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Studying the ABCs of Capitalism

Photograph Source: SPACES Gallery – CC BY 2.0

Capitalism Denotes Both an Economy and Society

Not that long ago few mentioned Karl Marx or capitalism. Old Karl and the system he loathed were now safely locked in history’s dustbins (marked “No longer relevant”). Scholars spoke of “developed” and “underdeveloped” societies or “pre-modern,” “modern” or “post-modern” societies. They contrasted “pre-industrial” with “post-industrial” kinds of societies. These days the go-to label is “knowledge-based economy.” Whatever the label, the clever Streeck reminds us (“How to study contemporary capitalism? In How will Capitalism End? [2016]) that sociologists once knew that “modern society is a capitalist society: that capitalism is not one thing—a particular type of economy–and modern society another.”

The classic economists and sociologists divided their work: sociologists like Weber recognized the economics in sociology and economists like Keynes recognized the sociology in classic economics. “The lesson to be learned from all of them,” Streeck argues, “is that capitalism denotes both an economy and a society, and that studying it requires a conceptual framework that does not separate the one from the other.” Writing in the late 19th century, Alfred Marshall (Principles of Economics [1890]) knew that pursuit of wealth was embedded within the wider social world. So did Marx’s “political economy”—with its postulation of both a “means of production” and “relations of production.”

Streeck begins with a lucid definition—“a capitalist society is a society that has instituted its economy in a capitalist manner, in that it has coupled its material provision to the private accumulation of capital, measured by units of money, through free contractual exchange in markets driven by individua calculation of utility.” A capitalist society, then, depends for its life force on the “successful accumulation of privately appropriated capital.”

Waving a red flag, Streeck argues that naming a society “capitalist” always risks the “social relations governing its economy penetrating into and taking possession of previously non-capitalist social relations.” Habermas calls this the “colonization of the lifeworld.” Although a more deterministic interpretation of Marx, where the “substructure” governs the “superstructure” at all historic moments, cannot be sustained, the subsumption of social relations under the “organizing principles of a capitalist economy is an inherent present danger …”

Streeck is mighty worried about the Neo-liberal form of economic production, and demonstrates in “Citizens as customers,” in How Will Capitalism End?, that a market rationality has colonized the role of citizen, twisting it into customership. What Streeck aims to show us is “how economic relations upon closer inspection turn out to be social ones, while social-political-cultural relations are found to be fully intelligible only with recourse to their interaction with the underlying capitalist economic order.”

The results are intellectually breathtaking. In this relatively short article, I can only highlight selected insights into the nature of the capitalist beast. Streeck examines capitalism as history, culture, polity, a way of life and its possible future. As an accomplished, renowned critical theorist, Streeck’s conceptual sensors are attuned to the dangers capitalism poses to social relations. My simple approach will be to set out each theme and draw out an illuminating axiom and danger point.

Capitalism as history

“That capitalism permanently revolutionizes the society that it inhabits is anchored in its institutional fabric, in particular the legitimacy it affords to competition—to depriving one’s peers of their livelihood by outbidding them—and in the absence of a ceiling on legitimate economic gain. While competition makes for fear, unlimited gain encourages greed; together the two produce the characteristic restlessness of a capitalist political economy and society. Greed and fear also contribute the superior innovativeness of capitalist economies …”

Danger point 1: The wasting of nature for commercial purposes and severe marketization of human labour—”the logic of growth by individual aggrandizement that is constitutive of capitalism as a social system has come under suspicion as potentially dangerous for human society and the human species.”

Capitalism as culture

“A rising share of the goods that make today’s capitalist economies grow would not sell if people dreamed other dreams than they do—which makes understanding, developing and controlling their dreams a fundamental concern of political economy in advanced-capitalist society.”

Danger point 2: This provocative idea is seldom expressed. Here, one danger is the gargantuan power the media and advertisers have to feed the appropriate dream of endless, exquisite consumption into our brains and soul. Alternative dreams are crushed to pieces. I close my eyes and all I can see is a SUV zipping along a twisting, mountainous road. I want it. Then, too, Mark Zuckerberg might be whispering in my ear late at night for all I know. “Buy it, Mike. Buy it soon.”

Capitalism as polity

“As a social system, capitalist democracy is ruled by two diverging sets of normative principles, social justice on the one hand and market justice on the other, the former vested in the society’s moral economy and the latter residing in what may be called its economic economy. While the moral economy of democratic capitalism reflects what people believe is right and fair, the economic economy, or market economy, allocates resources on the basis of marginal productivity, and in this sense of maximized efficiency.”

Danger point 3: There have always been tensions between democracy and capitalism. But under Neo-liberal capitalism, as “democratic states are being turned into collection agencies on behalf of a new global haute finance, market justice is about to prevail over social justice, for a long if not an indefinite period of time.”

Capitalism as a way of life

“The last three decades have witnessed a fundamental restructuring of the family and child-rearing in rich Western countries, in close interaction with new constraints and opportunities created by the progress of markets, of labour markets as well as markets for consumer goods. The old Fordist model of everyday life has vanished.”

Danger point 4: At his provocative best, Streeck states that the “high pressure way of life” imposed on us by “demanding and insecure” employment and child-rearing, is embraced as a “test of their personal capacity for permanent improvement, much like high-performance athletes. Living the contemporary capitalist way of life, parents comply with social expectations that they subject themselves in good spirit to the strict regimentation of a self-enforced rigid time regime and take pride in enduring the hardships of a new sort of ‘inner-worldly asceticism” in the service of career, income, consumption and human capital formation.” But this subjection to regimentation has a high likelihood of burn out.

Preventing the destructiveness of capitalism

“Capitalism entails, in addition to whatever else it may entail, an ever-present possibility of self-destruction of its social containment, in the course of a politics of liberalization conceived as progressive removal of boundaries of all sorts, towards a final triumph of collectively irresponsible individual interests. Preventing this requires a non-capitalist politics capable of defining and enforcing general interests in the sustainability of human society, bringing capitalist actors to their senses and forcing them to act in line with their better insights, whether the already have them or not.”

Danger point 5: Although 10 million marched against the US invasion of Iraq in 2003—and the bombs still dropped—one can never quite predict whether the global capitalist rulers will see the hand-writing on the disintegrating icebergs and the raging storm winds of hurricanes.

More articles by:

Dr. Michael Welton is a professor at the University of Athabasca. He is the author of Designing the Just Learning Society: a Critical Inquiry.

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