In The Formation of the Economic Thought of Karl Marx, Ernest Mandel writes: ‘Hegel had been profoundly affected in his youth by economic studies, in particular by the work of Adam Smith; Marx saw the Hegelian system as a veritable philosophy of labour.’footnote1 He goes on to quote from Pierre Naville’s well known study De l’aliénation ` la jouissance as follows: ‘When he [Marx] read The Phenomenology of Mind, The Philosophy of Right, and even The Science of Logic, Marx thus not only discovered Hegel but already through him, he was aware of that part of classical political economy which was assimilated and translated into philosophical terms in Hegel’s work; so that Marx could not have gone about his systematic criticism of civil society and the state according to Hegel if he had not found in the latter’s writings certain elements which were still live, such as the theory of needs, the theory of appropriation, or the analysis of the division of labour.’footnote2 It is my aim in this essay to try to retrieve Hegel’s views on political economy on their own terms, as a prologomenon to understanding what Marx may or may not have derived from them for his own economic writings. I shall try to indicate the development of Hegel’s views on political economy and his mature position on these issues. In this discussion the Science of Logic will not figure, because however much Marx may have been influenced by it in the development of his own analysis of capitalism, and however much Lenin may have felt that it was necessary to understanding Capital,footnote3 it does not itself articulate any of Hegel’s specific views on political economy—although it does provide the philosophical background in logic and ontology within which his views on political economy, together with his understanding of other forms of human activity, is situated.footnote4

In a recent book on Hegel, I argued that the latter’s thought was dominated by two interrelated ideals: the restoration of wholeness and integrity to the human personality; and the restructuring of society on a more harmonious, reciprocating basis, restoring a sense of community.footnote5 A crucial influence on the formation of these ideals was a romanticized and idealized picture of the Ancient Greek and particularly the Athenian polis. In such a society, so it was believed, a real sense of community had been achieved. Social practices and institutions such as religion, morality and politics were all closely interwoven. The individual citizen was able to develop a roundedness and wholeness to his personality by being able personally to take part in all these interwoven social activities—an integrity of the personality which has been denied to the modern man. For many, and for Hegel in particular in his early years, Greece was the model; and even when his enthusiasm for it had evaporated somewhat, he still extrapolated from Greek political culture a deep and abiding political conviction about the need for society to recapture some sense of the harmony of Greece—albeit in a modified, contemporary form—and to recover something of that sense of human wholeness which had been such a dominant part of Greek culture.

While Hegel was dominated by these ideals during the earliest period of his writing on these topics in Tübingen from 1789 to 1793, he does not seem to have been particularly interested in exploring the material and economic basis which enabled this kind of society to flourish in the ancient world, or the current material conditions of life which made such a form of communal life difficult, if not impossible, to achieve in the modern world. On the contrary: during the period in question Hegel seems to have seen religion as the key to the unified structure of Greek life and religious changes to have been the cause of the baneful structure of modern society. In Hegel’s view, Greek folk religion had been a unifying institution. It appealed to all the powers of the human mind, to head and heart, whereas modern European religion had become too deeply rationalistic and theological, neglecting the need for religion to nourish the emotions.footnote6 In addition, it was a powerful force for the integration of society generally. All practices in a society had a religious dimension and, as such, there were close relations between them mediated by this communal bond. In its social function Greek folk religion was very different from modern Christianity, the practices of which have become a rite reserved for special days of the week, involving specialized ceremonies and liturgical forms, with the result that it has become more and more dislocated from the ongoing life of the community. The recapture of a sense of community, and with it the regeneration of personal life, is thus seen by Hegel at this time very much in terms of rediscovering something like Greek folk religion, largely by a fundamental re-shaping of Christian beliefs and, in particular, by a rigorous attempt to demythologize the gospels, in order to exclude all elements of transcendence and positivity.footnote7 There is therefore very little in the Tübingen fragments to suggest that Hegel had a serious interest in exploring the forms of economic relationships within which new forms of community could grow or in discovering the material conditions of life within which Greek community had flourished.

Hegel’s writings during his period as a private tutor in Berne involved a significant shift in his opinions and interests. Christianity was now seen against a background of the social and political changes of the later Roman era. Far from appearing to have a determining role in the fashioning of life and social experience, it was now seen very much as the projection of a social malaise which has already set in. Hegel argued that the military might of Rome had led to the formation of a governing élite, which used military power and the riches derived from conquest to maintain itself in power. In Hegel’s view, this form of economic and political domination led to disastrous social and political consequences. The individual began to feel estranged from the state: ‘The picture of the state as the product of his own energies disappeared from the citizen’s soul . . . . All activity and every purpose now had a bearing on something individual—activity was no longer for the sake of the whole or the ideal.’footnote8 These socio-economic changes had a very profound effect on religious life. Folk religion could not adapt to this changed situation; it was based on and mirrored a system of reciprocity and integration. With the breakdown of this integration, folk religion had to disappear. Christianity with its emphasis on the privacy of the individual and his personal relationship with God, who transcended the social order, filled the gap in social life left by the decline in the authority of folk religion.

This move towards a more materially-based approach to social analysis became much more pronounced after Hegel’s move to Frankfurt when, under the influence of his reading of the economic works of Sir James Steuart, he began to reflect much more systematically upon the material and economic basis of social structures and cultural forms.footnote9 Hegel derived three main insights from his reading of Steuart’s Inquiry into the Principles of Political Economy. First, he developed the beginnings of a philosophy of history, and one which enabled him to take up a far more positive attitude towards the development of modern society. In the second place, he arrived at the idea that the development of commercial society leads to an increase in human autonomy and personal freedom, but at the same time commercial society throws up its own specific forms of integration and its own supportive community groups. Finally, from Steuart’s theory of the statesman, Hegel derived a distinctive theory about the role of the state vis-`-vis commercial society. As a result of his researches into political economy, he gradually worked his way towards seeing in the economic life of modern society the development of new forms of integration and community appropriate for the modern world. These themes are clearly perceptible in his Frankfurt essay The Spirit of Christianity and Its Destiny.footnote10

In his Inquiry Steuart had postulated a threefold process of development in history from pastoral nomadic, through agrarian to modern society characterized by the exchange economy. The change from one of these to the other he interprets as a result of the necessity to increase the food supply, as a result of the increasing growth of population caused by the domination of the sexual impulse in human life. Steuart also correlates with these distinct economic formations particular kinds of social structures with different sets of social values.footnote11 So long as men remain unaware that the supply of food can be increased by human labour, they depend entirely upon the bounty of nature—consuming and passing on. In such a pastoral, pre-agrarian society men do not labour but live in idleness and enjoy a sense of natural liberty. This sort of social system could not last long, in Steuart’s view, because of the very definite limit it set to the level of population, and because life could only be maintained at the subsistence level. The pressure of population encourages labour in an attempt to augment the food supply. This marks the transition to the agrarian economy. The effect of agriculture is that each cultivator can produce more food than he himself requires and this surplus allows the population to increase. However, natural differences in physical strength and ability means that different levels of surplus are achieved, and those who are able to produce most eventually become the masters of those who produce less. An agrarian economy introduces labour, but labour introduces stratification.

The exchange economy is an advance upon the agrarian system out of which it develops, because it replaces compulsion by inducement. If wants are multiplied above the level of physical necessities, then once a taste for what Steuart calls ‘luxuries’ is developed a man has an inducement to produce a surplus through his labour with which he can procure other goods, luxuries, which go beyond the level of subsistence.