Anti-Capitalists and Capitalists
by J. R. Nyquist, Global Analyst. January 22, 2010
If you haven't scanned the cable news channels since the crash of 2008, you could be in for a shock. Except for FOX NEWS, you are going to hear an anti-capitalist message percolating up through your television. This isn't altogether new, but there is a new quantitative and qualitative edge to it. It is tailor-made for those who know very little, whose degrees and credentials were "earned" by studying for a test (which differs from studying an actual subject). The anti-capitalist dog has slipped its leash. Whereas, previously, it was allowed to walk and relieve itself on university campuses, it now advances through the tube into millions of homes.
In his classic work, The Anti-Capitalist Mentality, Ludwig von Mises explained that human beings tend to overrate their own worth. "If a man's station in life is conditioned by factors other than his inherent excellence," wrote Mises, "those who remain at the bottom of the ladder can acquiesce in this outcome and, knowing their own worth, still preserve their dignity and self-respect. But it is different if merit alone decides. Then the unsuccessful feel themselves insulted and humiliated. Hate and enmity against all those who superseded them must result."
How could a meritless genius console himself? Well, he could stay in school and become a professor of history or literature. He could specialize in subjects so insignificant that nobody would ever take notice of his work, or judge it. Through the beneficence of government financing of higher education, he might make a living comparable to that of a skilled laborer.
"In order to console himself and restore his self-assertion, such a man is always in search of a scapegoat," noted Mises. "He tries to persuade himself that he failed through no fault of his own. He is at least as brilliant, efficient and industrious as those who outshine him. Unfortunately this nefarious social order of ours does not accord the prizes to the most meritorious men; it crowns the dishonest and unscrupulous scoundrel, the swindler, the exploiter, the 'rugged individualist.' What made himself fail was his honesty."
The frustrated ambition of a would-be genius is thus engaged. While free market capitalism treats everyone according to his or her contribution to the well-being of others, the thwarted mediocrity can always blame the system. According to Mises, "They sublimate their hatred into a philosophy, the philosophy of anti-capitalism, in order to render inaudible the inner voice that tells them that their failure is entirely their own fault." They loathe capitalism because it has elevated people into positions they wanted to occupy. Mises wrote: "Such is the case with those people who are commonly called the intellectuals." Through its generous funding of education, through the elevation of bureaucrats in place of entrepreneurs, through the expansion of government services, the anti-capitalists have found their cause -- and a way to strike back. The evils of capitalism must be opposed. Thus, through incessant activism and whining, a system is built in support of failure (enabling the drug addict and the malingerer), offering management positions to those who would otherwise be running a small business into the ground.
In a financial crash, the excellent and the poor businessman perish together, but the unhampered entrepreneur finds his way and the economy quickly recovers. Only today, the government is pumping money into useless activities on every side. It is called "the stimulus package." One has to wonder, in a sophisticated society such as our own, why the capitalists fail to defend themselves. Why don't they defend the market system? After all, the market system made them rich and powerful. The answer to this question was provided, long ago, in a book by Joseph Schumpeter titled Capitalism, Socialism and Democracy.
According to Schumpeter, "Technological progress is increasingly becoming the business of teams of trained specialists who turn out what is required and make it work in predictable ways. The romance of earlier commercial adventure is rapidly wearing away, because so many more things can be strictly calculated that had of old to be visualized in a flash of genius." Thus, says Schumpeter, the entrepreneur will inevitably be replaced by managers and teams of experts. A man on a white horse, so to speak, is no longer required. Heroes are now replaced by celebrities. Genius is supplanted by advertising. We are told what is smart, while fewer and fewer observers can tell what really is smart. "Bureau and committee work tends to replace individual action," wrote Schumpeter. "Rationalized and specialized office work will eventually blot out personality...." The power to calculate blots out vision. Whereas, the economic and military relations of the Middle Ages were intensely personal; the economic and military relations of late modernity are suffused with bureaucratic rationality. The capitalist entrepreneur has been replaced with a bureaucratic manager, who has no real stake in defending the capitalist system. For even under socialism, he will still be a manager, possessing the credentials of a manager. The entire bourgeoisie, therefore, faces extinction. That way of life, which consists in owning a business, has become too precarious. Having built the economic base of our civilization, it is destroyed by the rationalization of the system itself.
Schumpeter summarized his thesis as follows: "Since capitalist enterprise, by its very achievements, tends to automate progress, we conclude that it tends to make itself superfluous -- to break to pieces under the pressure of its own success. The perfectly bureaucratized giant industrial unit not only ousts the small or medium-sized firm and 'expropriates' its owners, but in the end it also ousts the entrepreneur and expropriates the bourgeoisie as a class which in the process stands to lose not only its income but also what is infinitely more important, its function. The true pacemakers of socialism were not the intellectuals or agitators who preached it but the Vanderbilts, Carnegies and Rockefellers."
The socialists may not appreciate the irony of this, and the conspiracy theorists will have a field day; but Schumpeter's description of the overall process of transition from capitalism to socialism has proven accurate. What also occurs in this process is the destruction of our civilization's "protective strata" -- as Schumpeter calls it. Since we are all employees (and even the bosses are employees), the defense of private property in the means of production is not as keen or vigorous as it was in the past. The debate is now focused on government programs, government solutions (that is to say, bureaucratic solutions). The anti-capitalist mentality is not going to be checked, or driven back, as it once was. It is now permanently empowered and entrenched within our economic and political system. And it may be argued that the system itself has brought us to this state of affairs.
© 2010 J. R. Nyquist