Friday, March 18, 2011

Capitalism Defined, Part IV: You Say Ascetic, I Say Sociopath

Marx never doubted that capitalism was a social system, but he also argued that the material imperatives of capitalist societies were what really shaped their cultures and social institutions. Governments, laws, customs, and beliefs were all superstructures that the bourgeoisie had built atop the foundation of a capitalist economy. Twenty years after Marx's death, however, another German social scientist, Max Weber, reversed this equation. Defining capitalists as seekers after "forever renewed profit by means of continuous, rational, capitalistic enterprise" (p. 18), and agreeing with Marx that capitalism could not exist without free labor (because one could not fully monetize and rationalize unfree labor), Weber diverged from his predecessor in asking whence these driven capitalists and their willing workers came, and finding the answer not in their material circumstances but their cultural values. Capitalism, Weber argued, wasn't the product of commerce, mechanization, or corporate organization. It originated instead in a "social ethic" (54), the belief that one's earthly labor constituted a spiritual calling and that one had a religious duty to perform it well.

The capitalist, in Weber's view (expressed in his Protestant Ethic and the Spirit of Capitalism [Prentice-Hall, 1904/1977), revolutionized the world economy not with his techniques but with this ethic, which drove him to hard labor, "rigor[ous]...supervision" of his employees, and unrelenting maximization of output and profits (67-68). Weber tracked this ethic to the "Calvinistic diaspora" (43), particularly early modern Holland, England, and New England, the latter of which produced one of the world's first bourgeois ethicists, Benjamin Franklin, before it produced a capitalist economy. Calvinists, Weber observed, believed that mankind was totally depraved and helpless in God's eyes, and this belief endowed them with "a feeling of unprecedented inner loneliness" (104), unknown to Catholics and Lutherans. Unable to assuage this loneliness and anxiety through prayer or good works - neither of which Calvinists believed could help them achieve divine grace - Calvinists threw themselves instead into "intense worldly activity" (112). By the 17th century, Calvinist/Puritan theologians like Richard Baxter were arguing that constant labor was the Christian's primary duty, and that wasting time and losing opportunities to make profits were actually sinful, the former because it made one lose opportunities to advance God's work, the latter because it wasted the resources God wished to put into one's stewardship (157-58, 162-63).

The Calvinist's quest for self-perfection through work and material acquisition swiftly turned into a quest for continual and systematic increases in economic output, and the economies of nations with a large Calvinist population soon turned into productivity engines, emphasizing continual growth in profits and output at the expense of wages, consumption, or any of the ordinary pleasures of living. Indeed, since the Calvinist/Puritan's greatest earthly duty was to his work and "his possessions, to which he subordinate[d] himself as an obedient steward" (170), his work and wealth became more important, and one might say more holy, than any of the people involved in producing that wealth. The Protestant capitalist wasn't afraid of amassing possessions and growing rich; so long as he re-invested rather than consumed his wealth it would not block his entry into heaven. Nor was he opposed to inequalities of wealth, since these were ordained by God. Nor did he feel any obligation to pay his employees a decent wage, since if they were fellow Calvinists they would feel their work was its own reward, and if they weren't then they were sinners who would only work if goaded to it by the threat of starvation.

To this author, and I suspect to some of his readers, these seem like the personality traits of a borderline sociopath: ridden by anxiety, unable to feel contentment (at least not for long), and uninterested in the fate of others. Weber had no wish to condemn early capitalists for these traits, but his plumbing of the capitalist psyche revealed a type not terribly different from the bourgeois "eunuchs" found in Marx's early essays. There was, however, one feature of Protestant capitalism that could meliorate its more pathological features: the concept of stewardship. The religious capitalist who believed that he held his property and profits in trust for the Almighty was theoretically less likely to consider them his personal reward for his efforts and more likely to view them as communal assets that he should spend for a greater good - reinvesting them in the economy or spending them on charitable and educational enterprises. This was the attitude of Andrew Carnegie, who while treating his workers like dogs spent millions of dollars on ways to "help the aspiring to rise" libraries, museums, parks, and educational endowments. The robber baron who, after years of cutting throats and sweating his employees, finally curled up on his accumulated treasures like Smaug the Dragon, had no place in this moral scheme, though one suspects Ayn Rand and her followers would regard him as a laudable human being, Carnegie as a moralizing sap, and Weber as a bore.

Monday, March 14, 2011

Pacific Interlude

Two quick historical notes from the Pacific coast of North America:

First, an article in Science (summarized in the March 8, 2011 issue of the New York Times) reports on archaeological findings at three 12,000-year-old sites on the Channel Islands of California. The sites contained numerous shaped, "delicate" projectile points, used for a variety of marine-oriented subsistence activities: catching fish and shellfish and hunting seals and waterfowl. The most interesting feature of the sites was their age: they were contemporaneous with the Clovis culture, and provide further evidence that some of the earliest human settlers of the Americas were mariners who migrated into the hemisphere via the Pacific Coast.

Second, via Newshoggers.com, an interesting observation about historical earthquakes in the Pacific. I found it neat that one can so precisely date a major earthquake off the Oregon coast in the era before European contact, based on the simple combination of radiocarbon dating of destroyed trees and plant life, and the known impact date of a tsunami that crossed the Pacific and hit Japan the following day (27 January 1700). I must confess I also didn't know how recently Mount Hood had erupted: there was apparently a major eruption in 1805, right before Lewis and Clark arrived in the Columbia Valley.

Wednesday, March 02, 2011

Capitalism Defined, Part III: Tales of Rage and (False) Hope


A lifetime separated Smith's Wealth of Nations from Karl Marx's earliest major writings, the Economic and Philosophical Manuscripts of 1844. The two authors' views were also a world apart. Smith wrote in defense of an economic order that was still in its infancy, and a class that was still struggling for dominance against landed nobles and monopolists. Marx wrote after the new capitalist order had spread across half of Europe, and after its immiserating effects were becoming clear, at least in the new industrial cities of Britain, France, and Germany. Thus, where Smith was merely critical of merchants and manufacturers, Marx wrote of them with barely suppressed rage. His anger abated over time, as he and his colleague, Friedrich Engels, began to identify a revolutionary alternative to bourgeois rule and developed the belief that this alternative would inevitably triumph.

For Marx, as for Smith, capital was definable in terms of things - provisions, raw materials, tools, and machines - that one could use to produce new goods. Unlike Smith, Marx argued that there was a deeper and more important definition of capital, as "accumulated labor," and in particular accumulated wage labor (Economic & Philosophical Manuscripts, 98). Capital could not exist without wage labor because capitalism was essentially a social relationship, in which the bourgeoisie used capital and commerce to commodify people and goods and convert them into interchangeable "exchange values." Over time, capital could only reproduce itself by radically restructuring prior social relationships, eliminating independent craftsmen and petty-bourgeois shopkeepers and turning workers into a vast, de-skilled industrial army - the proletariat. (Wage Labor & Capital, 207-08, 210-11)

Adam Smith had suggested in Wealth of Nations that employers drove down wages whenever they could, but he also insisted that mechanization, the division of labor, and capital accumulation would ultimately lead to greater employment and rising prosperity. Marx strenuously disagreed. The division of labor, he argued, destroyed the value of craftsmen's skills and created a market for unskilled workers, who were easier to hire and fire. Meanwhile, the greater productivity offered by machinery allowed capitalists to lay off workers when competition and falling profits obliged them to do so. Capital accumulation and industrialization thus created "powerful industrial armies" whose generals, paradoxically, won their battles by cashiering their own men. These new armies could, however, ultimately rebel against their generals, once they discovered their common interest: eliminating the state system and the capitalist cash nexus that kept them in bondage. In their most famous pamphlet, The Communist Manifesto, Marx and Engels predicted that this rebellion would inevitably occur, after the proletariat discovered its potential strength and that they had "nothing to lose but their chains."

Much popular criticism of Marx today focuses on the failure of the communist states he inspired to deliver a classless, a more humane, or even a better way of life to their people. Instead, their command economies and elimination of "bourgeois" civil liberties gave their leaders power that (to paraphrase George Orwell) the most despotic pre-modern emperors could scarcely imagine. Marx was more successful as an analyst of capitalism. With the benefit of decades of hindsight, Marx was able to observe that industrial capitalism had a historical momentum that its creators could not easily control, and which led capitalist societies in directions they didn't want to go: toward depressions, mass unemployment, and organized labor unrest. He believed that these crises would inevitably destroy capitalism; the bourgeoisie could delay them by opening new foreign markets and discovering new, cheap sources of raw materials overseas, but they could not ultimately prevent an immiserated, trans-national proletariat from seizing its destiny.

We might in closing note that capitalists who had read Marx could and did find ways to prevent this final crisis from occurring. These included the creation of social insurance programs (by Wilhelmine Germany, British Liberals, and Progressives in the U.S.), the use of Keynesian government spending to counteract business cycles, and the taming of Labor by incorporating large labor unions into national economic planning. These mechanisms, coupled with a fair amount of old-fashioned political repression, kept Marxian communism out of most of the world's industrial states in the 20th century. They are techniques that, since 1991, American and European capitalists have been trying hard to unlearn. More the fools.

[All citations above are to The Marx-Engels Reader, ed. Robert Tucker (New York, 1978), second edition.]