In economics, Marx is relegated to the history of thought as his ideas were an economic dead end and a political disaster. Yet Marx-influenced literary criticism is a dominant mode of analysis in nearly every English department in the country. It’s not that the English professors are all Marxists, it’s that even the non-Marxists reach for Marxian concepts–class, ideology, alienation, material conditions, commodification–when analyzing texts. These concepts may be useful for analyzing a Victorian novel of the landed classes but they have become a default economics for all of literature. That default is odd. Class analysis predates Marx and society can be divided into more than one set of classes; material conditions do not supersede all artistic agency; and capitalism contains figures—entrepreneurs, speculators, intermediaries, innovators, discoverers—who are great subjects for art yet fit poorly into the Marxist moral geometry. Not surprisingly, Marxism handles capitalism’s protagonists badly.

Is Marxian economics the only economic lens one can apply to literature? What would a Hayekian literary criticism look like? The place to start is the great Paul Cantor’s pioneering essay on Thomas Mann’s “Disorder and Early Sorrow,” a slight-seeming story set in Weimar Germany during the hyperinflation. Cantor shows that when one reads the novella through Hayek and Mises rather than Marx, the story opens up.

Start with inflationary psychology and its ramifications. Inflation shortens time horizons. When money loses value by the hour, saving is foolish and the rational move is to spend as fast as you earn—Mises’s “flight into real goods.” Prudence, discipline, and respect for the past become maladaptive. Speed, improvisation, risk-taking, and a certain youthful irresponsibility become survival traits.

Thus, Cantor/Mann tell us that inflation changes psychology and inverts the authority of age over youth. The old are set in their ways and often living on fixed incomes that inflation has wiped out; they cannot adapt. The young have known nothing but instability and go with the inflationary flow effortlessly. So the conservative virtues that once commanded respect are in decline while youthful recklessness starts to look like competence. Thus, Mann’s world has “gone mad in the worship of youth”: the children call their father by his first name, the teenagers are “the big folk,” and Professor Cornelius literally crouches down to his children’s height as the hierarchy collapses around him.

Money is a society’s primary repository of value, so Cantor/Mann argue that when you shake a people’s faith in their money, you shake their other faiths. Thus Cantor ties the conviction-less skepticism of Cornelius—and the broader Weimar nihilism and disequilibrium that helped feed the rise of Nazism—to monetary disequilibrium.

In short, inflation converts economic disorder into moral, social, psychological, and finally ontological disorder. Prices become unstable, then values, then identities, then reality. The modern feeling of absurdity and inauthenticity that critics reflexively pin on capitalism, Cantor/Mann argue is due to government-created inflation and paper money.

A Marxist could read the same story and find the inevitable contradictions of capitalism. Cantor reads it and finds the consequences of the state debasing the currency. Both are economic readings of literature. Only one of them has the economics correct.

Cantor is the place to begin but a Hayekian literary criticism could go much further. Atavism, the impossibility of social justice, products of human action but not of human design, spontaneous order, the fatal conceit, subjectivism, the sensory order–there is a lot of Hayekian ideas that literary interpretation could draw upon.

A Hayekian criticism would ask questions like how do characters acquire and process knowledge? Which institutions transmit information successfully, and which corrupt it? How do money, law, language, and custom function as social coordination mechanisms? Why do some attempts at rational redesign end in disaster? Read War and Peace as a critique of the great-man theory of history, Brazil and The Lives of Others as the fatal conceit degenerating into ignorance, fear, and absurdity. The Wire as a Hayekian epic of spontaneous order that demonstrates the illusion of social justice. Cantor’s essay on Mann shows the method, the broader project remains underdeveloped.

Hat tip: Hollis Robbins for discussion.

Addendum: Don’t forget my earlier WSJ piece, Capitalism: Hollywood’s Miscast Villain which gives an economic, one might even say Marxist, explanation for why film directors in particular didain capitalists.