

bodies such as chambers of commerce, etc. Autonomous trade thus followed the rules that

were being discovered by economists, even though the state could not guarantee that they

became institutionalized. At the best, here one would have needed a theory of spontaneous

building of institutions. That is implicit in Hegel’s awareness of the phenomenon, but limited

to hints and lacking details that belong to positive science. Philosophical speculation,

according to its natural and strictly understood role, confines itself to indicating the role of

mediations without describing all the smaller aspects. Still, §189-245 in the Elements [of the

Philosophy of Right] contain too many details to comment on them here. But it is clearly there

that one could pursue investigations” (Campagnolo 2010: 52). So we finally have here thetype of economic analysis, that might help philosophy, which cannot claim expertise in

economic problems, which is clearly our case, to clarify some seemingly dark points in the

logical and historical development of the economic categories of interest for us here.

Hegel uses here economic arguments - of classical political economy rather than of

cameralists, but in a philosophical way, which puts him stylistically more towards cameralists.

He puts the reason (Vernunft) on top of Adam Smith’s understanding (Verstand). He loses

some of Smith’s details that would occur silly mistakes to a professional economist, where themost striking example is that division of labour multiplies rather than diminishes the number

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of jobs. But we can wholeheartedly forgive Hegel these mistakes in detail if the grand scheme

can help answer us some uneasy and not purely economic questions concerning institutions,

that even Smith wasn’t able to put down. Such a thing was to imagine what would be the

ultimate non-monetary, institutional outcomes of the trade with colonies. Hegel did just that,

as we will see later on. The present, so called new institutional economics has a vocabulary so

clear that can analyze interactions between institutions and economics in any time period in

any civilization or nation. It shouldn’t surprise us, if after adopting such an approach we will

reveal that “institutions aiming at guaranteeing individual freedom emerge spontaneously”

(Campagnolo 2010: 52) and that “corporations may not be created by the state, but emerge

spontaneously” (Campagnolo 2010: 53). With adopting such approach one might easily

depart Hegel’s own thinking. We surely ‘commit this error’. But the benefit we bring is better

understanding of Hegel himself and the reason why we do it our belief that Hegel’s proto-

institutionalist approach is more valuable than his precise formulations, since nobody will

deny today that particular Hegel’s opinions are just outdated. In this, we believe our approach

will be viewed as a truly Hegelian in nature.

Domestic evolutionary institutionalist aspects of rabble

What is Rabble and how does a state led by rabble look like?

First thing to do is to explain, what precisely rabble is for Hegel. The emergence of

rabble as such is the negative moment connected with the continuing development of the

category of civil society: “By generalizing the relations of men by the way of their wants, and

by generalizing the manner in which the means of meeting these wants are prepared and

procured, large fortunes are amassed. On the other side, there occur repartition and limitation

of the work of the individual labourer and, consequently, dependence and distress in the

artisan class. With these drawbacks are associated callousness of feeling and inability to enjoy

the larger possibilities of freedom, especially the mental advantages of the civic community”

(Hegel 2001b, 243§).

While it’s not surprising that “the way of living of the pauper class is the lowest of all”

(Hegel 2001b, 244§), it’s intriguing that it doesn’t serve as Hegel’s objective measure of

poverty, because being part of rabble is a matter of subjective decision as well. This way of

living “is adopted by themselves” (Hegel 2001b, 244§). The lowest way of living for Hegel is

in clear Aristotelian heritage of Hegel to live outside of the moral structure of the civil society

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and of the state when one is readily available. So being poor and being a member of rabble

aren’t the same categories though often it’s poor who are members of rabble. There are two

necessary attributes one adopts to become a rabble and neither of these is poverty. First

attribute is the rebellion against moral structure of civil society: “Poverty does not of itself

make a pauper. The pauper state implies a frame of mind, associated often with poverty,

consisting in inner rebellion against the wealthy, against society, and against constituted

authority” (Hegel 2001b, 244§). The second necessary attribute is unwillingness to work

“Moreover, in order to descend to the class, which is at the mercy of the changes and chances

of life, men must be heedless and indifferent to work” (Hegel 2001b, 244§). It is important to

note that in order to be a part of the rabble, one has to be unwilling to work even if he has one

or if one job is offered to him or even if he is really well-off. Therefore, being part of the

rabble means one “declares right without right” (Ruda 2011: 62). It means one demands right

where no right exists in the actual and real structure of civil society.

Ruda nicely distinguishes the poor rabble and rich rabble (Ruda 2011: 61-3). Member of

the poor rabble claims to live not by his work in the overall system of wants in the nation’s

civil society, that is, by offering his work on the national labour market. Member of the rich

rabble claims right for him not to respect rights of others. In addition to Ruda, we claim that a

businessman evading taxes might also be a member of the rich rabble, unwilling by his

nation’s civil society with its structure of rights including rights of government to collect

taxes: “taxes which the estates approve should not be regarded as a gift presented to the state;

on the contrary, they are approved for the benefit of those who approve them” (Hegel 2001b,

301§). As we will see later, Hegel analyzed the case of entrepreneurs as part of rabble. Their

reason were attempts to avoid high taxes and therefore they emigrated to where taxes were

lower.

One of the worst types of organization of state is the ochlocracy, rule by rabble, which

comes about when the poor and rich rabble unites: “The rule by rabble is even worse thandemocracy for Hegel: “degeneration of it [democracy] is the ochlocracy or the rule of rabble,

when namely that part that has no property and has unjust sentiments, holds the legal citizens

by the force of state” (Hegel 1840: 51). Hegel’s example of such constitution comes in

analyzing ancient Rome: “We should refer to Cicero to see how all affairs of state were

decided in riotous fashion, and with arms in hand, by the wealth and power of the grandees on

the one side, and by a troop of rabble on the other” (Hegel 2001a: 330). Some of ancient

Rome’s institutions were repeated in Italy later, too: “Equal disappointment was experienced by those Italians who hoped for deliverance at the hands of the Emperor from the ochlocracy

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that domineered over the cities, or from the violence of the feudal nobility in the country at

large” (Hegel 2001a: 405). As we will see later, Hegel characterizes rabble as a Naples’

Nazzaroni on one place. So with a little bit of exaggeration, we may say that a state of rabble

looks like Italy. This is of course the type of the institutional development Hegel not just

wanted to be prevented, but also saw actually being prevented incrementally to an ever greater

extent.

Corporations’ role in mitigation of rabble in Hegelian evolutionary

institutionalist economics

Given the dangerous domestic potential of rabble, Hegel offers two kinds of mitigation:

domestic mitigation by corporations and and foreign mitigation by colonization. Here we

concentrate on corporations, colonization will be dealt with later on.

While in the system of needs, in the invisible hand of market an internal order of society

is automatically enforced, conscious positive feedback to the order of society is left wanting

in intermediary estate, in trade and industry. Unlike other two estates, which are the

substantial (agriculture) and the substantial (public sector), the intermediary estate of trade

and industry lacks the automatic awareness of universality, of their actual and proper place

within the overall order of society: “The intermediate estate, i.e. the estate of trade and

industry, is essentially concerned with the particular, and the corporation is therefore speciallycharacteristic of it” (Hegel 1991: 270; 250§). The aim of the corporation is thus defined as

follows: “the corporation has the right, under the supervision of the public authority [Macht],

to look after its own interests within its enclosed sphere, to admit members in accordance with

their objective qualification of skill and rectitude and in numbers determined by the universal

context, to protect its members against particular contingencies, and to educate others so as to

make them eligible for membership. In short, it has the right to assume the role of a second

family for its members” (Hegel 1991: 270-1; 252§). Institution of corporation serves theirmembers to get aware of their position within the extended order of civil society, for example

by acknowledging their skills and since they know something of the industry sector, they can

serve a member with the orientation in the overall order of society and with finding the proper

job fitting to him.

Furthermore, it provides help against contingencies of life and since it’s located closer to

the member than is the state, it’s more probable it can acknowledge the extent, type and

length of the help provided. If this sounds outrageous, we should rethink Hayek’s famous

notion of having to live in two worlds at once, one based on familial morality, the other on

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English rabble and its evolutionary institutionalist aspects

Hegel’s analysis of the civil society and of the rabble in the paragraphs 243-8 of the

GPR there treats concerns modern age. It’s important to clarify the time period in question

since Hegel observed rabble in other time periods as well. However, as we will see later at the

analysis of rabble in Greece, it’s different from the modern rabble because of the absence of

the entire moral structure of the civil society that emerges only at the modern ages. In the

analyzed paragraphs of the GPR Hegel mentions England twice as the country of origin of the

rabble. Apart from England and Scotland, Naple’s Nazzaroni (Italian for rabble) is mentioned

(Hegel 2001b, 245§) along the way with French rabble in the first Philosophy of Right 1817/8

(Hegel 2012: 287). Why did he then turn just to England as the exemplary country of origin of

rabble? There are two reasons: (a) the massive emergence of rabble in England and (b) the

emergence of political economy as a modern science there. Both of these reasons can be

explained by analysis of the next quote: “These phenomena may be studied in England, where

they occur on an extensive scale” (Hegel 2001b, 245§).

England the most economically developed nation of Hegel’s age. If rabble emerged with

the growing economy, it’s natural that it was to be studied on the example of England, rather

than Italy or France. Italian nation didn’t even have it’s own state which could have

established the structure of civil society. As we will see later, impacts of rabble cannot be

studied in a country which doesn’t have colonies, since the rabble’s aim for Hegel is to export

the institutions of civil society. That was impossible in Italy, lacking both nation state and

colonies. Actually, in German Constitution of 1802, Hegel says that Italian cities were getting

smaller rather than bigger, the society’s institutions were crumbling and army had to employ

unreliable foreign rabble: “It entrusted its own defence to assassination, poison, and treason,

or to hordes of foreign rabble whom their paymasters always found costly and destructive,

and often formidable and dangerous; and some of whose leaders rose to the rank of princes”

(Hegel 1999: 97). Princes established by the rabbling army, this was certainly destructive of

civil society’s institutions in later Hegel’s thought that interests us here. French case is

different, rabble led by the abstract ideas of French philosophers (which were substantially

different from English mundane philosophers as we see on the example of Hegel’s treatment

of Locke) contributed there to the establishment of civil society through revolution, so it was

in the least a different mechanism of institutional change than the case of England. In the

1817/18 Philosophy of Right, French revolutionaries were rabble not because they demanded

the government’s sessions to be public, but because they were prepared “to wreak revenge”(Hegel 2012: 287) on whoever with whom they disagreed.

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Furthermore, rabble was actually studied there rather than in other countries by the

science of political economy. For Hegel, the modern science of political economy emerges in

England as well, as we saw on the example of Britain. But it is Hegel’s institutional analysis

developing from both the scottish enlightenment’s political economy and from German

cameralist Staatswissenschaft which is present in the par. 245 of the Philosophy of Right. We

consider Hegel as a precursor of evolutionary institutionalist economics. He provides us with

such evolutionary analysis of eliminating rabble. This evolutionary institutionalist economics

would be placed among “understanding” (Verstand) Scottish Enlightenment with their theory

of genesis of political spontaneous orders as in Adam Ferguson (Ferguson 1980) and despite

Hegel’s mutual conflicts with Savigny, put along with German Historical School of Law as

the precursors of either austrian evolutionary economics of institutions or that of

ordoliberalism (Menger 1996; Hayek 2011; Kolev 2015).

While the present author is well aware of the difficulties of conflating Hegel with

evolutionary austrian and ordoliberal economics, we can link here to Walter Eucken’s debt to

Hegel’s criticism of historicism in economics (Eucken 2012: 322), to the Hegelian-like

account of the origin of private property in James Buchanan: “Hegel's basic conception of

property is also similar to that developed here” (Buchanan 1975: 182, see also Buchanan

1974) and for an original synthesis of Hayekian and Hegelian approaches see Pavlik (Pavlik

2004; Pavlik 2006). We cannot address here all the criticism of Hegel from the classical

liberal camp, some of which we consider well founded and some wholly unsubstantiated. We

restrict ourselves here to mentioning that Popper’s mocking criticism of Hegel (Popper 1971)

was almost an intellectual fraud at times (Kaufmann 1951). I wholly accept Hayekian or a

Popperian criticism of Hegel for his synoptic illusion that a mind can see the society “from

above” and can know a lot of the knowledge which is nevertheless essentially dispersed

(Hayek 1973: 14). On the other hand, classical liberals criticized not a Hegel proper, but a

young-hegelian Hegel, refuted above. Classically liberal criticism of Hegel culminated inPopper, a Jew, during WWII. Therefore, while Popper’s criticism of Hegel’s seeming

totalitarianism is fully understandable, it cannot prevent nowadays’ classical liberals from

learning something from Hegel’s advances in the spontaneous order of politics over the

Scottish Enlightenment. If we consider Tocqueville as the precursor of Hayek’s theory of

spontaneous order of politics, of which one offshoot is Hayek’s suggestion for constitutional

reform, we should consequently consider Hegel as Hayek’s precursor.

Going back to Hegel, his evolutionary institutionalist analysis is what Hegel reproducesin par. 245 of the GPR, with the result that, given the ‘discontinuance’ of corporation (in some

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translations also ‘guild corporation’), “in England the best means to alleviate rabble was

found in letting it to its own fate” (Hegel 2001b, 245§). It should be noted that for

‘discontinuance’ there was a word ‘aufheben’ in the original edition (Hegel 1821: 233), which

usually means sublation, but here it’s better translated as ‘discontinuance’ of corporations in

accord with the par. 255, where Hegel speaks that “the corporations were abolished

[aufgehoben] in recent times” (Hegel 1991: 273; 245§).

Thus of seven possible Hegel’s means to mitigate rabble as identified by Ruda, (Ruda

2011: 15), the one applied actually in Britain was: letting poor on themselves and they either

adopt a citizen’s mentality and respect laws and are willing to adopt a job that is available to

them in England, or they emigrate and cease to be rabble in colonies. Thus the rabble is

sublated in Hegelian way with the aim of spreading the institutions of civil society abroad.

However, as we have already seen, Hegel identified an important role of corporation for

mitigating rabble. He was aware of the danger of rabble overturning the morals and

institutions of civil society. Rabble certainly wasn’t supposed to govern the country. While we

already addressed corporations’ role in mitigating rabble, its precise role in Hegel’s

evolutionary institutionalist economics needs more elaboration, especially given Hegel’s

strange, backward sounding language on corporations, resembling outdated guilds. Particular

attention will be paid to the relation of corporations and guilds in this evolutionary

institutionalist economics.

Adam Smith wanted guilds and corporations to be decommissioned: “Upon paying a

fine to the king, the charter seems generally to have been readily granted; and when any

particular class of artificers or traders thought proper to act as a corporation without a charter,

such adulterine guilds, as they were called, were not always disfranchised upon that account,

but obliged to fine annually to the king for permission to exercise their usurped privileges”

(Smith 1904a). England decommissioned guilds by Combination Acts in 1799 and 1800, so

when Hegel is complaining for England’s discontinuance of corporation, he wrote about theaffairs that had happened not that long ago. Hegel criticized hypertrophied guilds-

corporations, because they could create rather than mitigate rabble: “Europe has sent its

surplus population to America in much the same way as from the old Imperial Cities, where

trade-guilds were dominant” (Hegel 2001a: 99). Even if Hegel agreed with the Smith’s type

of criticism of guilds, he however emphasizes that corporation is not the same as a guild: “The

corporation, of course, must come under the higher supervision of the state, for it would

otherwise become ossified and set in its ways, and decline into a miserable guild system. Butthe corporation in and for itself is not an enclosed guild; it is rather a means of giving the

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isolated trade an ethical status, and of admitting it to a circle in which it gains strength and

honour” (Hegel 1991: 273; 255§ GPR).

Corporations are parts of the moral structure of the civil society which help their

members acquire the moral stance towards civil society rather than attitude of the rabble. We

can see it on Hegel’s treatment of Holland, which was an early form of civil society. But to

enforce its existence, also the help of guilds was needed: “the northern part of the Netherlands

— Holland — stood its ground with heroic valor against its oppressors. The trading class, the

guilds and companies of marksmen formed a militia whose heroic courage was more than a

match for the then famous Spanish infantry” (Hegel 2001a: 455). We can identify in Hegel’s

treatment of corporations his debt to the predominantly German economists of the

Staatswissenschaft and of James Steuart (Chamley 1963; Steuart 1767, Priddat 1990: 14).

Hegel reportedly had his opinion on corporations in 1799, when he is reported by Karl

Rosenkranz to have read the book by James Steuart (quoted as Stewart) and written the paper

on it. There’s no other trace of that paper beyond that Rosenkranz’s note (Rosenkranz 1844:

86). However, young Hegel had positive attitude towards guilds, as can be observed in his

1798’s paper on the political philosophy of the city of Bern (Hegel, Cart 1798: 195; on his

later stance on guilds in Bern compare with Hegel 2001a: 404).

As a consequence of lacking corporations, more rabble might have emerged in England

than was needed, more people acquired rebellious attitude against civil society. Therefore,

perhaps more rabble emigrated to the colonies than would be necessary, given the state of

development of England’s civil society. Still, it has its world-historical role.

As we have seen, english civil society is not the ideal civil society as Hegel sees it,

because of its institutions lack some of the attributes of the civil society proper such as

unwritten character of its constitution (Hegel 2001b, 211§) and of the solely negative

character of the division of powers (Hegel 2001b, 273§). But it has some moments established

of the civil society proper: “in England the ministers are rightly members of parliament”(Hegel 2001b, 300§), people pay voluntarily higher taxes than in despotic countries “the

people in a despotism pay light taxes, which in a constitutional state become larger through

the people’s own consciousness. In no other land are taxes so heavy as they are in England”

(Hegel 2001b, 302§). Moreover, “in England, for example, no unpopular war can be waged”

(Hegel 2001b, 329§). There are aspects where England developed more closely towards civil

society and aspects where Hegel would like to see reforms.

It applies also with regard to rabble: we have both positive and negative affirmations onrabble in England. On the one hand, it’s a mass phenomenon which occurs on an extensive

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scale (Hegel 2001b, 245§), perhaps more than necessary. On the other hand, “in England even

the poorest man believes that he has his right, and with him this standard is different from that

which satisfies the poor in other lands” (Hegel 2001b, 244§). What to do out of this seeming

contradiction? Well, in the light of the main argument of this paper, it can be argued, that

although rabble emerges as a mass phenomena in England, their members either turn (a) to

poor or rich who are willingly members of civil society, acknowledging rights of others, even

if this result is arrived at by the means of distracting public begging or (b) they don’t remain

remain in England no more, especially if they cannot earn their living in jobs they prefer, and

they emigrate to English colonies in a systematic way, organized by police (Polizey), which

probably means by companies like the East India Company. It is in colonies, where this group

of rabble cease to be a rabble. But we are ahead of ourselves.

Corporations in the USA and their role for Hegelian evolutionary

institutionalism

Hegel’s emphasis on labourers being obliged to be members of corporations is

complementary to his preference of constitutional monarchy over democracy. While not

everybody has a direct influence on politics in the constitutional monarchy, every citizen of

civil society provides his positive feedback to the institutions of civil society through

becoming a member of corporation: “In our modem states, the citizens have only a limitedshare in the universal business of the state; but it is necessary to provide ethical man with a

universal activity in addition to his. private end. This universal [activity], which the modern

state does not always offer him, can be found in the corporation” (Hegel 1991: 273; 255§).

While Hegel considered USA as not being a civil society at all, since no rabble was there

because of abundance of free land, Tocqueville, his younger contemporary, wrote what we

consider as alternative evolutionary institutionalist theory of the US constitution: its

decentralized form of government mitigated absence of Hegelian civil society and somethinglike Hegel’s morals (Sittlichkeit) emerged in the USA as a consequence: “The Americans

have also established certain forms of government which are applied to their associations, but

these are invariably borrowed from the forms of the civil administration. The independence of

each individual is formally recognized; the tendency of the members of the association points,

as it does in the body of the community, towards the same end, but they are not obliged to

follow the same track. No one abjures the exercise of his reason and his free will; but every

one exerts that reason and that will for the benefit of a common undertaking” (Tocqueville

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2006). Therefore, we consider it a great misunderstanding of Hegel, if one interprets him in an

communitarian way.

We will see later on the example of export of institutions in Ancient Greece, that Hegel

didn't take the Greek civilization as the ideal, to which he looked with ressentiment. While

Charles Taylor, who might be called a communitarian Hegelian, says that it was Hegel's ideal

of Greek morality, "why he did not see these differences [corporations] as remnants of earlier

history destined to wither away" (Taylor 2015: 115), we can't accept that. Even if Taylor says

"we cannot accept Hegel's solution today" (Taylor 2015: 115), he is certainly inspired by what

was dubbed as communitarianism: "certain core arguments meant to contrast with liberalism's

devaluation of community recur in the works of the four theorists named above" (Bell 2013)

including Taylor. After all, as editors of the edition of Hegel’s first Philosophy of Right

emphasize, “when he [Hegel] calls for 'corporations' he describes an institution that never

became actual in this manner, and that on the contrary was made impossible as labor relations

became progressively more extensive and more differentiated” (Hegel 2012: 42). Rather than

being inspired by Hegel's particular, communitarian-like solution to the problems of

establishing of modern constitutions and their acceptance among citizens, we are inspired by

Hegel's method which we identify here as evolutionary institutionalist economics with

Hayekian flavor. Concerning Hegel's method, we certainly disagree with Taylor in that "a

modern Western society would be unrecognizable to a man of early-nineteenth-century

Europe" (Taylor 2015: 106). If we are right that Hegel's method of inquiry can be translated

into evolutionary institutionalist economics, then Hegel's way of inquiry can be utilized for

inquiring modern problems.

Rabble is basically emigrating from England

Interpreters of Hegel, culminating in Ruda (2011) rightly interprets the country of origin

of rabble in Hegel’s thought: England. However, Ruda’s close textual following of Hegel and

of the logic of his argument is far from complete. Hegel speaks of emigration of rabble (Hegel

2001b, 245§), and if the country of the origin of rabble is England, so the Hegelian rabble

should emigrate from England. But this is not the case for Ruda. Ruda analyzes Hegel’s

stance towards the rabble that remains in England. While Ruda’s stance is interesting and

historically tenable, it remains in a framework of the nation state, typical for the German

discourse after Fichte’s Der Geschlossene Handelstaat (Fichte 2015) and later established

firmly in the German historical school of economics. As for Hegel, his starting point in

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Fichtean framework as well as his criticism of Fichtean analysis of the closed state only was

accounted by Campagnolo (Campagnolo 2012: 42-49).

For Hegel, this framework of the nation state was just the beginning of the analysis, not

the endpoint. The rabble’s emigration from this nation state framework serves Hegel to

transcend the category civil society within the nation state: “By means of its own dialectic the

civic community is driven beyond its own limits as a definite and self-complete society. It

must find consumers and the necessary means of life amongst other peoples. It must find

consumers and the necessary means of life amongst other peoples, who either lack the means,

of which it has a superfluity, or have less developed industries” (Hegel 2001b, 246§).

Unlike Chamley (1963) or Ruda (2011) we don’t interpret this sentence immediately in

the light of the theories of underconsumption like those employed by James Steuart or T. R.

Malthus. We will show that such explanation is not only non-Hegelian, but also unnecessary.

At this point, we just follow Hegel’s immediate successions more closely and try to fit this

argument into the body of his thought. The industry realizes its unexploited potential abroad,

especially by the sea-trade: “By means of the sea, the greatest medium of communication, the

desire for wealth brings distant lands into an intercourse, which leads to commercial

exchange” (Hegel 2001b, 247§). Then along with the traders, the means to employ the rabble

is found in establishing colonies, which will ultimately free themselves of the home country,

to the benefit of all (Hegel 2001b, 248§). When civil society emerged in England, it’s the

logic of Hegel’s argument that so did the rabble. If English rabble doesn’t remain in England,

it emigrates abroad. So it’s English emigrants that interest Hegel most, because England has

the most developed civil society, especially with respect to economy. In England arose “the

important question, how poverty is to be done away with” (Hegel 2001b, 244§). And of

English colonies employing emigrating English rabble United States of America interests

Hegel most. In the next section we will see the exact reason for this. Here Hegel’s Lectures on

the Philosophy of History serve us as the complement to the arguments of the Philosophy ofRight. In Lectures, Hegel explains that in North America, “the original nation having

vanished or nearly so, the effective population comes for the most part from Europe; and what

takes place in America, is but an emanation from Europe. Europe has sent its surplus

population to America” (Hegel 2001a: 99).

Let’s here suffice for us at this point that it’s the example of USA in the Lectures that

supports evidence for the assertion in the Philosophy of Right that “the independence of the

colonies has turned out to be of the greatest advantage to the mother land” (Hegel 2001b,248§). To this, the Lectures’ evidence is that “England has had fifty years’ experience, that

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free America is more profitable to her than it was in a state of dependence” (Hegel 2001a:

104). So the conclusion of this paragraph consists in our argument that English rabble doesn’t

remain in England and migrates to the USA, where it ceases to exist. England continues to

maintain even more positive relations with USA, particularly economic ones, after the latter’s

independence. Therefore, the rabble is not an inherent contradiction that constitutes the point

of departure of from Hegel’s original train of thought, as is the case for Ruda. There is a

sublation of rabble in the USA. By the logic of Hegel’s argument, rabble will emerge also in

the USA after the emergence of civil society there. We will see later that this seeming

complication will serve the world historical role for Hegel. But let’s first clarify who

everything belongs to this rabble for Hegel, because there are some surprising groups among

them.

Pauperization of the substantial estate and its future in the USA

Hegel distinguished three estates of the civil society: substantial, reflecting and universal

(Hegel 2001b, 202§), which means, agriculture, industry and public sector. The aim imputed

by Hegel for estates is serve their members to secure their morals appropriate to the

profession and compatible with the whole of civil society. Specifically, substantial estate

“embodies in substantive feeling an ethical life resting directly upon trust and the family

relation” (Hegel 2001b, 203§). Hegel considered the substantial estate as logically andhistorically primary: “States are rightly said to come into existence with the introduction of

agriculture along with the introduction of marriage” (Hegel 2001b, 203§).

Here we concentrate on the logical aspect of the argument. In a section later on, we will

concentrate on the historical aspect thereof. In accord with the logic of Hegel’s argument,

agriculture “will always retain much of the substantive feeling, which pervades the patriarchal

life” Therefore, being a member of this estate provides a certain tranquillity of life, which

soon comes to be regarded as a natural thing to demand: “man accepts what is given with a

simple mind, thanks God for it, and lives in the assurance that the goodness of God will

continue. What he gets suffices him, and he uses it because it comes again. This is the simple

disposition unaffected by the desire for wealth. It may be described as the type of the old

nobility, who consumed simply what was there” (Hegel 2001b, 203§). But it won’t continue

like this for all of the members of the substantial estate. “In our time agriculture, losing some

of its naturalness, is managed in a reflective way like a factory, and acquires the character of

the second class” (Hegel 2001b, 203§). So we have to analyse the development of the

substantial estate in the light of the development of the second estate.

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The second, reflective estate, concentrates on industry. There, as exampled by pin

factory (Waszek 1985), the productivity rises remarkably as an effect of the division of

labour: “This is the division of labour. By it the labour of the individual becomes more

simple, his skill in his abstract work greater, and the amount he produces larger” (Hegel

2001b, 198§). Another effect of the division labour is the substitution of labour by machines,

by capital: “Moreover, the abstraction of production causes work to be continually more

mechanical, until it is at last possible for man to step out and let the machine take his place”

(Hegel 2001b, 198§). Some of thus substituted workers find their work in the new wants,

needs that constantly arise: “The tendency of the social condition indefinitely to increase and

specialize wants, means, and enjoyments, and to distinguish natural from unrefined wants, has

no limits” (Hegel 2001b, 195§). But not all of them will find their job this way. They then

become a rabble.

By analogue, this is true also for the members of the substantial estate crowded out by

the improving technologies in agriculture. Some of them might be drawn to the secondary

estate where they will help create goods satisfying new emerging needs: “As the firm-set

earth, or the soil, is the basis of family life, so the basis of industry is the sea, the natural

element which stimulates intercourse with foreign lands. By the substitution for the tenacious

grasp of the soil, and for the limited round of appetites and enjoyments embraced within the

civic life, of the fluid element of danger and destruction, the passion for gain is transformed”

(Hegel 2001b, 247§). But for Hegel, some part of the crowded out agriculturists will be

unwilling to swap the estates. Thus “such a condition of things presents itself that a large

portion of the people can no longer satisfy its necessities in the way in which it has been

accustomed so to do” (Hegel 2001: 103). It is then these former agriculturists who immigrate

as a rabble to new colonies and seek for the new soil rather than a job in industry. By

colonization, “a part of its population it provides on a new soil a return to the family principle,

and also procures for itself at the same time a new incentive and field for work” (Hegel2001b, 248§). Thus, former farmers make up some part of the emigrating rabble. By

spreading their morals of family and agriculture, they will help to spread unintentionally the

institutions of the original nation’s civil society.

Rich who belongs to the rabble migrating to the USA

The text of the Philosophy of Right makes reader imagine that just paupers make up the

rabble. Even Ruda (2011) is fighting this notion. Let’s follow Hegel’s argument more closely.

Hegel offers couple of characteristics of rabble: “Poverty does not of itself make a pauper.

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The pauper state implies a frame of mind, associated often with poverty, consisting in inner

rebellion against the wealthy, against society, and against constituted authority. Moreover, in

order to descend to the class, which is at the mercy of the changes and chances of life, men

must be heedless and indifferent to work” (Hegel 2001b, 244§). So the pauper, member of

rabble, need not be poor, though often is. Rather than an objective measure of well-being,

rabble is subjective notion (1) of rebellion against society, against constituted authority, that is

in Hegel’s term, the morality (Sittlichkeit), (2) man is idle, unwilling to work in this society.

There are two surprising groups of people which usually do not belong to the poor, but

which still belong to the emigrating rabble: those persecuted for religion and tradesmen. As of

religious emigrants from England, Hegel has to say in his Lectures on the Philosophy of

History that they contributed substantially to establishment of the commercial republic:

“Since in England Puritans, Episcopalians, and Catholics were engaged in perpetual conflict,

and now one party, now the other, had the upper hand, many emigrated to seek religious

freedom on a foreign shore. These were industrious Europeans, who betook themselves to

agriculture, tobacco and cotton planting, etc. Soon the whole attention of the inhabitants was

given to labour, and the basis of their existence as a united body lay in the necessities that

bind man to man, the desire of repose, the establishment of civil rights, security and freedom,

and a community arising from the aggregation of individuals as atomic constituents; so that

the state was merely something external for the protection of property” (Hegel 2001a: 101-2).

It’s quite clear from this quotation that for Hegel, religious emigrants follow the two

necessary conditions for becoming a rabble in the home country: they rebel against the

constituted authority and are unwilling to work within this society.

Concerning tradesmen, Hegel has something significant to say, too. North America’s

“effective population comes for the most part from Europe; and what takes place in America,

is but an emanation from Europe. Europe has sent its surplus population to America in much

the same way as from the old Imperial Cities, where trade-guilds were dominant and tradewas stereotyped, many persons escaped to other towns which were not under such a yoke, and

where the burden of imposts was not so heavy. Thus arose, by the side of Hamburg, Altona —

by Frankfort, Offenbach — by Nürnburg, Fürth — and Carouge by Geneva. The relation

between North America and Europe is similar. Many Englishmen have settled there, where

burdens and imposts do not exist, and where the combination of European appliances and

European ingenuity has availed to realize some produce from the extensive and still virgin

soil. Indeed the emigration in question offers many advantages. The emigrants have got rid ofmuch that might be obstructive to their interests at home, while they take with them the

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advantages of European independence of spirit, and acquired skill; while for those who are

willing to work vigorously, but who have not found in Europe opportunities for doing so, a

sphere of action is certainly presented in America” (Hegel 2001a: 99-100). With respect to

these tradesmen, trying to avoid the over-regulated and in many respects still mercantilist

economy of England of 1820s, Hegel is even more explicit that they fall to the status of rabble

within the society of their origin: they rebel against the society and are unwilling to work

within it.

The connecting aspect of both of these groups is that in case they remained in the

country of origin, they would undermine the Morality of that society. Deteriorating the moral

framework of society is exactly the attitude Hegel opposed most vehemently.

World-historical role of emigrating rabble and trade: Export of

the institutions of civil society

In this section, we will see that international trade and the rabble emigrating particularly

through the sea have the world historical role for Hegel: to spread culture of morality

(Sittlichkeit) to other nations beyond the nation’s civil society. In the words of the present

economics, the historical and future achievement of rabble will be the export of formal and

informal institutions, of regulated capitalism.

As we have seen, Hegel argues, that the economy of civil society is forced to transcend

itself because its productivity is so raised that it needs to find new markets abroad (Hegel

2001b, 246§). We consider it unnecessary to provide import of the theories of

underconsumption into the meaning of this sentence. Rather, in what follows we resort to

couple of probable sources of Hegel’s model. We find his predecessors in John Locke’s

model of the emergence of the market and in Adam Smith’s thoughts about the long run

impacts of the establishment and demise of the colonies. Then we place Hegel’s argument

into the long line of authors predicting that growing economy will have positive impact on the

political order as reconstructed by Hirschman (1997).

John Locke is for Hegel at the origin of the philosophy which gave rise to the modern

science of political economy: “The philosophy of Locke is certainly very comprehensible, but

for that very reason it is likewise a popular philosophy to which the whole of the English

philosophy as it exists at this day is allied ... It is in this way that rational politics took their

rise in England, because the institutions and government peculiar to the English led them

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specially and in the first place to reflection upon their inward political and economic

relationships” (Hegel 1892). Locke says that at the initial stage of development of mankind,

individuals could reap more

than the can possibly eat individually “a man might gather a hundred bushels of edible

nuts or apples” (Locke 2013: 129, par. 46). They didn’t keep this surplus production

themselves, but obtained commodity money: “People might (say) swap surplus perishable

foodstuffs for pieces of metal whose colour pleased them” (Locke 2013: 130, par. 46). And

with this commodity money, they could purchase whatever goods or services they needed

“rather than simply hoarding them, it would often be better for them to exchange these items

for other goods and services and to continue buying, selling, and investing in an ever

widening circle of economic activity and growth” (Locke 2013: 130, par. 46). What’s

significant for us here is that there’s no need in Locke to resort to the theories of

underconsumption. It’s just the theory of growth starting with the analysis of behaviour of the

individual, but is soon led by the logic of the argument to transcend the category of individual

and interpersonal economy is established as a result.

We have analogous theory in Hegel’s case. The category of the nation’s civil society

increases its production rapidly through the effect of the division of labour (Waszek 1988). It

has to place its surpluses abroad. But it’s not an economic theory of international trade that

interests Hegel here. Hegel is not analysing the effects of any abstract international trade as

would David Ricardo do in his theory of comparative advantage. Neither is Hegel saying that

the effects of trade vary with the stages of development as German Historical School did later.

Rather, Hegel is interested by a certain type of international trade, which he considers has the

potential of spreading the Morality of the civil society, of its formal and informal institutions,

of commerce with colonies. So it’s a theory of the emergence of institutions of the kind of

great members of the Scottish enlightenment and of Hayek, though it’s much more

rationalistic in its presentation than latter ones.While Hegel’s idea of trading surpluses having as unintended consequence the

emergence of institutions have an antecedent in Locke, Hegel’s idea of applying this

argument on surveying the emergent effects of colonies can be traced to Adam Smith. Smith’s

debt to Locke with respect to our subject of interest consists in that Smith speaks of surpluses

in the international trade with colonies, which is carried on by the sea trade, to which Smith

placed special importance. Surpluses produced in America increase the wealth of European

countries trading with it: “The surplus produce of America, imported into Europe, furnishesthe inhabitants of this great continent with a variety of commodities which they could not

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otherwise have possessed” (Smith 1904b). On the other hand, America provides new market

for European countries trading with the USA: “All such countries have evidently gained a

more extensive market for their surplus produce, and must consequently have been

encouraged to increase its quantity” (Smith 1904b). These surpluses are therefore mutual and

augment the production both in colonies and countries, with which they trade. These are

therefore not the surpluses of the type of aggregate supply as in theories of underconsumption.

However, Smith goes further. He tries to make the philosophical argument on the

emergent outcome of the establishing and demise of colonies, with which he modestly comes

back to his old ambition, which was not to be satisfied in the end, to write the book on the

succession of various revolutions and in emergence of the body political as a by-product of

this development (compare with Smith’s Introduction to the last edition of the Theory of

Moral Sentiments, Smith 2002): “The discovery of America, and that of a passage to the East

Indies by the Cape of Good Hope, are the two greatest and most important events recorded in

the history of mankind. Their consequences have already been very great: but, in the short

period of between two and three centuries which has elapsed since these discoveries were

made, it is impossible that the whole extent of their consequences can have been seen” (Smith

1904; compare Montesquieu’s take on the impact of colonies on the world in Montesquieu

2001: 392-9).

Although Smith provides a caveat of why not to conduct such research, he didn’t resist

the temptation and conjured a little more, formulating firstly the beneficial outcome: “What

benefits, or what misfortunes to mankind may hereafter result from those great events, no

human wisdom can foresee. By uniting, in some measure, the most distant parts of the world,

by enabling them to relieve one another’s wants, to increase one another’s enjoyments, and to

encourage one another’s industry, their general tendency would seem to be beneficial” (Smith

1904b). Secondly, the negative consequences might be derived: “To the natives, however,

both of the East and West Indies, all the commercial benefits which can have resulted fromthose events have been sunk and lost in the dreadful misfortunes which they have occasioned”

(Smith 1904b). However, he didn’t just resort to such reluctant dead end of the argument. He

hypothesized on what role might be played by the international trade in overcoming the

negative effects: “Hereafter, perhaps, the natives of those countries may grow stronger, or

those of Europe may grow weaker, and the inhabitants of all the different quarters of the

world may arrive at that equality of courage and force which, by inspiring mutual fear, can

alone overawe the injustice of independent nations into some sort of respect for the rights ofone another. But no

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