The Capitalist Future

It is by now a cliché to say that the most important political event of the twentieth century has been the collapse of the Communist regimes and of the socialist idea on which they ultimately rested. True, there are still quite a few intellectuals who try desperately to distinguish one from the other, who insist that there is still some life left in the socialist idea, conceived of as a kind of immortal political soul that survives the corruption and decay of its worldly incarnations. But political ideas do not have any such Platonic or otherworldly status. They live and die in history. They are what they become. It makes no sense to say that such-and-such a political idea turned out badly because human beings mishandled it, or misinterpreted it, or because circumstances conspired against it. If those ideas cannot withstand human mishandling or unforeseen circumstance, they are more accurately described as political fantasies rather than realistic political ideas. And political fantasies can only impose themselves on reality by brute coercion. That has been the natural destiny of socialism: A political fantasy incarnated into a reign of terror, a historical nightmare from which humanity has now awakened.

But awakened to what? The implications of the collapse of the socialist idea are still far from obvious. Certainly the world has been awakened to the merits of a market economy as against a planned economy. But this is a very odd kind of awakening, best described as a re-awakening. After all, Adam Smith’s Wealth of Nations was published over two centuries ago; market economies have been the dominant form of economic organization in the United States and most of Western Europe for something like seven generations; and all during this time the world could plainly see the benefits that accrued to nations with market economies. Nevertheless, it was during this time, and in these very nations, that the socialist idea was born, flourished, and gave rise to the theories that produced socialist tyrannies which, in recent decades, threatened to envelop the globe.

How did this happen? What is there about a market economy that, despite the best efforts of our best economists, leads large numbers of people, including a lot of intelligent people, to believe that there is something radically wrong with it? What makes a market economy so vulnerable to erroneous, hostile beliefs?

It seems to me that there are three major weaknesses in a market economy. The first has to do with the nature of commercial activity as a self-interested activity. The second has to do with the occasional—relatively rare but so very traumatic and memorable—malfunctioning of the system. The third has to do with the growing tendency within modern democratic politics to frustrate the system’s working by imposing ever-heavier burdens upon it.

Those who have taught elementary economics to college students know how easy it is to teach this subject, how easy it is for students to learn this subject, and how incredibly hard it is for them to remember what they have learned. This is because the most fundamental principle of free market economics—that in a free market, self-interested transactions between consenting adults are mutually advantageous—is so difficult to hang on to when our own self-interest is involved. When Adam Smith enunciated this fundamental principle he established, for the first time in human history, the moral legitimacy of a market economy based on self-interested activity. He did so against a hostile, incredulous intellectual tradition, one that was best summed up back in the year 301 A.D. by the Roman Emperor Diocletian, who in the course of decreeing wage and price controls throughout the Roman Empire, declared: "Unregulated economic activity is an offense to the gods." Today, more than two centuries after Adam Smith, most of us do accept the legitimacy of self-interest in general, but are nevertheless instinctively suspicious of other people’s self-interest.

Let me give you an example, from my own experience, of just how tenacious this suspicion is. In the late 1960s, we were living in an apartment house on Riverside Drive in New York. It was inhabited by well-educated upper-middle-class types: professors, lawyers, businessmen and the like. The landlord decided to make the building a cooperative and offered to sell us our apartments on very attractive terms. So attractive that, were we so inclined, we could turn around and sell our apartments for more than double the price he was quoting. Nevertheless, the offer became very controversial among the tenants and there were heated meetings, all of which focused on the question: "How much money is the landlord going to make on this deal?" It took some vigorous persuasion, over a period of several months, to move my fellow tenants to do the sensible and profitable thing—profitable for themselves as well as for the landlord.

The inference is clear: A market economy depends on a large degree of economic sophistication among the citizenry, and this level of economic sophistication can only be achieved and sustained by permanent, ceaseless economic education of an elementary but fundamental kind. It is hard work, uphill work, because backsliding is equally ceaseless. Nevertheless, it can be done. One of the reasons the American public remains so much more sensible about economics than the public in other lands is that we have all been shaped by an economic education that results from having a Constitution based on sound economic principles, as well as having a judiciary which, until recent decades, insisted on respecting such principles. It is not unreasonable to hope that we shall once again have such a judiciary in the decades ahead.

But economic education can only go so far if economic realities seem to contradict it—as they have sometimes done. This brings me to the second weakness in a market economy: Its tendency to produce what in the nineteenth century was called "gluts" and which we call "depressions." In an urbanized society these are especially devastating, and in fact it was the emergence of what seemed to be a cruel, uncontrollable "business cycle" in the early decades of the nineteenth century that gave rise to the early socialist critiques of capitalism. To make matters worse, such "gluts" were not supposed to happen according to prevailing economic doctrine, so the explanations proffered by various socialist critics were all the more credible.

I know, from personal experience, exactly how those early socialists reacted to the first capitalist depressions. As an adolescent in New York City in the 1930s, I remember vividly the flash of insight that made me into a young socialist. I saw around me unemployed men eager to work but finding none. I saw well-equipped factories standing idle. I saw a vast wealth of natural resources unexploited. I saw a population in dire need of all those things that could be produced. And I said to myself: "Why in hell can’t someone put all this together? This situation is not only tragic, it is stupid." Under those circumstances, the notion of an economy planned by governmental authority seemed commonsensical, not ideological.

Now, we are very fortunate in that, over these past fifty years, we have had only relatively minor and blessedly short breakdowns in our market economy. We seem to be doing something right—but it would be nice to know what. For the sad truth is that we have no theory of what we call the business cycle, no theory worthy of the name. I myself will always retain a gnawing uncertainty about the future of our market economy until our economists can reassure me that at least they have got the theory of it right, so that if politics and politicians then proceed to mess things up I’ll know who, in good conscience, I can blame.

And mess it up they will. Which brings me to my third point, which is perhaps the most important of all: Socialism is dead, but versions of the collectivist impulse live. You don’t have to be a socialist to distrust or even destroy a market economy. Contemporary liberal politicians can manage that task very well.

John Adams once wrote that he and other members of his generation were compelled by circumstance to devote their lives to war and politics so that their descendants could devote their lives to the study of philosophy and the arts. In our modern democracy, a significant percentage of these descendants, having tasted the fruits of affluence and having enjoyed the benefits of a superior education, have nevertheless developed a passionate interest in politics—indeed, have come to believe they are more fit to govern than others less privileged. They develop a keen and irrepressible desire for political power, firm in the conviction that they are uniquely qualified to exercise this power in the "public interest." These activists are practitioners of what might be called "supply-side politics," in which entrepreneurship creates a market for their programs. Theirs is what an author recently called, quite brilliantly, The United States of Ambition.

The politics generated by this approach is what we call contemporary liberalism. Because the intrusion of government involves large numbers of people as accomplices—sometimes whole professions or institutions—it creates a substantial political base for itself. The consequence is that, in all Western democracies with a two-party system, one of those parties has only an expediential, as distinct from principled, commitment to a free market economy, much preferring in its heart of hearts an economy in which all business and corporations function, or try to function, as regulated public utilities.

For those of us who care about a free market economy and something that can properly be called a free society, this challenge of contemporary liberalism survives the death of socialism. The good news is that this is a challenge we have been confronting for the past half century and that we have gotten better and better at coping with it, more aggressive in criticizing the liberal agenda in intellectually coherent terms. To use a favorite term of the liberal media, we have been able to make the liberal agenda "controversial," whereas only conservative ideas used to be so designated.

That’s the good news. The very good news is that, though contemporary liberalism has constructed a network of interest groups and a media that buttress much of our welfare state, the American people have nevertheless shown an enduring resistance to it. The average American tends to be unmoved by propaganda to the effect that his life is a bundle of "unmet needs" that government must address. He believes that government can help him best by keeping spending under control and his taxes low. Nor is this focus on personal liberty a uniquely American phenomenon. In all of the Western democracies, the social-democratic parties—the European version and counterpart of contemporary American liberalism—find it difficult to get elected, and if elected they find it impossible, without severely compromising their ideology, to govern successfully. People in all the democracies, and in most other countries as well, have decided that the market economy is by far the most desirable of all possible alternatives.

It is not, then, the economics of capitalism that is our fundamental, unmanageable problem. That problem today is located in the culture of our society, which is in the process of outflanking our relatively successful economy. While the society is bourgeois, the culture is increasingly, and belligerently, not.

Bourgeois society is a society in which certain virtues are accepted as a matter of course by the majority of the people. These virtues—today we defensively call them "values"—include a willingness to work hard to improve one’s condition, a respect for law, an appreciation of the merits of deferred gratification, a deference toward traditional religions, a concern for family and community, and so on. It is a commitment to such beliefs that creates a middle class, which then sustains a market economy. Today the old-fashioned animus against a market economy is being sublimated into an aggressive animus against the bourgeois society that is organically associated with our market economy. If you de-legitimize this bourgeois society, the market economy—almost incidentally, as it were—is also de-legitimized. It is for this reason that radical feminism today is a far more potent enemy of capitalism than radical trade unionism.

In this confrontation, defenders of capitalism are at a great disadvantage. The intense focus on economics and economic growth, so natural to the heirs of Adam Smith, has left defenders of capitalism powerless against its cultural critics, as distinct from its economic critics. Adam Smith himself, though a creative genius in economic thought, was something of a philistine, believing that cultural attitudes and opinions, like religious attitudes and opinions, were matters of personal taste about which reasonable men would not and should not get particularly excited. For two centuries now, Western civilization has been haunted by this stupendous error of judgment, with the result that today, even as a market economy is, at least in principle, accepted as superior to any other, the bourgeois society on which the market economy is based is being challenged with unprecedented boldness and equally unprecedented success.

This is not a challenge that the defenders of a bourgeois society and its market economy are finding it easy to cope with. Bourgeois society is so vulnerable because it is primarily a society oriented toward satisfying the ambitions of ordinary men and women. These are modest ambitions—in the eyes of some, lowly ambitions. They are, in most cases, what earlier eras would have called "domestic" ambitions: bettering the economic conditions of one’s family, moving from a "rough" neighborhood to a "nice" neighborhood, and above all offering one’s children the possibility of moving still further ahead in economic and social status. It is precisely because bourgeois capitalism has, however irregularly, managed to satisfy these ambitions that it has engendered popular loyalty and made it so difficult for radical dissatisfaction to achieve a popular base.

But the world is not inhabited only by ordinary people. From the very beginnings, persons emerged who either were extraordinary or thought themselves to be so and found this new order not to their liking. To put it bluntly, they found it boring and vulgar, since it places so much emphasis on self-interest as the engine of economic growth and improvement of the common lot as its goal. These people—we call them intellectuals and artists, and some have indeed been entitled to that label—do not like the marketplace, and find the very notion of their own participation in the marketplace utterly repugnant. They do not conceive of themselves as producing commodities for sale or exchange, even if they welcome the profits from such a sale. In addition, whatever they may say about equality, they do not believe that they themselves are merely equal to other people. They believe that their talents and sensibilities make them superior. Some historians, especially in France, have pointed out the many ways in which, after the Revolution, the French intellectual class quite openly saw itself as the heir to the older aristocracy and clergy, though (alas!) without their status and privileges. This lends a pointedness to their critique of bourgeois society as a society with "no class!"

The culture generated by this class was from the beginning a kind of counterculture, "escapist" in its earlier forms, critical and hostile in its succeeding expressions. The kind of optimistic, rationalistic world-view found in the writings of Adam Smith, a world-view that tends to permeate a bourgeois society in-the-making—what we today call "modernization"—was too "thin," too prosaic for those with an active imagination.

It was in Paris, in the 1820s and 1830s, that this revolt of the imagination bloomed into an embryonic public counterculture. While those thinkers and groups who were later to be designated "utopian socialists" were constructing schemes for the total transformation of society and the human condition itself—a movement that reached its intellectual climax in Marxism—some hundreds of young people were settling in what was called the Bohemian section of Paris, where they proceeded to dissociate themselves from the society they inhabited by a series of dramatic gestures. Ostensibly committed to the life of the artist, though for the most it was more a life-style than a productive artistic life, they wore workmen’s clothes (the blue jeans of the day), were sexually promiscuous, took drugs (opium then being the drug of choice), committed suicide with alarming frequency, and in general disported themselves in such a way as to baffle and alarm their elders. It was out of this milieu that there emerged the vision of a cultural "avant garde" with a special mission. The term itself, of military origin, referred to the assault troops who led the attack. It was picked up and redefined by the Utopian socialists, as referring to themselves and their heroic ambitions. But it received its definitive version within the artistic and literary world, as meaning a radical cultural critique of bourgeois-capitalist values and the human beings deemed to have been misshapen and deformed by those values. In our own time, the very idea of an avant-garde has been coopted by bourgeois-capitalist society to signify merely the latest fashion, the latest trend, in the arts. This absorption of the avant-garde into the fashion market has been eminently successful in corrupting the artistic enterprise. Unfortunately, it has also been very successful in corrupting the co-opters, as the bourgeois world itself has become ever more "trendy."

In any case, from 1870 to 1950, we witnessed the rise of the "modern" in all of the arts, fueled by bourgeois money seeking status, not by buying and living in stately homes, but by buying and consuming cultural products. And "modern" art and "modern" literature almost by definition are hostile to bourgeois conventions, bourgeois morals, bourgeois virtues. Sometimes this hostility flows from a reactionary contempt for the modern world, sometimes from radical fantasies of a more perfect world. In either case, it rejects the rational, secular, technological, progressive society that defined the dominant mode of modern politics up until World War II.

It was out of these cultural passions that there evolved, in painting, such phases of modern art as Impressionism, Expressionism, Cubism, Futurism, Dadaism, Surrealism, and all those other "isms," swiftly succeeding one another. Each new "ism" invented novel ways of exploring the artist’s deepest sensibilities, and these sensibilities, however various, were alike in being incompatible with the everyday world of the average citizen. But it was not until after World War II that one has the sense of our society entering a new era. For it was in this period, which we are still living through, that the passions of the world of "high" culture began to pervade the universe of popular entertainment—especially among the young—now solemnly designated as "popular culture."

A sign of the time of troubles we were headed for was evident in the early 1950s. While the parents were watching Milton Berle on their new television sets, their children were listening to Elvis Presley on their old radios. For these adolescents and teenagers, frank sexuality—and what was really new, frank female sexuality—shoved aside the older romantic-erotic appeal of, say, a Frank Sinatra. Rock concerts were soon born and bourgeois parents were put in the position of encouraging modesty and chastity among their young daughters and then sending them off to Dionysiac festivals.

And then came the real breakthrough, with the Beatles. I recall that when this group made their first visit to America, the London Observer asked me to interview their manager, the late Brian Epstein, and to forecast whether the American youthful public would be as enthusiastic about the Beatles as the British had been. I did the interview, shook the hands of those pleasant young Liverpudlians, and published my forecast, to the effect that the Beatles really wouldn’t have much appeal over here. Not one of my better forecasts. . . .

The significance of the Beatles was two-fold. For the first time, young people were now producing their own music—actually composing the music and writing the lyrics, as well as consuming it. Secondly, the market for such popular music—a market serviced by the exploding record industry—was now taken over by the affluent young. Classical recordings survived, of course, but only as a sideshow. The record industry was now an adjunct of a blossoming youth culture, and it was the growing affluence of our society—and of our young in particular—that made this possible. Ten years later, this same phenomenon was experienced by the movie industry, as the baby boomers took over, consigning their elders to television. Today, it is the affluent young—at least young in their ethos, if not in their years—who are reshaping television. Those baby boomers are now thirty-something, or even forty-something. They visit dentists more frequently than discotheques. And—O poetic justice!—they are now trying to raise their children. But we are learning that youthful fantasies can often outlive youth itself. And Hollywood and television are under the dominion of fantasy.

We have, then, been living through a cultural revolution which at one point threatened to become a political revolution—that flash point was experienced during the student revolution of the 1960s—one of those failed revolutions that was nevertheless enormously influential. In the United States it pretty much forced us to withdraw from Vietnam. It also led quickly and decisively to the capture of the Democratic party by its left wing in 1972, thereby importing a kind of permanent polarization into American politics. And in the cultural world its energies were channeled into what is now called post-modernism, whose basic theme was expressed in Paris, during the student rebellion of the 1960s, by one of the graffiti painted on the walls of the Sorbonne: "All Power to the Imagination." This academic irrationalism is the dominant intellectual mode, not only in the arts today, but in the study of the humanities in our institutions of higher learning.

From a dissenting culture, to a counterculture, we have finally arrived at a nihilistic anti-culture. This anti-culture permits the post-modernists to abolish the distinction between what used to be called "highbrow" art—it also used to be called "culture" without equivocation—and "popular" culture. The modern movement in the arts, from 1850 to 1950, was distinctly "highbrow." It was "difficult" and it took decades for even our educated classes to feel comfortable with its works, in literature and art. A whole new generation had to be trained to understand and appreciate T. S. Eliot, Ezra Pound, and James Joyce in literature, Picasso, Miró, and Klee in painting. Today, in contrast, at some of our best universities, you can take a course, for credit, in the meaning of a popular comic strip which explores the ways in which American society and Western civilization in general is infested with race, sex, and class antagonism. Indeed, many students in literature, the arts, and the humanities today, in pursuit of self-expression, reveal an extraordinary ignorance of, and lack of interest in, their avant-garde, modernist forebears. So anti-traditional are they that they happily dispose themselves of their own formative, anti-bourgeois traditions. This explains why the mission of an institution such as the National Endowment for the Arts has become a mission impossible. The so-called "arts" it was founded to support have become enmeshed with "arts" that were unimaginable a few decades ago—indeed, that would never have been designated as "arts."

It is important to understand just how radical this new phase of modern thought is. Whereas modernism had calmly accepted Nietzsche’s dictum that "God is dead," it generally interpreted this to mean simply that institutional religion was moribund. But only a handful of modernists jumped to the Nietzschean conclusion that "if God is dead, everything is now permitted": That was implicit in modernism, and more than implicit for those who believed themselves to be the avant-garde of modernism. But only with post-modernism has it become belligerently explicit, and a dominant motif in the culture at large.

For centuries, as the focus on religion as a central human experience continued to dim, the intellectual world remained remarkably complacent. The satisfying rituals of religion, it was thought, could be replaced by an esthetic experience of the arts. In truth, the aura of the sacred has largely been transferred from religion to the arts, so that the burning or even censorship of books is regarded as a greater sacrilege than the vandalization of churches or synagogues. As for the moral code traditionally provided by religion, it was assumed that, since modern individuals were rational moral agents, rational philosophy could be relied on to come up with a code that, if not identical with religion’s, was sufficiently congruent with it so that the practical moral effect was the same. From Immanuel Kant to John Dewey, that has been the basic assumption of secular rationalism and gives rise to the modern quasi-religion of secular humanism. Such a philosophical enterprise, it was believed, would converge on what John Dewey called "a common faith"—a faith in the ability of reason to solve all our human problems, including our human need for moral guidance.

But this is a faith that has failed. Secular rationalism has been unable to produce a compelling, self-justifying moral code. Philosophical analysis can analyze moral codes in interesting ways, but it cannot create them. And with this failure, the whole enterprise of secular humanism—the idea that man can define his humanity and shape the human future by reason and will alone—begins to lose its legitimacy. Over the past thirty years, all the major philosophical as well as cultural trends began to repudiate secular rationalism and secular humanism in favor of an intellectual and moral relativism and/or nihilism.

Bourgeois capitalism began with a kind of benign toleration of religion but a firm commitment to Judaeo-Christian morality. In this respect, Adam Smith and our Founding Fathers were of one mind, one sensibility. Their fundamental error, doubtless attributable to their rationalism, was a complacency about the relation of this morality to its religious roots. In this respect, they compare unfavorably with the Church Fathers of Christianity who, in the first three centuries A.D., had to confront powerful movements to keep the Old Testament out of the Christian Bible. After all, spokesmen for these movements argued, we have a new Evangel that transcends the old, so what do we need the old for? The Church Fathers, however, understood that the rather otherwordly New Testament needed to be complemented by the more this-worldly Old Testament if a viable Christian "way of life " was to be propagated. Nor did they make the mistake of scissoring out pieces of the Old Testament—the Ten Commandments, for instance—for incorporation in the New Bible. They understood that in order to establish the absolute legitimacy of those elements in the Old Testament that were lacking in the New, they had to take it all. The Ten Commandments are divine commandments only if the Old Testament itself is of divine status. Without the victory of the Church Fathers in this bitter and prolonged controversy, the Catholic Church could never have created a new and enduring orthodoxy.

The bourgeois capitalist revolution of the 18th century was successful precisely because it did incorporate the older Judaeo-Christian moral tradition into its basically secular, rationalist outlook. But its error was to scissor out this moral tradition from the religious context that nourished it. And so, in the nineteenth century, in all Western nations, we had what was called a "crisis of faith" among writers and philosophers. It was not yet a crisis in moral beliefs. George Eliot wrote that God was "inconceivable," immortality "unbelievable," but Duty nonetheless "peremptory." A few years later, Nietzsche came along to proclaim that Duty was an illusion fostered by the Judaeo-Christian "slave morality." Nietzsche was not taken seriously until the period after World War II—a war that Hitler lost but that German philosophy won.

Today, in our academic and intellectual circles, Nietzsche and his disciple, the Nazi sympathizer, Martin Heidegger, are almost unanimously regarded as the two philosophical giants of the modern era. It is important to understand that their teachings are subversive, not only of bourgeois society and the Judaeo-Christian tradition, but also of secular humanism, secular rationalism, bourgeois morality—and, in the end, of Western Civilization itself.

This cultural nihilism will have, in the short term, only a limited political effect—short of a massive, enduring economic crisis. The reason it will not happen—this is still the good news—is that a bourgeois, property-owning democracy tends to breed its own antibodies. These antibodies immunize it, in large degree, against the lunacies of its intellectuals and artists. The common people in such a democracy are not uncommonly wise, but their experience tends to make them uncommonly sensible. They learn their economics by taking out a mortgage, they learn their politics by watching the local school board in action, and they learn the impossibility of "social engineering" by trying to raise their children to be decent human beings. These people are the bedrock of bourgeois capitalism, and it is on this rock that our modern democracies have been built.

But a society needs more than sensible men and women if it is to prosper. It needs the energies of the creative imagination as expressed in religion and the arts. It is crucial to the lives of all our citizens, as of all human beings at all times, that they encounter a world that possesses a transcendent meaning, in which the human experience makes sense. Nothing, absolutely nothing, is more de-humanizing, more certain to generate a crisis, than experiencing one’s life as a meaningless event in a meaningless world.

In a sense, it is all Adam Smith’s fault. That amiable, decent genius simply could not imagine a world where traditional moral certainties could be effectively challenged and repudiated. Bourgeois society is his legacy, for good and ill. For good, in that it has produced, through the market economy, a world prosperous beyond all previous imaginings—including socialist imaginings. For ill, in that this world, with every passing decade, has become ever more spiritually impoverished. That war on poverty is the great unfinished task before us. The collapse of socialism, along with the vindication of a market economy, offers us a wonderful opportunity to think seriously about such an enterprise. It is only such an enterprise that can ensure a capitalist future.

Communism is dead? This would be nice, if true.

Sure, communism was tried about 20 times, and failed just as many times, killing hundreds of millions and making the lives of even more people miserable.

But communism does work very well in another way. It’s a wonderful way to convince idiots to let you establish a dictatorship over them. So you get all the power and privileges of a dictator, and your pals do very well do as members of the Nomenklatura, and tough luck to the people who put you there.

So what if it all falls apart 70 years down the line, or even 20 years down the line? Meantime, you’ve had a very nice life, living high on the backs of the Proletariat, and killing off your enemies. Let someone else worry about what happens later.

Kristol also fails to consider, what happens if you get a leader like Obama who WANTS to destroy the country? It’s a twofer. He gets to live high off the hog, make his country as miserable as he thinks it deserves, and be a hero to the fellow traveling intellectuals and media while he does it.

Lots of great parties, lots of photo ops, lots of world travel. What more could a country-destroyer ask for? And communism explains exactly how to do it.

That amiable, decent genius simply could not imagine a world where traditional moral certainties could be effectively challenged and repudiated.

This is actually the crux of the problem. The intellectual avant garde always imagined the rules that they themselves were too intellectually sophisticated to follow would nevertheless always be followed by the bourgeoisie. However, their nihilism "trickled down" to chattering classes who lacked the sheer wealth it takes to indulge in that sort of behavior without leaving one's partner bereft of sustenance. In other words, it is much easier for the rich to walk out on one another. The children are taken care of. When commoners imitate the sophisticate, however, orphans without means are created and left in baskets by the road or, today, aborted.

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