Capitalism, Alone: Four important--but somewhat hidden--themes

I review here four important, but perhaps not immediately apparent, themes from my Capitalism, Alone.  The book contains many other, more topical, subjects that are likely to attract readers’ and reviewers’ attention much more than the somewhat abstract or philosophical issues briefly reviewed here.

1. Capitalism as the only mode of production in the world. During the previous high point of the British-led globalization, capitalism shared the world with various feudal or feudal-like systems characterized with unfree labor: forced labor was abolished in Austria-Hungary in 1848, serfdom in Russia in 1861, slavery ended in the US in 1865, and in Brazil only in 1888, And labor tied to land continued to exist in India and to a lesser degree in China. Then, after 1917, capitalism had to share the world with communism which, at its peak, included almost a third of the world population. It is only after 1989, that capitalism is not only a dominant, but the sole, system of organizing production (Chapter 1).

2. The global historical role of communism. The existence of capitalism (economic way to organize society) throughout the world does not imply that the political systems must be organized in the same way everywhere. The origins of political systems are very different. In China and Vietnam, communism was the tool whereby indigenous capitalism was introduced (explained below). The difference in the “genesis” of capitalism, that is, in the way capitalism was “created” in various countries explains why there are at least two types of capitalism today. I am doubtful that there would ever be a single type of capitalism covering the entire globe.

To understand the point about the different origins, one needs to start from the question of the role of communism in global history and thus from the interpretation (histoire raisonée) of the 20^th century (Chapter 3; Appendix A).

There are two major narratives of the 20^th century: liberal and Marxist; they are both “Jerusalem”-like in the Russian philosopher Berdiaff’s terminology. They see the world evolving from less developed toward more developed stages  ending in either a terminus of liberal capitalist democracy or Communism (society of plenty).

Both narratives face significant problems in the interpretation of the 20^th century. Liberal narrative is unable to explain the outbreak of the First World War which, given the liberal arguments about the spread of capitalism, (peaceful) trade, and interdependence between countries and individuals that ostensibly abhor conflict should never have happened, and certainly not in the way it did—namely by involving in the most destructive war up to date all advanced capitalism countries. Second, liberal narrative treats both fascism and communism as essentially “mistakes” (cul de sacs) on the road to a chiliastic liberal democracy without providing much of reasoning as to why these two “mistakes” happened. Thus the liberal explanations for both the outbreak of the War and the two “cul de sacs” are often ad hoc, emphasizing the role of individual actors or idiosyncratic events.

Marxist interpretation of the 20^th century is much more convincing in both its explanation of World War I (imperialism as the highest stage of capitalism) and  fascism (an attempt by the weakened bourgeoise to thwart left-wing revolutions). But Marxist view is entirely powerless  to explain 1989, the fall of communist regimes, and hence unable to provide any explanation for the role of communism in global history. The fall of communism, in a strict Marxist view of the world, is an abomination, as inexplicable as if a feudal society having had experienced a bourgeois revolution of rights were suddenly to “regress” and to reimpose serfdom and the tripartite class division. Marxism has therefore given up trying to provide an explanation for the 20^th century history.

The reason for this failure lies in the fact that Marxism never made a meaningful distinction between standard Marxist schemes regarding the succession of socio-economic formations (what I call the Western Path of Development, WPD) and the evolution of poorer and colonized countries. Classical Marxism never asked seriously whether the WPD is applicable in their case. It believed that poorer and colonized countries will simply follow, with a time lag, the developments in the advanced countries, and that colonization and indeed imperialism will produce  the capitalist transformation of these societies. This was Marx’s explicit view on the role of English colonialism in Asia. But colonialism proved too weak for such a global task, and succeeded in introducing capitalism only in small entropot enclaves such as Hong Kong, Singapore and parts of South Africa.

Enabling colonized countries to effect both their social and national liberations  (note there was never a need for the latter in advanced countries) was the world-historical role of communism. It was only Communist or left-wing parties that could prosecute successfully both revolutions. The national revolution meant political independence. The social revolution meant abolishment of feudal growth-inhibiting institutions (power of usurious landlords, labor tied to land, gender discrimination, lack of access to education by the poor, religious turpitude etc.). Communism thus cleared the path for the development of indigenous capitalism. Functionally, in the colonized Third World societies, it played the same role that domestic bourgeoisies played in the West. For indigenous capitalism could be established only once feudal institutions were swept away.

The concise definition of communism is hence: communism is a social system that enabled backward and colonized societies to abolish feudalism, regain economic and political independence, and build indigenous capitalism.

3. The global dominion of capitalism was made possible thanks to (and in turn it exacerbates) certain human traits that, from an ethical point, are questionable. Much greater commercialization and  greater wealth have in many ways made us more polished in our manners (as per Montesquieu) but have done so using what were traditionally regarded as vices—desire for pleasure, power and profit (as per Mandeville). Vices are both fundamental for hyper-commercialized capitalism to be "born" and are supported by it. Philosophers accept them not because they are by themselves desirable, but because allowing their limited exercise allows the achievement of a greater social good: material affluence (Smith; Hume).

Yet the contrast between acceptable behavior in hyper-commercialized world and traditional concepts of justice, ethics, shame, honor, and loss of face, creates a chasm which is filled with hypocrisy; one cannot openly accept that one has sold for a sum of money his/her right to free speech or ability to disagree with one’s boss, and thus arises the need to cover up these facts with lies or misrepresentation of reality.

From the book (Chapter 5):

"The domination of capitalism as the best, or rather the only, way to organize production and distribution seems absolute. No challenger appears in sight. Capitalism gained this position thanks to its ability, through the appeal to self-interest and desire to own property, to organize people so that they managed, in a decentralized fashion, to create wealth and increase the standard of living of an average human being on the planet by many times—something that only a century ago was considered almost utopian.

But this economic success made more acute the discrepancy between the ability to live better and longer lives and the lack of a commensurate increase in morality, or even happiness. The greater material abundance did make people’s manners and behavior to each other better: since elementary needs, and much more than that, were satisfied, people no longer needed to engage in a Hobbesian struggle of all against all. Manners became more polished, people more considerate.

But this external polish was achieved at the cost of people being increasingly driven by self-interest  alone, even in many ordinary and personal affairs. The capitalist spirit, a testimony to the generalized success of capitalism, penetrated deeply into people’s individual lives. Since extending capitalism to family and intimate life was antithetical to centuries-old views about sacrifice, hospitality, friendship, family ties, and the like, it was not easy to openly accept that all such norms had become superseded by self-interest. This unease created a huge area where hypocrisy reigned. Thus, ultimately, the material success of capitalism came to be associated with a reign of half-truths in our private lives."

4. Capitalist system cannot be changed. The dominion of hyper-commercial capitalism was established thanks to our desire to permanently keep on improving our material conditions, to keep on getting richer, a desire which capitalism satisfies the best. This has led to the creation of a system of values that puts monetary success as its top. In many ways it is a desirable evolution because “believing” in money alone does away with other traditional and discriminatory hierarchical markers.

In order for capitalism to exist it needs to grow and to expand to ever new areas and new products. But capitalism exists not outside of us, as a external system. It is individuals, that is, us, who, in our daily lives, create capitalism and provide it with new fields of action—so much that we had transformed our homes into capital, and our free time into a resource. This extraordinary commodification of almost all, including what used to be very private, activities was made possible by our internalization of the system of values where money acquisition is placed on the pinnacle. If this were not the case, we would not have commodified practically all that can be (as of now) commodified.

Capitalism, in order to expand, needs greed. Greed has been entirely accepted by us. The economic system and the system of values are interdependent and mutually reinforcing. Our system of values enables hyper-commercialized capitalism to function  and expand. It then follows that no change in the economic system can be imagined without a change in the system of values that underpins it, which the system promotes, and with which we are, in our everyday activities, fully comfortable. But to produce such a change in values seems, at present, to be an impossible task. It has been tried before and ended in the most ignominious failure. We are thus locked in capitalism. And in our activities, day in, day out, we support and reinforce it.