Capitalism Article

THE IDEOLOGY OF CAPITALISM AND THE ALTERNATIVES I. INTRODUCTION Since the start of the global economic crisis in the summer of 2008, many voices, have been raised in favour of a “new” capitalism, a compassionate, regulated, honest incarnation of a somewhat tarnished product. These voices recognized some of the errors of the three neo-liberal decades, but were convinced that capitalism had to be preserved or disaster would ensue. If all that was meant was that a considerable degree of private enterprise would remain in a reformed world, these voices were indubitably correct. No one wants to return to the inefficiency, the brutality and the absurdity of Stalinism or to try to create a new form of command economy. The presence of a vibrant private sector is a feature also of democratic socialism or social democracy and not only of capitalism. Indeed, a regulated market economy is more typically described as social democratic than as capitalist. By its nature, pure capitalism cannot be open, totally transparent or compassionate. The reason for calling the future reformed society “new capitalism” rather than “new social- democracy” is the propaganda victory won by conservative think-tanks and ideologues since 1970. In the past many people, including some who did not like socialism, such as Schumpeter, were convinced of its inevitability. Now, even those instinctively hostile to capitalism have embraced the myth that only capitalism can produce growth and that no viable alternative exists. The constant repetition of this in our media led to a situation where many feared to be ridiculed if they demurred and people often fear ridicule more than repression. Thus a new near-unanimity has been forged, not always at the highest academic spheres but, more ominously, in living rooms, in the popular press and on the street. We can see this tendency in the dismissive attitude taken towards labour leaders whenever they challenged the dominant dogmas. Businessmen, on the other hand, were taken seriously. However, in our system of collective bargaining, both are equally representative of “special interests“ – persons promoting their own groups. In Quebec, the conservatives who issued the manifesto of “Quebec lucide” in 2007 were viewed as objective, when they called for sacrifices on the part of everyone, except the business lobby, so that Quebec could remain competitive. The left-wing response of “Quebec solidaire” was given short shrift. The majority no longer believed those who advocated its interests, but rather those who called on it to tighten its belt and to give up the attainments won during the social- democratic era between 1950 and 1980. Since the crisis of 2008, deficit “hawks” have, if anything, become stronger, at least in the English-speaking world, despite the weakness of their argument. For instance, the British Conservative/Liberal Coalition under David Cameron has embarked on a course of fairly extreme austerity which goes beyond what Mrs. Thatcher could implement in the 1980s. The ideology of capitalism that has been generally adopted is based on its supposed rewarding of hard work, thrift and innovation. The myth of America was that anyone can win and that winner takes all. This type of thinking is in part descended from Weber’s and other thinkers’ embracing of the protestant ethic, from the popular notion that Protestantism and Judaism are particularly suited for entrepreneurship, unlike Roman Catholicism. In our time, this has sometimes been identified with the “Anglo-Saxon” model, developed in Thatcherite England and Reagan’s America, inspired by Milton Friedman and Raymond Aaron. The fundamental premise is that those who work hard and who are clever succeed for the most part and that the world is most efficient when winners are fully rewarded. It is implicit that, if there are to be winners, there must also be losers, and it became a dogma that we must ignore compassion in order to promote overall efficiency and growth. By creating wealth, capitalism would ultimately make everyone better off. Even in the early days of capitalism, David Ricardo, who did not share modern capitalists’ ebullient optimism about infinite growth, nevertheless thought that welfare would only make the lower classes more miserable. With today’s triumphalism, this type of thinking has become endemic, even if it lacks Ricardo’s intellectual basis or rigor or his ultimate pessimism. It therefore became a common view that successful businessmen were generally the best and the brightest, who deserved their success, that the “bad eggs” who cheated would eventually be weeded out and that the dishonest were a miniscule percentage of businessmen who should be punished in an exemplary fashion in order to promote personal integrity and a high standard of “governance”. In fact, “governance” became a major preoccupation in the last 20 years, just as standards of honesty declined everywhere in the west. This thinking persists, especially in the U.S., even though it is now clear that the upper echelons of businessmen form an incompetent, ruthless, self-seeking nomenclatura, always ready to vote itself bonuses, astronomic profits and separation packages and to plead ignorance when the books do not balance or the company’s plans turn out to be disastrous. Indeed, this nomenclatura is no better than the one overthrown in 1989 in formerly communist countries. In both cases, it must be added, there were some high-minded, brilliant, devoted men, trying to do good work within the limits of their system, but they were the minority. Clearly we would have been better off had we confided administration of business affairs to a combination of small businessmen, academics and public servants than to this nomenclatura of big business. Moreover, the reason for the behaviour of big business is not, as so many say, the unfortunate greed of a few. Capitalism necessarily relies on greed as its primary engine and the conduct of businessmen today is no different than in the past. It is simply not true that honest, hard work reaps rewards or ever did. We have forgotten the lessons of Balzac or Zola about what most often happens to honest people and to inventors in the system and how they are almost always shunted aside by speculators. Once again, there are exceptions such as Bill Gates and Steve Jobs, who made their fortune through talent, but it is difficult to think of many fortunes honestly made or kept. Artists, athletes and actors can occasionally become very wealthy because of their unique ability, and that is what was called an “economic rent” in classical economics. It is not a significant factor. “Dog eat dog” is the essence of capitalism and ruthless drive towards victory is the only possible method. The speculators and the robber barons win every time. The expansion of corruption, contraband trade, international bribery, poaching and pollution after the “revolution” of 1989 is simply not an accident, but a natural consequence of untrammelled capitalism. That is why honest, transparent capitalism is a pipe-dream. Success depends on hoodwinking and out-manoeuvring the competition and therefore one cannot require open books and regulated conduct without transforming the system into something very different. It is not the appearance on the scene of a few transgressors like Madoff which led to a perception of corruption. The system always functions that way and “open”, honest capitalism is as likely as vegetarian lions. The way to defeat the competition is to pay less to workers, to avoid unionization, to evade taxes, to cover up pollution, and to bribe third-world potentates. Anyone who tries to act differently will be out of business very quickly even if, in the long run, his more enlightened policies prove wiser. It is to be noted that, under capitalism, as under the law of the jungle, the short-run advantage almost always prevails over long-run wisdom, because survival is first and foremost a short- term issue. You do not come back after you have been eaten. During the 2012 U.S. election, Republican vice-presidential candidate Paul Ryan expressed great interest in Ayn Rand who, he stated, had influenced his thinking. Despite her very weak skills as a novelist, Ayn Rand did indeed describe faithfully the necessarily rapacious nature of capitalism. She has been a cult figure for some participants in the revival of right-wing thinking that took place since the 1960s. While she was accurate about the essence of capitalism, her boundless enthusiasm for it was an indication of a lack of moral compass and an inability to empathize with the weak. Another aspect of capitalism is its tendency towards the concentration of wealth. Marx made this point and, as on so many issues, he has turned out to be a prophet. Left unchecked, the system leads to a disparity of wealth and gives undue economic and political control to the wealthy. One of the most telling statistics of the 30-year old “Anglo-Saxon” model is that virtually all of the increase in wealth during these decades accrued to the richest half percent of the population. The average man is no better off and, if one includes the non-pecuniary disadvantages of two-income households, and the almost universal loss of security, is probably worse off than before. Most of us are aware of these perfectly natural qualities of capitalism. Sayings like “nice guys finish last” abound, even among children. We have developed a cult of success rather than knowledge or goodness. There is also a sublimated anger in our society which expresses itself in vigilante attitudes towards criminal law and a certain pervasive conformism, harshness and pettiness. People sense the odds against them in their lives, yet they continue to repeat the discredited credo of capitalism – that the deserving succeed and that hard work usually brings reward.

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