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. 

Thomas Homer-Dixon Update

Thomas Homer-Dixon sent out a recent email on updated activities, and a visit to his site led me to read this article about complexity. Complexity is one of the most compelling and productive theories that has recently arisen on my intellectual horizon. It applies to natural sciences and social sciences, which, I contend, shade into one another. Homer-Dixon also provides a succinct description of complexity theory and of "panarchy," taken from the work of his fellow Canadian, C.S. "Buzz" Holling.

This article deals with climate change, Homer-Dixon's current number one concern. Unlike the enigmatic  (late)  Seth Roberts (a UC Berkley/Quinghua) professor who takes appropriate skepticism to an extreme of denial, Homer-Dixon looks beyond theoretical skepticism to realities, such as the Arctic. Homer-Dixon argues we'd better sit up and pay attention. I really admire his work. Deep theoretical understanding combined with first-hand observations and engagement make his work the most compelling and important that I've read on the burning (literally) issue of climate change.

Edited & updated 12.03.20. sng

Ferguson: Historian as Commentator

This long interview of Ferguson about his cover story in Newsweek about the Obama Administration's actions in Egypt raises a really interesting background question: does a deep knowledge of history give one a deeper insight into current events? Does Ferguson, who certainly is well versed in the history of the last couple of centuries, have greater insight into current events? Some random thoughts:
1. Ferguson loves controversy. I think this love of controversy may cloud his judgment.
2. As I mentioned in a comment to my last post (yes, I'm down to commenting on my own posts!), the author of Virtual History should know better than to criticize those who fail to forecast events.
3. I think that he is right in pushing the idea of scenarios. That is, consideration of multiple futures, not knowing which will prevail. Acknowledge the limitation of knowledge.
4. Is the Muslim Brotherhood so strong and so reactionary? I don't know. Does he, really?
5. He mocks Obama for calling Islam and religion of peace, and certainly a lot of evidence that it's not. But would he mock anyone if they said Christianity is a religion of peace? Certainly a lot of evidence that it's not. Religion, for a great many people, is considered no more seriously than their choice of language. They're born with it, enough said. This allows those who want to, to manipulate people rather easily toward violence. Violence and religion have an awfully long history. (See Rene Girard's works.)
6. I have some sympathy for Ferguson's argument that we need some greater sense of grand strategy.
7. One more interview on Parker-Spitzer: http://parkerspitzer.blogs.cnn.com/2011/02/14/niall-ferguson-obamas-handling-of-the-egyptian-crisis-was-a-foreign-policy-debacle/.
8. Perhaps U.S. policy was wise to play it both ways? Ferguson is quite critical of this, but I'm not convinced that it will necessarily prove so bad. You play both sides of the street, hedge your bets. If you don't screw the winner, the winner can forget easily enough if you offer the right attitude following. On the other hand: Iran 1979.

John Lewis Gaddis: The Landscape of History

I today finished The Landscape of History: How Historians Map the Past (2003, 183 p.) by John Lewis Gaddis, professor of history at Yale. Gaddis wrote this in the tradition, and very much considering, the precedents of E. H. Carr's What is History?
and Marc Bloch's The Historian's Craft. Gaddis certainly does very well by himself while standing in the shadow of these and other illustrious predecessors. Gaddis updates our understanding of history by using complexity theory to help us appreciate how causes merge and meld into the unfolding of reality. Causes are like tributaries leading to the present, where they pause but for an instant, and then recede into the distance, from which point we try to map their course. Gaddis likens history to mapmaking or painting, which must of necessity attempt to make sense out of a present by abstracting those features that grab our attention and give meaning to us. Gaddis spends a good deal of time contrasting the aims of historians from those of social scientists. Social scientists, he says, hope to isolate variables with the ultimate intention of forecasting the future (something that I expect more and more social scientists have become more wary of attempting). Thus, whereas historians want to consider all of the causes worth noting that lead to an event or situation, social scientists want to isolate and abstract with the hope of obtaining structural knowledge, if not forecasting ability. Another interesting facet of Lewis's work is his consideration of history in comparison with the so-called "hard sciences". Lewis, who quotes and cites Stephen Gould almost as much as any historian, notes that the sciences have become more and more historical in their outlook. Some, like evolutionary biology, must perforce due so; however, this might also prove relevant to physics and chemistry, which do deal with change over time, although it's often on such a scale that it doesn't affect outcomes or actions. Historians, Gaddis argues, can't run lab tests to gauge the accuracy of their theories, but they can provide plausible explanations subject to peer review and criticism. He argues that the lab for historians lies in their minds and imaginations, much like geologists and paleontologists. Of course, both these scientists and historians diligently hunt and weigh the evidence of the past that they can identify, whether fossils or archive documents, but neither can, strictly speaking, re-run the past in order to test the accuracy of their understanding. Thus, replicability is replaced by virtual replicability as the standard of reference. Gaddis writes: "Imagination in history then, as in science, must be tethered to and disciplined by sources: that's what distinguishes it from the arts and all other methods of representing reality." (43).

I hope that the above offers some sense of Gaddis's take on these subjects, although this book is much richer than I can give it credit for in this brief report. In closing, I find that Gaddis seems to track with my thinking (greatly influenced by John Lukacs) that history is the master science in some sense. As Lukacs argues, all knowledge comes from the past. How it got here, like the path of evolution, determines what arrived. Like biological evolution, this path of travel may be so slow that we ignore that it represents change over time, nevertheless, this is how it all happens. Understanding and appreciating the interdependence of variables and complexity (and therefore uncertainty) of our world is a huge challenge; yet, understanding history through this lens will prove very fruitful, and it will continue the quest interminably into the future.

P.S. How does the "interdependency of variables" (the title of one of Gaddis's chapters) fit in with the Buddhist concept of co-origination and the like?