Watching Hollande move to Sarkozy-lite policies, and his economics minister, Moscovici, respond to a question about Keynesian politics as though Keynes were the new devil (poor Marx, downgraded to second devil status!), one … lurches between disbelief and the sense that this was all pre-ordained. Both the Left and the Right in Europe accepted the neo-liberal straight-jacket long ago. It has worked out well – for the upper tier of bureaucrats in both the public and private sectors. The social distance between this tier and the man I came upon, yesterday, sleeping in the street before the post office on the Rue des Archives, yawns as wide as ever the distance between the 18th century aristocracy and the peasantry. Chamfort, one of my favorite dark writers, tells an anecdote in his Maxims and Portraits about one of the daughters of one of the Princesses, that is, one of the granddaughters of Louis XV. She was playing with one of the maid servants and she looked at the maid’s hand, and then she looked at her own. And she asked why the maid had as many fingers as she did. A perfect anecdote. Of course, our leaders know that we all have the same number of fingers, and you can even make it up the bling bling ladder if you serve the appetites of the rich in some way, but in most ways, the gulf is wide and the interests are disparate between those at the top and the rest.
In 1989, when the Berlin Wall fell, Robert Heilbroner, the guy any non-economics major has to love for having provided the most well written short guide to economics (The Worldly Philosophers), wrote an essay for the New Yorker on how much the triumph of capitalism invalidated the predictions not only of the Marxists, but of the founding fathers of capitalism itself – Adam Smith, David Ricardo, Thomas Malthus, John Stuart Mill, etc. Their central model always involved declining return to investment – and, society wide, this would mean either decline or – in Mill’s case – the famous stationary state. None of them, in other words, bought the story of growth as the new and necessary horizon of the future. Marx, ironically, seemed much closer to that view, but he disentangled growth from the capitalist engine of growth, private enterprise. It was the latter which would eventually fail, while the horizon of growth it had driven would split away from it.
Heilbroner thought that capitalist had outlasted the predictions of the prophets for a number of reasons: one was that they thought of growth in too narrow a sense. The substitution of commodity for commodity, for instance, turns out not to be, as it would be in logic, a matter that leaves an economic state of affairs alone, but instead creates new opportunity niches that produce more growth in directions that were unseen before. Heilbroner puts it like this: … the special province of capitalism has always been finding ways of expanding its commodity frontiers by moving activities from the sphere of personallifeinto that of profitable business. Particularly in modern times, every generation has extricated itself from satiety by reinventing its own standard of living. Even Marx,who was keenly alive to capitalism’s capacity for generating outlets of expansion, would have been nonplussed by the extent to which such once wholly noneconomic pursuits as family entertainment, meal preparation, housework and exercise have been ‘commoditized’ by TV, precooked foods, detergents and running shoes.” All of which, I would point out, are technologies that produced new spheres of substitution, which is a necessary element of the dialectic that creates technological change. The latter is considered by mainstream economists as something “exogenous” to the economy – hence, the myth that the economy changes through technological shocks, and their ain’t anything planners can do about it. This is the pulling the rabbit out of the hat point of view about technology, or, more simply, magical thinking. Unfortunately, it is the magical thinking that has governed the plan de-industrialization of much of the developed countries, which was in full bore as Heilbroner was writing in 1989.
But a more important marker that one finds in this essay, and that will help us measure how we have arrived at our present paradoxes, is Heibroner’s important sense that capitalism is a regime. Underneath the separation of politics and economics that characterizes it (that is, the officially political institutions do not produce, devolving that function to the private sphere), capitalism resists internal and external revolts in the same way any regime does – by creating a sort of ideal spokes-class for the entire society. That class is the businessman. It is a class that is protected by infinite amounts of footwork in the media world. Within that class, however, things have shifted from 1989. It has become more financialized, more self-reflective about what it is doing and how to take advantage of areas for profit, and – from the outside - more greedy. Greed, however, doesn’t really describe the rich – it is rather an attempt to use an archaic ethical vocabulary to describe a shift in ethics – in ethos, in character, in self-identification. In a sense, the businessman class has become ever more sensitive to resistance. Money operates, at the highest level, to produce a smooth world. It is a smooth world legally – if you are a Russian oligarch with a seedy past and might have abetted a few murders on the way to wealth, you can still easily get residence in the UK, for instance – whereas if you are a Somali fleeing famine, tough luck. Money crashes down line-time – the queuing time that determines the shape of access for everything from medical care to groceries for most people. I could list the number of areas in which resistance is liquidated for the wealthy, but we have all seen the standard amount of Hollywood films, so we know this already. Hollywood in fact imagined the resistless life in such a way that the businessman – not usually talented in imagining lifestyles – has accepted it as fact.
It is the businessman’s sense of the resistless world which is really at play in such things as taxes. Why would a man with one hundred million dollars worry if the tax bill cuts into a portion of that wealth that has zero marginal utility for him? Because that wealth is him. The wealthy identify with their wealth. Taxes are, in this sense, pure resistance. And resistance is intolerable.
One is often astonished at the things that CEOs negotiate. Jack Welch, for instance, negotiated a contract with GE in which GE basically bought and gave Welch all the commodities that are usually associated with domestic life: a place to say, transportation, food. Welch earned millions, and buying these things would have meant little to him. But the symbolic power of having everything bought for him – of overcoming the resistance of the cash nexus itself –was the aphrodisiac.
Heibroner, picking up from Schumpeter, did have a sense that the businessman who represents the capitalist regime might be the Achilles heal of the regime: “Capitalists, in whose name the system is organized, no longer possess the basic powers that accrue to persons of similar importance under earlier systems; unlike the most minor feudal lords, for instance, they cannot try, imprison, or forcibly muster “their” workforces, or enjoy the privileges of a legal code different from that applicable to other groups..”
This gap is perceived by the capitalist, in the present state of our regime, as resistance; the policymaking elite that has grown up since 1989 finds it increasingly intolerable that such resistance exists. Hence, the policies that have been adopted since the crisis are characterized by two things: massive immunity for the financial elite that crashed the system; and massive, punitive economic policies for the wage class. The immunity is, on the one hand, a small thing – but it looms large symbolically. That the banks could simply defraud Libor and remain comparatively unpunished for it – punished as though they had jaywalked – speaks to a larger issue: the inability of states to resist socializing the debts of banks, while at the same time refusing to nationalize them. This is of the essence of the current plutocratic system. And that it has not emerged as an issue in any of the democracies that have held elections since the crash – in the UK, France, Spain, Greece, and now the U.S. – is a definite sign that we have moved further into a regime in which the capitalist is closing that gap, liquidating that resistance.