Let’s All Blame Capitalism

Well, actually let’s not.

Just as much as I decry single minded adherence to what I have called the binary vision of our world, as in markets are great, the state is bad, I also object to laying all the blame for our multitude of ills at the feet of capitalism. Simple answers to complicated questions always raise my suspicions. I suspect that the truth is somewhat more nuanced.

Take poverty for example. Is it really true that capitalism is the root cause of poverty? No. It is not.

What do we mean by poverty anyway? Relative poverty, as in some distribution of incomes and wealth? Or absolute poverty, as in an inability to provide sufficient sustenance to support life?

Theses are quite different things.

The libertarians are naturally inclined to look at what we can call the long view of poverty. Many more people live above the basic support level than ever before. To argue the contrary is to delve into special pleading and to redefine the issue in a prejudicial way. There is no doubt that we, in our part of the world, live a far more prosperous life than any of our ancestors. The great surge of invention unleashed after the Enlightenment and then applied after the Industrial Revolution has driven the average person’s lifestyle to gaudy levels undreamed about even a mere two hundred or so years ago. That is an extraordinary achievement.

And achievement of whom?

The people who benefitted most from driving the change. Most of whom qualify to be called capitalists.

Left wingers who deny this are always left stumbling about and creating oddball utopian visions in order to debunk the progress that basic free market economies have produced. They introduce things like our alienation from our previous self sufficiency. As if that was a nirvana from which our ancestors would not have wanted to escape. Endless hours tilling land with primitive technology. A constant threat of starvation because of dependence on weather. Awful living conditions and disease prone lives that were more squalor than haven.

Sign me up for alienation.

I doubt my ancestors – the servant class in an aristocratic backwater in England – would mind the oppression of modernity at all. In fact I know my grandmother embraced it. So do I. Cleaning stables so some aristocrat can go play polo is not my cup of tea. But that’s what her husband did. She looked after the fireplaces so the duke could keep warm.

No. My family was liberated by the Industrial Revolution. Capitalism, if that’s what we describe the basic economic  model of the past two hundred years of so, has done me proud.

But.

The leftists are right if they change the subject to today and quit the old nonsense. We have a problem with the distribution of the modern cornucopia.

Another but …

This modern problem is not a failure of capitalism. It is a failure of democracy.

I can hear you groaning.

The problem with the binary worldview held by both libertarians and leftists [Marxists in particular] is that it ignores the emergence in the past hundred years of something called democracy. Allow me to introduce you to it!

The political domain becomes a lot more complicated when we introduce the notion of self-governance. Even if the system is not ideal – as I am no doubt many of you are dying to tell me – it is far more progressive than one party, autocratic, military, or any other type of rule.

Why is it more complicated?

Because the people now have a foot in two camps. They work and trade in the economic camp. They vote and self-govern in the political camp. So even if economists don’t like the notion of political economy the real world now does.

So the distribution of income is as much political as it is an economic problem. People can vote to get a bigger share of the national pie. Which is what happened with social programs the world over. And which is also why libertarians with their binary view dislike those programs.

I have been flippant. The deeper issue is this:

At the onset of the great leap forward back in the 1700’s the concepts and ideas that support both the modern right and the modern left were conflated. They were very fuzzy. The great thinkers of that era were still struggling to sort them all out. Balibar calls it “equaliberty” for exactly this reason.

So the founding fathers of the US could prattle on about how egalitarian their new nation was even while ignoring slavery, the plight of women, and the lack of voting rights for the majority. Liberty, to them, was a very sparsely defined idea. It extended to  very few. In fact, apart from their lack of hereditary status, the founding fathers were to a whole lot different from the more enlightened [a relative term if ever there is one] European aristocrats they so despised.

During the 1800’s, as industrialization disrupted traditional lifestyles, late thinkers started to rise those muddled ideas apart. They saw liberty as something different from equality. Indeed they created a great divide that we still struggle with.

Liberty and equality are in conflict. And their modern manifestations are thus the source of argument. Liberty, and its economic version engine that libertarians interpret as the ‘free marketplace’, undergirds such things as private property and ultimately capitalism. It is built around incentive and wealth. It is divisive simply because different people have different abilities to respond to those incentives. And if rewards flow freely – as they do in a society based on liberty – then the distribution of incomes and wealth will inevitably be unequal.

The negative social consequences of capitalism – what the leftists identify as its oppressive and distorting effects – stirred up a reaction. But that reaction did not replace capitalism, it merely constrained it, by elevating people into the governance of the societies being distorted. The Marxist road to nirvana was blocked by an alternative logic of history. People wanted to be part of the great leap forward, but not stop it. Mitigation rather than elimination and replacement became the driver of modern politics. Hence the emergence of democracy as we know it subsequent to industrialization.

So as the original and muddled ideas were crystalized they separated into two conflicting streams that need to be balanced if we are to benefit from them both.

And, unfortunately, we cannot achieve that balance as long as the two sides, our libertarian and Marxist friends, insist on re-hashing arguments from the old days.

For instance is we all blame capitalism for the ills of poverty we miss its role in getting us to where we are. And if we simply laud its ability to generate wealth and prosperity, we miss our need to mitigate its downsides.

I realize its fun to be ideologically committed, and that a binary worldview make life simpler, but we need to get beyond that divide. The problem with modern democracy is that it isn’t a pure system. It isn’t socialist and it isn’t libertarian. It’s the ugly middle way no one wants to defend. But defend it we must if we want to preserve the prosperity capitalism has bestowed upon us, and yet enforce restraints on liberty to ensure a more equal distribution of that prosperity – and to prevent further degradation of our environment.

So is capitalism to blame for all our ills?

Yes. And. No.