Tragic Capitalism

Capitalism, when it isn’t being used as a “dirty word” by “socialist democrats” (the correct rendering, and an oxymoron at that), simply entails three connected things:

  • There is private ownership of the means of production — capital — which consists of the hardware, software, and processes used to produce goods and services.
  • There are private markets in which capital, goods, and services are bought by users, which are (a) firms engaged in the production and sale of capital, goods, and services and (b) consumers of the finished products.
  • The owners of capital, like the owners of labor that is applied to capital (i.e., “workers” ranging from CEOs and high-powered scientists to store clerks and ditch-diggers), are compensated according to the market valuation of the worth of their contributions to the production of goods and services. The market valuation depends ultimately on the valuation of the finished products by the final consumers of those products.

For simplicity, I omitted the messy details of the so-called mixed economy — like that of the U.S. — in which governments are involved in producing some goods and services that could be produced privately, regulating what may be offered in private markets, regulating the specifications of the goods and services that are offered in private markets, regulating the compensation of market participants, and otherwise distorting private markets through myriad taxes and social-welfare schemes — including many that don’t directly involve government spending, except to enforce them (e.g., anti-discrimination laws and environmental regulations).

None of what I have just said is the tragic aspect of capitalism to which the title of this post refers. Yes, government interventions in market are extremely costly, and some of them have tragic consequences (e.g., the mismatch effect of affirmative action, which causes many blacks to fail in college and in the workplace; the withholding of beneficial drugs by the FDA; and the vast waste of resources in the name of environmentalism and climate change). But all of that belongs under the heading of tragic government.

One tragedy of capitalism, which I have touched on before, is that it leads to alienation:

This much of Marx’s theory of alienation bears a resemblance to the truth:

The design of the product and how it is produced are determined, not by the producers who make it (the workers)….

[T]he generation of products (goods and services) is accomplished with an endless sequence of discrete, repetitive, motions that offer the worker little psychological satisfaction for “a job well done.”

These statements are true not only of assembly-line manufacturing. They’re also true of much “white collar” work — certainly routine office work and even a lot of research work that requires advanced degrees in scientific and semi-scientific disciplines (e.g., economics). They are certainly true of “blue collar” work that is rote, and in which the worker has no ownership stake….

The life of the hunter-gatherer, however fraught, is less rationalized than the kind of life that’s represented by intensive agriculture, let alone modern manufacturing, transportation, wholesaling, retailing, and office work.

The hunter-gatherer isn’t a cog in a machine, he is the machine: the shareholder, the co-manager, the co-worker, and the consumer, all in one. His work with others is truly cooperative. It is like the execution of a game-winning touchdown by a football team, and unlike the passing of a product from stage to stage in an assembly line, or the passing of a virtual piece of paper from computer to computer.

The hunter-gatherer’s social milieu was truly societal [and hunter-gatherer bands had an upper limit of 150 persons]….

Nor is the limit of 150 unique to hunter-gatherer bands. [It is also found in communal societies like Hutterite colonies, which spin off new colonies when the limit of 150 is reached.]

What all of this means, of course, is that for the vast majority of people there’s no going back. How many among us are willing — really willing — to trade our creature comforts for the “simple life”? Few would be willing when faced with the reality of what the “simple life” means; for example, catching or growing your own food, dawn-to-post-dusk drudgery, nothing resembling culture as we know it (high or low), and lives that are far closer to nasty, brutish, and short than today’s norms.

There is also an innate tension between capitalism and morality, as I say here:

Conservatives rightly defend free markets because they exemplify the learning from trial and error that underlies the wisdom of voluntarily evolved social norms — norms that bind a people in mutual trust, respect, and forbearance.

Conservatives also rightly condemn free markets — or some of the produce of free markets — because that produce is often destructive of social norms.

Thanks to a pointer from my son, I have since read Edward Feser’s “Hayek’s Tragic Capitalism” (Claremont Review of Books, April 30, 2019), which takes up the tension between capitalism and conservatism:

Precisely because they arise out of an impersonal process, market outcomes are amoral. Hayek thought it unwise to defend capitalism by emphasizing the just rewards of hard work, because there simply is no necessary connection between virtue of any kind, on the one hand, and market success on the other. Moreover, the functioning of the market economy depends on adherence to rules of behavior that abstract from the personal qualities of individuals. In particular, it depends on treating most of one’s fellow citizens not as members of the same tribe, religion, or the like, but as abstract economic actors—property owners, potential customers or clients, employers or employees, etc. It requires allowing these actors to pursue whatever ends they happen to have, rather than imposing some one overarching collective end, after the fashion of the central planner.

Hayek did not deny that all of this entailed an alienating individualism. On the contrary, he emphasized it, and warned that it was the deepest challenge to the stability of capitalism, against which defenders of the market must always be on guard. This brings us to his account of the moral defects inherent in human nature. To take seriously the thesis that human beings are the product of biological evolution is, for Hayek, to recognize that our natural state is to live in small tribal bands of the sort in which our ancestors were shaped by natural selection. Human psychology still reflects this primitive environment. We long for solidarity with a group that shares a common purpose and provides for its members based on their personal needs and merits. The impersonal, amoral, and self-interested nature of capitalist society repels us. We are, according to Hayek, naturally socialist.

The trouble is that socialism is, again, simply impossible in modern societies, with their vast populations and unimaginably complex economic circumstances. Socialism is practical only at the level of the small tribal bands in which our psychology was molded. Moreover, whereas in that primitive sort of context, everyone shares the same tribal identity and moral and religious outlook, in modern society there is no one tribe, religion, or moral code to which all of its members adhere. Socialism in the context of a modern society would therefore also be tyrannical as well as unworkable, since it would require imposing an overall social vision with which at most only some of its members agree. A socialist society cannot be a diverse society, and a diverse society cannot be socialist.

Socialism in large societies requires direction from on high, direction that cannot fail to be inefficient and oppressive.

Returning to Feser:

… Hayek—who had, decades before, penned a famous essay titled “Why I Am Not a Conservative”—went in a strongly Burkean conservative direction [in his last books]. Just as market prices encapsulate economic information that is not available to any single mind, so too, the later Hayek argued, do traditional moral rules that have survived the winnowing process of cultural evolution encapsulate more information about human well-being than the individual can fathom. Those who would overthrow traditional morality wholesale and replace it with some purportedly more rational alternative exhibit the same hubris as the socialist planner who foolishly thinks he can do better than the market.

Unsurprisingly, he took the institution of private property to be a chief example of the benefits of traditional morality. But he also came to emphasize the importance of the family as a stabilizing institution in otherwise coldly individualist market societies, and—despite his personal agnosticism—of religion as a bulwark of the morality of property and the family. He lamented the trend toward “permissive education” and “freeing ourselves from repressions and conventional morals,” condemned the ’60s counter-culture as “non-domesticated savages,” and placed Sigmund Freud alongside Karl Marx as one of the great destroyers of modern civilization.

Hayek was committed, then, to a kind of fusionism—the project of marrying free market economics to social conservatism. Unlike the fusionism associated with modern American conservatism, though, Hayek’s brand had a skeptical and tragic cast to it. He thought religion merely useful rather than true, and defended bourgeois morality as a painful but necessary corrective to human nature rather than an expression of it. In his view, human psychology has been cobbled together by a contingent combination of biological and cultural evolutionary processes. The resulting aggregate of cognitive and affective tendencies does not entirely cohere, and never will.

Feser than summarizes three critiques of Hayek’s fusionism, one by Irving Kristol, one by Roger Scruton, and one by Andrew Gamble, in Hayek: The Iron Cage of Liberty (1996). Gamble’s critique, according to Feser, is that Hayek

never adequately faced up to the dangers posed by corporate power. Most people cannot be entrepreneurs, and even those who can cannot match the tremendous advantages afforded by the deep pockets, legal resources, and other assets of a corporation. Vast numbers of citizens in actually existing capitalist societies simply must work for a corporation if they are going to work at all. But that entails an economic dependency of individuals on centralized authority, of a kind that is in some ways analogous to what Hayek warned of in his critique of central planning. As with socialism, conformity to the values of centralized authority becomes, in effect, a precondition of the very possibility of feeding oneself. By way of example, we may note that the political correctness Hayek would have despised is today more effectively and directly imposed on society by corporate Human Resources departments than by government.

Feser concludes with this:

None of this implies a condemnation of capitalism per se. The problem is one of fetishizing capitalism, of making market imperatives the governing principles to which all other aspects of social order are subordinate. The irony is that this is a variation on the same basic error of which socialism is guilty—what Pope John Paul II called “economism,” the reduction of human life to its economic aspect. Even F.A. Hayek, a far more subtle thinker than other defenders of the free economy, ultimately succumbed to this tendency. Too many modern conservatives have followed his lead. They have been so fixated on socialism and its economic irrationality that they have lost sight of other, ultimately more insidious, threats to Western civilization—including economism itself. To paraphrase G.K. Chesterton, a madman is not someone who has lost his economic reason, but someone who has lost everything but his economic reason.

Alan Jacobs offers an orthogonal view in his essay, “After Technopoly” (The New Atlantis, Spring 2019):

The apparent captain of technopoly [the universal and virtually inescapable rule of our everyday lives by those who make and deploy technology] is what [Michael] Oakeshott calls a “rationalist”…. [T]hat captain can achieve his political ends most readily by creating people who are not rationalists. The rationalists of Silicon Valley don’t care whom you’re calling out or why, as long as you’re calling out someone and doing it on Twitter….

Oakeshott wrote “The Tower of Babel” at roughly the same time as his most famous essay, “Rationalism in Politics” (1947), with which it shares certain themes. At that moment rationalism seemed, and indeed was, ascendant. Rejecting the value of habit and tradition — and of all authority except “reason” — the rationalist is concerned solely with the present as a problem to be solved by technique; politics simply is social engineering….

Oakeshott foresaw the coming of a world — to him a sadly depleted world — in which everyone, or almost everyone, would be a rationalist.

But that isn’t what happened. What happened was the elevation of a technocratic elite into a genuine technopoly, in which transnational powers in command of digital technologies sustain their nearly complete control by using the instruments of rationalism to ensure that the great majority of people acquire their moral life by habituation. This habituation, of course, is not the kind Oakeshott hoped for but a grossly impoverished version of it, one in which we do not adopt our affections and conduct from families, friends, and neighbors, but rather from the celebrity strangers who populate our digital devices.

In sum, capitalism is an amoral means to material ends. It is not the servant of society, properly understood. Nor is it the servant of conservative principles, which include (inter alia) the preservation of traditional morality, both as an end and as a binding and civilizing force.

I therefore repeat this counsel:

It is important (nay, crucial) to cultivate an inner life of intellectual or spiritual satisfaction. Only that inner life — and the love and friendship of a small circle of fellows — can hold alienation at bay. Only that inner life — and love and close friendships — can give us serenity as civilization crumbles around us.

Another Angle on Alienation

In an earlier post about alienation I said that

the life of the hunter-gatherer, however fraught, is less rationalized than the kind of life that’s represented by intensive agriculture, let alone modern manufacturing and office work.

The hunter-gatherer isn’t “a cog in a machine”, he is the machine. He is the shareholder, the manager, the worker, and the consumer, all in one. His work with others is truly cooperative. It is like the execution of a game-winning touchdown by a football team, and unlike the passing of a product from stage to stage in an assembly line, or the passing of a virtual piece of paper from computer to computer.

What really matters in life — perhaps as much as love and friendship — is the sense of accomplishment that derives from producing something of value to others, something that they willingly pay for.

In decades of post-collegiate work, nothing gave me more satisfaction than the weekly publication of the Pennysaver that — in the late 1970s — I owned, operated, and poured my labor (and a large share of my savings) into for three years. “Publish or perish” was far truer of me than it is of the academics who exclaim it.

I bought the Pennysaver to escape the “rat race” of the D.C.-area government-contractor milieu: big-city anonymity, commuting, high taxes, and — most of all — disconnect between work and accomplishment. In fact, I doubted that the work that I and thousands of others like me accomplished anything but the appropriation of taxpayers’ money.

During the Pennysaver years I concentrated intensly on making a living. But more than that, I was producing something of real value — a publication supported by willing advertisers and eagerly awaited by local residents, who found it in their mailboxes every Wednesday.

I gave up the Pennysaver to return to the “rat race” of the D.C. area, so that I could earn enough to retire comfortably. (Life is full of choices; that was mine.) I often took pride in some of what I accomplished in the ensuing 18 years. But it wasn’t the same sense of accomplishment that I experienced as a business owner. It was just the satisfaction of doing a job well, even if the job wasn’t worth doing.

I worked hard in those final 18 years — from 60 to 70 hours a week until the end was nigh. But I was no longer the captain of my own ship, though I usually worked directly for the CEO. There were three of them in those years. The first one was deposed (deservedly) in a coup, brought about in part by internal opposition to his Queegish management. The second one was a careerist of high professional and ethical standards who steered the organization back to its roots as an empirical, objective, and apolitical operations research outfit.

Then along came the third one, and a new kind of alienation descended on me: I couldn’t even derive a sense of satisfaction from doing a useless job well because he corrupted the organization. Not in a criminal way, but — almost as bad — in a political way. He was prone to magical thinking (e.g., there should be a greater percentage of black Ph.D.s on the staff but standards shouldn’t be lowered), and he pushed the organization away from empirical research into “policy analysis” (a.k.a., advocacy bullshit) with a partisan edge. It was all in keeping with his proud self-identification as a “Carter Democrat”.

The stress of working for such a man became almost debilitating. So I arranged for early retirement on favorable terms before the stress became absolutely unbearable. My foreboding was borne out when, in the years after my retirement, the organization took an overtly political turn (e.g., backing for some of Obama’s domestic programs, “global warming” as a national-security issue).

Alienation comes in many forms. And it isn’t restricted to workers who are just “cogs in a machine”. Alienation is a sense of uselessness that can descend on anyone in any job at any income level.

Alienation

This much of Marx’s theory of alienation bears a resemblance to the truth:

The design of the product and how it is produced are determined, not by the producers who make it (the workers)….

[T]he generation of products (goods and services) is accomplished with an endless sequence of discrete, repetitive, motions that offer the worker little psychological satisfaction for “a job well done.”

These statements are true not only of assembly-line manufacturing. They’re also true of much “white collar” work — certainly routine office work and even a lot of research work that requires advanced degrees in scientific and semi-scientific disciplines (e.g., economics).

One result of alienation, especially among males, is the mid-life crisis, which often causes them to deplore the “rat race” and even to seek a way out of it. (I’ve been there.)

I thought of alienation because of a recent post at West Hunter. It’s short, so I’m reproducing it in full:

Many have noted how difficult it is to persuade hunter-gatherers to adopt agriculture, or more generally, to get people to adopt a more intensive kind of agriculture.

It’s worth noting that, given the choice, few individuals pick the more intensive, more ‘civilized’ way of life, even when their ancestors have practiced it for thousands of years.

Benjamin Franklin talked about this. “When an Indian Child has been brought up among us, taught our language and habituated to our Customs, yet if he goes to see his relations and makes one Indian Ramble with them, there is no perswading him ever to return. [But] when white persons of either sex have been taken prisoners young by the Indians, and lived a while among them, tho’ ransomed by their Friends, and treated with all imaginable tenderness to prevail with them to stay among the English, yet in a Short time they become disgusted with our manner of life, and the care and pains that are necessary to support it, and take the first good Opportunity of escaping again into the Woods, from whence there is no reclaiming them.”

I suspect that there’s a lot of truth in those observations. Why? Because the life of the hunter-gatherer, however fraught, is less rationalized than the kind of life that’s represented by intensive agriculture, let alone modern manufacturing and office work.

The hunter-gatherer isn’t “a cog in a machine,” he is the machine. He is the shareholder, the manager, the worker, and the consumer, all in one. His work with others is truly cooperative. It is like the execution of a game-winning touchdown by a football team, and unlike the passing of a product from stage to stage in an assembly line, or the passing of a virtual piece of paper from computer to computer.

No wonder so many males find relief from their alienation by watching sports on TV. There, they see real teamwork (however artificial the game), and they see that teamwork rewarded by victory (though not always victory by the home-town team). The beer helps, too.