Defending Capitalism

...And so, with the aid of our helpful leading questioner, GM's cruelty in not paying the salary of everyone whose services are no longer required is exposed for all to see...

...I have already hinted that the most obvious failure of the "economic" defense is its inability to persuade...

...Milton Friedman would tell you (to oversimplify) that it doesn't work because the government simply competes with the private sector for available loan money, so there's no more money being spent, in toto, than there was before---only 8 The Alternative March 1974 the spenders have changed...

...Thus, describing capitalism, Smith would point to the "divinely ordered harmony of egoistic and altruistic impulses in man," Malthus would stress the lessons of "Moral evil and Natural Law," and Mill would observe how effectively the free man's "moral barrier" had protected basic economic freedoms...

...Many people have to walk past skin flicks and "massage parlors" on the way to work, and their children may be indirectly or directly exposed to a rather demeaning, vicarious approach to sex ("Mommy: What's a 'Deep Throat...

...After the war, half of Western Europe seriously considered "going socialist...

...But it is not, after all, that painful a lesson...

...I suggest that we have been misled, and The Alternative March 1974 5 that capitalism's popularity problem is due more to the way we now defend capitalism than to the changing worth of what is defended...

...The century of socialism in this sense probably came to an end around 1948...

...In fact, the issue concerns magazines, photographs, films, and books explicitly depicting sado-masochism, child molesting, bestiality, lesbianism, oral and group sex, anal fetishism, and a variety of other practices and positions that defy description...

...Joseph Schumpeter exaggerated terribly when he wrote that, in addition to alienating intellectuals, "capitalism is constitutionally unable to p r o d u c e . . , emotional attachment to the social order...

...Economic planning" for war, poverty, inflation, depression, and illiteracy turns nominally freemarket economies into subjects for political party platforms...

...Or words to that effect--I'll admit that I didn't write them down at the time...

...Today, when an economist links economics with opinions about social behavior (e.g., linking the causes of inflation to prevailing theories of social reform), he does so at the risk of being annihilated by his fellows...

...As a rule, "economic" truisms belie unspoken premises which are more important than the defense itself...

...If there is benefit in an economy rapidly growing short of gasoline, paper, fuel oil, and electricity, it is surely the lesson that all these things are not the boundless gift of a munificent and indulgent providence...

...We can afford it...

...Arbitrary state intervention, practiced with numbing regularity, steadily obscures the line between public and private, and so vitiates capitalism's greatest supposed benefit, guaranteed substantive due process...

...The irony of our modern defense of capitalism is that the more thoroughly our "economic" and "valueless" arguments are vindicated in a narrow sense, the less effectively they will persuade or convince...

...New York's Times Square area has been ruined as a tourist attraction by scruffy little porn shops...

...In particular, I would point to two broad weaknesses of present-day arguments in defense of capitalism...

...It is strange, perhaps, that man's most advanced technological society needs tc learn all over again the world's most fundamental lesson: Nothing is free...

...In human terms the decision to buy an extra TV set, he observes, is very different than the decision to buy an extra loaf of bread...

...The U.S...

...By the late 1800s Marx could predict, by "scientific" reasoning (and what a powerful word that was for frustrated adherents of Spenser and Fiske), that the top-heavy edifice would only worsen and fall before things got any better...

...Didn't have no welfare states/Everybody pulled his weight/Gee, our old La Salle ran great/ Those were the days...

...How can we help but grow indifferent to an economic process which regards with perfect indifference our own state of affairs...

...Galbraith, moreover, has others in the faith who have almost certainly never read his prose...

...In the early 1800s it was not clear that nascent industrialism had raised the standard of living in Western Europe one whit...

...Rostow among others has pointed out how performance comparisons between the U.S...

...Feldstein suggests a number of policies to alleviate the problem which merit serious consideration...

...Among them might be: (1) A philosophic or religious conviction that the individual conscience supersedes communal morality...

...The individual who dismisses the idea of a cornucopia of easily available wealth as so much bosh and attempts to put in a lonely word for the dignity and necessity of individual endeavor sounds, by contrast, as if he is singing the opening song of All in the Family along with Archie Bunker...

...A: No...

...Each generation since North, these axioms, fundamental to the idea of capitalism, have been variously restated withSut much change in meaning...

...Most of this, of course, very rapidly became trite to any nondemonstrator exposed to it for any length of time...

...It is a peculiarity of our times that manipulating the state's fiscal affairs to speed up the economy is thought to be a morally "valueless" act, a way of making capitalism work '~bette~," while a state-managed investment market (which might amount to the same thing) would be considered a crude violation of western freedoms...

...Over the last two decades, multifold proofs of capitalism's "economic" success--the proper antidote for charges of "economic" failure--have had little impact on publics which just don't care much whether the idea of capitalism succeeds or fails...

...its effect on our spirit, even more so...

...Robert Nisbet calls them "intermediary institutions" between the individual and the state...

...The politics of affluence is deeply ingrained, and one's acceptance of it has become a measure of his sophistication in any number of academic, journalistic, and political circles...

...It can, therefore, have no permanence unless the confidence which any contract presupposes rests on a broad and solid ethical base on all market parties . . . . Even if we conscientiously credit the market with certain educational influences . . . the ultimate moral support of the market economy lies outside the market...

...among politicians, it is a shadowy concept that needs to be "ameliorated...

...Events have since borne Hayek out...

...For the idea it expresses---namely, that there's all kinds of wealth just sitting around, a certain portion of which belongs to every individual as part of his birthright--is actually a fairly pervasive one...

...Now, there are several reasons for this...

...What are these "moral prerequisites...

...When the public's marginal utility choices have reached a sufficiently high level, perhaps attention to economic questions about producing and allocating resources is displaced by attention to other issues--those, for instance, concerning social equality or civil liberties...

...The word %apitalism" itself is a recurrent opprobrium...

...This is over-the-counter stuff in most big cities, and a simple request for more "action" will bring even raunchier material from beneath the counter...

...but he argued against it anyway, because, he declared, wherever the state entered, individuals lost both freedom and maturity and became like children...

...Although he would resent the label, an academic entrepreneur named John Kenneth Galbraith earned X thousands of dollars a few years ago, as well as the accolades of T/me, Newsweek, the Washington Post, and all the Arthur Schlesingers of the world, by writing a book called The Affluent Society...

...General Motors recently laid off some auto workers, (Cadillacs aren't moving too well in this season of gasoline shortages), and the satraps of ABC decided this was worthy of a few '~human interest" interviews to be broadcast into the ~ation's living rooms...

...Generally the nineteenth-century defender of capitalism shunned what he considered the piecemeal tyranny of scientific data, and instead argued the rhetoric of a rational and individualistic humanism...

...The one would characterize society as a collection of individual decision-makers, in which the state must uphold some common measure of civility and reason...

...Modern economists, who think themselves technicians, have a well-documented tendency to ignore the premises of their craft as well as solutions external to their system...

...The problem with the "economic" defense, if it is to justify capitalism as an idea and not as a tool, is that it must assume that our lives are a logical, rather than an ethical, proposition...

...but no longer, as witness the following interview with a laid-off worker with /ess than a year's seniority: Q: So the company won't be paying you anything...

...If ITT's executives had to face the roller coaster demand of perfect competition, argues Galbraith (and here he is correct), we might expect more heart attacks among its staff--but certainly not increased productivity...

...But this is only part of our problem...

...the other suggests an organism, in which the state must form the organizing nucleus...

...More productive to whom...

...How does one counter all this...

...Surely the most important reason why the "economic" defense is not always fit for popular consumption is that it is logically incomplete...

...The goodies are '%here," somehow...

...jobs are there, but people won't take them, even in a tight labor market...

...It follows Gresham's law...

...The problem is very real to those who are close to it...

...Nobody, in fact, really believes in unrestricted communications...

...does it make sense that they should also account for a declining interest in capitalism's future...

...Understood simply and at face value, these two arguments are not even consistent...

...therefore it should be assumed that "there can be no trade unprofitable to the Publick...

...It must suppose (the nearly Marxian premise) that we are preprogrammed to achieve a certain material and quantitative measure of success...

...This has happened repeatedly with early western religions and with western political traditions...

...Understand...

...I suspect that this same portion of the population would be highly offended if this nation decided it would no longer subsidize that preference...

...Furthermore, "economic" superiority is hard to define...

...As Feldstein points out, the standard Keynesian formula for decreasing unemployment is to increase aggregate demand...

...Indeed, many smut suppliers are only too happy to identify their products as intended for "adults only," as a selling point, thus advertising the prurient intent...

...bad business drives out good...

...Both our "economic" and "valueless" defenses of modern capitalism are ineffective bemuse they lack foundations, a set of boundaries within which they are true and outside of which they are false...

...The other weakness (this I shall come to later) is our complementary insistence upon a "valueless" free market, which can be equated, in looser political language, to that hopeless quest for a "valueless" freedom...

...In the polite language of social science, there are obvious "externalities," "social costs," or '~aeighborhood effects" arising from having an "adult" bookstore or theater next door to your apartment, stere, or office...

...economy, though less stable, has thrived while yielding littleto the practical side (and not at all to the theoretical side) of '~not socialism's" depression-years charm...

...Ordinarily, when an essential western dogma has lost the support of the existing institutional hierarchy, it can look forward to better times when new or revitalized institutions will rescue it from oblivion...

...These prerequisites must be furnished from outside, and it is, on the contrary, the market and competition which constantly strain them, draw upon them, and consume them...

...This tradition--the product of centuries of treaties, compromises, pacts, and cedes--was what Gibbon used to distinguish western due process from the arbitrary rule of "oriental despotisms...

...When a Galbraith writes a book, a hundred Schlesingers and other worthies say things like "This brilliant book opens new paths in our understanding," or that anyone who fails to read it "will be opting out of serious discussion of the future of American life...

...It is also said that "capitalism is more productive...

...The briefest survey of history, in which ruthlessly rule-bound societies have sustained themselves "economically" for cem furies, convinces me that Heimann is right...

...Today, now that the Western European economy has experienced its most affluent and expansionary generation in the free-market spirit of the EEC, such a course is unthinkable...

...Genuinely private contracts could not exist without it...

...3) A social adherence to institutions that exercise authority over different domains, at different levels of legitimacy, and with different means of coercion...

...This is the error of liberal immanentism...

...If, for instance, the adaptability of business to meet changes in consumer demand is heavily stressed, the capitalist model may come out on top...

...When the issue of the contest was in doubt during the twenties, thirties, and forties, people took a zealous interest in the principles of competing economic systems...

...John Stuart Mill, by contrast, denied in a famous illustration that the state would be less efficient or inferior in building houses...

...Obviously, the problem is not that people do not know what capitalism is...

...This question he can hardly begin to answer withoui conceding that the classical, antimaterialistic bias had one great advantage: it assured that capitalism would remain an ideal, and would not be weakened, as it is being weakened now, by indifference to capitalism as a mechanism...

...To control pornography, one must first be able to identify it...

...In recent decades, the bestknown research into these aspects of capitalism have been conducted from diverse, but uniformly critical points of view (the names of Weber, Sombart, Hobson, Veblen, Commons, and Schumpeter come to mind...

...Now, you might suppose this to be patently absurd to anyone with a week of high school economics under his belt, but not so...

...Capitalist productivity has few advantages if we start, say, wis a Galbraithian "advertising and development" theory of consumption...

...Now this "valuelessness" is covered over with venerable and well-intended libertarian cliches...

...Any essentially liberal system of thought, when carried to its extreme, becomes ever more useless as a statement of human ends or ultimate purposes...

...out would come the marchers, the speakers, the bullhorns, and the homemade signs, as if on cue, for a little display of concern and relevance in the collegiate Marxist tradition...

...There really is an end...

...What we have lost in our rational perspective on economics is the countervailing presence of prerational value judgments, a feeling for the cultural and historical and philosophic roots of the capitalist way of thinking...

...if long-run price, cost, and investment security is stressed (particularly in the heavy industries) the scale may tip to the socialist side...

...All the wealth is just out there, see, and it's all a matter of dividing it up more equal like, you dig...

...The reason why these enthusiasms rarely incorporate "capitalism" into their rhetoric is not so much because capitalism is an argument of the opposition, but more because capitalism is thought to be outside the argument altogether...

...All in all, it's a pretty insulting, elitist view of the average man in the average community...

...Now, the UAW won a contract with GM some years back which has the company paying any worker with more than a year's seniority a sizable percentage of his salary for a considerable number of weeks in the event of a layoff...

...But the idea was straightforward enough...

...Eduard Heimann has wisely concluded: "It is a myth typical of this age (the post-war era) that the answer to the technical problem of the productivity of capital must determine the political decision between capitalism and socialism . . . Once this myth is exploded we are free to recognize that the fundamental political decision between capitalism and socialism is a moral problem...

...and wherever the traders thrive, the Publick, of which they are a part, thrives also...

...In short, the idea of the '%ard-core unemployed," unable to find jobs, is only about half true...

...One weakness is our overweening dependence upon the "economic" defense of capitalism's greater productivity and efficiency, the sensational and blatantly materialistic defense we see constantly in the western media...

...the other half is that some people won't take or keep jobs that they find "unattractive...

...Its effect on our economic life would be most welcome...

...Similarly, much unemployment is voluntary-about 50 percent representing people who have voluntarily left their jobs...

...Nor, in peacetime, can we say that capitalism has led us to the most efficient method of transporting commuters to and from cities...

...A less charitable summary might be, "John Kenneth Galbraith tells an eager America how it should split up all its goodies...

...John Kenneth Galbraith sets the blame (or credit) on affluence, on a mounting superfluity of consumer goods and a rising real income which have dulled our interest in matters of economic principle...

...Any strike or firing or other labormanagement dispute was a sufficient catalyst...

...There is yet some hope, however, that what we lesser lights call "reality" will intrude...

...For all the discussion, there is no strictly "economic" way of settling such a comparison...

...Finally, consider the following informatio~t, gleaned from "The Economics of the New Unemployment," an article by Martin Feldstein in the fall, 1973 issue of the Public Interest...

...The rest of us, I think, would have to agree that there is something incomplete about opportunism, something nihilistic about drastic libertarianism, and something presumptuous about assuming that these alone will constitute an effective defense in the long run...

...Indeed, the only people who can honestly believe that capitalism is an essentially "economic" promise are opportunists, in the old Darwinian sense, to whom free enterprise is simply the best devised means for material aggrandizement...

...The AL TERNA TIVE Est...

...At the time, it seemed quite a concession...

...But events have also added a puzzling irony to this outcome, which I doubt even Hayek could have predicted...

...In any event, this idea was greeted with some considerable approval among those assembled...

...Another theory, popular among "future shock" prophets, holds that complexity itself has led to an "expertization" of economic decision-making, and thus to a diminished attachment to capitalism as a common-sense way of life...

...But at least for westerners mention of full-blown socialism suggests failure, more because of its obvious economic debacles (as in, say, Allende's Chile) than because of the questionable moral precepts of Maoist China...

...Nineteenth-century classical economists could point out, with ease and effectiveness, how the concept of the free market coincided with prevailing religious and ethical beliefs and a sense of "right living...

...1924 VOLUME 7 NUMBER 6 Neil Howe Defending Capitalism I N THE ~.ARLY F~rrIES the great economist Friedrick A. Hayek announced, with words then daring and prophetic, that '%ot socialism . . .--that organized movement toward a deliberate organization of economic life by the state as chief owner of the means of production--is nearly dead in the Western world...

...A Boston manpower program in the late 1960s had well over half of its participants turn down openings that the program agency had located for them...

...Indeed, in recent years certain demands of the vex p o p u l i - - f o r decentralizing institutions, for individual "moral" responsibility, for local or racial autonomy, for guarantees against totalitarianism--are at least partially consistent with capitalism's ~raditions...

...Today, Americans as well as Europeans are indifferent to the one set of principles which has persisted...

...so are 'kmfair competition," "intent to defraud," %insanitary conditions," and "loitering...

...All this is well and good, and Mr...

...Discrimination" is hard to define...

...It would appear, then, that a significant portion of the population no longer thinks working is worth the candle...

...Unlike the subjects of most liberal-statist restrictions, these are matters that do affect third parties who are neither buyers nor sellers...

...Art itself is seriously threatened, we're told, by the "average vigilantes...

...The economy is not, rumors to the contrary notwithstanding, the World's biggest Reader's Digest Sweepstakes, with 200,000,000 prizes guaranteed to be awarded...

...Not to a public whose purchases have been planned for in advance...

...Few could deny this...

...Such diversity justifies the free market...

...There was, however, one aspect of these events which always struck me as f a s c i n a t i n g - namely, the "economic theory" which seemed at the core of the entire ritual...

...This is exactly what we are powerless to make credible...

...This was best expressed in a particularly silly, but incredibly popular slogan which kept popping up at these demos, to wi't, "30 Hours Work for 40 Hours Pay...

...Considering how much indifference has greeted conventional rhetoric since the war, it may be time for those who wish to defend capitalism to look in the same direction and adopt the same method...

...Simple, yes...

...For example, Feldstein points out that most unemployment is of relatively short duration---over 50 percent being unemployed for less than five weeks...

...In his words, "A firm can generally provide the opportunity to acquire new marketable skills--by on-the-job training, detailed supervision, or even just by learning by experience--only to a worker whose net product during the period of training is at least equal to his wage...

...But I suspect that these axioms can be and have been pushed so far in argument that people must begin to wonder: Exactly how do we value a value-free system of conducting our everyday business, in which "Good and Evil" are determined by whatever trade "prospers...

...There is a good possibility that reasonable restrictions on the location and sales-tax exemption of such material might well be workable using the industry's own classification scheme...

...Why on earth can't urban residents exercise similar control over the location of porn businesses, which are certainly no less offensive to the senses...

...I am also convinced that in this crucial respect--in our ability to justify capitalism as the best solution to a "moral proble$n"-we have been declining steadily over the last hundred years...

...But the most significant point of his article seems to me to be the one he makes at the very beginning...

...If capitalism is morally neutral, what is it, apart from the haphazard individual choices which might sustain it...

...In an age when states dealt with merchants as summarily as with horse-thieves, the likes of Sir Dudley North are to be admired for first asserting this moral relativism...

...Success mixed with indifference, even more than failure, poses awesome difficulties for the defender of capitalism nowadays...

...Community control of schools is now terribly chic, it seems, but not so community control of porn parlors and skin flicks...

...critics could argue seriously that the capitalist revolution had only made life worse for the average man...

...yet during the twenties Americans surely grew more, not less, attached to the free market's cosmopolitan allure...

...Private autos are more "efficient" only if we could somehow put a price on illusions of freedom, status, machismo, or what have you...

...Most communities have effectively limited minors' access to pornographic material...

...rather, the problem is that people won't take them...

...Cool socialism," the managed economy which is not so much an idea as an expedient (the "Welfare State," for instance), is in the long run inevitable...

...Once society loses the western bourgeois ethic in which "capitalism" proper has thrived (characterized, according to Schumpeter, by the permanence of the family and the tangibility of property), the operational "valuelessness" and autonomy of the free market will be abandoned as altogether superfluous...

...So it is with valuelessness p e r se as a defense of the free market---or, for that matter, of "freedom" in general...

...The problem is rather that people do not know why capitalism, now on top, is to be preferred, or why its success and integrity should be protected...

...Opposition to capitalism among intellectuals seems, if anything, to have increased since the war...

...for if any prove so, men can leave it off...

...Not for making war...

...In essence, this less-than-weighty tome attempted to systematize the aforementioned view of the economy...

...2) A tradition of a Rule of Law, which delimits the function of state authority...

...The market economy," he writes, "is a constantly renewed texture of more or less short-lived contractual relations...

...Why do so many of us remain unconvinced...

...in a free-market, the referee is "unbiased...

...Pornography shops are beth a symptom and a contributing factor in the exodus of middle-class families from the cities...

...The former (Aristotelian rather than Platonic model) has always preceded the growth of a capitalist voting public...

...Classical economists knew very wel[ indeed they were surrounded by instances---that when a society collectively chooses to achieve limited and tangible ends (e.g., for food, land, war, equality, or indeed today, for cars and kilowatts), it would begin to supervise its economy accordingly...

...Here Roepke tends toward bombastic enthusiasm...

...rhe bourgeois fortress thus becomes politically defenseless," he wrote...

...Moreover, this is true even when substantial public effort is made to find jobs for the unemployed...

...Polls show that up to 60 percent of the American public has a "low" or "no" opinion of capitalism and business (often based on astonishing misinformation...

...Alan Reynolds Life, Liberty, and the Pursuit of Pornography F ROM TH~ WAVE OF hysteria that followed the Supreme Court decision on pornography, one might suppose that Galileo and Darwin would not have made the grade under contemporary cormnunity standards...

...He somehow concluded that such phenomena as entrepreneurialism, the Victorian political order, and the American frontier spirit were inconsistent with, even though part of, the history of capitalism...

...and Soviet economies always depend upon the sort of performance each economist thinks most valuable...

...Thomas Molnar calls them the foundation of an "articulate society...

...Over the last two decades a variety of distinguished economists (Sumner H. Slichter was a famous instance in the United States) have demonstrated, by all or most of these criteria, how badly the socialist model has foundered...

...Today everyone observes that the specter of the completely managed economy, which once had entered such a titanic contest with capitalism for the affections of western man, indeed seems to have lost or at least has defaulted due to lack of interest...

...Conservatives are properly wary of granting judicial or regulatory bodies the authority to The Alternative March 1974- 9...

...And the rise of New so-called "humanistic" Socialism--whose lofty goals are about as conducive to "economic" success as medieval usury laws--shows how easy it is for perfectly rationgl people to refuse (in Kristol's words) to "think economically...

...out of thousands of metaphors, we might choose to liken capitalism to a clear glass, through which --but not by which--human preferences for one thing or another are expressed...

...capitalism is superior because it is "morally neutral" toward economic decision-making...

...And no doubt these ideas have freed our lives from centuries of arbitrary management...

...This quaint little conception of macroeconomics has by no means died out the way student demonstrations have...

...4) Under the name of democratic political process, a trust in a Benthamite, individualist consensus rather than in a Rousseauian "general will...

...It is difficult, to say the least...

...it is almost self-evident that in a day when the maxims of Franklin were on parents' and teachers' and employers' 6 The Alternative March 1974 minds, if not their lips, and when individual success along the "straight and narrow" won society's quiet applause, defending the idea of capitalism before one's fellows was likely to be easier than it is today...

...In such circumstances, people cannot help but feel diffident about a "free" market, whose justification, so the classical economists thought, is part of a wholly different relationship between the society and the individual...

...The Public Policy by Peter Rusthoven "Come and Get It ": The Politics of Affluence B ACK IN THE DAYS when s t u d e n t demonstrations were in vogue, one of the more popular themes for these little street convocations was "worker-student solidarity...

...As Irving Kristel observed in 1972 in what has quickly become a much-quoted apothegm, although socialism "has lost the argument," free enterprise "seems somehow not to have won it...

...The bosses can afford it...

...Nor does anyone really believe that any business should be permitted to operate anywhere it wants: A refinery, auto body shop, or kennel would be most unwelcome in the residential sections of Scarsdale or Beverly Hills...

...When I was an undergraduate at Harvard, this concept was regularly trotted out as a recommended focus for concerned student attention, usually during those spells when the war in Vietnam seemed relatively quiet...

...Market and competition are far from generating their moral prerequisites autonomously...

...The other day in one of my law school classes the professor mentioned in passing his "firm belief that individuals have a 'right not to work.'" (Don't ask me how these topics come up in a law class--I've given up trying to figure it out...

...It is characteristic of freemarket advocates today (one must point to "Friedmanites" in America or the Institute of Economic Affairs in Britain) that state intervention is made to seem costly ,and inefficient...

...Why, in contrast to our own, was the classical defense characterized not by empirical "economic" proofs, but by a prudent, philosophic idealism...

...A multimillion dollar effort to fix-up downtown Sacramento, in an effort to bring back family shoppers, was partly thwarted by the infestation of the area by "adult" bookstores and movie theaters...

...Doubtless there are many other prerequisites...

...The issue is discussed, in editorials and TV talk shows, as though it were addressed to Playboy and the novels of D.H...

...To the classical mind, there was a complex symbiosis between, on the one hand, the Protestant ethic, post-Renaissance humanism, and liberal, enlightenment political theory, and on the other hand, the growth of the capitalist idea...

...On the other hand, we don't seem to know what to do about indifference...

...Over the last few decades, innumerable social scientists have observed that the legitimacy of capitalism has suffered from weakening institutional support...

...Over the last few decades the failure of affluence to satisfy (or even soothe) such '~economic" yearnings is cause enough for skepticism...

...But the purpose here is not so much to be comprehensive as to give shape and texture to what Roepke means when he talks about the "framework of a free market...

...At the very least, this argument presupposes a certain republican value judgment: that what is optimum efficiency in war (i.e., regimentation) is not optimum efficiency in peacetime...

...The current wage structure is a rip off...

...The Alternative March 1974 7 Capitalism depends upon such diversity among the forces which mold individual preference...

...In fact, both sheer "af_9 fluence" and sheer economic "complexity" are prerequisites to the birth of a capitalist economy...

...To say that pornography is hard to define is not to say that it doesnt exist, or that it doesn't present a problem...

...Most classical economists thought themselves philosophers and openly developed their theories of "political economy" out of pre- or extra-capitalist value judgments, a set of givens that enjoyed broad popularity- among educated peoples of the western world...

...In part, this may be a reflection of sublime innocence...

...But Feldstein offers yet another reason: the problem isn't that jobs aren't there...

...We live in an age of revolutionary cultural flux, and in such an age we grow indifferent to ideas which are not defined in sufficiently fundamental terms...

...It is true that the defense itself has been largely vindicated since the war...

...The irony is that while capitalism has thus formally overcome its adversary, at no time in recent history have we westerners been so ambivalent toward capitalism as an economic way of life...

...Pause) Q: Do you think that's fair...

...A: None...

...Q: No benefits...

...In a post-Keynesian era it is easy to smile at an age when moral pieties were occasionally abstracted into natural law...

...This is the l e s s intere s t i n g question, and its simple answer is that the "economic" defense was then an impossibility...

...The book sold tons of copies, and became required reading in more economics classes than one cares to remember...

...usually, this means more deficit spending by the government, which creates more demand for goods and ~ervices, and thus generates new jobs for the unemployed...

...Between the Great Depression and the Second World War socialists promised the capitalist world that they could satisfy our most thoroughly bourgeois desires---for increasing production, a high rate of investment, monetary expansion, an explosion in consumer goods, higher wages for the middle class--and do a better job of it than the bourgeoisie itself...

...On the one occasion when I foolishly approached a young man carrying one of these signs and inquired about it, he responded impatiently with "Come on, man--you know the bosses can afford it...

...The United States versus the USSR, West versus East Germany, Japan versus China --these are showcases, but not exceptions to capitalism's superiority in servicing consumer-based, industrial societies...

...A modern would do better to ask why (again in contrast to our own) the western classical defense was so emminently successful that capitalism made good sense to nearly every social class, including (with a few qualifications) the iitterati and religiosi, for well over a century...

...A: No, I don't think it's fair at a l i b i don't get a thing...

...Because the arguments are inconsistent, few of us are serious about pursuing either one...

...But Schumpeter was correct in observing that the popularity of capitalism as an idea would be seriously threatened when capitalism's "rationalist," "antiheroic" attitudes would at last permeate and pervade established institutions...

...But the problem with all such circumstantial explanations is that they are historically unreliable...

...It is not true that what is defended has or will remain worthwhile to the western imagination...

...In short, minimum wage raises the pay scale for entrylevel jobs, but makes it too expensive for firms to turn those jobs into a route to something better...

...The market, we like to say, is "value free...

...A vigorous campaign of racist or anti-Semitic propaganda would be denounced for the same reason that wide-open pornography ought to be denounced--many innocent people would be injured or offended by such material and by the clientele it attracts...

...For another, the minimum wage laws, as Feldstein illustrates, help turn many entry-level jobs into dead ends...

...But more efficient for what...

...It seems there really is a bottom to the barrel...

...This valued "valuelessness," as I mentioned earlier, is the second fundamental weakness in the way we look at capitalism nowadays...

...Moral verities common to their era--e.g., that man is rational, that man is educable and can best educate himself through worldly trial-anderror, that the individual is the locus of ethical decision-making, that the best evolution of manners and morals is brought about by a free interplay of self-interests-these they thought were premises of a sound economy no less than of a sound way of life...

...A more inductive and broadly correlative approach is called for an emphasis on what Wilhelm Roepke has called the "framework of a free market...

...It is said that "capitalism is more efficient than socialism...

...What no one (to my knowledge) had added is that our modern ideology of capitalism has worsened matters by espousing, in place of a normative defense, a resolute (and libertarian) conviction that capitalism lacks any norm whatsoever...

...And the only people who can honestly believe that capitalism is "valueless" are radical libertarians, who deny that any norms need be enforced by a truly "free" market...

...Of course, most of the world is still (and may remain) content with peculiar hybrids of capitalist and socialist mechanisms...

...WVhenever men consult for the advancement of the publick good," he wrote in the late 1600s, "as for the advancement of trade wherein all are concerned, they usually esteem the immediate interest of their own to be the common measure of Good and Evil...

...Any schoolchild in a dozen western nations can recite the basic rules of a free market...

...We forget that these rules of a classical economy were never designed to function in the alien cultures of the late twentieth century...

...As Hayek defines it, it is "a respect for man qua man, that is, a recognition of his own views as supreme in his own sphere, however narrowly that may be circumscribed, and the belief that it is desirable that men should develop their own individual gifts and bents...

...the "economy of wealth" exists, mirabile dictu, as if by itself, an autonomous product of industrialization, created without the aid or effort of human hands...

...Unfortunately, the current minimum wage law prevents many people from accepting jobs with low pay and valuable experience...

...Insulated by their affluent suburbs, the ritualistic liberals don't address themselves at all to the main issue of what proliferating smut shops and theaters can do to the aesthetics and safety of a shopping or entertainment area...

...Encomiums to a higher GNP or to a more efficient investment market may be heard and understood, but they cannot by nature invoke popular conviction in the system which sustains them...

...Efficiency is a rationally determined state of affairs, but capitalist efficiency is determined by the subjective, often frivolous, and ultimately noncoordinated preferences of individuals...

...As one of my fellows put it to me after class, if we forced one to starve in order to exercise his right not to work, we would render that right "meaningless...

...The dogma of capitalism, however, seems to be insuring itself against such a renewal (and in the process denying that it is a dogma): any emerging social, religious, or political institution, which must rally popular strength around certain well-defined value judgments, is repelled by a definition of capitalism that insists it is free of any...

...For one thing, through welfare and unemployment compensation, whatever their other merits or demerits, the government provides notorious disincentives to work...

...Consider the American twenties: an era of skyrocketing affluence and the unprecedented complexities of credit-buying, mass advertising, a growing Fed, and wild speculative markets...

...We forget, for instance, that Smith never intended that his utilitarian Wealth of Nations (which today is sold in millions of copies) would be read independently of his Theory of Moral Sentiments (which today is out of print...

...But it seems it doesn't quite work...

...On the one hand, the decline of an idea through indifference wreaks consequences in the real world...

...Self-discipline, a sense of justice, honesty, fairness, chivalry, moderation, public spirit, respect for human dignitv" are all on his list We would be less prejudiced if we were to observe and categorize the normative "prerequisites" hlstorically necessary to capitalism's development...

...One could easily dismiss all this as just one more expression of the self-righteous n~/ivitd of a few leftist students, but to do so, I think, would be a mistake...

...I think, though, that this one had something to do with trying to mangle the Constitution to produce this new 'Tight...

...My own suggestion that the "right not to work" did not carry with it the right to be supported at someone else's expense was met in turn with mostly tolerant amusement...

...But the idea is the same in either case...

...With amazing reluctance is it ever admitted that economic goals themselves imply debatable assumptions about which collective responsibilities our society should and should not assume...

...A handbook on how to practice bacterial warfare would be a likely candidate for censorship by even the most liberal of liberals...

...Hypotheses abound...

...This is not so insurmountable a problem as many claim...

...Lawrence...

...It was, in the words of his paperback publisher, "A challenging argument for new economic structures based on an economy of wealth...

...Few people have objected to this control, or have maintained that the classifications arrived at were entirely arbitrary...

...This calamity could easily be avoided, he thought, siiace our highly industrialized society could well afford to support such a right...

...Whence our indifference...

...It is said that old, easily apprehendible maxims about lending and borrowing, about the entrepreneur's incentives, about the vices of monopoly, or about metal-based currency, have been outstripped by a late or post-industrial world...