Capitalism and Its Critics: A Long-Term View
The Present Situation
Since then another century has passed,
which has brought deep changes different from what Max Weber and his
contemporaries had expected. There have been far-reaching technical and
organizational innovations, the digital revolution of recent decades
among them. There has been an unprecedented expansion and
differentiation of consumption, including mass consumption, but also
pronounced socioeconomic inequality which, within our societies, has
started to grow again since the 1970s. In this "century of extremes"
(Eric J. Hobsbawm), people in Europe and elsewhere have experienced
unprecedented social, political, and cultural upheaval, somehow related
to capitalism, largely initiated by Europeans, but impacting on most
other parts of the world as well, among them the deep crisis of
capitalism in the interwar period facilitating the rise of fascism and
World War II.
We have experienced the rise of a powerful,
anti-capitalist alternative: The Soviet type of state socialism, which
radicalized the rejection of capitalism in a very practical and
effective way for decades, before it lost out in a worldwide conflict
and imploded.
Particularly in Europe, coordinated, organized,
regulated forms of capitalism were invented and made concrete with the
help of organized interest groups, including organized labor, and with
the welfare state as its centerpiece. The beginnings of "organized
capitalism" - others prefer to speak of "coordinated capitalism" or the
"Keynesian welfare state" - can be traced back to the late nineteenth
century and World War I, but it really flourished in the third quarter
of the twentieth century, when it proved to be very compatible with
representative democracy. However, it has been questioned (though not at
all destroyed) under the more market-radical, "neo-liberal" auspices in
more recent decades, which have been characterized by an unproportional
rise of finance capitalism and financialization.
In the latter
part of the twentieth and the early twenty-first century, globalization -
understood as increasing interdependence, not as increasing convergence
- proceeded with accelerated speed, across borders between countries
and world regions; conditioned by and affecting large parts of
capitalism that have become more transnational and global than ever
before. This poses an unresolved problem for any form of regulation and
coordination of capitalism by political means, since political power is
still largely vested in competing national states (the criticism of
capitalism and the criticism of globalization are nowadays intrinsically
mixed). The global dimension of present-day capitalism dramatically
increases its destructive impact on the natural environment including
climate; a problem largely absent in previous centuries.13
As
mentioned in the beginning, more and more authors find the concept
"capitalism" useful, in one way or another. Especially when it comes to
discussing complex connections among economic, social, political, and
cultural dimensions of historical reality, and to synthesizing or making
broad comparisons across space and time, historians and historically
oriented social scientists make use of the concept. On the other hand,
the concept continues to serve as an interpretative concept that invites
fundamental debate about the past, present, and future. It certainly
plays a role in intellectual and political debates outside the scholarly
world, too, as it already had around 1900.
There are authors who
use the concept of capitalism with clearly positive overtones, for
example economists in the tradition of the Chicago School. Take the late
Gary Becker as an example, who wrote: "Capitalism with free markets is
the most effective system yet devised for raising both economic
well-being and political freedom". In popular literature too, the term
"capitalism" is used in an affirmative sense.14 There are also numerous
examples of a primarily analytical, "neutral" use of the concept, such
as in the long and ongoing debate by economists and political scientists
about "varieties of capitalism". In this debate, we usually distinguish
between types of capitalism according to different relationships
between market and state, ranging from a relatively market-radical
model, especially in the U.S., to state-capitalist forms, especially in
East Asia, with different forms of coordinated or organized capitalism
in combination with strong welfare state elements in the middle,
especially on the European continent.15
Anyone who takes a
serious look at the history of capitalism and, moreover, knows something
about life in centuries past that were either not capitalist or were
barely so, cannot but be impressed by the immense progress that has
taken place in large parts of the world (though not everywhere). In
spite of its very unequal distribution, this progress has also impacted
on the broad masses of people who did not and do not belong to the
elites and well-situated upper-strata; with regard to material living
conditions and everyday life, gains in life span and health,
opportunities for choice, and freedom.16 It was progress of which one
might say, in retrospect that it would presumably not have happened
without capitalism's characteristic way of constantly stirring things
up, pushing them forward, and reshaping them. To date, alternatives to
capitalism have proven inferior, both with regard to the creation of
prosperity and to the facilitation of freedom. The downfall of the
centrally administered state-socialist economies in the last third of
the twentieth century was, in this respect, a key process for evaluating
the historical balance sheet of capitalism.
Nevertheless,
particularly in Europe the concept continues most frequently to be used
with skeptical or pessimistic overtones, in a spirit of criticism or at
least of ambivalence, and with much sensitivity for the dark sides of
capitalism's record. There are notable continuities in the criticism of
capitalism. Take the catholic social teaching as an example, with its
critique of the "idolatry of the market" and its rejection of "radical
capitalist ideology" (Centesimo Annus, the papal encyclical of 1991).
The current pope, undoubtedly against the background of his experiences
of countries from the Global South, has again intensified the tone of
the Catholic critique.17 Other examples of discursive continuities can
be found in different currents of (what I want to call) a totalizing
critique that rejects "capitalism" as the epitome of (Western) modernity
or as the outright embodiment of evil. This type of fundamentalism is
hard to discuss.18 Now, as in the nineteenth and twentieth centuries,
criticism of capitalism can be raised from standpoints on the political
left - for example by rejecting inequalities and dependencies coming
with capitalist relations - or from standpoints on the political right -
for example with anti-liberal, anti-cosmopolitan, nativist
implications. Politically, Kapitalismuskritik is polyvalent and
ambiguous.
Some critiques of capitalism that were once at the
center of attention have, however, moved to the margins. This is true
for the classical Marxist critique of capitalism as the site of the
alienation of labor and of the immiseration of the working class. In
most economically developed parts of the world, the "labor question" has
ceased to have the explosive and mobilizing effects it used to display
in the nineteenth and first part of the twentieth century. Nevertheless,
at the global level it deserves to be rediscovered, given the massive
spread of so-called "informal labor" under conditions of capitalist
exploitation in the Global South.19
Other topics have moved to
the foreground. Concrete abuses are denounced, such as "structured
irresponsibility" in the financial sector. That lack of accountability
has led to a widening gap - incidentally, in violation of one of
capitalism's central premises - between deciding, on the one hand, and
answering to the consequences of decisions, on the other. As a result,
exorbitant profits for money managers are facilitated by public budgets
that take on gigantic losses ("too big to fail").20 Moreover, the
contemporary critique of growing inequality as a consequence of
capitalism is becoming ever more urgent. Here, public discussion has
focused on the kind of inequality of income and of wealth distribution
that since the 1970s has become much more severe inside most individual
countries; there has been less interest in the much more serious
inequality that exists between countries and regions of the globe. The
latter grew immensely between 1800 and 1950, but no longer did so after
that. Lamenting the growth of inequality blends into protest against
infringements on distributive justice, which is how the critique becomes
systemically relevant.21 One criticizes the discrepancy between, on the
one hand, the claim of democratic politics to shape our common
destinies according to democratic principles and procedures, and on the
other hand, the dynamic of capitalism that evades democratic politics.
The relationship between capitalism and democracy continues to be a much
discussed theme.22 Also lamented are the perennial insecurity,
unrelenting acceleration pressures, and extreme individualization that
are inherent to capitalism and that may lead, in the absence of
countermeasures, to the erosion of social welfare and neglect of the
public interest. Similar, in the way it poses fundamental questions, is
the critique of capitalism's intrinsic dependence on permanent growth
and constant expansion beyond the attained status quo; a dependence that
threatens to destroy natural resources (the environment and climate)
and cultural resources (solidarity and meaning). These are resources
that capitalism needs in order to survive, but that it increasingly
exhausts and destroys.23 This, in turn, raises the urgent question of
where the limits of the market and of venality lie, or where - on moral
or practical grounds - they should be drawn. The historical overview
offers strong arguments for the case that there is a need for such
boundaries: That capitalism, in other words, cannot be allowed to
permeate everything, but that it needs non-capitalist abutments in
society, culture, and the state.24
Certainly, there are those who
defend capitalism in the public debate. They have good arguments, which
demonstrate its achievements, its alliance with progress, and its
beneficial effects over the centuries. However, by and large the
critical, skeptical, pessimistic arguments, connotations, and overtones
dominate - particularly since the Great Recession of 2008 - both in
public debates and in relevant parts of the social sciences, at least in
Europe. Writings about "postcapitalism" are selling well, nowadays with
frequent references to the impact of digitalization and the inclination
to predict the imminent end of capitalism as we have known it.25 With
changing arguments in detail, this type of literature has a long
tradition.