Posted by: Dan | November 16, 2007

The Church and Capitalism: Part I-I.1

[Over the next little while I'll be posting a series of entries on 'The Church and Capitalism', which is a paper that I have been working on for quite some time. I'll repeat a few of the points I made in my earlier series on 'Christianity and Capitalism' but I trust that there is much greater detail, and much that is new, in this series.]

I. The Confrontation

I.1 — Neoclassicism and the Triumph of Capitalism-as-Fascism

Whither Capitalism?

In 1776, Adam Smith gave birth to the modern science of economics by predicting that the liberation of the market from various forms of state control would lead us into the best of all possible worlds.[1] In 1848, Karl Marx challenged Smith and predicted that capitalism would be overthrown in the inexorable rise of socialism.[2] Since then, there have been endless competing prophecies about where capitalism is leading our life together. However, from the vantage point of the early twenty-first century, we can see that what has arisen is the global dominance of neoclassicism.[3] What, then, are we to make of the various predictions about capitalism?

To begin with, it is clear that capitalism has not developed into the utopia foreseen by Smith. Rather, we now live in a time when inequality, famine, and economic oppression affect more people around the world than ever before.[4] Consequently, it is necessary to emphasise that Smith’s vision was, in fact, utopian (in the worst sense of that word). Smith’s vision promised us that which could not be attained by the means provided.[5]

Secondly, the triumph of neoclassicism has made it clear that capitalism does not lead to socialism, as predicted by traditional Marxists and others.[6] In fact, we have seen exactly the opposite occurrence: the majority of socialist nations have converted to capitalism, and even so-called ‘communist’ nations, like China, espouse what is, by and large, a neoclassical form of economics. Why has this happened? There are a number of reasons for this (not the least being the greater military power of the capitalist nations, who were able to destroy many socialist governments in their infancies), but the primary reason for this was that socialism was too closely wed to capitalism. Slavoj Zizek makes this argument:

Marxian communism, this notion of a society of pure unleashed productivity outside the frame of capital, was a fantasy inherent to capitalism itself… ‘Socialism’ failed because it was ultimately a subspecies of capitalism, an ideological attempt to ‘have one’s cake and eat it’, to break out of capitalism while retaining its key ingredients.[7]

Socialism represents a failed utopianism, precisely because it simply continues the utopianism of capitalism (i.e. instead of arguing that capitalism leads us directly to utopia, it argues that capitalism leads us indirectly, through socialism, to utopia).

Thirdly, others who have predicted that capitalism will lead us to anarchy have also been mistaken.[8] Certainly, capitalism has lead to the fracturing of most social bodies, but the result has not been chaos. Rather, within neoclassicism we have seen the birth of massive oligarchies that hold power over an increasingly fractured public.

So who has correctly predicted the movement of capitalism into its neoclassical form? Surprisingly, it was those Marxists, who rejected the fatalistic element of Marxism, who were able to foresee where capitalism was leading us.[9] It was the likes of Bukharin, Lenin, and Trotsky who were able to see that capitalism, if left to its own devices, would develop into a fascist form of imperialism.[10] To be clear: the global conquest accomplished by neoclassicism, with its focus on privitisation, deregulation, and cuts to social spending, is the conquest of the globe by capitalism-as-fascism.[11] It is important to define what is meant by ‘fascism’ here. Traditionally, fascism has been understood as the subordination of individuals, and all other corporate bodies, to the State. What has occurred within neoclassicism, however, is the subordination of individuals, and all corporate bodies, including the State, to the regnant economic powers – the oligarchies, the multinational corporations, and those who serve them (like the World Bank and the International Monetary Fund). With this distinction in mind, the other elements of traditional fascism hold for our contemporary experience of capitalism-as-fascism (also referred to as ‘corporatism’): (1) it assaults all forms of collectivity, and all public bodies; (2) it is, therefore, defined by the drive for conquest; (3) it favours the interests of a few over the interests of the many; and (4) it makes the many favour their own repression.[12] The damning proof of this is in the specific examples of the ways in which neoclassicism has played out at ground level in the various countries to which it has been applied.[13]

Furthermore, it is important to realize that the neoclassicism does not appear as a perversion of ‘capitalism proper’; it develops from the root of capitalism itself.[14] Consequently, the question is not ‘where did capitalism go wrong?’ because it was wrong from the very beginning – as George Weissman says: “The germ of fascism is endemic to capitalism”.[15] Therefore, it is a mistake to try to redeem or rectify capitalism. The effort to return to the form of capitalism that preceded neoclassicism is akin to trying to escape Germany in 1945 by returning to Germany in 1934! Here the words of Simone de Beauvoir are quite apropos: “To protest in the name of morality against ‘excesses’ or ‘abuses’ is an error which hints at active complicity. There are no ‘abuses’ or ‘excesses’ here, simply an all-pervasive system.”[16] Consequently, the challenge for Christians is not the pursuit of ‘capitalism with a human face’ or ‘moral capitalism’; rather, the challenge is to move out of capitalism into an altogether different system.
[1] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1, ed. R. H. Campbell, A. S. Skinner, and W. B. Todd (Indianapolis: Liberty Fund, Inc., 1981), IV.i.11, et passim.
[2] Karl Marx and Friedrich Engels, The Communist Manifesto (New York: International Publishers, 1948), 9-21.
[3] The term ‘neoclassicism’ as it is applied throughout this paper is intended to refer to both the theory and the practice of those who are both committed to, and participate within, the structures of the laissez-faire form of capitalism championed by Friedrich Hayek, Milton Friedman, and the ‘Chicago School’ (cf. Friedrich A. Hayek, The Road to Serfdom, with an introduction by Milton Friedman [Chicago: Chicago University Press, 1994]; and Milton Friedman with Rose D. Friedman, Capitalism and Freedom [Chicago: Chicago University Press, 1962]).
[4] Cf. Jacques Derrida, Specters of Marx: The State of Debt, the Work of Mourning and the New International, Routledge Classics, trans. Peggy Kamuf (New York: Routledge, 1992), 106.
[5] However, because the neoclassicists continue to promise us this same utopia, further discussion of this point must be deferred until our evaluation of neoclassicism itself. Here, it is worth noting Naomi Klein’s comment that, whereas the Marxists envisioned a “workers’ utopia,” the neoclassicists envision an “entrepreneurs’ utopia” (The Shock Doctrine: The Rise of Disaster Capitalism [Toronto: Knopf Canada, 2007], 60).
[6] A notable other being Joseph Schumpeter (cf. Capitalism, Socialism & Democracy [New York: Harper & Row, 1947]).
[7] The Fragile Absolute – or, why is the Christian legacy worth fighting for? Wo Es War (London: Verso, 2000), 19. Peter Maurin, co-founder of the Catholic Workers’ movement, also makes this point: “The Bolshevist Socialist is the son of the bourgeois capitalist, and the son is too much like his father. All the sins of the father are found in the son” (Easy Essays, illustrated by Fritz Eichenberg [Chicago: Franciscan Herald Press, 1977], 115; cf. 116-17, 174).
[8] Cf. John Gray, False Dawn: The Delusions of Global Capitalism (New York: The New Press, 1998), 207, et passim.
[9] However, it is quite possible that Marx himself abandoned the fatalistic approach later in life. When, shortly before his death, he stated “I am not a Marxist” it is not likely that he was then saying that he was abandoning the struggle on behalf of the proletariat. Rather, it is more likely that he realized that socialism would not necessarily replace capitalism, but would only come by the means of a sustained struggle. If this is the case, then the true legacy of Marx is not his fatalistic theory, but his lifestyle of solidarity and his action on behalf of the proletariat. This, then, goes against Robert L. Heilbroner’s understanding of Marx’s legacy, which by pretending to take Marx seriously, ends up not taking him seriously at all (The Worldly Philosophers: The Lives Times & Ideas of the Great Economic Thinkers [New York: Simon and Schuster, 1963], 142).
[10] Cf. Leon Trotsky, Fascism: what it is and how to fight it, with an introduction by George Lavan Weissman (New York: Pathfinder Press, Inc., 1969), 6-7, et passim; Nikolai Bukharin, Imperialism and World Economy, with an introduction by V. I. Lenin (New York: Monthly Review Press, 1929), 10, 107-108, 112-15, 140.
[11] The irony here is that it was Hayek’s fear of fascism that prompted him to write The Road to Serfdom in the first place (cf. The Road to Serfdom, 4).
[12] All of these points will be developed in more detail later within this paper. For further comment on neoclassicism as fascism cf. Noam Chomsky, Profit Over People: neoliberalism and global order, with an introduction by Robert W. McChesney (New York: Seven Stories Press, 1999); Klein, The Shock Doctrine, 12, 17, 369; Brian Massumi, A User’s Guide to Capitalism and Schizophrenia: Deviations from Deleuze and Guattari (Cambridge: The MIT Press, 1992), 64, 106, 116, 125-26; and, especially, Gilles Deleuze and Felix Guattari, Capitalism and Schizophrenia, Vol. 1, Anti-Oedipus, trans. by Robert Hurley, Mark Seem, and Helen R. Lane (Minneapolis: University of Minnesota Press, 1983; Capitalism and Schizophrenia, Vol. 2, A Thousand Plateaus, trans. by Brian Massumi (Minneapolis: University of Minnesota Press, 1983).
[13] The devastating impact of neoclassicism upon country after country, and the ways in which it operates as fascism, have been documented by Klein in The Shock Doctrine. Significantly, it is not only outsiders who have made this observation but those who have worked within the heart of institutions responsible for spreading neoclassicism have come forward and said the same thing (cf. John Perkins, Confessions of an Economic Hit Man [London: Penguin Books, Ltd., 2004]; and Davison L. Budhoo, Enough is Enough: Dear Mr. Camdessus… Open Letter of Resignation to the Managing Director of the International Monetary Fund, foreward by Errol K. McLeod [New York: Horizons Press, 1990]).
[14] Grey’s argument that ‘bad capitalism’ naturally drives out ‘good capitalism’ is helpful in this regard (Grey, 78-87), as are Lenin’s comments on Bukharin’s argument that fascist imperialism is the direct development of a system that relies on continual growth (Bukharin, 10).
[15] In Trotsky, 7. This is where those like John Maynard Keynes, John Kenneth Galbraith, Daniel Bell, and Benjamin R. Barber end up going wrong. Each of them is aware that capitalism can lead to fascism, but each of them does not believe that capitalism necessarily leads to fascism and so, each proposes some form of State, democratic, or civil control that they believe will both save capitalism and save us from capitalism (cf. Keynes, The General Theory of Employment, Interest, and Money [New York: Harvest/Harcourt Inc., 1964]; Galbraith, The New Industrial Society [Boston: Mentor, 1967]; Bell, The Cultural Contradictions of Capitalism [New York: Basic Books, Inc., 1976]; and Barber, Jihad vs. McWorld: How Globalism and Tribalism are Reshaping the World [New York: Ballantine Books, 1996]).
[16] Quoted by Klein, The Shock Doctrine, 150.


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