Death to Capitalism! (Seriously!)

[Sandra]

Kill the out-dated Marxist concept, “capitalism.” Freedom is not a “politico-economic system,” It is your birthright.

Death to Capitalism! (Seriously!)

Daren Jonescu  Monday, January 16, 2012
 
Recent events in the Republican primary campaign, ugly though they have been, have nonetheless performed a tremendous and necessary service for the American people, or at least for those still capable of caring about their country. They have shined a blazing white light on a fundamental theoretical divide between the Republican Party Establishment and the conservative voters it pretends to represent. The divide pertains to whether free enterprise is a positive government project, as it clearly is for the Establishment, or a pre-governmental default position, as it is for constitutionalists.

When Newt Gingrich and Rick Perry began attacking Mitt Romney’s tenure at Bain Capital, many criticized this open assault on capitalism from Republican presidential candidates. Some of us sought to focus the issue not on the details of Bain’s decisions, nor on a defense of Romney, but rather on the nature of the attacks themselves. As I have previously argued, there is something fundamentally wrong with attempts – especially by alleged conservatives – to subdivide free enterprise into its “legitimate” and “illegitimate” manifestations on the basis of whether or not the capitalists in question are motivated by public-spiritedness. Free market endeavor is not about providing and protecting jobs in the community. It is about gaining profit through voluntary exchange.

The Gingrich and Perry types will claim that they, too, are advocates of free enterprise, and that they understand that the profit motive is indeed the best means to the general welfare. But this is precisely the problem: they see “capitalism” as a public policy decision, on a par with welfare statism, socialism, fascism, or communism. This is a fallacy. Capitalism is not, in truth, an “-ism” at all. It is not a project, an experiment, or any sort of means to an end.

When Gingrich said of Bain’s practices, on January 7th, “I think it’s a legitimate part of the debate to say okay, on balance were people better off, or were people worse off, for this particular style of investment?” he gave the game away. Free enterprise, in his view, is just another “conservative solution,” “21st century agenda,” or what have you – like “green conservatism” and the individual mandate he once promoted – a government-designed and directed “framework” for bringing about desired social results. For such pseudo-conservatives – i.e. for most leading Republicans, whether in elected office, in the media, or in academia – the debate with the Left is over which “system” is a more effective job- and tax revenue-producer.

As is often the case in modern politics, the trouble here can be traced back to Karl Marx – although perhaps, in this one instance, he is not actually to blame for it.

Marx attempted a complete, if hazy, historicist reinterpretation of productive activity, with the intention of changing his contemporaries’ understanding of existing economic conditions. Specifically, his immediate goal was to plaster over traditional economic theory – which took the existing conditions at face value, and sought to explain how they worked – with a new, positive theory of his own, dialectical materialism. In this theory, the evolving eras and their corresponding political arrangements bespoke not a complex interaction of the conscious decisions of individual men and the vagaries of chance and circumstance, but rather a fully comprehensible schema, which, like Freudianism after it, rejected the idea that there ever was a “face value,” arguing instead that the belief that present conditions were natural was itself a manifestation of the forces of history – specifically of the changing material conditions of men, where “men” meant units of productive energy.

The ultimate goal of this theory was not to explain the past, but to explain the future; in particular, to explain how present conditions, which Marx called “capitalism,” would inevitably give way to a “worker’s paradise,” by means of violent revolution. Of course, Marx’s theory of dialectical inevitability could never quite be reconciled with his revolutionary activism. What was supposed to be an impersonal force of matter working through history was always undermined by Marx’s own obvious desire to achieve specific communist ends. In addition, as is well known, his theory of economic relations in the capitalist “stage” of history was thoroughly discredited by its lack of predictive value – the facts utterly disproved the theory. The entire theory was bunk, nothing more than a clever social scientist’s effort to justify his desired political ends by creating a thin pretense of objective necessity.

Which brings us back to the present. No one – certainly no Republican presidential candidate – believes in Marx’s theory of surplus value anymore. Nor does anyone on the Republican side find anything edible in the intellectual light lunch of dialectical materialism. There is, however, one remnant of Marx’s influence on politico-economic analysis that has wormed its way into the present, and it continues to wreak havoc on political discussion, even in the one country that is most constitutionally unwelcoming to Marx. That remnant is Marx’s premise that “capitalism” is a transient societal construct, springing out of the material conditions of a particular historical moment, rather than an outgrowth of human nature and its intrinsic inclinations. If Marx is right, then the so-called free market is in truth a positive (i.e. constructed) element of the “superstructure” – essentially, a government program.

Absurdities like the Gingrich and Perry assaults on certain “styles” of investment, or on “vulture capitalism,” on the grounds that “good” capitalism

It is this false, post-Marxist presupposition, deeply insinuated into today’s political discourse, that leads to absurdities like the Gingrich and Perry assaults on certain “styles” of investment, or on “vulture capitalism,” on the grounds that “good” capitalism is about creating jobs. It also leads to Romney’s equally absurd claim that he would defend himself against a similar attack from President Obama by making direct comparisons between his own actions at Bain and Obama’s “management” of GM and Chrysler. As Mark Levin has pointed out, government manipulations of private business operations – on the “too big to fail” model – have nothing whatsoever in common with profit-oriented business decisions made in the semi-free market. On the contrary, by making such a comparison, Romney demonstrates the same post-Marxist presupposition as do his critics.

This is not a small theoretical quibble. The issue at stake is whether today’s Republican Party elite understand what freedom means. If they do not, then America is in mortal danger. (All signs suggest they do not.)

Separated from its Marxist heritage, “capitalism” is not an “-ism.” Nor is it an “economic system.” It is, in effect, the absence of a system, which is to say the absence of a government-imposed framework determining the nature of human productive activity and interaction. Perhaps the best way to clarify this most important issue is to address two potential counterarguments to the claim I have just made.

1. Must not government create the conditions or climate in which the market can work, and does this not make the free market a system, just like other economic systems that involve a government-established framework?

In a word, no. Socialism cannot arise at all independently of government regulation. Even if a very small group of people chose to live in a socialistic manner, they would have to make some form of quasi-governmental arrangement among them as to how goods will be produced, labor divided, and shares allotted. Rules of behavior, rules which must be adhered to strictly in order not to violate the principle of economic equality, are necessary from the outset. The larger the community, the more complex the rules must be, and the more powerful and omnipresent the regulatory authority, in order to project the principle of economic equality throughout all the complex facets of human interaction.

A free market, by contrast, exists in principle any time two people trade something voluntarily without external rules as to how their transaction ought to be undertaken, including rules about what is to be considered satisfactory “value” or “fair trade.” That is, it is precisely the absence of pre-established rules, or of any need for regulatory oversight (because there is no “objectively” predetermined outcome to be enforced), that defines the free market. Government does not “create” the conditions that constitute a free market, whereas it does, and must, create the conditions of any other economic system. This is the fundamental difference between the free market and all other economic arrangements: The free market is born independently of government, and avails itself of government only as a means of protecting the unregulated voluntarism of trade. (That is to say, the free market can exist quite perfectly in an anarchic condition, but the threats against property and voluntary trade that are always presented by our imperfect human nature make police authority a useful servant of freedom.) The other arrangements, the “systems,” require government, not merely as a protective authority superimposed on pre-existing conditions, but as a founding authority, and a constant guide.

2. If the free market is a “natural” non-system, why does it not arise everywhere as it did in the West, and most fully in the United States? Are not humans essentially the same everywhere?

Human nature is the same everywhere, undoubtedly. What is not the same everywhere is the political and moral climate that allowed free markets to flourish in some places more than others. Nevertheless, some semblance of a free market has existed throughout all human societies that were not governed by totalitarian impulses – which means most societies prior to the twentieth century. The extent to which it led to the kind of wealth-production and growth seen in the modern West, and especially in America, is inversely proportional to the level of irrational power-lust displayed by the governing authority, and also perhaps to the level of collectivist morality bred into the citizenry, thus dulling the profit-seeking (i.e. practical power- and security-seeking) impulses that individualism promotes. But that some measure of voluntary trade has existed in almost all past communities which had figured out how to produce anything worth trading is obvious. In short, free markets do arise everywhere; the question is whether they are allowed to remain free, as usually they are not.

One of the by-products of this post-Marxist view of “capitalism” as an artefact of a particular historical moment – a modern “invention” – is the distorting lens through which past economic ideas and conditions are now seen. A famous, relevant example that has always rankled me personally: Modern interpreters of Plato’s Republic, reading his prescription for communism among the ruling classes, assume that this communism was intended to be pervasive throughout all strata of Plato’s theoretical “just city.”

In fact, Plato never suggests this, and explicitly talks about the role of trade in his model city. The fact that he never explicitly prescribes a “free market” for his non-ruling class – the bulk of the citizens – leads many today to assume he meant to impose his communism on everyone. (Karl Popper’s famous The Open Society and Its Enemies falls into this trap.) On the contrary, Plato explicitly discusses communism with regard to the rulers precisely for the reason I have explained above, namely that a controlled economy, on any scale, requires founding regulations. He does not explicitly discuss or prescribe a market economy for the non-rulers, for the simple reason that he does not need to. As everyone understood before Marx, voluntary trade between members of the productive class is the default assumption, and thus requires no formal arrangement. Voluntary trade is not an artificial construct; it is human nature, tied to our instinct for self-preservation. Regulation of that natural activity – i.e. the restriction of freedom – is an artificial construct. The U.S. Constitution is, first and foremost, an attempt to preserve the primacy of human nature, and to limit the insinuation of artifice into human social life.

The Free market is not a government project, a “noble experiment,” or a system to be tweaked or “saved.”

In sum, the free market is not a government project, a “noble experiment,” or a system to be tweaked or “saved.” It is the condition of free, productive people interacting with one another voluntarily, independently of any government decision or regulation. It is not to be negotiated, compromised, or restricted without a clear understanding that under such circumstances, no net gain of freedom is possible.

Contrary to the view of the entire Republican Party Establishment, the free market is not preferable because it is more productive than other social arrangements. The free market is the practical manifestation of Locke’s natural right to property, so honored by the Founders, as they adapted it broadly into the Declaration’s right to “the pursuit of happiness.” Thus, the free market is no more a government creation than are those natural rights themselves. It is simply freedom as manifested in one’s productive life.

This point is essential in the fight against the continual deprivations of freedom that are about to choke the life out of the Western world. As long as the free market – i.e. individual liberty – is defined on Marxist terms, namely as “capitalism,” the intellectual ground of the argument has been conceded to the Left. For on that definition, the free market is merely one of the various alternative societal arrangements. If that is so, then its only defense is that it is more productive, and thus more conducive to the general welfare. (The job-creation argument.)

This defense, while true as far as it goes, will always be susceptible to criticism by those who argue that superior productivity is not enough, if it does not lead to more equitable distribution, and therefore that some means of “spreading the wealth around” is a necessary concomitant of whatever benefits capitalism can bring. In other words, the “productivity” defense gives rise to the “inequality” counterargument, thus leading to the “reasonable limits” compromise – i.e. to progressivism in taxation, redistributionist programs, regulatory agencies, public-private “partnerships,” and so on. Since what is compromised in this case is not merely productivity, but the very principle of liberty, those who subsequently wish to stem the progressive tide have nothing more to stand on, intellectually, than a reiteration of the “productivity” defense. And so we go, round and round, spiralling into the authoritarian quicksand.

It is your birthright. The Founders understood this. Today’s Republican Establishment does not.

If, on the other hand, the small contingent of genuine American constitutionalists finally succeeds in wresting control of the GOP from the oh-so-clever establishmentarians who have forgotten it was freedom they were supposed to be defending, then they can, in time, shift the argument back to its proper ground. The battle to be waged is not government-facilitated productivity (capitalism) vs. government-mandated equality (socialism). The battle is individual freedom vs. government encroachments upon freedom – natural rights vs. political authority. If the debate were framed in this way – the correct and properly American way – the authoritarians in either party would never stand a chance. The great challenge, however, is to shift the battle onto this ground.

A first step towards meeting this challenge: Kill the out-dated Marxist concept, “capitalism.” Freedom is not a “politico-economic system,” comparable to the socialist system, the communist system, and so on; it is not a project of, or a gift from, the ruling class. It is your birthright. The Founders understood this. Today’s Republican Establishment does not.

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