Compassionate Capitalism

Capitalism comes in many forms, from raw “free market” capitalism to the form we recognize in which capitalism is tempered somewhat by social programs to benefit those who might otherwise be excluded from the table of plenty where the capitalist sits and eats his fill. Robert Heilbroner wrote the definitive study of “raw” capitalism in 1985 and he characterized it as follows:

Its ideological aspect lies rather in the function played by its deepest conception — an indifferent and inert matter as the ultimate stuff of reality. It thus provides a world view compatible with, and needed by, that required for the limitless invasion of the world for the purpose of surplus accumulation. . . .The culture of capitalism thus expresses a voracious, even rapacious, attitude toward the material

world. — a point of view that would be impossible if the world were portrayed as ‘mother’ Nature.*

This view of the world was, of course, the view that Karl Marx attacked in this three-volume study of capitalism that led, eventually, to the establishment of socialism in countries like Russia and China. Marx was particularly concerned about the unethical dimensions of capitalism, its notion that the exploitation of workers was acceptable in the name of higher profits for the owners of the means of production. In fact, the ethical concerns raised by Marx were what carried the book to the popular heights it achieved later on; as a book on economics it was filled with flaws and misconceptions and is nearly unreadable. Marx’s economics rest, for example, on the “labor theory of value,” which has since been shown to be simplistic and downright unworkable.

Our country started out with what historians call “mercantile” capitalism, a form in which the mother country, Britain, dictated who the colonies were to trade with and to whom they could send exports. Most exports went directly to England, of course, while others were taxed heavily by Britain when sent elsewhere. In a word, the mother country called the shots and merchants and farmers who were eager to make profits in this country had to bend to the yoke willingly provided by Great Britain. This yoke eventually became a burden and erupted in the American revolution, of course. Indeed, Marx predicted that all forms of capitalism would eventually lead to revolution as the workers of the world would find their burden excessive and rise up and throw it off.

The fact that this has not happened in this country after the British yoke was thrown off is largely due to the growth and expansion of the middle class — a class that Karl Marx never saw evolving from the heart of capitalism. In addition, especially since the Great Depression, this country has introduced a number of social programs that have tempered capitalism and made it more compassionate, if you will — programs designed to assist those in need, those excluded (as mentioned above) from the table filled with rich foods that feed the “fat cats” at the top of the capitalist hierarchy. Also, a number of steps have been taken to temper the “rapacious” attitude of those in this country toward Mother Nature to whom they owe their very lives.

But the middle class and the social and environmental programs that make capitalism more compassionate have recently come under fire in the form of the Republican strategy to enrich those who control the wealth in this country and widen the gap between those with great wealth and those who are impoverished — while, at the same time, eliminating as far as possible those governmental restraints on further capitalist “rapaciousness” toward the planet. In a word, as the planet itself comes under attack, the middle class, which Karl Marx never saw coming, is in danger of falling into the chasm that is widening in this country as the rich grow richer and the poor grow poorer. I discussed this in an earlier blog and it is reinforced by information collected by the Pew Research Center:

As the 2012 presidential candidates prepare their closing arguments to America’s middle class, they are courting a group that has endured a lost decade for economic well-being. Since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some—but by no means all—of its characteristic faith in the future.

Will this eventually erupt in a revolution as Marx predicted? Is “Occupy Wall Street” a sign of things to come? Will our continued denial of the stewardship we owe Mother Earth finally catch up with us? Time will tell. But much depends on the awareness of the growing number of those at the bottom of the capitalist pyramid who may or may not realize what is occurring. As of this writing they seem content to remain in the dark.

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Robert Heilbroner: The Nature and Logic of Capitalism (New York: W.W. Norton, Inc.), p. 135.

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6 thoughts on “Compassionate Capitalism

  1. Well done. I wish many more see this. Your title speaks volumes and is a key point that the unfettered capitalism view overlooks. The “Haves” have always taken advantage of the “Have Nots.” So, our history has the government trying to keep it fair. Your “Rich Get Richer” post of last week is evidence that even with those efforts the unfairness exists in America. Yet, if you look down that chart which shows the ratio of CEO pay to average worker pay, you see Canada at 20 to 1 and Germany at 12 to 1 versus the US 475 to 1. And, having worked with a great number of CEOs, I can assure you the average US CEO does not deserve that kind of ratio. The obvious truth is one presidential candidate embodies every thing that is wrong with this picture and yet there are so many that do not see this. Here is one final thought, if we keep on diminishing our middle class, fewer are left to spend anything. Keep on banging the drum.

    • I have thought of that: if the middle class disappears there is no buyer for the products. The same argument, I fear, has been used to support outsourcing. If we don’t put money in the pockets of those in other countries we cannot balance trade. The problem with this argument is that most of the things made in the US are not desired in other countries — or they are too expensive. Most of our exports are food and oil anyway, as I understand it.

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  2. Slightly off topic, but one of the most baffling notions I have yet encountered is the embracing by the political, economic and religious right of Ayn Rand. From my reading of her novels, she was the fundamental opposite of compassionate capitalism. She was a militant opponent of all notions of altruism. She was a hard-core atheist. She advocated open marriage (basically forcing her husband to join her in this behavior) and her view of ideal sexual expression was essentially rape.

    I do understand that many embrace her economic theories and her enthusiastic support of capitalism. The point I make is that if one is looking for a standard bearer for capitalism, there are many better places to look than Ayn Rand. Even cursory readings of Adam Smith, Milton Friedman, John Maynard Keynes or Ludwid von Mises will provide far more lucid and cogent arguments in support of capitalism than the 3rd rate mind of Rand could ever devise.

    The reason I slight go off topic is to come back to it. I am increasingly convinced that the far right is not in the slightest bit interested in the same things we are: lucidity, cogency and strong argumentation are not fundamental virtues to this crowd. I am convinced many within this camp consider them evils to be avoided, not virtues to be embraced. It seems as though many in the far right are only looking for passionate belief and see logic, evidence and critical thinking as being fundamental opposed to the passionate belief they desire. The argument you create and the observations you make in this little essay are cogent, logical and are based on critical thinking. Therefore, your approach is all wrong from their perspective. They prefer that people just say what they belief and say it with lots of conviction; be loud and be proud. The louder one talks, apparently, the more truthfully one speaks.

  3. I am glad someone has pointed out that you should not appoint someone to sainthood before you know the whole resume. Ayn Rand is interesting reading, but so are other authors as noted. It is not dissimilar to anointing Ronald Reagan to sainthood. Reagan had a decent presidency with several great moments, but he came darn close to being impeached for lying to the American people and Congress for the Iran-Contra affair, which people seem to forget. He also re-launched the homeless problem by not funding mental health facilities and some chronic cases were released to the streets. Again, great post.

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