A Toast to Capitalism--And Now Junk It

David Brooks: defender of capitalism & yet conservative

I want to take up David Brooks’s challenge set forth in his column “Two Cheers for Capitalism”. But let me first state my opening position:

Capitalism is the best form of economic system—ever. And it needs to be replaced. Starting now.

Brooks argues in defense of capitalism that its better than socialism. He doesn’t use the word “socialism”, but it’s implied when he writes “government planners are not smart enough to plan complex systems”. True but trivial. Centralized planning as an alternative to markets lost long ago. No serious commentator wants to restore central planning.

Brooks ignores the extent that business and government are  intertwined in early 21st century consumer capitalism. We delude ourselves in believing that mainstream economics, which provides the intellectual infrastructure for capitalism, could ever escape political economics. An economy is always nested within political and cultural systems. The most important intertwining of politics and government in the U.S. today has to do with regulatory capture, not regulatory restraint. Big government today is controlled by Big Money. Big Money includes individuals (yes, think Koch) and aggregates (trade organizations, corporations, etc.). Adam Smith, the intellectual godfather of capitalism, pegged it when he observed that when two or more merchants meet, the conversation would inevitably turn to restraint of trade. We could add "politicians" to any merchant or private interest, and we'd get the same effect. This happens--often--and we ordinary folks suffer for it. (For an enlightening—and frightening—discussion of regulatory capture and flaws in economic thinking, read Dr. Robert H. Lustig’s Fat Chance: Beating the Odds Against Suger, Processed Food, Obesity and Disease (2012) (review forthcoming)).

Brooks is correct that capitalism has lifted more people out of poverty than any time in history. As one currently living in China, I see proof everywhere of the power of consumer, market capitalism (for good and ill). But will it last?

Here I come to my greatest critique of contemporary capitalism: can this ride last? I do not (now) fear the backlash of resentment that growing inequality can spawn. Only a little of this has occurred yet. Humans are not the biggest challenge to the system, although this could change quickly. Rather, Mother Nature is the ultimate judge of capitalism.

I know that you’re thinking, “Yea, yea, and you forget the Ehrlich-Simon bet and how Ehrlich lost it—big time.” No, I don’t. Ehrlich lost within the time frame set for the debate, but Mother Nature doesn't recognize such puny time frames.

Every economic system extracts energy from the environment and returns entropic waste. Contemporary capitalism and its civilization do this more effectively than any other civilization. According to Dr. Joseph Trainer, Dr. Thomas Homer-Dixon, Dr. Jared Diamond, and Dr. William (Patrick) Ophuls, among others, no civilization has escaped the limits of the environment and entropy. It’s a social and environmental-economic challenge that capitalism has met better than any other system by using industrialization, rationalization, and technology. But no system—not even contemporary capitalism—can negate these limits. We’ve known about these limits in the form of global warming from dumping waste into our environment for over 20 years, but we've attempted to ignore it. Even the Pope, head of an organization not known for its embrace of cutting-edge science, has recognized the problem. (Pope Francis and his predecessors have long-recognized the corrosive social costs of capitalism.)

John Stuart Mill wrote about the need for a steady-state economy in the mid-19th century, well ahead of his time. We need to address these issues now. Endless acquisition and endless growth don’t square with the limits placed upon us by the natural world—the world of our atmosphere, our oceans, our lands, and our societies.

The hope I have is not for a revolution (or  rather only one seen only in the rearview mirror in slow motion). Nor am I a Luddite. Rather, we need to improve our lives by using what we have, consolidating our gains, and re-thinking some of our fundamental beliefs. This will be an immense challenge, but it’s a project that conservatives, like David Brooks (to the extent he’s really a conservative), should embrace. Not the factory, but the garden should serve as our guiding metaphor: we prune and graft and cultivate with the seasons, we don’t lay waste and move on. This is how capitalism must become something new. If grafted and cultivated along with democracy—real democracy—it could become something of lasting value. 

Nicolo Machiavelli, The Prince, translated by Tim Parks

I first encountered The Prince in the spring of 1972, a time when we might say an archetypical Machiavellian figure occupied the White House. I read it as an assignment in my introduction to political theory course. I don't remember a great deal about the book (although I do remember the "C" I took in the course!) Anyway, the topic of political theory took with me anyway, and I've returned to Machiavelli again by assignment and of my own volition. Why? He is (perhaps along with Thucydides) the supreme political realist. As James Burnham made clear in The Machiavellians, a keen understanding of how politics really works, as opposed to how we would like it to work, provides us with a knowledge that we can ignore only at our peril. Not that we shouldn't think or work for a better political system, but that we had better understand how it really is working.

For a paper for a course in Renaissance history, I wrote about the mirror of princes literature that preceded Machiavelli. These were medieval tracts that advised rulers to act according to the Church and Aristotelian standards. In other words, to act like goody-two-shoes. Then comes Machiavelli like a Tammany Hall ward captain at Girls State, pulling the would-be leader aside and telling her, "Hey, kid, listen up. If you wanna get ahead here, here's whatcha' gotta' do". The intuitive ruler always knew these things, or at least some of them, but never before had anyone of any notoriety ever stated the real practices so blatantly. (And, by the way, while Machiavelli didn't offer his advice to young ladies, he did write The Prince to try to woo the Medici family into retaining his services. It didn't work.)
  
I'd seen that #JLF speaker Tim Parks had recently completed a translation of The Prince and that Jared Diamond (who looks quite mellow) had given The Prince a shout out in an interview asking what he'd recommend to the president to read, so I took up Parks's translation. Parks, a Brit who lives and writes in Italy, and whose book Teach Us to Sit Still I greatly enjoyed, has performed a great service and provided us with a very useful translation. I don't have any expertise on translations, but Parks explains his intent in the introduction--to give a sense of the "handbook" style that Machiavelli wanted to use to convey his practical wisdom--and it works very well. For instance, Machiavelli's famous description of fortune (Fortuna) as a woman was not written--nay, was intentionally not written--to be politically correct. Parks recognizes this and translates the passage with the machismo that Machiavelli no doubt intended to convey. This everyday, contemporary English gives this translation a feel that matches its practical usefulness for today.

I was going to go on to discuss Machiavelli, who still intrigues and puzzles me. However, such an undertaking isn't easy, as he has perplexed and challenged thinkers since he published The Prince. But good luck rode to the rescue, and I happened upon this piece by Isaiah Berlin, the British political philosopher and historian of ideas, in which he thoroughly reviews the literature on Machiavelli and arrives at his own assessment. I can't do better and won't try, except to say that the "evil Machiavel" is worth the read to challenge and inform you. Here's a teaser snippet from Berlin's article that I'll close with: 

But the question that his writings have dramatized, if not for himself, then for others in the centuries that followed, is this: what reason have we for supposing that justice and mercy, humility and virtù, happiness and knowledge, glory and liberty, magnificence and sanctity will always coincide, or indeed be compatible at all? Poetic justice is, after all, so called not because it does, but because it does not, as a rule, occur in the prose of ordinary life, where, ex hypothesi, a very different kind of justice operates.

Stephen Walt on Jared Diamond & Decline

In his most recent FP post, "What I Learned from Jared Diamond", Stephen Walt considers the elements of decline that Diamond discusses in his book Collapse: How Societies Choose to Succeed or Fail. Walt gives a succinct account of the factors that Diamond catalogues in his book, and Walt considers current U.S. problems in light of those factors, such as groupthink, tragedy of the commons, failure to anticipate, failure to detect (e.g., climate change amidst fluctuations in the weather), etc. Walt's points are well taken. In summary, both as individuals and as societies, we have to have our crap-detectors on full blast 24-7. (Thanks, Neil Postman.)

A Farewell to Alms and Emotional Awareness

I began A Farewell to Alms: A Brief Economic History of the World by Gregory Clark (2007) today. Clark argues against Jared Diamond of Guns, Germs, and Steel fame, as well as those like Pomerantz, who argue that colonies and coal provide the explanation of the Great Divergence (i.e., why Britain and then Western Europe zoomed to a dominant position via the Industrial Revolution). Our visit to Cameroon spurred this interest, as the gap between the Cameroonian standard of living and ours is so great. Why? In reading Clark’s introduction, he sets forth his basic tenants. First, until the 1800’s and the Industrial Revolution, most parts of the world remained nearly equally poor. In fact, humankind may have been worse off on the eve of the Industrial Revolution than it was as hunter-gathers over 8,000 years ago. Until the Industrial Revolution, humans lived in a Malthusian world. However, in Britain, because of culture, the Industrial Revolution took off. Clark argues that coal and colonies did not distinguish Europe from China and Japan. Indeed, Clark suggests that certain attributes, such as delayed gratification and hard work spread into British society before (or more effectively than others), perhaps even through genetic changes. Finally, in his introduction, Clark reminds us of the weird but often-cited fact that we are no happier, and perhaps less happy, than our much poorer ancestors. Indeed, in our recent trip to Cameroon, we found the villagers where we stayed quite warm and welcoming,  and on the whole happy. Clark suggests that envy is the problem; perhaps, he says, the envious will inherit the earth.

I’ve been listening to the Dalai Lama (voice-over by Richard Gere) and Paul Ekman in the audiobook of Emotional Awareness (2008). The conversation is fascinating. Ekman the Western scientist has obviously been very impressed with his introduction to Buddhist thinking in the areas of consciousness, awareness, and emotional control. Today he and the DL discussed compassion and how we can cultivate it. Do we need to have suffered? How can we foster universal compassion? Ekman and the DL seem to agree on a lot, and it shows for me the deed empirical wisdom of this aspect of the Buddhist tradition, the Buddhist psychology (and Buddha was perhaps the greatest psychologist-therapist).