[This is Chapter Seven of Murphey’s book Socialist Thought.]

Chapter 7 RELATION TO CAPITALISM

It is worthwhile now to consider the extent to which socialism has been a response to capitalism's faults.

The Marxist, of course, will pose the question differently. He will say “you have missed the point if you talk about whether socialism has been a reaction to the faults of capitalism. A far better way of seeing the connection is to understand it as one in which socialism arose from the contradictions within capitalism and from the interplay of the conflicting interests that have reflected a variety of changing class strata."

I myself, however, believe that both approaches are misleading. Socialism has not primarily been a reaction to capitalism's faults. Nor has it been a result of a dialectic of class changes. My conclusions are accordingly provocative, since they fly in the face of considerable opinion to the contrary.

First, let’s consider the fault theory.

We should readily acknowledge that there have been serious shortcomings within capitalism and the attendant bourgeois society. We should note, though, that (1) the turn of the modern age's intellectual culture sharply to the left preceded, rather than followed, any long experience under capitalism; and that (2) a turn toward socialism cannot be attributed to those flaws if the faults were correctable within capitalism's own ethos. As we review the main faults we will see that they have generally been remediable. The intellectual culture turned precipitously toward socialist perspectives without first giving serious consideration to remedies within a classical liberal context.

Here is what I said about the timing in Understanding the Modern Predicament: "Capitalism wasn’t tried and seen to fail before the intelligentsia developed its hatred for it. The hatred came first. In the United States, the alienation began in the generation of Emerson and Thoreau. This was still during the pre-Civil War age of local, small-shop capitalism, well before the smoky industrialism and tendency toward concentration that are usually pointed to when we receive our impressions of why intellectuals abhorred capitalism. In England, the landed aristocracy -- not the middle class -- controlled both the politics and the economy until after the passage of the Reform Act of 1832. Even then it took Richard Cobden years of struggle to gain even a partial adoption of the Free Trade position. When Chartism showed its hostility, the bourgeoisie and capitalism had hardly been given a chance. In Germany, there was little capitalism until late in the century. But this didn't deter Karl Marx from devoting his life (mostly in England) to excoriating it. His theories, and those of Lassalle and others, were a priori, the product of agitated minds, not of history itself. In Russia, socialist radicalism began before mid-century. There was almost no capitalism at that time."¹

This tells us that the alienation came first and was in no significant way caused by felt deficiencies. It also says something about the refusal to give capitalism a chance, as well as about the refusal to devote attention to how any faults might have been correctable consistently with liberal individualism. Still further, the effects of these failures must be considered: The drain of intellectual resources to the left drove the classical liberals who stayed behind into a defensive posture that has been incompatible with reformist impulses. This has acted further to prevent an amelioration of the defects. (For reasons that will be given in my book on modern liberalism, I don't consider the later welfare liberalism to have been a genuine attempt to provide solutions in a way fully consistent with classical liberal values.)

The following review of the flaws, to see if they were correctable, is necessarily an abbreviated discussion of any given issue:

An evident fault has been the problem of the trade cycle. I am enough of a monetarist to believe, however, that a reliable, stable monetary system is by no means impossible for a market economy. To accomplish this, it won't be enough simply to create the appropriate monetary and fiscal policies; the grab-bag aspect of interest group politics and the institutionalized pressures, through unions and minimum wage laws, to raise wages above the supply-and-demand rate will both have to be faced squarely within our society. But an active classical liberal intellectuality and political program can in theory provide corrections to the trade cycle. [Note in 2003: This doesn’t seem nearly as clear to me now as it did when I first wrote this paragraph. Milton Friedman’s monetarist predictions have not always held true, and the Federal Reserve under Alan Greenspan’s chairmanship proved not to be able to maintain control over the economy, despite several years in which he seemed a genius. The problem of the trade cycle remains to be solved – and I have long felt that that would be a major deficiency in the foundations of a market economy. It was to satisfy myself about that that I attended Ludwig von Mises’ classes at New York University during late 1956 and early 1957.]
A fault of a very different type is the Philistine mediocrity that has always been ascribed to the middle class. That mediocrity certainly exists. Commercial culture does add to it because of the endless repetition of trivia in commercial contacts that comes to pervade all social intercourse, creating a stultifying "outer flow" that bypasses true emotion and intellect. In a broader perspective, though, it appears that trivial conversation is a characteristic of average people everywhere. Only a non-decadent educated elite will avoid it, but I would hope that rule by the intelligentsia would send a shudder of fear down our spines. (See Konrad and Szelenyi's insightful book The Intellectuals on the Road to Class Power, which tells about the craven human types that typify rule by the intelligentsia in the Soviet bloc. Fascinatingly, they are precisely the same types of hollow men we see so much of in contemporary American society. This suggests that “human nature,” not “bourgeois Babbittry,” accounts for their existence.
But is this mediocrity correctable? Not if we expect the "perfectibility of man" that was so much a part of nineteenth century optimism. Nevertheless, the problem can be transcended if capitalism ever acquires the supportive, but still critical, intellectual culture it so much needs. An elevating "clerisy" of intellectuals, both empathetic and anxious to reform, could work wonders. Its absence is more attributable to the world intellectual community than to capitalism.
Another fault has been that capitalism has lacked some of the structural preconditions that are needed if it is most fully to serve human values. This was especially true during the beginning of capitalism when it had not had time for these to develop. Capitalism remains quite young and raw-boned, with much refinement still to come.

I am thinking of such a thing as the need, in many contexts of ordinary life, for risk sharing. Early capitalism necessarily didn't have a developed insurance industry to provide a cushion for such tragedies as industrial accident. Even our present insurance industry has a long way to go. There seems to be no reason it cannot continue to refine its servicing of such needs.

Another structural aspect has to do with the many features of the work relation: such things as the dignity of labor, due process for employees, industrial safety, stability of employment, and the reliable provision for old age. Capitalism is well on the way to addressing these needs, although credit is usually given to unions and legislation for the advances that have been made. What is needed is a non-defensive sensitivity to them on the part of theoreticians and legislators who want to see capitalism succeed. Further sensitivity and refinement does not have to be incompatible with a framework of classical liberal values.

Yet another flaw has come from the failure of classical liberal theory, in its defensiveness, to acknowledge, and then to provide adequately for, situations that involve imperfections in the market. Various "bargaining power disparity" situations are of this kind. Few markets are perfect, and a classical liberal theory is needed about the ethical and legal framework necessary to enhance the smooth functioning of imperfect markets. The "consumer protection" movement has been one of the goads used by anti-capitalist activists, but it has been useful on the anti-capitalist side of the ledger in part because of intellectual default by classical liberals.

Again in their defensiveness, many of the theoreticians for a classical liberal society have embraced the "nightwatchman" view of the appropriate functions of government. This pinched view has proved their doctrinal purity, but has served an individualistic society poorly. What is needed is an awareness that there are some things the market cannot provide, but that serve important human values. These include such things as space exploration, the finding of a cure for cancer, and at least a decentralized assistance to the arts.

An insufficiency in the classical liberal theory of the free society has been a failure to appreciate the need for a "commons.” This is a concept that acknowledges the necessity, even within an individualistic nexus, of certain freely available and shared amenities. As a classical liberal who sees the immense value of a system of predominantly private property, I would not have us go to extremes in providing socially for such "free goods." But the question of how much an individualistic society will do in this regard compared to a welfare statist or a socialist society is largely a matter of degree, since there is no clear delimiting principle. [Note in 2003: If my expectation of a crisis caused by the displacement of work is correct, the extensive provision of a “commons” will become a necessary feature of an adapted classical liberalism. See my book The Emerging Crisis of Economic Displacement.]

Many critics of capitalism would see a major fault as being the lack of sharpened communal purpose within a bourgeois society. Carlyle abhorred the absence of "heroic" strivings; Sombart dichotomized between the "hucksters" within a commercial ethos and the "heroes" within, say, national socialism. (It is true that alienated literature has also championed the "anti-hero." This appears inconsistent, but it makes sense as one of the Left's debunking weapons and as one of the products of the Left's championing of the have-nots.)

The criticism that commercial life lacks heroic striving reflects some insensitivity on the part of the critic, who has failed to perceive the human adventure that really is quite intense for people who, for example, put together an oil refinery or who even establish a small shop to sell ice-cream cones. There is excitement where there is hope of success and the specter of loss.

I take it as really no criticism at all that bourgeois society is peaceable. The absence of martial striving is something I consider a blessing, although I know that Nietzsche would call me a "cow, a female or an Englishman" for such a preference.

Still, the daily round of life within peaceable society does need uplift. It isn't sufficient in itself, and needs ennoblement. To some extent sports fill this need; far from being mere games, they can be sublimations of heroic impulses that in other societies often find bloodier expression In the broader sphere, the uplift awaits the on-going presence of a supportive intellectual culture, such as I have already described. Bourgeois society definitely needs the heroic arts that were so great of a legacy of classical Greece.

I will stop the listing of the flaws at this point, and before leaving the subject will observe that some of the things that critics see as faults are not really deficiencies at all:

Hegel said that the state is divine. The limited state endorsed by classical liberalism flies in the face of those who want a Caesar-like direction of mankind or who want to remold humanity from on high. Since I fully believe that mankind will long retain some significantly neurotic tendencies and that Lord Acton was right when he said that "power corrupts," I prefer to think that classical liberalism comes out on top on this issue. [Note in 2003: It is an amazing fact that within the recent past a great many American “conservatives,” who for the most part have classical liberalism as their core philosophy, are embracing an American foreign policy of worldwide global interventionist meliorism. “Remolding humanity” is very much a part of this messianic effort. It flies in the face of fundamental classical liberal premises. Patrick Buchanan has perhaps seen this most clearly in his A Republic, Not an Empire.]

Critics think of the market economy as "a mutual swindling match," a "competitive rat race," and a "cash nexus" that militates against the sort of humanism that comes from selfless endeavor. Here I think they overlook the humanistic values served by economic dynamism. If, say, America is not fundamentally more humanistic than its competitors, then we must wonder why a flood of refugees has been pouring into America from all parts of the Communist bloc [and since the end of the Cold War, from the Third World in general]. The refugees see America for what it is, notwithstanding all the alienation heaped upon it for so long.

The Left thoroughly believes the market economy entraps millions of people who simply can't make it within a self-reliant milieu. I have discussed this at length elsewhere [see my chapter on the “exploitation theories” in this book]. Not only is the assertion factually inaccurate; it is also a seriously demeaning view of people.

At the beginning of this chapter I mentioned that Marxists would feel I have misstated the issue. Instead of relating the rise of socialism to capitalism's faults, they would say, I should ask how socialism has flowed from the dialectic of class struggle.

Such a thesis was hard to judge in Marx's own day, since prophecy looks to the future. The available criticism to apply to it, of course, was epistemological: that the prophet had no way to prove his assertions. Today, we have the hindsight of more than a century. About the only "class struggle" that appears to have had any significance to the rise of socialism has been the savaging of the predominant society by the alienated intelligentsia. It is interesting, although ultimately tiresome, to read the many Marxist analyses of modern society. They eagerly latch onto every conceivable nuance of group self-interest. But all this becomes hollow when we realize that the radical intelligentsia has imputed anti-capitalist potential to every group that has not been thoroughly assimilated or that has had any ground, real or imagined, for dissatisfaction. Virtually all of these so-called classes and strata have been quite unresponsive, since their members actually aspire precisely to an assimilation into the main society. [Note in 2003: This would not seem totally to be the tendency for the various ethnic groups that have flooded into the United States since the removal of immigration barriers in 1965. An ideology of “multiculturalism” has championed a refusal to assimilate, and is the principal ideological instrument of the Left in the United States today. The point I have made here illustrates the difficulty a non-assimilationist ideological aspiration will have. But assimilation is not assured.] The man of words pokes and prods and conspires, perhaps dies fighting in the jungles of Bolivia. It is true that this is something that can profit from sociological analysis -- and that is what I see myself as applying to it --, but the "dialectic of class struggle" almost totally misses the point so far as an understanding of modern society is concerned.

NOTES

Dwight D. Murphey, Understanding the Modern Predicament (Washington: University Press of America, 1982), pp. 273-274.