Carroll Quigley: Investment

In The Evolution of Civilizations, Carroll Quigley identifies two kinds of societies:

Page 76 (74 of 425):
(a) parasitic societies and (b) producing societies. The former are those which live from hunting, fishing, or merely gleaning. By their economic activities they do not increase, but rather decrease, the amount of wealth in the world. The second kind of societies, producing societies, live by agricultural and pastoral activities. By these activities they seek to increase the amount of wealth in the world.

I've heard of "hunter-gatherer" societies and the pastoral or agricultural societies. Quigley identifies them by a different standard, and as a result he is able to advance the discussion to the next level:

Page 148 (145):
If this society is productive and if it becomes organized so that it has an instrument of expansion, a new civilization will be born.

An instrument of expansion?

Page 132 (129):
The three essential parts of an instrument of expansion are incentive to invent, accumulation of surplus, and application of this surplus to the new inventions.

Arnold J Toynbee described a "growth" phase for civilizations. Carroll Quigley describes a growth device, the instrument of expansion, which creates growth. In terms of our time:

• Invent something;
• Sell it for a profit;
• Use the profit to invent more stuff.
  

It can work for an individual. It can work for a society. Quigley reinforces the idea:

Page 137 (134):
Loosely speaking, the term "instrument of expansion" might be applied to the organization for capital accumulation alone, although, strictly speaking, this organization should be called the surplus-creating instrument. This surplus-creating instrument is the essential element in any civilization, although, of course, there will be no expansion unless the two other elements (invention and investment) are also present.

Note well: "This surplus-creating instrument is the essential element in any civilization". The essential element. The essential one.

This brings us to investment:

... there will be no expansion unless the two other elements (invention and investment) are also present. However, the surplus-creating instrument, by controlling the surplus and thus the disposition of it, will also control investment

And will, he adds, have at least an indirect influence on the incentive to invent. In the story Quigley tells, all the pieces are there. Everything fits. If I want to describe that story and emphasize investment, I have to break his sentences apart do it.

Quigley's use of familiar terminology makes it easy to understand his idea, and easy to see the economic troubles of our time as the troubles of a civilization. That's important, because those troubles must be solved if our civilization is to endure.

Perhaps Quigley's familiar terminology makes it difficult to picture the instrument of expansion in other civilizations, especially ancient ones. No problem:

Page 137-38 (134):
This surplus-creating instrument does not have to be an economic organization. In fact, it can be any kind of organization, military, political, social, religious, and so forth. In Mesopotamian civilization it was a religious organization, the Sumerian priesthood to which all members of the society paid tribute. In Egyptian, Andean and, probably, Minoan civilizations it was a political organization, a state that created surpluses by a process of taxation or tribute collection. In Classical civilization it was a kind of social organization, slavery, that allowed one class of society, the slaveowners, to claim most of the production of another class in society, the slaves. In the early part of Western civilization it was a military organization, feudalism, that allowed a small portion of the society, the fighting men or lords, to collect economic goods from the majority of society, the serfs, as a kind of payment for providing political protection for these serfs. In the later period of Western civilization the surplus-creating instrument was an economic organization (the price-profit system, or capitalism, if you wish) that permitted entrepreneurs who organized the factors of production to obtain from society in return for the goods produced by this organization a surplus (called profit) beyond what these factors of production had cost these entrepreneurs.

It's all there.

Instruments and institutions

I have a little trouble distinguishing between Quigley's "instruments" and his "institutions" for a very silly reason: both words start with the same letter. (Teaching myself the C language in the 1980s, I had problems with the language for three years, until I finally paid attention to the difference between "declarations" and "definitions".)

In the Foreword to Quigley's Evolution, Harry J. Hogan clarifies the difference between "instruments" and "institutions":

Page 17 (19): Quigley found the explanation of disintegration in the gradual transformation of social "instruments" into "institutions," that is, the transformation of social arrangements functioning to meet real social needs into social institutions serving their own purposes regardless of real social needs.

Hogan says that over time,

social arrangements are molded to express a rigidly idealized version of reality. Such institutionalization would not have the flexibility to accommodate to the pressures of changing reality...

Okay. Now we can finish Quigley's thought on the surplus-creating instrument. We pick up right where we left off, on page 138. He now describes how the growth device fails:

Page 138 (135):
Like   all   instruments,   an   instrument   of   expansion   in   the   course  of  time  becomes  an  institution  and  the  rate of  expansion  slows  down.  This  process  is  the  same  as  the  institutionalization  of  any  instrument,  but  appears  specifically  as  a  breakdown  of  one  of  the  three  necessary  elements  of  expansion.  The  one  that  usually  breaks  down  is  the  third — application   of   surplus   to   new   ways   of   doing   things.   In   modern  terms  we  say  that  the  rate  of  investment  decreases.

The rate of investment decreases. Quigley's words. Quigley's words to describe not a troubled economy, but a failing civilization. At last, I have found what I've been looking for.

I've been a fan of Arnold Toynbee's A Study of History since the 1990s, because he uses the facts of history like ornaments on a christmas tree to produce a truly amazing and fascinating display. I accept the idea of "stages of civilization" because of Toynbee.

But Toynbee doesn't seem to see economic concerns as a significant factor affecting the decisions people make. This is something I cannot accept. As I see it, everything we do for money and everything we do with money, taken together, creates a highly significant driving force that gives direction to most of the decisions we make: a highly significant driving force arising overwhelmingly from the economic conditions we face. And the worse the economic conditions, the greater is the economic component of our decision-making process.

Toynbee doesn't see it, but Carroll Quigley does. You don't know what a relief this is for me.