force of evil for which only really nasty, cruel people could be responsible. It is as if capitalism happens to us, imposed by external trickery. But that is not true. Most of us actively participate in keeping capitalism going every day, and not always unwillingly. Indeed, some of those it seems to serve so poorly—much of the working class, for example—are among its most energetic defenders.
This book is written with the conviction that much of the way we organize the “economic” aspects of modern life is ethically and politically indefensible, and ecologically suicidal. It is also written with the conviction that merely pointing that out, and then waiting for everyone to agree, is a mostly futile exercise. It simply reproduces slumped-shouldered pessimism or smug radicalism, a chorus of self-proclaimed rebels repeating conspiracy stories and sweeping generalizations with which their listeners already agree: “Banks rule the world!” “Capitalism = greed.”
Not that all the conspiracies and sweeping generalizations are baseless—but some are definitely hollow, and those that are true are often only symptoms of other, more powerful dynamics. Take the two placard slogans above. Both seem to state the obvious. Modern governments are beholden to the banks and bond markets, and it does sometimes seem that capitalism is driven by “greed,” but in neither case is the problem as straightforward, nor the solution as clear, as the indictment makes it seem. Capitalism is much more complex and compelling than that.
This is a fatal flaw in much radical critique of contemporary capitalism. One of my goals is to expose this flaw, and suggest a way that critique and politics can move past it. It is not enough to point fingers, to expose puppet-masters. Doing so may satisfy a sense of fairness, while indulging in the comfort of a black-and-white politics that identifies “the” enemy. But it almost always degenerates into moralizing. High-horse politics, which rely on the claim that “we” are better or more honest or more caring than “them,” the bad guys, crudely oversimplify the difficult choices most people make in real life—assuming they have a choice at all. (Not to mention that such moralizing is what conservatives do best).
Perhaps the CEOs of Shell Oil or Citibank are indeed cruel profiteers and super-rich megalomaniacs. Perhaps they really are bad guys. That is not, and cannot be, the basis of a critique of capitalism. Capitalism is neither made nor defended by profiteers and super-rich megalomaniacs alone, nor did they produce the system that requires the structural position they fill. In reality, capitalism is produced and reproduced by elaborate, historically embedded, and powerful social and material relationships in which most us participate. In fact, many of us struggle to maintain those relationships, sometimes with all our might, because we feel like we have little choice. Are immigrant workers who cross a picket line because they need to cover the rent the “bad guys”? What if they are hoping to one day be a boss or factory-owner? Are they merely duped? Are the poor “really” anticapitalists at heart, but just don’t know it yet? Would they choose something other than capitalism if given the chance? On what basis could we make that claim?
“We’re good, you’re evil” strategies can easily undermine mass solidarity, precisely because of those tricky everyday decisions people have to make. Barring a “clean slate” political solution, such as the revolutionary elimination of the “bad guys” (which history suggests is a risky route), I am convinced that the only basis for solidaristic anticapitalist politics is an analysis that makes sense of “complicity.” We need an approach that comprehends the various positions and political dilemmas in which people find themselves, and helps them see that these dilemmas are neither inevitable nor necessary—that they can find what they need in different, better ways, through other ways of living and thinking.
So, while it is partly true, for example, that “banks rule the world” through their control of governments, if we want an end to that control, we need to know more than the fact that it exists. Recognizing the reality we face is a crucial first step, but on its own it gets us almost nowhere. What we really need to know is how banks exercise control: how bond markets work, how the state has come to depend upon them, and what we must undo or fix to alter existing structures of power. If we want to get rid of “greed” (because capitalism is held to be exceptionally greedy), we have an even bigger problem on our hands. Only by ignoring all of human history can we blame greed on capitalism, and it is not obvious that capitalist greed is necessarily worse than, say, the greed of Henry VIII or Hernán Cortez, of slave-owners or elites in the Communist Party of China.
The problem is not that capitalism is a conspiracy of greedy people. The problem is that capitalism, as a way of organizing our collective life, does its best to force us to be greedy—and if that is true, then finger-pointing at nasty CEOs and investment bankers may be morally satisfying, but fails to address the problem. We are aiming for more than a world with nicer hedge-fund managers.
Two premises follow from this. First, we need to understand capitalism in more than just a wishy-washy, general way. If we want to change it, whether by tweaking or reworking the whole economic fabric of society, we need fairly detailed knowledge of the how, why, what, who, and where. Second, while critical theories (like Marxism) have a lot to offer, it is just as important to seriously engage capitalist theories of the capitalist economy, the ideas that make up modern orthodox (“neoclassical”) economics and political economy. In other words, we have to recognize that as capitalism has developed, it has done so in tandem with ideas of human society with which it makes sense of itself.
Without some understanding of modern economic thinking, we cannot understand capitalism, because we cannot understand the logic and analysis that justifies it, that orders its institutions and gives it the legitimacy that has helped it survive and thrive for so long. Capitalism is organized the way it is because of how capital understands the world—an understanding, we must admit, shared by millions of people all over the world. Capitalism is not maintained by mere violence and deception. If it were, it would be far less robust. It is also sustained by a set of institutions, techniques, and ideas about human affairs and social goals that, for many people in the wealthy world, are unquestionable, as natural as gravity. Critics of capitalism ignore or dismiss these ideas at their peril.
This is not as dry as it sounds. The “dryness” of orthodox economics is part of what gives it its power. It seems so boring and technical, so coldly mathematical. Its subtle technicalities—interest rate dynamics, firm structure, pricing minutiae—sound like the province of arrogant experts and self-important businessmen. But behind this curtain lie key ideas and institutions, and we need to understand them. I wager that, if we put them in their broader political context, you will find a lot of it downright fascinating—troubling, certainly, but fascinating.
The book proceeds by laying out the ideas (Part I), and then putting them to critical work in the real world (Part II). In Part I, the rest of this chapter provides the necessary foundations: what exactly is this capitalism thing? Chapter 2 turns to some influential theories of capitalism, drawing from both critical and non-critical or “liberal” political economy. One theme that will emerge is that capitalism is extraordinarily dynamic and robust—arguably more so than any other way of organizing economic life yet realized. Despite a common misconception that it is rigid and unaccommodating, it has changed a lot over time, and continues to change. In reality, there is a range of actually existing capitalisms. This means that despite their persistent influence, some of the older ideas presented in Chapter 2 seem quite poor descriptions of capitalism today, especially regarding finance and credit, which were not always so central.
With this conceptual frame to help organize our thoughts, the next two chapters in Part I consider the principal features of modern capitalism’s core institutions and processes. Chapter 3 starts with the essential capitalist institution that usually gets either down-played or dismissed: the state. It also examines the form and content of money, maybe the most important way in which the state and the market are bound together in capitalism. Chapter 4 contains an analysis of markets in their varieties, and looks at what their “actual” operation can tell us about modern capitalism and the working people and profit-driven firms that play so crucial a role in its dynamics.
