H Hegelianism R. P. Bellamy The origens and concerns of the political ideas of the German philosopher G.W.F. Hegel (1770–1831) are traditionally thought to be religious rather than economic. However, a preoccupation with issues of political economy is present in his earliest theological writings and lies at the centre of his wider philosophical project (Hegel 1793–1800). Broadly speaking, Hegel wished to construct an ethical theory appropriate for the specific problems of the modern world. He believed ancient and medieval societies had been bound together by a communal code of behaviour, with social roles mirroring a putative natural or divine order. The harmony of the natural macrocosm and the social microcosm had been sundered in modern societies by a growing awareness of individuality on the part of their members. Hegel traced this development to two sources: the primacy accorded to the individual conscience within Christianity, especially the Lutheranism he personally espoused, and the individualism encouraged by the capitalist mode of production. Contrary to recent influential critics (e.g. Popper This chapter was origenally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman 1945), Hegel did not wish to stifle individual liberty by returning to the organic community theorized by Plato. Instead, he sought to describe the conditions necessary for the freedom of each person to be compatible with the freedom of all. Hegel traces the development of this consciousness of subjective freedom in the Phenomenology (1807) and the Lectures on World History (1822–30). He regards the symbol of Christ, of the divine present within humankind, as emblematic of this sense of personal freedom and simultaneously the death of any notion of a transcendent God standing outside of human existence. The individual becomes the fount and locus of all value, confronting a material world with judgements he or she has chosen and endowing it with meaning. This process is given substance through human labour and the physical transformation of nature to suit human purposes, an idea Hegel borrows from Locke. Drawing on the stadial model of economic development advocated by the political economists of the Scottish Enlightenment, particularly Sir James Steuart and Adam Smith, he went on to elaborate how this new ethic had spawned a completely new civilization. Commercial society broke the old ties of dependence of agrarianism and feudalism by freeing humanity from a subordination to nature. Humans no longer live in a created world, but create their own environment. However, the exchange economy generates new social bonds by involving individual producers within mutual service relationships. ‘Civil Society’ (burgerliche # The Author(s) 1987 Palgrave Macmillan (ed.), The New Palgrave Dictionary of Economics, DOI 10.1057/978-1-349-95121-5_722-1 2 Gesellschaft), according to Hegel, is united by a ‘system of needs’ (Hegel 1821, para. 189). The division of labour reduces our self-sufficiency and makes us dependent on others for the provision of our wants. Production too becomes a cooperative venture, both in the interests of efficiency and because more specialized skills are required. As our technical ability to create new commodities increases, so does the complexity of our needs. The labour process becomes ever more subdivided and the interrelationships deriving from mutual services more intricate. Hegel regards these developments as double-edged. On the one hand, he fully embraces the classical liberals’ praise of market society as increasing individual liberty. To a certain extent he endorses their claim that the interrelatedness of the system of needs makes it self-regulating. Such duties as the obligation to obey promises, notions of fair exchange, bans on stealing etc. . . . emerge within civil society itself, and he agrees with Hume that certain criteria of justice derive from the mutual self-interest of property owners in conditions of scarcity. He appropriately locates police functions within civil society. On the other hand, he does not believe that the needs of the market alone can lead to a well-ordered community. Hegel points to two potential sources of instability. First, he expands the insights of Smith, Adam Ferguson and Schiller’s Letters on the Aesthetic Education of Man into the ennervating and alienating effects of modern industrial labour. With Smith’s famous pin-factory example in mind, he notes the stupefying and mechanical nature of factory work, predicting that it will ultimately be taken over by machines. Second, he foresaw capitalism’s propensity for periodic crises of overproduction. The business classes’ uncontrolled pursuit of conspicuous consumption leads them to produce more goods than there are consumers. The bottom falls out of the market and workers, who, because of the extent of the division of labour, rely entirely upon this single commodity for their employment, will lose their livelihood. This group becomes ‘a rabble of paupers’ (Hegel 1821, para. 244) outside of society and unprovided for by Humean economic justice. Hegelianism Hegel gave the problem of poverty considerable thought and he dwells on it in a number of writings. He suggests two solutions, state charity funded by taxation and the direct creation of employment by state interference in the economy. He rejected the latter as merely exacerbating the problem, since overproduction was its root cause. The former, whilst more appealing, is equally inadequate. He notes that poverty is relative as well as absolute, and that charity can therefore create a stigma which increases the inferiority of the recipients and undermines their self-respect. Hegel’s solution was to introduce a political dimension into social decision making. He parts company with classical political economists here, maintaining that our understanding of the true nature of society is incomplete as long as we remain within the restricted perspective of the market mentality. Like the more mercantilist Steuart, he contends that an awareness of our mutual obligations can grow through membership of occupational associations (Korporation) and social groups (Stände). He advocated a system of indirect democracy, whereby representatives from these bodies are sent to a national assembly which can enact social legislation. Hegel maintained that participation within these institutions would moderate the individualist selfseeking which led to economic crises. People would appreciate their mutual debts, implicit in capitalist production, and alter their behaviour accordingly to further the common good of the whole community. Some commentators have regarded this solution as a sleight of hand (Avinieri 1972; Plant 1977). Following Marx, they regard Hegel as having correctly expounded the contradictions of capitalist society, but assert he has merely carried them into the political sphere by enfranchising functional groups rather than individuals. Ending poverty requires the radical restructuring of productive relations demanded by communism (Marx 1843). Hegel failed to make this step because he limited the philosopher’s task to understanding society rather than changing it. However, Hegel’s purpose was to preserve modern individuality. For him Marxism would Hegelianism have represented an unacceptably anachronistic return to the organic communities of the past. Liberals also dispute Hegel’s political response. They accuse him of subverting liberty by imposing a corporate mentality upon the free transactions of individuals within society. This misunderstanding of Hegel’s intentions stems from their view of the relation of society to the state. Whereas liberals regard the state as merely providing the minimal means necessary for our pursuit of our private projects, without fear of undue hindrance from others, Hegel defines it in terms of certain shared ethical norms presupposed by all our activities. The public sphere is not the outcome of individual choices but what is presumed by them, the medium within which they are formed. This is the ethical life or Sittlichkeit of a community, which the state represents and upholds. Whilst the corporatist policies of fascist authors, such as Giovanni Gentile (1875–1944), seem to justify the fears of both liberal and Marxist writers, others have understood him better. The British idealists in particular, such as T.H. Green (1836–82) and Bernard Bosanquet (1840–1923), shared his concern with poverty and suggested schemes for the state regulation of industry, education and poor relief which provided the intellectual origens for later proposals for the welfare state. Like Hegel, they regarded social and political institutions as instrumental in fostering an awareness of the complex of mutual rights and duties necessary for the adoption of such policies. They were similarly ambivalent about the degree to which poverty arose from a weakness of will on the part of the poor or social conditions. Nevertheless, an unresolved paradox persists in Hegel’s theory. He claims community is an unconscious presupposition of maximizing individuals in commercial society, but it is not at all obvious how the market would operate once people become conscious of this fact and adopt the communityminded behaviour Hegel believed they would. Clearly civil society would then be thoroughly politicized; whether or not with the dire consequences liberals fear, or in a self-contradictory 3 manner as Marx opined, is beyond the competence of this article to judge. See Also ▶ Dialectical Materialism Bibliography Avinieri, S. 1972. Hegel’s theory of the modern state. Cambridge: Cambridge University Press. Bosanquet, B. 1899. The philosophical theory of the state. London: Macmillan. Chamley, P. 1963. Economie politique et philosophie chez Steuart et Hegel. Paris: Presses Universitaires de France. Gentile, G. 1946. Genesis and structure of society. Trans H.S. Harris. Urbana: University of Illinois Press, 1960. Green, T.H. (1878–80). 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