Deep Thoughts: a capitalism that renders capitalists helpless

The Market as Purgatory
The New Capitalism has become a Weltanschauung. It is no longer content with the economy. It now seeks a corner on our life and thought.
By Jens Jessen

Capitalism has changed its face. The elation of 1989 seems far behind, when the collapse of the socialist camp was celebrated generally as the triumph of the market economy. Only the conservative sociologist Niklas Luhmann, himself not one to long nostalgically for socialism, had no wish to speak of victory: In his opinion, the most one might say was that the collapse of socialism had preceded that of capitalism.

To argue with Luhmann over the prophetic quality of his pronouncement is no longer possible, as he, in the meantime, has died. Still it is certain that capitalism’s stock throughout the world, and even in the Western countries of its birth, has sunk dramatically. Equally certain, it has long since ceased to be a problem only for the Left. All the authors whom we queried in our series on the “Future of Capitalism,” whether scientist, philosopher or writer, whether from Europe, America or the Third World, whether conservative, liberal of leftist, all were of the opinion that capitalism, which had, for centuries, brought fabulous prosperity to the West, could only be viewed today as a kind of threat.

Even the Entrepreneur Sees Himself a Victim

Even captains of industry, making the rounds of the television talk shows, anxiously shake their heads and assert--and believably--that they are at the mercy of a free market, which allows no leeway for their decision-making. They don’t want to order mass layoffs, the return on capital demands it; they don’t want to relocate factories abroad, but the competition forces them to; they don’t want to shut companies or to gut them, but the market with its remorseless fluctuations makes this, unhappily, unavoidable.

This is an astonishing turn of events. Describing capitalism as a system of inexorable compulsion used to be, rather, the specialty of leftist critique. What is prompting businessmen today to adopt the language of Marxist alienation as a self-description? Is it merely a rhetorical trick for deflecting personal responsibility onto the system? Or are they beginning to feel themselves victims of that alienation which consists in having to act otherwise than how one actually wants to act?

The social philosopher Hartmut Rosa of the University of Jena recently proposed a minimal definition of the classical concept of Marxist alienation, which fits our contemporary situation quite well: Whoever, operating in the capitalist market, feels himself compelled, for his own survival, toward some goal, which, outside the market, he would never seek. No one wishes to destroy the environment, but the necessity of cutting production costs compels him to do it; everybody would like to help society’s under-dogs, but the necessity of cutting social spending causes the State to place them beyond the pale; everyone suffers from the hysterical progression of technological innovations, but competition forces producers to keep on manufacturing new products.

Now, this shrinking down to nothing of business’s range of freedom used to be the classical argument which leftist criticism leveled against the system. And so it wanted to see the system toppled, since the blandishments of social-democratic reform and moralistic appeals to legal principles solved nothing. A good Marxist always knew that the entrepreneur is not a bad person, only that he cannot act otherwise than as the system dictates.

The traditional defenders of capitalism, however, contested this characterization of the system, the language of inexorable historical processes being, to them, nothing but a flimsy construct of philosophy-of-history. They never would have asserted that all political will and all political morality must bow to the peculiar logic of capitalism.

And today? What has happened that social democrats, to whose historical credit has always been the taming of capitalism, hold it, meanwhile, to be a system that can no longer be tamed? What has changed with the New Capitalism that it is experienced as compulsion by its own supporters and beneficiaries?

It is globalization. Here, then, the generally accepted, but on closer examination, curious answer. For globalization, in this context, denotes nothing other than the expansion of market competition beyond national boundaries, to encompass the world. The cheapest manufacturers of rich countries are competing with the still cheaper manufacturers of poor countries. This means, in the first instance, only that capitalism has grown. Can it be that it has only changed its face? Or is it that its expansion into underdeveloped countries amounts to a reversion to an earlier phase of its own development, one that now again conforms to the classical Marxist description?

Let us assume, for the sake of argument, that capitalism truly is a system, which brings unavoidably all that it does bring to mankind; its future prospects, then, don’t look good. For it is not to be supposed that the citizens of the developed countries, where capitalism has been tamed, will accept its reversion to its untamed condition without resistance. The founding of a German party of the Left outside the Social Democratic Party, is only the first sign of a political resistance, which, before long, could assume a pre-revolutionary form.

Let us assume, contrariwise, that capitalism is no system, and its effronteries not inevitable–what then? Then the talk of the inexorable demands of the system would be the merest ideology, akin to communist propaganda, only that this time, it would be deployed by the champions of free markets and carried forward by means of capital itself for the intimidation of society and the steady rise of the rate of return.

Market Law as Nature’s Law

This possibility might seem, at first sight, suspiciously naïve . It has, however, some surprising validations. Preeminent among them is the superfluity of world-explanatory armor with which the new ideologues appears bedecked on stage. In their effort to immunize the market economy against every form of criticism, they take a distinctive step that even surpasses Marx, in that they treat the principle of competition as a quasi-Law of Nature.

The rules governing free markets are, for them, not rules which society has given itself (and which it can also take away), but an eternal Force, comparable to the force of gravity, against which it is senseless to protest. A nation, which restricts economic competition domestically, will therefore lose out in the competition between nations.

The New Economism explains all social phenomena in accordance with this same pattern, even in the cultural sphere (the rise and fall of artistic genres) and in education (the decline of the classical Gymnasium.) In other words, the new market ideology teaches a simpleminded kind of Darwinism. The development of human culture realizes itself, in this perspective, with no one at the wheel, like evolution.

Such an assertion of eternal laws by which the future can be predicted is indeed, in the classic definition of Hannah Arendt, the essential hallmark of all totalitarian movements. One is absolved from every form of moral consideration, since who will be the victim and who the victor has been determined from the outset. The demise of those slated for destruction [whose market positions are hurting] cannot be prevented, it can only be accelerated; thus, in the case of National Socialism, the destruction of the alleged racial inferiors would be accelerated, as, with the Bolsheviks, would be the destruction of the so-called dying classes.

This will-to-acceleration is a further characteristic of the neo-capitalist ideologues, which they share with the totalitarian movements of the past. They by no means wish it to be seen by what means the victorious example of Western business methods have spread across the earth, especially if it was through free trade agreements advanced through extortion, or, in the case of especially refractory nations, through war. Nothing was more characteristic than the American media’s triumphant yawp over the transistor-listening, Coca-Cola drinking, gum-chewing Afghanis; it seemed, for a moment, as if the original war aim, the liberation from a terror-regime, paled utterly beside the victory of Western consumer culture.

But only seemed so. For the capitalist ideology, the liberation of the Afghanis actually arrives in tandem with those products of which the people had traditionally been deprived. This also connects the New Economism with the totalitarian movements: It preaches, naturally, not only an end to certain insults and injuries, but promises an end to all insults and injuries. Its promise of freedom, democracy and prosperity is by no means vouchsafed to all men, but only to those who submit to the economic program that serves as the source of all blessings.

This linking of the eternal with the incidental, of universal human rights with the particulars of one modern economic approach, and the erasure of democracy’s historical claim to have existed prior to capitalism, signalize (as do all distortions of the truth) the ideological character of Economism. It has even tried to maintain that capitalism is, in itself, already a democratic institution, insofar as the consumer, with each purchase at the cash register, votes, and the market, in its own self-interest, eschews discrimination.

This confident masking of conditions, which even in dictatorships, capitalism has hitherto accomplished with brilliance, and which even the Apartheid regime in South Africa didn’t seriously impede, shows most clearly, perhaps, that it is demagoguery that is operating here rather than empire. The assertion that popular sovereignty is already immanent in consumerism, is not too far from the Bolshevik argument that held parliaments and the rule of law superfluous given that true popular sovereignty was already established with the common ownership of property.

And the propaganda of the Bush regime, in fact, conforms, as it preaches the exporting of democracy – not, indeed, through the creation of democratic institutions, at least not if these do not entail unfettered economic competition. The American effort to open all that was formerly State-organized and controlled to the free market - including education, the water supply, and transportation infrastructure - betrays what is truly at issue: an Imperium that seeks to imprint its image upon the entire world. Not just its democracy, but also its economy and its way of life.

Private Enterprise’s War Against the State

The New Capitalism is a totalitarian movement also in that it neither can nor will come to rest until it has comprehended the entire earth, and placed into private hands all that had once been subject State or citizenry. This demonic will-to-self-replication and the leveling of all differences stands exactly at the center of Hannah Arendt’s famous study The Origins of Totalitarianism (1955). Among these origins belongs the distinctive hostility to the State exhibited by totalitarian ideologies, which, not by accident, wish to see themselves not as parties but rather as movements. All that is rule-bound, manageable and therefore static must melt into air before the dynamic principle of the Movement. All that is individual, traditional, culturally specific and intractable must pass through Capitalism, as through the purifying fires of Purgatory, to emerge in a world that is uniform and redeemed.

The awkward thing, even for the true believer, is that can never be specified when the Movement’s goals will have found their fulfillment. “Those who march off to impose their image upon the world cannot be satisfied with only a mediocre portrait. The defective reflection of themselves will prompt them tear up the copy, and begin again from scratch”, wrote the Indian author Amitav Gosh in our series, and one could continue with Hannah Arendt: “The unbounded process of an endless accumulation of power, which offers and enjoys an ever-renewed expansion for expansion’s sake, requires a constant supply of new material in order to renew itself, and not grind to a halt.” Or, once again, with Amitav Gosh: “The melding of Capitalism and Imperium means a program of permanent war – an idea which once intoxicated the Trotskyites and which the neo-conservatives have now embraced with their project for the New American Century.”

The point of this, if one may pursue the totalitarian analogy, lies not in the satisfaction of ends, but the maintenance of a state of constant uncertainty, so people can be kept from developing the faculty of judgment, and thus kept from acts of resistance. Herein lies the reason for the characteristic anti-intellectualism of the New Capitalism, which seeks everywhere to discredit potentially critical forms of high culture, in favor of a vacuous mass entertainment (allegedly because high culture can’t be competitive.) “The consistent suppression of all the higher forms of intellectual activity under the modern leaders of the masses has”, again according to Hannah Arendt, “a deeper origin than the natural animosity to all that one doesn’t understand. Total dominance can allow no breathing room for free initiative. “

Similarly, the American sociologist Richard Sennett has described, in our series, the paralysis of independent initiative. “The new insecurity is not at all an unintended outcome of an unstable market; it is programmed into the New Capitalism. It is not an unwanted, but a desired element.” And further: it is embedded deeply in the organizational structure of the modern enterprise with its flat hierarchies constant changes at the managerial level. “The continual purges, the sudden ups and downs of work careers hinder any ability to really learn the job at hand and the development of a secure working-life experience” writes, no longer Richard Sennett on the New Capitalism, but Hannah Arendt, again, on the Soviet bureaucracy under Stalin.

Flat Hierarchies as an Element of Total Domination

The advantages are obvious of such a structure in which “finally, there are no remaining intermediate levels between the Leader and the ruled”: “In the absence of any secure hierarchy, the dictator remains absolutely independent of his subordinates, and can execute at any time the extraordinarily rapid twists and turns of his policies.” Let one substitute “CEO” for “leader” (or “dictator”) and “business plan” for “policies” and one has a rather exact picture of a company, which, true to the ideals of “shareholder value,” can be market-flexible, that is, it can operate nimbly, at will, and without any concern for colleague or customer.

With this sinister, organizational change, which has moved the production facilities of the New Capitalism itself to where they border on the totalitarian movements, we can perhaps bring our conspectus to a close. The parallels are obvious. They do raise the question of why capitalism, which, throughout its history, has more or less managed to get by without hectoring and the ideological promising of panaceas, must, in the home stretch, seek refuge in crude propaganda lies and utopian manifestoes.

Some date the turn-around from 1989 and the end of socialist challengers who had forced capitalism to assume a human face. And has it now cast off the mask? With equal justice it might be said that it has only now put on the ferocious mask. This wouldn’t have happened in 1989, then, but with the market crash of 2000 and the attack of Islamic fundamentalism on the World Trade Center, when it would have been apparent that capitalism, also, could collapse, or had, at any rate internal as well as external enemies, who were not to be placated with fine words alone. It wouldn’t be the first example in history of an imperial system, which, feeling threatened, turns vicious, posing a danger to civilized humanity.

(This article originally appeared in the German weekly, Die Zeit and was translated from the German by Jeff Craig Miller.)