(With my apologies to David Rapoport and his colleagues in the Department of Political Science.)

The term political economy suggests that the fundamental social articulation is that between the political and the economic, the exercise of power and the distribution of economic goods and services. From Marx’s materialist standpoint, which has much to recommend it, politics is the servant of economics; the power-structure is determined by the mode of production. GA proposes that, although material consumption is the sine qua non of social life, the most fundamental human problem is not economic but political–the destructive potential of mimetic desire. Man is his own worst enemy, and human culture comes into being not as a means to increase material productivity, but to prevent mimetic violence from destroying the potential producers. Although economics–the satisfaction of appetite–is the fundamental process, it is dependent on politics; until we have been humanized by diffĂ©rance, we cannot tend to our animal needs.

As a result, the originary hypothesis begins not with material consumption but with the deferral of consumption under the threat of potential violence. The sign as exchanged among the participants of the originary scene is a means of insuring that no individual, not even the “alpha” in the prehuman pecking order, will be able to appropriate the central object for himself. But once the sign has been exchanged, the sacred center, by the very fact that the sign protects it from appropriation, no longer risks arousing mutually destructive violence; it has become approachable. Whence the sparagmos or tearing-apart of the object that is the originary form of distribution.

The originary reciprocal exchange of signs is the source of our model of moral equality. But this should not be taken to mean that the originary community constituted by this exchange is a lost paradise. History is not driven by a desire to return to the womb. The reciprocity of the originary community has only a single degree of freedom. Each individual renounces through the reciprocal exchange of signs the center that can only be appropriated by the group “equally” through the reciprocal exchange of things. Pre-agricultural societies maintain this reciprocity, which dictates elaborate systems of gift-giving and “the exchange of women.” But the center remains sacred; no subsequent decision as to its apportionment can do more than reaffirm the originary renouncement.

Hierarchical society is born after the invention of sedentary agriculture, when an individual who generates a surplus realizes that he may thereby usurp the function of the sacred center, a discovery that in The End of Culture I attributed to the “big-man.” The first wave of hierarchical societies culminates in the great archaic empires–in the West, Egypt and the various Mesopotamian kingdoms–where the god-king’s occupation of the ritual center extends the tribal big-man’s usurpation. Whatever the inefficiencies and brutalities of theocratic rule, it offered a genuine decision-making apparatus for the distribution of the economic surplus where the original system could at best devise ritual mechanisms of waste, such as the Kwakiutl potlatch so dear to Georges Bataille. Rousseauian sentiments to the contrary, the “equality” of modern democracy has nothing in common with that of primitive society–nothing, that is, that has not been mediated by the archaic usurpation of the center.

The first democracy arose in Athens when the remnants of the palace hierarchy inherited from the Mycenaean era had become unable to maintain order among the small independent producers who composed the backbone of the population. The focus of Solon’s reforms in the early 6th century BC was the abolition of the debts and “feudal” obligations that bound the individual citizens to their noble superiors. The citizens were empowered to choose their own leaders; dialogue and negotiation took the place of theocratic dictates and hierarchy became the free choice of the community.

Solon’s reforms mobilized the citizens for external conquest, not economic take-off. They strengthened the Athenian military forces, particularly the navy, in order to assure Athens’ dominance over its colonies and tributary states. Athenian democracy, like later Roman republicanism, paid for itself militarily rather than economically. The liberation of the Athenian population from economic dependency that was the basis for its political freedom generated a need for slaves to do the work that in other societies was accomplished by unfree peasants (e.g., Sparta’s helots); the freedom of the Athenian citizenry was paid for by the subjection of foreign populations.

The small producers who made up the majority of the electorate were empowered to make decisions in the “originary” context of reciprocal dialogue, but because the economy was not itself empowered by a similar model, the immense mobilization of civic energy to which we still pay tribute was invested in cultural and military, but rarely in strictly economic projects–there was indeed no conception of “economic investment.” Although productive labor was not held in contempt, the sheer quantity of political activity–voting, lot-drawing, judging, ostracizing–in this direct democracy was an obstacle to work. Athens could not maintain its military edge, and after the defeat by Sparta in the Peloponnesian War (404 BC), its heroic era was over.

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Ancient democracy failed because it was politics-driven. The resource-allocation system had changed from a ritual hierarchy to an electorate of free citizens without liberating the economic sphere as such. In modern liberal democracy, the free market provides for reciprocal exchange in the economic sphere to complement that in the political sphere. The result is the institutional articulation of the originary balance between politics and economics: political institutions have their raison-d’ĂȘtre not in themselves, but in the maintenance of a “civil society” of economic production and consumption.

Modern democracy differs from Athenian democracy not merely in its representative structure, but because it presides over a society in which economic rather than political activity is foregrounded. The proportion of human energy devoted to politics in the United States, whether at its creation or today, is incomparably smaller than in ancient Athens. Although nascent American democracy, like its Athenian predecessor, was dependent on slavery, its subsequent history, punctuated by the Civil War, showed this atavistic mode of production to be incompatible with modern democracy rather than indispensable to it.

Just as democracy makes the originary reciprocal exchange of signs the basis for the negotiation of political decisions, so in the market, the “equal” division of the sacrificial victim becomes the basis for the negotiation of economic values. The market presupposes the accumulation of property and consequent differences of wealth, just as the political process presupposes the accumulation of influence and consequent differences of power.

Economic exchange did not await the coming of the bourgeoisie. It is not easy to understand in what way the marketplaces of the “free market” differ from those of the past. As a result, we tend to subordinate the innovation in human relations brought about by the free market to that effected by the technological progress that the market in fact inspired: we speak not of the “market revolution” but of the “industrial revolution.”

My experience in purchasing souvenirs from the Arab vendors in the shuk or souk in Jerusalem gave me a useful insight into the premodern market . These vendors have no fixed or even posted prices. The Western tourist, especially the American, is offered at first an outrageous price, say, $200 for a cotton dress. On refusal, the price comes down sharply to $20 or $15. A little experience taught me that not only does the seller offer no fixed price, but the buyer can command pretty much any price he likes. It suffices to name one’s figure and to continue to stick to it as the vendor makes successively lower offers. I didn’t experiment with deliberately absurd prices, but those I set were always eventually accepted.

But the interaction would become increasingly unpleasant. As the price got lower, the vendor’s attitude changed from obsequious to grave to downright hostile, and when the purchase was finally made, he would turn away in disgust. I abandoned my technique out of an uncomfortable feeling that I was subverting the vendors’ culture of negotiation by exploiting a loophole that authentic participants disdained. Both parties were expected to bargain; holding to a fixed price was not interacting appropriately with my adversary.

In this kind of market, the vendor sets the price of each item interactively. The lower the price you want, the more you have to work for it, and the more uncomfortable you are made to feel. It is as though the vendor concentrated in himself a collective sacrificial energy. Ultimately you could have the goods for free, but you would be lynched on leaving the stall.

From the standpoint of the free market, what is wrong with this form of bargaining is that it confuses politics with economics. Instead of fluctuating around a “fair price” determinable by objective calculation of market conditions, the price is the object of a contest of wills and implied threats–a contest of power. To find the price is not to seek the intersection of the supply and demand curves for the product, but that of the two parties’ “negotiation curves”: the point at which the one is unable to endure the signs of the other’s potential for (individual and collective) violence. I could subvert the system without penalty as a tourist in a policed marketplace, but not in a society where the seller’s relatives might avenge his humiliation.

An economy dominated by interactions of this type could not become independent of the political system. In such a society, my power-relations with the vendor would be just a tiny element of the political hierarchy. A rich or influential buyer would get a better price, or no price at all. The market’s distribution of resources could not become an independent source of economic information.

In liberating economic exchange from “politics,” the free market reciprocally liberates the political system from responsibility for economic distribution. The result is a democratic political system conceived not, as in Athens, as a substitute for the old central system of ritual redistribution, but as a means to maintain the conditions–peace and security, rule of law, economic infrastructure–under which a “civil society” ordered by market exchange may flourish.

The democratic process requires that the large majority of citizens have, as it is often put, “a stake in the system.” But this “stake” is best measured not by a certain level of economic success but by the capability of creating an individual “message” of identity through consumption of products offered on the market. No aspect of “capitalism” has been so bitterly denounced by the intelligentsia as “consumer society”; yet the ability to express one’s political disaffection from the liberal democratic system via an economic transaction within the system is a measure of its stability. What Herbert Marcuse a generation ago called its “repressive tolerance” is its insurance against the horrors of centralized political control.

In the scene of human origin, the key moment is the “political” exchange of signs, but the ultimate goal is the “economic” distribution of the body of the sacred victim, which incarnates the meaning of the sign in materially assimilable form. When we can produce economic goods in such quantity and variety that they function more like the sign that defers mimetic violence than the object that incites it, the average citizen need not contest through the political agon what he can obtain through the peaceful reciprocity of the marketplace. The “deferral of violence through representation” that is the function of human culture need no longer defer the pleasures of consumption as well. As a result, the political, like the cultural, comes to be just another sector of the universal dialogue among the citizenry.

What some see as the degradation of the political process–recent events indeed make this sentiment difficult to avoid–is more significantly its democratization. The rigorous separation of politics from economics, word from thing, sacred from profane, is “elitist” even before it generates an elite; the dialectization of these differences in the social dialogue, along with that of class and ethnic differences, is a guarantee of social stability. Each gets to define and display to others “esthetically” through the medium of consumption a personal identity, a personal piece of the universal sacred. It is surely noteworthy that, whether or not we have reached the “end of history,” the most virulent anti-Western ideologies today, unlike that of the Bolsheviks of old, promise less rather than more economic productivity. Today’s resentful revolutionaries, like the peasant in the Russian tale, are happy to lose one eye provided that their neighbor lose both.

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Much remains to be said about the relationship between the stability of modern democracy and the nature of social conversation in consumer society. I hope to return to this subject in future Chronicles.