rottweiler capitalism

Image: Elyeser Szturm

By Eleutério Prado*

In the book The future of capitalism (L&PM, 2019) the use of the proper noun r, very heavy, qualifies what?

There is no doubt, it is with this indicator of stupidity, brutality and ferocity that Paul Collier describes the society that currently exists in Great Britain, the United States and Europe: “despite the promise of prosperity” – he says – “what the modern capitalism is currently delivering [mainly to the more traditional population of these countries] is aggression, humiliation and fear”.[1]

Here we intend, at first, to present the current social and economic crisis of the most developed capitalist countries from the critical perspective of this author, an economist attentive to contemporary economic theories, who did not abdicate the understanding of social science as a whole. Because it is believed that this perspective, even having an idealistic bias[2], reveals how the contradictions engendered by contemporary capitalism are manifested after four decades of ideological dominance by neoliberalism.

It should be noted at the outset that this author is by no means an opponent of the capitalism in force in those countries that form the center of the production system, now strongly globalized. On the contrary: he is an antagonist of both the left and the right who want to transform him: the first, somehow instituting a new socialism and the second, somehow imposing an authoritarian populism (his expression) with some fascist tones.

Well, Collier is proud and announces more than once that he is a centrist economist – from the hard center, even if a little to the left, as he classifies. Here is what he repeats in several pages of his book: “the proper aim of modern capitalism is to make widespread prosperity possible”; “Modern capitalism has the potential to lift everyone to an unprecedented level of prosperity.” Therefore, this mode of production, which is characterized, above all, by the unlimited accumulation of capital, for him, must continue to exist.

However, the society based on it – points out the author – is facing problems, imbalances and ever deeper divisions. The social fabric is, therefore, frayed and even quite destroyed in many points. The social bases of the concerns he sees are not located, however, in oppositions inherent to the structures that define social classes, but are based on geographic, educational and moral differences.

The inhabitants of less populous regions now reproach those of the big cities; the less educated are disgusted with those who received better education; workers who previously prospered with a thriving industrialization, now do not stop condemning rentiers and “invaders” in a world in the process of globalization – that is, people of other customs or even of other sexual orientations, foreigners and those from other skin colors, possibly browner, darker as well as different hair, perhaps blacker and curly.

And these manifestations do have concrete bases: income inequality between strata and between regions of “first world” countries, which had decreased in the first three decades after the end of World War II, started to rise from then on.

And the differences not only widened quantitatively, but crystallized into qualitatively distinct social strata, which fueled growing resentment from the poorest, those living in stagnant suburbs, the less educated, those who had become professional in more traditional pursuits. of the manufacturing industry against those who acquired university degrees, who started to prosper in the big cities, who started to work in the most dynamic areas of technology, computer services and world finance.

Social cracks, however, did not open up only due to differences in income, but also widened through the emergence of different standards of behavior and morality. “The most successful” in the dynamics of contemporary capitalism, which, according to him, was still extraordinary, “were neither the capitalists nor the common workers, but those who were able to study more, thus obtaining new skills”.

As they climbed the narrow ladder of social ascension now made possible, these new professionals constituted themselves, according to the author, as a “new class” – which then began to despise those who were left behind. In the view of themselves, the members of this emerging “elite” came to think of themselves, as he claims, not only as smarter, more accelerated, and more productive, but also as holders of a superior morality, a more open sexuality and a style more cosmopolitan life. Well, this is certainly how the social division between winners and losers of the neoliberal advance appears, and this is how Collier characterizes the social fissure that now exists in society in the most developed countries. 

And this problem, according to him, was created by the development of capitalism itself. The process of globalization, on the one hand, has transferred an enormous amount of middle-skill occupations to Asia, thus emptying many factories in central countries. Computer technology and digital communication, the basis of the Third Industrial Revolution, on the other hand, eliminated a series of jobs that depended on the skill and performance of skilled workers.

As a result, the workforce market was polarized: on the one hand, occupations that required low qualifications and paid low wages grew, especially in the service sector; and, on the other hand, those professions that demanded a lot of formal education and, therefore, high qualification, thus providing good remuneration. Thus, the middle income strata experienced persistent stagnation in income and living standards.

As a result of this compression of middle-class incomes, a huge contingent of traditional workers in central countries stayed on the side of the road, missing the train of progress. Collier, then, registers what were and still are the worst consequences of this fact, which is nonetheless a consequence of the incessant operation of the “satanic mill”, that is, of capitalist competition:

Among older workers, job loss often led to family breakup, drug and alcohol consumption, and thus violence. (…) Polls show that there is unprecedented pessimism among young people: a large number of them expect to obtain a worse standard of living than that of their parents. This is no illusion: over the past four decades, capitalism's performance has deteriorated. The 2008-9 financial crisis showed this pessimism, but it has been slowly growing since the 1980s. Capitalism's reputation that it can raise everyone's standard of living has been tarnished: it continues to deliver prosperity to some, but not to others. all.

It was to be expected that the economist Paul would be able to mention the economic reasons for this change in the course of capitalism at the turn of the 1970s to the 80s of the last century. As is known, it emerged as a possible response – but which was presented as imperative – to the prolonged crisis it faced in the first decade mentioned. After all, as statistics show, the rate of profit in developed countries fell persistently from the end of the 60s to the beginning of the 80s. capital in its double dimension: effective and prospective. And this, as we know, always appears to be socially and economically disastrous in the evolution of capitalism: unemployment, idle capacity, etc.

Still under the so-called Keynesian economic policies, stagflation began to threaten the development of the economically richest countries in the second half of the 1970s. set of changes in the capital system; this came to be commanded by a set of policies organized around a new rationale: neoliberalism. Instead of promoting an integrative sociability, as had occurred since the end of World War II until then, the norms of individualism, competence and competition began to be privileged, which engendered a fragmenting sociability. Note, however, that the term neoliberalism is not explicitly found in his discourse.

As a result of the economist's silence, it is the moral philosopher Collier who will present an explanation for this change in the course of capitalism. The origin of the erosion of sociability now observed is attributed by him to the dismissal of social democracy at the end and after the 1970s. This, while it was in force, was somehow concerned with addressing the concerns of common people in a pragmatic and communal way, providing health, education, pensions, unemployment insurance, etc. in the form of public or collective goods. These policies – he points out – were maintained and supported by both the center-left and center-right parties.

However, social democracy itself had gradually deviated from the communitarian ideal, which is based, according to him, on common effort and, therefore, on reciprocal obligations. Instead of promoting cooperation within society, an old ideology, now intensified, transformed the management and regulation of society, because it entered the path of social paternalism: “The public policies of social democracy were becoming, increasingly, sophisticated ways of use taxation to redistribute consumption while reducing the incentive to work”.

The reason for this supposed anomaly, according to him, comes from the utilitarianism that had taken the minds of economists by storm and, through them, the way of thinking of many bureaucrats and many politicians. According to this moral philosophy, the human being is, ultimately, an “economic man” who profiles as a being “selfish and infinitely greedy, someone who does not care about anyone except himself”. In this perspective, the human being fulfills himself, above all, in consumption and through the acquisition of the largest possible amount of money.

Consumerism is evidently a consequence of the evolution of a mode of production that was capable, from the XNUMXth century onwards, of pulling humans out of rural idiocy and life dominated by generalized need. “Mamonism” – that is, the cult of money and ostentation – is, however, inherent in it. But it also expands and becomes absurd as this system evolves. When realized historically, this mode of production in today's rich countries spontaneously created an individualistic way of life, governed by the facticity of stupid abundance, generalized waste and the love of abstract wealth. It thus tended to produce arrogant people on the one hand and resentful people on the other. Now, it is noteworthy that Collier sees in this passage only the malevolent influence of individualism, whose keynote, at best, is only concerned with a better distribution of income and wealth in order to promote the self-satisfaction of the greatest possible number of people. people.

Individualistic moral philosophies, and utilitarianism in particular, he argues, run counter to “communitarianism,” which is based on norms of loyalty, justice, freedom, hierarchy, care, and sanctity. Now, still according to this author, they distorted, little by little, the good social democracy that promoted precisely these values ​​within society. With the weakening of these values ​​and in the face of a State focused on income redistribution, little by little, space and the possibility of ascension and dominance of another political rationality were created. The attack on paternalism came from the supporters of natural law, who took pains to proclaim the protection of individuals against infractions and State interference in private life.

Social democracy, for him, was undermined by two currents: on the left, movements in defense of the rights of socially and economically disadvantaged minorities emerged in developed countries: blacks, gays and women, mainly. Its theoretical source would have been provided by the equitable liberalism of John Rawls.

This moral philosopher had proposed that a principle of reason should govern law in modern society: laws and social and economic policies should benefit the least advantaged first. Collier points out two undesired consequences of this guideline. Policies that promote fair justice are paternalistic and thus authoritarian to some extent. Furthermore, they do not promote social solidarity throughout society, but only within certain groups and social categories. Thus, they end up fracturing society itself between irreconcilable factions.

From the right, the assault on social democracy came from the ultraliberals [libertarians], in particular those who support Robert Nozick, who defend the individual rights dear to capitalism and which can be summarized in the idea of ​​negative freedom. In more concrete terms, this current of moral philosophy mainly privileges the right to undertake and operate in markets with minimal interference from the State.

From this perspective, the ideas of the economist Milton Friedman were widely disseminated, which proclaimed the right of each person to pursue his or her own self-interest, constrained only by market competition. For him, the norm of competition inherent to the markets requires that the freedom to negotiate be considered as a supreme value. This is how the creation of material wealth that individuals as such supposedly crave would be optimally arranged. On the basis of this economistic anthropology, ultraliberals conclude that there is an alternative choice [trade-off] between personal freedom and social solidarity. Inequality of income and wealth thus appears as an inevitable consequence of such a modality of freedom. Friedrich Hayek, another pillar of the diffusion of ultraliberal moral philosophy in contemporary society, even went so far as to say that “social justice is a mirage”.

The author reviewed here criticizes utilitarianism, equitable liberalism and libertarianism because they privilege individuals and not collective values. He joins, as has already become clear, the current of thought that, even in the modern era, conceives the community as the basis for the organization of society. According to him, the great names of the Scottish Enlightenment, David Hume and Adam Smith, also defended civic and public participation in collective decisions, that is, positive freedom.

From this perspective, which he sees as pragmatic, he also criticizes Marxists because they supposedly continue to want to renew society, creating a hierarchical social structure under the label of “dictatorship of the proletariat”. In doing so, he refers to a historical experience that common sense itself and the love of the deepest freedom – and not just fidelity to Marx's original theory – instruct us not to repeat. 

Collier also wants to rebuild contemporary society, but without abandoning the economic system based on private property, merchandise, money and capital. Consequently, he maintains that social democracy needs a new beginning and that this must be based on the adoption of “communitarianism”. The institutions that support the markets – he argues – need to be complemented with public policies capable of responding to the concerns that now appear and that originate from the lack of collective goods. Now, given the current stage of development of capitalism, he may be proposing to square the circle.

Neoliberalism – as you can see – is not a mere option in a varied menu of social and economic policies that can be implemented under any circumstances in the current historical context; lo and behold, the leverage of capitalism at the heart of the system became increasingly anemic after the burst of progress that followed the end of World War II. Neoliberal strategies emerged, therefore, as responses to a concrete situation. They aimed to untangle the accumulation of capital from a setback produced by a sharp drop in the rate of profit.

In summary, profitability plummeted in the 1970s because the organic composition of capital had generally increased and because unproductive expenditure of surplus value had increased. Furthermore, real wages had become inflexible downwards due to the Keynesian and social democratic compromise. The strong expansion of the size of the State observed in general, that is, of its participation in the national income after the end of the Second World War, is an indisputable historical fact.

It is necessary to understand that the State's activities do not produce value or surplus value, but, on the contrary, consume part of the abstract wealth generated by work in the sphere of commodity production. As it became necessary to expand public spending to meet the needs of expanding infrastructure and to meet the increased demand for goods and social services, a growing part of the surplus value generated in the goods-producing sector began to be used in a more efficient manner. unproductive, thereby implicitly reducing the return on capital. Now, all this expansion has its origin in the increasingly social character of capitalist production. And the difficulties it generates are found in the private character of the appropriation of income and wealth that it makes possible.

The neoliberal policies that were put in place did raise, albeit moderately, profit rates from the 80s onwards and, therefore, enabled the intensification of capital accumulation in rich countries. However, to use Wolfgang Streeck's happy expression here, they only bought time, without eliminating the fundamental obstacles, since these were and continue to be structural.

By reducing labor rights, by weakening unions, by encouraging entrepreneurship, they created the “precariat”. By cutting social spending and entitlements to services provided free of charge by the state, they reduced the provision of public goods for the general population, especially for the poorest. By privatizing companies that produce fundamental goods such as water, electricity, telephone, transport, etc. raised the cost of living for lower-income classes. They created, therefore, an objective situation in which the “beings-there” had no alternative but to rebel collectively.

Well, the situation that Paul Collier describes with developed countries in mind is even more serious in many countries on the capitalist periphery. It is therefore necessary to generalize beyond these geographical limits.

The criticism of authoritarian and even totalitarian “bureaucratic socialism” is fair. The return to social democracy, however, is a dream that does not bear the light of day; but, under the sun, it is still necessary to go beyond the appearance; in doing so, it should be evident that, at the present stage, capitalism does not have much room for concessions.

Without ceasing to think about reforms, as a result, it is necessary to radicalize political projects, thinking about deeper changes that affect the very nature of the mode of production. Only a democratic and environmentalist socialism (to be discovered in theory and practice) now seems to provide a social horizon capable of mobilizing those from below in order to overcome the contradictions and fractures of capitalism. Behold, tensions are already manifesting themselves in social movements with renewed impetus and even with great explosiveness. Now, this situation was not posed by the left, but by the development of capitalism itself.

* Eleutério Prado is a professor at the Department of Economics at FEA-USP.

Article published on the website other words


[1] Paul Collier is a British development economist who serves as professor of economics and public policy at the Blavatnik School of Government at the University of Oxford.

[2] It is evident that policies cannot exist without first being preceded by deliberations and decisions; these, of course, depend on the political ideologies that circulate in society with greater or lesser preponderance; however, one cannot ignore the objective constraints – which are not, by the way, deterministic – to which they are submitted.

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