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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 the 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. 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 about not only or mainly the economics of capitalism but its interrelationship with culture, morality, 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 a 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.

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 Neil'' 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.

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 economies - 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 claim 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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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 Dicontents 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

 
 

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 - 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. 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 theoreticians, 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.

 
 

Chapter 11 - Schumpeter: Innovation and Resentment

 
 

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

 
 

Chapter 13 - Fredrich Hayek: Untimely Liberal

 
 

Conclusion

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

 
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