October 27, 2019

ALL ECONOMIC CONFUSION ARISES FROM A SINGLE ERROR...:

What Comes After Capitalism?: A review of Capitalism, Alone: The Future of the System That Rules the World, by Branko Milanovic  (Samuel Hammond, 10/27/19, Quillette)

But rather than throw out historical materialism altogether, Milanovic suggests Marx simply got the sequence wrong. Communism turned out to be the most successful in agricultural, Third World economies as a tool to vanquish feudalism, and thus lay the foundation for capitalism. This is validated by our best understanding of how countries like China and Vietnam initiated their economic development. After the Chinese Communist Party's victory in 1949, for example, China abolished quasi-feudal systems in rural areas through comprehensive land reform, and weakened clan-based social relations by imposing nuclear family structures and gender equality. "This was no less than a complete overturning of historical hierarchical relationships," notes Milanovic.

The famines spurred by China's Great Leap Forward were catastrophic. Nonetheless, the broader political centralization and reorganization of society made "a tabula rasa of all ideologies and customs that were seen as retarding economic development and creating artificial divisions among people." Western societies skipped this revolutionary step because they developed first, having overcome the feudal and familial barriers to growth in a much more gradual fashion. In this respect, the influence of Christianity is perhaps the most neglected factor in Milanovic's account.

The spread of the Western Church throughout Europe centuries before the Industrial Revolution helped dissolve extended kin-group networks through prohibitions on cousin marriage. This ultimately created the social conditions for the emergence of democracy. Evidence for Christianity's role includes empirical work by the economist Jonathan F. Schulz, which finds a strong correlation between exposure to the medieval Church and the formation of inclusive city- level institutions and urban population growth. Extending his thesis globally, Schulz even finds that the prevalence of cousin-marriages can "explain more than 50 percent of the variation in democracy across countries today."

Milanovic suggests that these two developmental histories--gradual and revolutionary--give rise to the two distinctive models of capitalism in the world today: "Liberal meritocratic capitalism" in the West, and one-party "political capitalism" in countries like China, Vietnam, Malaysia and Ethiopia. Nonetheless, the egalitarian ethos spread by Christianity is important for understanding why the West became not just liberal, but democratic. Materialist accounts only get us so far.

In a democratic society, the equality of citizenship gives each member an ownership stake in the commonwealth. Western democracies still have hierarchical organizations like corporations, but the political system is relatively flat: civil servants and elected representatives work within the bounds of a social contract. China's political system, in contrast, is itself like a top-down mega corporation. Its model of "regionally decentralized authoritarianism," in which local and provincial leaders move up the ranks by hitting performance targets, even shares similarities with the governance structure of Japanese conglomerates. The ethos of China's political capitalism is thus to treat citizens as contractual employees, rather than as equal owners with corresponding rights.

Indeed, political capitalist economies achieve spectacular growth rates by doing an end-run around the constraints of the rule of law and democratic negotiation. They prize efficient bureaucracies and the autonomy of the state, legitimized by continuously rising standards of living rather than the consent of "we the people." The corruption endemic to political capitalism may even be a feature, Milanovic argues, helping to grease the wheel of rapid development.


...the failure to ask the purpose of an economy in the first place.  When one asks the question it becomes apparent that there can be only one answer: to create wealth. This is why capitalism is the End of History.  No other social arrangement has ever delivered increasing wealth as well, nor even come close.

When we examine the implicit answers of the core question offered by various ideologies, it becomes clear why they do not ask.  Broadly speaking, what the Left promises is complete economic equality for all members of society--essentially a pre-Lapsarian state.  This is the "economy" of Abel, the hunter-gatherer, where wealth was finite and man's only role was to collect what existed.  Over and against this was the actual economy of Cain, which involved increasing wealth through endeavor. We know how Man resolved that choice. Were the Left today to ask people if they prefer a system that distributes finite wealth evenly, so that everyone is equal but impoverished, or a system where wealth grows constantly and everyone becomes wealthier, but some more wealthy than others, there is not any serious question what the answer would be.

On the other hand, what the Right promises is a return to stasis at some idealized point in the past.  We need not make this overly pejorative by citing their love for moments like the Antebellum South; it is enough to go with their idealization of something like coal-mining or textile manufacturing and the "stable communities" associated with them.  The Right's economics imagines a return to those halcyon days via ending trade, technology and immigration so that we'd be forced to return to such work. But the answer to asking a Protectionist/Nativist/Luddite if he'd be willing to mine coal by hand himself is so obvious it's no wonder the Right never asks. The ostensible benefits of a return to those days also requires that no questions be asked.  What, after all, was the actual value of a nuclear family, deep local roots, etc., when you labored 16 hours a day at a job that broke you physically and/or killed you, in order that you live in a shared poverty? The Right's nostalgia is just as addlepated as the Left's.

It is hardly surprising that it is capitalism that answers the unasked questions in the way that the citizenry would answer.  On the Leftward side, the rapid acceleration of technology and trade under capitalism is rendering an economy that requires ever less labor to create ever more wealth.  Not only has poverty been eliminated in the developed world but the lowest classes are now affluent by historical standards and even in the developing world deep poverty is disappearing.  All this is being achieved at a time when such work as is required has been made so safe and easy that women were easily accommodated into the work force, jobs have been exportable to the most backwards societies and now machines are replacing humans in the workplace.  This is only economics, so it's no utopia, but we approach an age of unlimited wealth and negligible labor.  

On the Rightward, if the hoped-for ideal is that men have more time to devote to family, neighborhood, church, community, etc., then the future they are fighting is the past they invented in their own minds. Likewise, if geographical immobility is your fetish, then a humankind that can choose to live anywhere rather than being forced to chase better-paying jobs is in the offing.  The future Okies will be able to stay in their Dust Bowl if they prefer.

Note that none of this is the panacea it first seems.  While the question of economics has been answered, there remain the political and religious questions.  Politically, the question is obviously how we equitably distribute the wealth our societies create.  Religiously, the question that remains to be answered is to what degree our sense of personal worth and fulfillment depends on employment.  These are big enough quandries to occupy us going forward. 


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Posted by at October 27, 2019 10:48 AM

  

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