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THE MIND AND THE MARKET

Jerry Z. Muller

Subtitle: Capitalism in Western Thought, Random House, NY., 2002, 487 pgs., index, notes, paperback

 
 

Reviewer Comment:
I learned a great amount from reading this book. And it complements Dr. McCloskey's three volumes. Here, Dr. Muller refers to his selected authors as 'intellectuals' and of course they are. But for me they are a particular group, a component of them, not all those who can be classified as 'intellectuals' are of the 'intelligentsia' - Rather they are what many others (including me) call the 'intelligentsia' - or Dr. McCloskey calls the 'clerisy'. That is, smart and well educated people who self-determine that their personal roles are to change society to what they consider 'the better'. Dr. Muller credits these individuals, as do many other commentators as well, as among the elite influencers of 'public opinion'; which was a growing power source in Europe as a larger and larger segment of the population gained political power. The more the masses could vote, the more critical it was (and is) to insure that they vote according to the enlightened thought of their intellectual betters. Moreover, when they do not, or ignorant politicians seek votes, the envious intelligentsia must intervene.
As his subtitle indicates, this is not a study of capitalism itself nor of the economic history of Europe during which capitalism became the driving force. Rather, it is a study of the thoughts of a selected group of these intelligentsia members about not only or mainly the economics of capitalism but its interrelationship with culture, morality, and ethics. Or as he writes in the introduction: "That is why this is a history not of economic ideas, but of ideas about the capitalist economy." However, he cites his methods as an historian which enable him to place the individuals' thoughts in both the context of their personal biographies and the historical setting in which they lived. And he does have to outline their views on economics in order to place their published pronouncements on the cultural and social results of capitalism in to context. Dr. Muller describes the personal biographical background of each author in sufficient detail to demonstrate the connection between each author's life experience and his thoughts - theories - on capitalism. This is a critical subject because the theories espoused by intellectuals (an anyone) are developed during their interaction with their environment and education.

The chapter titles indicate the names of these individuals. Most are well known to general students, but several are almost unknown and not usually included in such compendiums as Thomas Neill's Makers of the Modern Mind, or Robert Heilbroner's The Worldly Philosophers. Dr. Muller includes critics of capitalism as well as its supporters, but mostly critics. For my purpose the chapters on the most recent authors such as Schumpeter, Marcuse, Keynes, and Hayek are most important.

As is common about many philosophical issues contention over these same issues remains central to the political agendas of adversaries today. Definitions of 'capitalism' itself are contentious. Even more so are opposing concepts about the definition and nature of 'money' and its role in capitalist and other economic systems - a topic for another discussion. I include Dr. Muller's book with others in a general survey of current thought about capitalism, markets, money, and 'social justice'. The reader may notice that much of the criticism and opposition to 'capitalism' is based not on economics but on concepts of morality and ethics or about claims that 'capitalism' degrades culture. But this is a response to the promoters of economic theory who early on viewed economics in a purely materialistic way, even positing their subject as the actions of 'economic man' - that is one whose desires and actions are motivated by purely materialistic goals. Thus the two groups are talking past each other still, today.

 
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Bourgeois Role

 
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McCloskey, Deirdre - Volume I - The Bourgeois Virtues

 
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McCloskey, Deirdre - Volume II - Bourgeois Dignity

 
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McCloskey, Deirdre -Volume III - Bourgeois Equality

 
 

Introduction:
The author starts out directly, writing: "We live in a world shaped by capitalism"... and, "It (the book) is based on the assumption that capitalism is too important and complex a subject to be left to economists." Further, "That is why this (book) is a history not of economic ideas, but of ideas about the capitalist economy."

He notes the development about which I have objected for years, namely, the separation of economics as a separate academic and professional discipline and subject matter from its real context as an integral component of 'political/economy'. This, he notes "have come at the expense of marginalizing many of the issues about the market that are likely to concern reflective people." But he also notes that 'the moral, cultural, and political ramifications of capitalism' have recently become the subject of serious concern and attention for commentators. The resulting losses of the 'forces of commerce' have included civic virtue and the "willingness to defer gratification upon which capitalism depends.". "Individualism and selfishness were destroying any sense of collective purpose."
Dr. Muller cites his interest in our contemporary conflicting analysis of the 'virtue' or not, of capitalism and of its manifestation in 'the market' on the grounds of moral, cultural, and political criteria, of which he mentions many. He decided to investigate the historical background of these theories and found that they all have lengthy pedigrees starting from the very origin of intellectual recognition that something causing radical change in human relations was taking place.

Recognizing all this, he undertook to research the history of thought about capitalism as found in the writing of major Western - European - intellectuals back to the early 18th century. He writes: "I found that reflections on the cultural, moral, and political effects of capitalism had been central not only to intellectuals often treated as 'economists' such as Adam Smith and Joseph Shumpeter, but to figures not usually thought of in connection with the market, from Voltaire through Hegel, from Edmund Burke through Matthew Arnold and beyond." The result is this book in which each chapter is focused on one or several writers. In connecting their views he has found several general themes, which he has addressed. Among then: "Among the issues that recur throughout this study is the question of poverty and wealth." "Then there are questions of capitalism and culture." "How the market economy affects the family has been another long-standing focus among the analysts of capitalism." "The relationship between capitalism and equality is another recurrent theme." "A larger theme, uniting several of those mentioned so far, is the effect of the market on pre-market institutions - political, religious, cultural, economic, and familial." "Because the rise of the market to its position of centrality in modern European societies coincided with the rise of intellectuals as a distinct social group, another recurring theme is how the thinkers in question conceived of the role of intellectuals within a capitalist society."

He writes, "The Mind and the Market moves between practical, concrete capitalism, and intellectual reflection on capitalism - between what the Viennese satirist Karl Kraus in his Magical Operetta, called 'tachles' and 'shmonzes'." He continues with a discussion of his methodology for historical research and his selection of the writers and their thoughts that he considers most significant. A feature of his method is to place each author and their thought in the context of their time.

 
 

Chapter 1 - Historical Backdrop: Rights, Righteousness, and Virtue
The content of this chapter is an important confirmation of the very same appraisal Dr. McCloskey presents in her three books on the Bourgeois role in modernization and expansion of market capitalism. Dr. Muller cites the most influential authorities going back to Plato and Aristotle and the Bible. All the intellectual preconditions on which capitalism; modern ideas about money, markets, competition; and roles of individuals in society are based were opposed by both civil and religious opinion and institutions. Some of the same concepts appear, such as honor, dignity, trade, markets and liberty. As he notes, the fundamental debate is "about the moral worth of a society organized around markets" Societies were structured on a hierarchal basis in which everyone had a status and knew what it was. Work, especially artisan and merchant activities were disdained. Making 'money' was denounced. There was great 'hostility toward trade and money- making' in both the religious and civil traditions. He continues: "The most suspect form of commerce was the making of money from money." Lending money which generated interest was by definition 'usury'. Wealth itself was 'disparaged' by moralists. Dr. Muller traces published views on all this from classical and Biblical times through the middle ages. One powerful classical authority he does not mention is Cicero, who dismissed all forms of commerce out of hand and preached that politics was the only really honorable way of life.

He cites the admonitions of St. Bernard of Clairvaux warning about Jewish influence in money making, even though the Cistercians were noted for their development of profitable marketing activities. Moreover, he writes: "Thus began an association of money-making with the Jews, an association that would further taint attitudes toward commerce among Christians, and that, as we shall see, would survive in transmitted forms in the reflections of modern intellectuals."
I see a 'feedback loop' here. Jews were denounced because they were 'money-makers' and 'making money' was denounced because it was considered a Jewish activity.
Luther was "hostile to commerce in general and international trade in particular." not to mention usury. And. "That trade was inimical to communal cohesion was a staple of the civic republican assumptions of early modern political thought." He cites Machiavelli as a proponent of the classical view on 'virtue' and self-sacrifice in favor of the community - the 'public good'. "Republican 'liberty was the freedom to take part in preserving the freedom of the commonwealth from foreign domination." - A classical Greek conception of the meaning of 'liberty'. Dr. Muller then discusses the development of civil law in contrast to Christian and classical traditions.

 
 

Chapter 2 - Voltaire: "A Merchant of a Noble Kind"
In this short chapter we learn a great deal more about Voltaire's personal life and activities than one finds in the usual essay about his political opinions and influence. As is his objective with all these intellectuals, we find that Dr. Muller identifies the way in which Voltaire's personal life agenda and activities corresponded with his public political pronouncements and how his theories subsumed his views on economics (especially capitalism) beneath his theories on culture and social issues. And we learn also about Voltaire's advocacy for an increased role and power for intellectuals (of a certain sort) in creation of public political policy.

 
 

Chapter 3 - Adam Smith: Moral Philosophy and Political Economy
Dr. Muller devotes much more space here for a fuller description and analysis of Smith's thought (and real meaning) especially in his two main books. The Wealth of Nations, and The Theory of Moral Sentiments, but also other publications, letters, and lectures. Smith's full range of opinions is revealed to be much deeper and richer than one finds in the typical quotation about 'the hidden hand'. In fact much of the standard concepts today about Smith's theories about economics are shown to be misleading at best. He was a moral philosopher before he was an economist.

 
 

Chapter 4 - Justus Moser: The Market as Destroyer of Culture
This German gentleman was a contemporary of Smith's who vehemently opposed capitalism mostly on cultural and social grounds. But this was in support of his own class position in medieval society, in other words special interest. Moser's attack on 'capitalism', 'the market economy', and industrialization was based largely on his view that these were disrupting established society, which of course they were. He favored the 'status quo' of feudalism, manorialism, guild control, hierarchy and 'honor' based on status. In other words, he was a staunch defender of the conceptions about the superiority of medieval life and society. But he, himself, was a member of the intelligentsia determined to advance this category into running the state.

 
 

Chapter 5 - Edmund Burke: Commerce, Conservatism, and the Intellectuals
Burke was a British politician whose influence waxed and waned on Parliament. He is best known to students today for his Reflections on the Revolution in France, but his speech Thoughts on the Cause of the Present Discontents brought him to public attention. And his speech Vindication of Natural Society and lengthy attack on the misconduct of the British East India Company for its greedy exploitation of India generated much contention in Parliament and Royal politics.

 
 

Chapter 6 - Hegel: A Life Worth Choosing
We learn quite a bit about Hegel in this chapter. Again, it is clear that his philosophical theories were the outgrowth of his personal experience. He was another member of the intelligentsia, but a supporter of Hardenberg in the reform campaign to concentrate power in the bureaucratic state. He stressed study of history to find the true nature of 'liberty' as opposed to the excesses of the French revolutionaries. Dr. Muller writes: "Hegel sought to explain that, rightly understood, the institutions of the modern world were worth affirming, for modern institutions have their own ethical dimension." And further: "For Hegel, the fundamental fact about man is that he is capable of being free." Dr. Muller continues with much more on Hegel's views of civil society and such important features as private property. And Hegel believed in the positive role of the entrepreneur in the expansion of consumers. Dr. Muller writes: "The market, that is to say, did not just satisfy wants, it created them." And: "The market was a want-creating machine." And all this was good as it promoted the sense of individuality as long as the consumer has the self discipline to control his desires. There is much more valuable expansion of Hegel's philosophy in this chapter. Dr. Muller concludes with this: "Hegel's influence upon later intellectuals was formidable, and reached well beyond German-speaking Europe."

 
 

Chapter 7 - Karl Marx: From Jewish Usury to Universal Vampirism
As usual the author provides a brief but excellent biography of Mars and Engles that links their thought to their life experiences. This is a lengthy chapter with a rich content that defies a brief summary. The title indicates Dr. Muller's exposition of Marx's core belief in the antisocial essence of the Jew. From an elaborate critique of all the evils that Jews were supposed to embody, Marx expanded to claim that the central social problem was the extension of 'Jewishness' to all of modern 'capitalist' market economy.

 
 

Chapter 8 - Matthew Arnold: Weaning the Philistines from the Drug of Business
This author was another of those who denounced capitalism on cultural, moral, ethical grounds but from a practically opposite position to that of Marx. He favored 'high culture' considered that of the aristocratic class and bemoaned its being downgraded by the pretensions of the middle class of business and industrial society. He was an example of the intelligentsia cited by Dr. McCloskey.

 
 

Chapter 9 - Weber, Simmel, and Sombart: Community , Individuality, and Rationality
Dr. Muller considers all three of these sociologists together because they were of one generation and addressed the same issues related to 'capitalism' but from different points of view.

"Setting the terms"

In this introduction he writes, "What is capitalism" as the important philosophical and academic subject of the age. And further, "Perhaps never has capitalism received the level of intellectual attention and illumination as it did in Germany during the reign of Kaiser Wilhelm, in the two decades before the Great War" "At the center of those debates were three academics: Max Weber, Georg Simmuel and Werner Sombart". "It was an era when German universities, research institutions, and museums - paid for by the state and by state-solicited donations from newly wealthy capitalists - were widely regarded as the best in the world, and when the prestige of professors within Germany was at its peak".

Indeed, and the results has been a political, social, academic disaster. This is the era in which the 'treason' of the intelligentsia as Dr. McCloskey terms it spread from Germany throughout western Europe and America. This is the time in which American academics flocked to Germany for graduate study and returned to the U.S. with 'enlightened' visions of total change of society via educating the youth to German ideas. That these ideas were promoted by the Prussian 'State' to further its conquest of the rest of Germany did not matter, if it was even noticed. Thus in economics we have the conflict between the German Historical School and the Austrian economists - Georg Knapp versus Carl Menger and Ludwig von Mises. And this Georg Simmel is the intellectual beacon whom Herbert Frankel singles out in his devastating critique in - Two Philosophies of Money. of the 'Chartalist' theory of the nature of money. Thus this chapter is a very significant reference source for understanding the academic situation today.

For the sociologists, Dr. Muller notes: "The debate focused on the question 'which human type is promoted by modern capitalism'" He addresses the influence of Ferdinand Tonnies. "There were two fundamental forms of social life, (Tonnies) asserted. In community, individuals shared a basic solidarity. They were united by an 'organic will,' by cultural assumptions so deeply shared that they became virtually second nature, leaving little room for conscious choice". "He, (Tonnies), saw community in its broadest form in the way of life of the guilds and villages championed a century earlier by Justis Moser". (see above).

And this also is the theme of Polyani. The other 'human type' was that occupying a 'market economy society'. And Tonnies was very pessimistic about the future of society created in this fashion.

Muller writes that Tonnies' book "presented a fundamentally pessimistic vision of historical development, depicting modern man as moving from the solidarity of shared aims and beliefs into a calculating society without shared ideals". "Tonnies' description of modern society and of its central institution, the market, was heavily influenced by Marx, and though he regarded himself as a man of the left, his portrait was steeped in the prejudices of the new integral German nationalism of Paul de Lagarde". "Tonnies repackaged romantic anticapitalism at a time when Germany was once again being transformed by the market".

"Commercial Transformation"

Dr. Muller describes the transformation of German industrial and economic power prior to WWI.
"Germany was also at the forefront of the development of the most characteristic feature of the twentieth century capitalist economy: the bureaucratic corporation".

In his excellent book, Capitalism, Geoffrey Ingham goes into more detail, showing the significant differences between 'capitalism' as it developed in Germany and its development in Great Britain and Anglo-Saxon countries. But Muller does note one of the significant differences, that German industrial production remained largely in ownership by families, but with professional management, with financing by banks rather than by widespread ownership of stocks.

He continues: "The division of labor, once evident primarily in production, now became characteristic of management as well". He cites other results as well.

"Weber: Efficiency and Disenchantment"

Dr. Muller writes his characteristic brief but incisive biographical background of Weber and notes that "Weber's analysis and policy prescriptions flowed from his political commitments". Muller notes that Weber was a 'liberal nationalist'. Weber "was a nationalist because he thought that in the modern world the nation-state was the broadest framework that could exert real power, but also because he felt that ultimately Germans ought to put the fate of their own society and culture above those of other peoples".

Do you see the image of Hitler appearing in the mists? Dr. Muller continues for many pages with his insightful appraisal of Weber's thought and publications.
For a much longer and detailed description and analysis of Weber one can read Reinhard Bendix - Max Weber: an Intellectual portrait.
"Simmel: Money and Individuality"

Dr. Muller writes: "The theme of capitalism as the triumph of means over ends was elaborated by Weber's contemporary, Georg Simmel, who in 1900 published one of the most fertile works of reflection on capitalism and its cultural ramifications, The Philosophy of Money. In this and other works, Simmel explained how the development of the market economy made for new possibilities of individuality". Muller again gives us Simmel's biography and how that influenced his thought.
"Life in a modern money economy, Simmel stressed, is characterized by even greater distances between means and ends. Determining how to attain our ends is a matter of intellect, of calculation, weighting, comparing the various possible means to reach our goals most efficiently".

Dr. Muller describes Simmel's ideas that with the money - market economy involving more and more complex means that require decisions the ends sought become more and more displaced. The exposition of this concept with many explicit examples of practice requires many pages.

"The Dialectics of Means and Ends"

"To Simmel, money was an example, perhaps the quintessential example, of a larger pattern in the relationship between men and the objects they created". This concept, too, requires pages of exposition. But the topic and its analysis by Simmel is still very important today. As we see in Frankel's references to Simmel.

"Sombart: Blaming It on the Jews"

"If Weber and Simmel were ambivalent but predominately positive about the prospects presented by capitalism, Werner Sombart viewed it with despair". Dr. Muller's biographical sketch indicates that Sombart was a very influential intellectual figure who published many widely read and influential books.
He "combined economic history with romantic anticapitalism" "He portrayed the precapitalist economy of the artisan and peasant as 'natural' and the modern capitalist economy as 'artificial'. "Sombart shared the romantic prejudice that identified the archaic with the authentic".

Again, see Polyani for a 20th century version of this romantic idealism.

"Sombart began to draw attention to what was to become a leitmotif of his writing and lecturing for the next decade; the link between capitalism and the Jews".

"The World War as Turning Point"

Dr. Muller notes that all three authors supported the war and its German aims but also had different views about it and their expectations of its results for societies. He writes that Sombart's "'greater bombast and national chauvinism... argued that the war had given back meaning and collective purpose to society".

 
 

Chapter 10 - Lukas and Freyer: From the Quest for Community to the Temptations of Totality

Dr. Muller follows the standard academic classifications in considering Lukas as a 'left wing' communist and Freyer as a 'right wing' National Socialist (Nazi). But the Nazi's were every but as much revolutionaries (and leftists) as were the Communists. And, as Dr. Muller shows, both are representative of the anti-Capitalist thought and critique. He gives us excellent, brief, biographical backgrounds that show clearly the origins of their ideas. They were influenced by Weber and Simmel (not Sombart) - showing how the theories progressed through the generations.
He writes, "Lukas and Freyer provide examples of intellectuals whose analysis of the cultural effects of the market led them to reject liberalism altogether and, like so many European intellectuals, embrace totalitarian solutions to the cultural dilemmas created by capitalism." They were among the intelligentsia 'traitors' whom Dr. McCloskey describes. Lukas was a Jew, although not practicing. But he was one of those who was a convenient target for popular attack.
Dr. Muller writes, "The identification of Jewry with capitalism, which in much of Europe was a metaphor and elsewhere polemical hyperbole, was close to exactitude in Hungary. Lukas became a leading Communist theoretician, thus was an example of both opposite sources of public hatred".

"Capitalism was Jewish, Communism was Jewish" - both were sources of all social problems. Dr. Muller devotes considerable attention to the growing animosity against the Jews in Central Europe prior to World War One. With Communism Lukas was expecting and advocating the eventual elimination of the 'state'. Fryer had a similar view of the cultural and social disaster caused by capitalism but took an opposite position and developed theories that made the 'state' the ultimate and central power.

Thus they are Muller's excellent examples of the opposite solutions in totalitarianism. Along with the 'state' Freyer extolled the role of war, "War for Freyer was the essence of politics." The 'state' was created to wage war. The 'state' could not exist without 'war'.
There is much more fascinating detail in this chapter discussed with the following section topics But these German authors have less authority now than those in the following chapters.

"From Intellectuals to Revolutionaries"

"Capitalism as a System of Illusion"

"Education of the Revolution"

"The Party as Community"

"Freyer: Alienation and the Quest for Community"

"The Particularist Critique of the Market"

"War, the State, and the Preservation of Cultural Particularity"

"Revolution from the Right"

 
 

Chapter 11 - Schumpeter: Innovation and Resentment
Schumpeter remains a very influential source of economic theory today.. Dr. Muller begins by citing his most important book -Capitalism, Socialism and Democracy published in 1942 by which time Schumpeter was a professor at Harvard. Shumpeter disagreed with the growing number of socialists who were using the Depression as ammunition for Marxism.
As Muller writes: "Schumpeter made some startling claims. He argued that capitalism had been a great source of economic betterment for the mass of the population, and that despite the current depression there were excellent reasons to believe that it was capable of alleviating material want. Yet his paradoxical conclusion was that 'capitalism is being killed by its achievements'". It was that, "The forces that have made capitalism the most creative and dynamic economic system in history are creating a social and psychological backlash that will bring it down".

Again, Muller relates Schumpeter's thinking to his personal biography.

The section topic headings are these.

"Creativity and Resentment in Schumpeter's Early Writings"

In this section Muller describes Schumpeter's early life in Vienna during which he studied under Eugen von Bohm-Bawerk the original founder of 'Austrian School Economics' whose subsequent leaders were Rudolf Hilferding and Ludwig von Mises and later Frederich Hayek. Dr. Muller notes that Schumpeter published four major books by age 30 and taught in London before moving to the U.S.
Dr. Muller credits the development of of Schumpeter's work to his response to the collapse of the Austro-Hungarian Empire and the growth of socialist orthodoxy all around him. And he notes also the prevailing development of theories about the importance of elites, such as found in Nietzsche.

Muller writes: "Schumpeter would make the theme of creative leadership central to his conception of capitalism, though he was not the first to do so". ... "From the very beginning of his career, Schumpeter thought of creativity, evolution, and superior individuals as central issues to social-scientific explanation, the implications of which he would explore in economics and then elsewhere".... "The role of creative elites in the economic process was the subject of his second major work, The Theory of Economic Development'".... "Schumpeter distinguished the entrepreneur from the owner of capital, the inventor, and the manager - roles with which the entrepreneur was often confused". ... "The entrepreneur not only fulfilled an economic function, he represented a psychological type. The psychology could not be explained by the scheme of motivations usually employed by economists, namely a hedonistic calculus of carefully maximized well-being". ... "The second Nietzschean theme that runs through Schumpeter's work is that of Resentment: the psychological antipathy of the inferior many to the superior few, and the attempt of the resentful majority to devalue the achievements of the creative and successful".

This is also the focus of Helmut Schoeck in Envy: A theory of Social Behaviour. And also of George Orwell. And it is the psychology that underlies what Dr. McCloskey denounced as 'the treason' of the intelligentsia, while appearing at a loss to understand its causes. Of course it is the mentality also of mediocre politicians who cater to even more mediocre supporters..

Dr. Muller continues: "In attempting to account for the appeal of socialism, Schumpeter borrowed not only from Nietzsche but from the Italian political theorist, Vilfredo Pareto".

"The Birth of Irony from Catastrophe"

In this section Dr. Muller continues with a lengthy explanation of Schumpeter's background in Austria after World War I. And one of the results shown in Schumpeter's theories is very enlightening with respect to socialist ideas today.

"Socialists had other reasons as well to promote capitalist development, he argued. They hoped to end the need for economic activity as the prime task of life. That would only become possible after the buildup of tremendous capital. but investment comes at the expense of present consumption, and socialist politicians would find it difficult to withhold present income from consumption in order to devote it to investment for the future. It was best therefore to begin socialism from a high level of economic production, which capitalism was more likely to bring. Because it would have difficulty creating savings and investment, socialism required demographic stagnancy. Here too capitalism was preparing the way Schumpeter contended, by suppressing irrational impulses and bringing down the birthrate".

This is why proto-socialists like Bern Saunders do not advocate preventing individuals from BECOMING wealthy, because they need wealthy individuals to create wealth. Rather they plan on extracting the wealth necessary to cater to their followers.

"Socialism would slow down economic development, Schumpeter explained, but that was consistent with the purpose of freeing human energies from economic purposes".

"From Prosperity to Depression"

In this section Schumpeter's time in Austria ended in 1932 and he moved to the U.S. Dr. Muller added some information about the growing scale of production during this period and how capitalism itself was changing. He comments that "capitalism was transforming the family as well". He mentions Margaret Sanger and birth control. Then he switches to comments about the causes and impact of the Great Depression. He notes that Roosevelt's extensive interventions failed to 'solve the problem of unemployment". This and other descriptions of Roosevelt's 'new deal' are background for the next section.

"Schumpeter's Analysis of the Depression and New Deal"

Dr. Muller writes: "Schumpeter's first major literary response to the Depression in the United States came in his mammoth work, Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process".... "He sought to show that cyclical booms and busts were an inevitable part of the history and process of capitalist development, though he thought that the swings of the business cycle could be moderated as business cycles were better understood by corporations and by governments".
Muller believes that Schumpeter did not agree with the radical Marxist view on causation. "Schumpeter offered a far less apocalyptic diagnosis, He maintained that the Depression in the United States had come about as a confluence of long-term and short-term cyclical factors. The recovery that had begun to occur in 1933 was due more to the 'natural' effects of the business cycle than to government policies. But that recovery had been slowed by government policies such as the National Industrial Recovery Act of 1933".

Further, he comments. "The Keynesian analysis of the Depression held that contemporary capitalism suffered from a shrinking of opportunities for investment. Schumpeter concurred, but not for the reasons offered by the Keynesians. The problem, in his view, was that popular and governmental hostility to economic elites had led to a situation in which those who ought to have made the most significant innovative investments were discouraged from doing so".
"Schumpeter was skeptical of the government antitrust efforts. He defended large corporations, part of his lifelong justification of the creatively superior.
"In America too, 'antielitist resentment was killing the capitalist goose, creating as situation in which neither capitalism nor its possible alternatives are workable'".

"Capitalism, Socialism, and Democracy"

Dr. Muller continues, "Under such circumstances Schumpeter brought together ideas that he had been exploring for several decades in Capitalism, Socialism and Democracy".
"Probably because Schumpeter recognized that the Depression had made Marxism more attractive than ever, especially to intellectuals, he began his book with an inquiry into what made Marxism so appealing, and went on to anatomize Marx's achievements and failures. Thought Marxism condemns religion as the opium of the masses, it is best understood as a religion itself".

Just what I was teaching 50 years ago without having found the idea in Schumpeter's books.

Dr. Muller devotes the remainder of this section to analysis of Marxism and Schumpeter's views of it and of capitalism. All excellently analyzed.

"The Role of the Intellectuals"

Now comes the killer comment. Dr. Muller writes, "If capitalism creates its own gravediggers, Schumpeter suggested ironically, they are the class of intellectuals - those whom Marx called 'ideologists' of bourgeois origin and Matthew Arnold the 'aliens', the sort of person exemplified by Georg Lukas or Hans Freyer. Their power came from their role of shaping the minds of others. Through teaching, writing, and influencing governmental bureaucracy, they fashioned the cultural climate of their societies".

Bingo, bravo, the 'traitors' that Dr. McCloskey wonders about. And they now are filling the faculties not only of colleges but even of elementary schools. They especially gravitate to careers as economists and political theorists consulting governments. And the pseudo-intellectuals flock to the entertainment and journalist fields as well. And boy, are they envious, especially when the 'despicables' don't clamor for their advice.

Dr. Muller continues with further description of the intelligentsia. Then he concludes the chapter with this.
"As the world formed by capitalism changed, so did the terms of the indictment, an indictment best exemplified by the work of Herbert Marcuse, but foreshadowed by John Maynard Keynes".

The intelligentsia will always find issues they can generate to indict capitalism or actually any and all forms of government or society that do not place themselves at its pinnacle of power.

 
 

Chapter 12 - From Keynes to Marcuse: Affluence and Its Discontents

"The Paradox of Keynes"

This is a play on Keynes's theory of the 'paradox of saving'.
Again, Dr. Muller provides a sufficiently clear but brief, mini-biography of Keynes to establish the psychological and environmental influences on his thought processes. Dr. Muller probably recognizes that Keynes is much better know to the readers than most of the other subjects. And one can indeed read volumes such as Nicholas Wapshott Keynes Hayek The Clash That Defined Modern Economics, and Hunter Lewis Where Keynes Went Wrong, and Lawrence White The Clash of Economic Ideas .

He mentions that while at Cambridge Univ. Keynes also was a member of the Bloomsbury sect, where his cultural sensibilities were shaped by his participation in its famed and flamboyant circle of artists, musicians, and writers". That is highly understating the group to say the least. But he does not mention how disappointed Keynes was when his excellent analysis of the German reparations demands after World War One were ignored. Keynes was highly ambitious to be seen as an important public policy expert. And he succeeded as Muller writes; "Keynes became the most influential economist in the Western world from the 1930's through the 1970's".

Indeed so, and by shifting his published theories as necessary to appeal to politicians by providing economic justifications for their political policies.
Some examples: "Taking aim at the conception of the economy as a self-regulating entity, which had come to be seen as the Smithian legacy, Keynes interpreted the Depression as a product of the mistaken assumption that the market would bring about full employment on its own"...
"He provided an economic rationale for governments to try to actively combat unemployment by raising the level of government spending".
"From early on, he portrayed the price of economic progress as the cultural deformation of those he invidiously dubbed the 'rentier bourgeoise', who had sacrificed the 'arts of enjoyment' to 'compound interest'".
"Keynes' vision for the future reverted to an older language reflecting a more hostile sensibility".
"The problem for Keynes, as for the young Marx, was deferred gratification, what he called 'purposiveness,' which boiled down to being 'more concerned with the remote future results of our actions than with their own quality of their immediate effects on our own environment'".
"He disparaged this elevation of the future over the present as an attempt 'to secure a spurious and delusive immortality'".
"Keynes' cultural antipathy to deferred gratification had a decided influence on his economic analysis and prescriptions".

Dr. Muller compares Keynes' ideas about money to those of Simmel.
"Keynes therefor concluded that there was a need for 'central controls to bring about an adjustment between the propensity to consume and the inducement to invest'".
"Keynes defended the expansion of the role of government 'as the only practicable means of avoiding the destruction of existing economic forms in their entirety and as the condition of the successful functioning of individual initiative'".

"The New Affluence and the End of ideology"

"Given a chance, both Schumpeter and Keynes predicted, capitalism could perform prodigious feats of productivity - though Schumpeter doubted it would get the opportunity".
"What had been luxuries in the era before the Second World War now became necessities: refrigerators, clothes washers, telephones, and record players".

Dr. Muller describes in some detail the economic developments of the post- World War Two decades.
"The success of welfare state capitalism in diminishing the problems of poverty, squalor, mass unemployment, and systemic instability seemed to portend the end of the subversive role of the intellectuals described by Schumpeter".


"The European Roots of Marcuse's Thought"

Dr. Muller includes a longer biography of Marcuse. He notes that Marcuse met Lukacs and read and was strongly influenced by his History and Class Consciousness. He notes also that Marcuse was a colleague of Max Horkheimer and moved to Columbia Univ. in NYC. Marcuse during WWII worked in the OSS and then in the State Department. He then taught at several universities and became for a while a mentor for the American new left intelligentsia.

"Redefining Oppression as Repression" Dr.. Muller mentions several of Marcuse's influential books. One of his themes sought to link sex ideas from Freud with critique of capitalism.

"Domination Through Sex and Affluence"

Dr. Muller asks Marcuse's question: "But why were so few people radically dissatisfied with their lives under capitalism?" ... "Because, Marcuse answered, the minds of the masses were controlled by the forces of capitalist production through the mass media, which kept people' entertained' while excluding all truly subversive ideas".

In this we see the results today of the influence of Marcuse and the adoption of his recognition by the generation of his pupils as college teachers who have adopted the thought to radicalize the next generation. If the masses were prevented from being dissatisfied - actually realizing that they should be dissatisfied - by life under capitalism because the capitalists controlled the media and especially the entertainment industry, then the path to enlighten the masses by re-channeling their sexual desires - their ideas, aspirations and objectives.

Dr. Muller writes: "In characterizations of such as 'totalitarian' and 'slavery,' Marcuse was consciously engaged in rhetorically reversing the political connotation of key terms".,,,
"Marcuse's purpose was to awaken the population from the anesthetization of consciousness by the forces of commerce".
"The function of what Marcuse called 'critical theory' was to judge - and condemn - existing society in light of what he took to be its inherent but unused possibilities"... "He sought to convince the masses that they were controlled by pursuit of 'false needs' rather than 'true needs'".
"True needs were the needs that men and women ought to feel and would feel if they heeded Marcuse's message of the better, happier, less repressed, and more cultured life that awaited them beyond the threshold of capitalism".
"The novelty of Marcuse's analysis lay in his insistence that contemporary capitalism was pernicious because it created new needs and then fulfilled them, leaving individuals feeling happy and satisfied. The individual becomes a slave to his passions, but passions that are molded and directed by others who seek to profit from creating the needs for new commodities and inculcating them through the mass media, through advertising, and through the means of entertainment".

Marcuse's book One Dimensional Man, "became a veritable bible of the New Left in Germany, France, and the United States, and Marcuse because an icon. He was cited along with Marx and Mao by student rebels in Paris in 1968. He was feted in Berlin and Frankfurt, and from Berkeley to Cambridge."
"Marcuse responded by identifying the student New Left as one of the forces (together with the blacks and the ghettos and peasant communist movements such as the Viet Cong) that might indeed lead beyond capitalism".
"Most students were not radicals, but it was the student radicals of the New Left who set the tone and increasingly the terms of debate of the era".

"Marcuse's Legacy"

Dr. Muller continues, "The decline of Marcuse's reputation was as rapid as its rise. His fame paralleled the trajectory of the New Left: launched in 1964, reaching its zenith in 1968, and all but exhausted by 1973".
"Yet, Marcuse's legacy outlived the 1960's, and his critique was incorporated into advanced capitalist societies in disparate and diffuse forms".
"The model of the professor as critical intellectual, liberating his or her audience from one or another variety of false consciousness, became institutionalized in some academic disciplines, above all literary studies and sociology". Dr. Muller continues with excellent description of the continuing expansion of Marcuse's program (without the name) throughout the academic world, even into business schools.

Alice Widener in her book Teachers of Destruction published in 1970 describes the great influence of Marcuse on the intelligentsia of that era who became and still are the teachers of today's young students, even now expanding into high schools.

 
 

Chapter 13 - Fredrich Hayek: Untimely Liberal

Dr. Muller provides a short bio sketch of Hayek who was born in Vienna and served during World War I in the Austrian army in Italy. "Hayek's was a conservative brand of liberalism, focused on individual liberty and the restriction of government, not, as with Keynes or most American liberals, on increasing equality,,, He first came to the attention of a broader public with the publication of The Road to Serfdom in 1944".

"The Making of a Liberal"

"Hayek drew two enduring lessons from his Viennese milieu: that a modern liberal society must be bound together primarily by factors other than shared cultural commitments, and that democracy could pose a threat to a liberal political order". .. "The teacher who influenced him most deeply at the university was Fredrich Freiheer von Wieser". He "was a pioneer of marginal utility theory who maintained that economic commodities had no intrinsic, objective value. They acquired their value only through the market process, through the relationship of supply to the shifting demand created by the preferences of individual consumers"... "Hayek was employed by Ludwig von Mises".
"By his own testimony, Hayek learned more from Mises than from any other man"... "Hayek's liberalism was a conscious choice, and an untimely one in interwar Vienna"...
"To appreciate the significance of Hayek's embrace of Mises' individualist, market-oriented liberalism, we must look at the politics and society of interwar Vienna".

"Viennese Liberalism, the Jews, and the Defense of Creative Minorities"

Dr. Muller in this lengthy section provides the 'look' at Vienna he considers necessary.
"Hayek's liberalism was not a typical product of Vienna: like much of what has come to be considered 'Viennese culture,' it was produced against its Viennese environment".
Muller's focus is mostly on the Jewish aspects and standard Viennese rejection - anti semeticism, versus Hayek's personal views.
"For Hayek, there was a close link between anticapitalism and anti-semeticism, not least because the Jews embodied precisely those characteristics that were essential to capitalist progress".
Muller quotes extensively from Road to Serfdom, written many years later, and from The Constitution of Liberty..

"Rent Control and the Hazards of State Intervention"

"Hayek's skepticism of govenment attempts to control the market was reinforced by his experience of rent control in the 1920's. It was the subject of one of Hayek's most searching examinations during his years in Vienna, and one to which he would return thirty years later, in The Constitution of Liberty".

Dr. Muller describes the adverse results of rent control in Vienna during the 1920's and Hayek's analysis of the results.

"Socialism, Planning, and the Functions of the Market"

Dr. Muller continues, "In 1931, at the age of thirty-two, he (Hayek) was invited to the London School of Economics by Lionel Robbins, a British economist heavily influenced by the Viennese economists, and soon thereafter Hayek was named to a professorship".
However, soon the trend of British academic establishment economists, led by Keynes, and influenced by the appearance of success in Russia began to favor socialism. This von Mises denounced in his writing, and Hayek joined in this position.

Dr. Muller notes that: "Mises argued that in an economy without private property and markets the efficient coordination of economic activity was simply impossible".
And, "Lenin, like many people without experience of entrepreneurial activity, fundamentally misunderstood the nature of economics, Mises, wrote". .. "Without private property, socialism faced another insurmountable obstacle: the problem of initiative". ..
"In presenting Mises' work to an English-speaking audience in 1935, Hayek pointed out that the Soviet economy exhibited the massive inefficiencies that Mises had predicted fifteen years earlier".
"In his subsequent work, Hayek expanded on the role of the market not only in conveying information ,but also in producing new knowledge".
"As Hayek continued to explore the knowledge generating role of the market, he concluded that the most valuable effect of competition is not that is shows the most efficient method of reaching some previously known aim, but that 'its results are unpredictable and on the whole different from those which anyone has, or could have, deliberately aimed for'".
"Capitalism as Hayek conceived it, was fundamentally dynamic, and that dynamism was due to the discovery of new needs and new ways of fulfilling them by entrepreneurs possessed with 'resourcefulness' - an analysis that owed a good deal to Schumpeter and jibed with that of Hegel".

Note that this creation of 'new needs' is a central fault of capitalism according to Marcuse and his followers.

Dr. Muller next focuses on a critical and mostly ignored point.
"Drawing on Weiser's notion that market prices reflect not some objective quality of quantity but the subjective evaluations of individuals, Hayek argued that the market did not merely coordinate economic values, because, he insisted, there is on such thing as 'economic values'".

This is a central concept that I continually stress. "Value' is subjective and a psychological phenomena and it exactly this that enables trade - exchange - to be conducted all. Both parties see more 'value' in what they are receiving than in what they are giving up.
Dr. Muller writes that Hayek spent his last years in expounding on and publicizing his thought expressed in Road to Serfdom.

"The Critique of 'Social Justice' and the Hazards of the Welfare State"

Dr. Muller continues by noting that Road to Serfdom gained Hayek some popular fame. He moved to the United States and was able to obtain a position at the University of Chicago, but not in economics, rather in social and moral science. But in 1962 he moved back to Germany. Even so, his thought was more influential in the US and UK.
He continues: "Hayek's concern was the tensions between liberty and the welfare state"... "He approved of some of the goals of the welfare state, and regarded some of them as practicable".
He decided that the chief danger to liberty now was not from the discarded idea of socialism but rather from the expanding efforts to condition capitalism itself to achieve 'social justice'. Dr. Muller elaborates on Hayek's thought about the inherent difficulty of basing economic action on achieving 'social justice' and preserving a free market economy that could retain individual liberty. The effort to achieve 'social justice' was based on government intervention and even coercion.

"What Hayek found particularly worrisome was a growing consensus among western politicians that government had a responsibility to maintain full employment, a belief enshrined in the economic doctrine of Keynesianism. Governments committed to keeping down unemployment, Hayek, noted, could only do so by increasing the supply of money and credit in the economy. That worked by causing inflation, which decreased the real value of the wages that unions had obtained temporarily, allowing businesses to regain profitability". "Within a decade Hayek's predictions were proving remarkably prescient. Politicians and policy makers devoted new attention to his writings."
When I study L. Randall Wray's book, Modern Money Theory, I find exactly the predictions of Hayek on every page and championed. MMT claims that governments have unlimited ability to create money-credit by electronic manipulation and the purpose of government policy should be to eliminate unemployment. The question of what impact this will have on the 'value' of money is ignored.
"The Intellectuals - Again"

Dr. Muller writes, "Like so many other thinkers whose works we have explored, beginning with Voltaire, Hayek believed in the power of intellectuals, who exerted long-term influence over public opinion. Hayek distinguished between two levels of thinkers: the small number who were original, and the 'intellectuals' proper, whom he defined as 'secondhand dealers in ideas' or 'experts in the technique of getting knowledge over'".
"It was futile, Hayek thought, to expect that politicians would strike out in new directions beyond the horizon of public opinion, which intellectuals did so much to shape".

Dr. Muller notes that Hayek's influence gained an audience in the 1970's.

"But the rise of Hayek's intellectual stock was due not so much to the organization he founded or the think tanks that sought to spread his gospel. It was because by the 1970's his ominous hypotheses about the development of communism and the western welfare state seemed increasingly to match the data".

"The Hayekian Moment"

Dr. Muller describes the social, economic, political changes during the 1960's -1970's in which increasing power of unions and increasing belief in the tenants of the welfare state were becoming fiscally difficult for governments to enable and total economic expansion was suffering.
He writes, "The combination of slow economic growth and expectations of continuous increases in provision of government welfare measures soon had their effects. Government's share of national income moved ever upward, and government budgetary deficits ballooned".
He describes the economic political conditions by late 1970's early 1980's of greatly increasing inflation and also increased unemployment. This was a refutation of the prevailing Keynesian economic formula. He describes the response of PM Margaret Thatcher in UK and President R. Reagan in US, both claiming to believe in Hayekian economic theory. Their policies represent the 'Hayekian moment' Muller titles for this section. He describes much else. Then writes, 'When Frederich Hayek died in 1992, many nations seemed to be moving in a Hayekian direction in other respects as well". ... "All in all, the 1980's and 1990's were a Hayekian moment, when his once untimely liberalism came to be seen as timely".

But it didn't last.

"The Tensions and Limits of Hayek's Thought"

In this section Dr. Muller critiques Hayek's complex thoughts. He notes that among Hayek's faults were simultaneously espoused opposing policies. "There were also tensions that arose from trying to incorporate disparate inellectual traditions into his work". He conflated two different conceptions of 'spontaneous' when describing the inner workings of free markets and the historical process by which such markets came to be. He stressed the idea that markets developed spontaneously yet also believed that perceived shortcomings in actual markets could be remedied by government action. And, "But this growing rhetorical warmth toward traditions seemed to be in tension with his emphasis on the progressive role of social and economic innovators, who set the example to be emulated by others".
Also, "Sometimes Hayek's tendency to exaggerate his own insights led to self-contradiction. His emphasis on the limits of human knowledge - the extent of our ignorance - led him to distrust of all rational institutional design. But this was at odds with his own suggestions for institutional reform based upon a rational analysis of the malfunctions of contemporary democratic institutions".

 
 

Conclusion

"The Centrality of the Market"

"What this book has demonstrated above all else, is the centrality of its theme for modern intellectual history. The question of the market - of its moral significance, of its social, political, cultural, and economic ramifications - has been at the focus of modern European thought".
"Much of the story we have told falls outside the boundaries of modern academic disciplines and their respective histories".
"Contemporary economics focuses on issues of efficiency in allocation, political science on the institutions of governmental power, political theory on questions of justice, sociology on social groups as defined by interactions outside the market".

"The Roles of Intellectuals"

Dr. Muller comments. "At various times and places, intellectuals have imagined a range of roles for themselves in a capitalist order. One, of course, is as opponents of capitalism, and as guides to its overthrow. But that has been only one imagined role, and by no means the most frequent or significant". He categorizes his selected authors as: anti-capitalist, Marx, Lukas and Marcuse, Sombart and Freyer; and pro-capitalism Voltaire, Smith, Burke, Hegel, Arnold, Weber, Simmel, Schumpeter, Keynes and Hayek. I would say 'limited' for Arnold and Keynes. And he notes that only Hayek should be considered as strongly pro-capitalism.

Of course, the intelligentsia throughout history, long before the concept of capitalism, have considered themselves the rightful mentors and leaders (even when not rulers) of society.

"Analytic Tensions"
"The intellectuals' analysis of the market presents us not with a single moral but with a series of tensions".... "On certain key issues, Smith and Marx, or Marcuse and Hayek, cannot both be right".

"Self-Interest and its Limits"

"Despite the divergences among the intellectuals we have examined, there are some broad areas of consensus"... "The first concerns the productivity of capitalism. All analysts, from Voltaire through Hayek, have commented upon the increase in productivity that capitalism has brought about"... "Above all, they have agreed on the importance of the rule of law, enforced by the state, in preserving individuals from the depredations of others who, motivated by the desire for gain and unconstrained by law, would be eager to dominate them".
Of course, this same condition required the creation of the concept of law and legitimacy of use of coercion by rulers since before the time of pharaohs and Chinese emperors. The 'desire for gain' has nothing to do with capitalism itself.

"The Necessity of Countermarket Institutions"

"Those intellectuals favorably disposed toward capitalism have tended to emphasize the need for countermarket institutions"... "The notion that sociopolitical orders require dispositions or virtues not cultiated by their dominant institutions is at least as old as Aristotle".
"The Family"

"For many, the family was the most important extra-market institution, which transformed self-interest into something quite different".
"The State"

"Another counterinstitution was the state"... "But precisely because the state was both indispensable for the very existence of the market, yet threatened by organized interests, intellectual analysts thought it necessary to cultivate a real commitment to the public good among at least part of the population".

The problem with this is that the state is certainly NOT indispensable for the very existence of the market". Markets flourished for thousands of years prior to the modern, western advent of the abstract concept of 'state' in Renaissance Italy. And since then it has been an unrelenting objective of those rulers claiming their legitimacy as agents of the 'state' to harness markets and all economic activity in their support.
And Dr. Muller also notes that this political propensity of rulers has been well understood.
"The trick was ( and is) to have legislators and civil servants who are public minded and yet capable of resisting the pressures to expand government endlessly, a temptation built into the reward structures of representative democracy, and into the natural propensity of civil servants to expand the purview of their power and control".

"The Nation"

"Some of the intellectuals we have examined regarded a concern for the nation - whether conceived as a distinct ethnic or cultural or political entity - as another counterweight to the market, an object of allegiance and duties beyond self-interest".

And again, as 'counterweight some mean total controller and hegemon.

"Cultural Institutions"

"Intellectuals have also suggested a variety of cultural institutions that would develop sensibilities, tastes, and traits not fostered by the market".

"Professional Associations"

"A number of thinkers maintained that meaning and direction could also be provided by professional associations, such as unions and professional societies".... "Yet, though many thinkers have thought such mediating institutions important, liberals of various stripes from Smith on have been suspicious of them as distinct sources of power. They have feared the power that such institutions have over individuals".... "Liberals have been especially suspicious of such associations when they are allowed to pursue political power, fearing that they will use the power of the state to distort the market in order to serve particular interests that economists now term 'rent-seeking'".

"Choices Devoid of Meaning"

"The importance of such counterinstitutions was connected to perhaps the most consistent worry of intellectuals: that the market (sometimes in tandem with other forces in modern society, such as science and technology) would lead to a life filled with choices but devoid of meaning".

Of course, again, intellectuals claim for themselves the definition of what 'meaning' in life actually is. Just as they claim to identify what 'culture' is meaningful

"Fear and Spillover"

"A recurent theme, at least since Burke, has been the fear of spillover; the notion that values and orientations that were appropriate in the market would spill over to other forms of human association".. "For at least two hundred years, then, from Moser and Burke down to Jurgen Habermas in our own day, intellectuals have repeatedly expressed concern that the modes of thought and action characteristic of the market would permeate all human relations. The result, they warned, would be the impoverishment or disabling of the very institutions on which human flourishing depends".

"Are There 'Market Values'?"

"Yet in apparent contradiction to this venerable line of analysis, Fredrich Hayek made the provacative but no less plausible suggestion that there are no market values. Individuals act in the market to fulfill a variety of purposes, and try to get what the market offers - money - not because they lack nonmonetary goals, but because money provides a means to attain their varied goals. In this understanding of the situation. individuals bring to the market purposes generated in nonmarket institutions".

Dr. Muller continues by describing the variety of such non-economic ends for which economic activity in the 'market' provides the means.
"Are There nonmarket Institutions?"

In this section Dr. Muller demonstrates how the 'market' (which means economic activity of exchange) is so central to human activity that all these 'institutions', considered by various intellectuals, are permeated by the same human desires and decisions to act that constitute the 'market'

"Community and Individuality"

In this section Dr. Muller discusses the contentions posed by intellectuals that contrast human life within a community and life as a separate individual; and the effect of 'market' (that is economic exchange) on this contrast.

"Pluralism and Diversity"

"Though capitalism is sometimes blamed for racism, sexism, and chauvinism, the most sophisticated analysts (whether of the left or the right) have noted that the market tends to break down barriers between groups".

It seems to me that all this contention over blaming capitalism for any and all convenient 'faults' especially with respect to culture are self-serving efforts bent on gaining power.

"Capitalism and Equality"

Dr. Muller discusses another common claim by many intellectuals, that capitalism is responsible for increased inequality of individuals and groups. But I claim that the historical record shows that this is false

"Is Capitalism Good for Peoples?'

This is another claim by the many varieties of opponents to capitalism. Dr. Muller describes some typical ideas about this and shows they are false when 'good for people' is defined as 'living better'. Of course individual 'happiness' is a psychological condition.

"Capitalism and the Jews"

Dr., Muller has identified the belief by some of his selected authors that there was or is a close link between being Jewish and capitalist and that is negative for both. Of course in medieval and modern Europe this concept was used as a hammer by those who had various reasons to do so. Interestingly, he notes that in recent times this idea has been taken by Islamists as part of their broader attack on western and European society.

"Vital Tensions"

Dr. Muller concludes, "One might say that in the capitalist era, the older tension between this world and the next have been replaced (or, for some, overlaid) with a new set of inner-worldly tensions. The tensions between choices and purpose, between cultivating individuality while preserving the sense of attachment that gives life meaning, between independence and solidarity, between collective particularity and cosmopolitan interests, between productivity and equality - these are the characteristic tensions of the capitalist epoch, tensions with which we will continue to live".

 
 

A few references

 
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Joel Mokyr - Culture of Growth: The Origins of the Modern Economy

 
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Richard Weaver - Visions of Order

 
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Richard Weaver - Ideas have Consequences

 
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Daniel Stedman Jones - Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics This is not about Hayek's total thoughts as an economist, but only his participation with the others in post - World War II conservative political action

 
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Hunter Lewis - Where Keynes went Wrong and Why Governments keep creating bubbles and busts.

 
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F. A. Hayek - Road to Serfdom The book that catapulted Hayek into public attention

 
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F. A. Hayek - The Constitution of Liberty The main book on economics and politics

 
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