Pathology of the Capitalist Spirit

An Essay on Greed, Loss, and Hope

D. Levine

• Éditeur: Palgrave Pivot
• Année: 2013
• ISBN:
  9781137346797
• Sujet: Économie
• Sous-sujet: Politique économique

Pathology of the Capitalist Spirit is about capital and about the economic system that bears its name. In this book, Levine argues that our pursuit of ever-more wealth in the form of capital expresses our dissatisfaction with the world we live in, with what we have and what we don't have. Capital embodies our hope for something different. Because capital embodies this hope, it has become desire's object. In his study of capitalism, Levine explores the meaning of capital as a social reality connected to fundamental human aspirations. The link between capital and the pursuit of a hoped-for state is especially important in light of the stubborn insistence on the part of its critics that capitalism exists to serve the material interests of those whose vocation is to own capital. This misunderstanding ignores what is essential about capital, which is its link not to interests but to hope, especially the hope that by accumulating capital the individual can achieve an attachment to the good.It is this hope that blocks tolerance of any notion that there is something unfair in the capitalist's acquisition of wealth and that fairness can be achieved through its redistribution to others. It is also this hope that animates the capitalist system as a whole. And in that sense, this hope is the spirit of capitalism. To develop this theme, Levine calls on the ideas and writings of major theorists involved with understanding modernity and capitalism: Adam Smith, Karl Marx, Max Weber, Emile Durkheim, and Joseph Schumpeter.

1

Capital

Abstract: This chapter explores the nature and meaning of capital. The idea of capital is the idea of a good that does not get old, does not lose its ability to satisfy need, is not limited in that ability, or have that ability erode over time. Capital enables us to take what wealth we possess and turn it into more. The importance of capital is that in acquiring it we acquire the power to separate income from work and future from past. Capital represents our dissatisfaction with the world we live in and the life we lead there. It represents the rejection of the past and of who we were then. It is hope embodied; and because it is hope embodied, it is desire’s object.

Levine, David. Pathology of the Capitalist Spirit: An Essay on Greed, Hope, and Loss, New York: Palgrave Macmillan,
2013. DOI: 10.1057/9781137346797.

Capitalism begins with capital; and capital begins with private property. So long as there are no legal restrictions on the use of property to acquire more, capital is a possibility. Thought about in this way, capital is one way we can use our property should we decide to do so. We can imagine a world in which it is legal to own private property, but not to use it to create more, though most economists would argue that in such a world there will not be very much private property for us to use. Wanting to have more is what capital is all about, and whether it seems wise to make owning property in the form of capital legal depends on the extent to which having more seems like a good idea, which depends on how we assess the consequences of making unlimited accumulations of wealth legal.

Judgments about the consequences of using property as capital need not be absolute, though they are often formulated that way. These more rigid formulations tend to stem from the notion that capitalism is synonymous with the absence of all legal restrictions on the use of property as capital and the implied equation of capitalism with the absence of any significant regulation of private property in general and capital in particular. But, using property to acquire more can take place in settings where the opportunities are in some ways limited and the gains from the use of property as capital are not all left in the hands of those who own the capital. Thus, questions can be asked not simply about the consequences of using property as capital, but about how those consequences might vary under different regulatory regimes that define and restrict the use of property.

How we assess these issues associated with ownership of capital depends in part on how we assess the consequences of the use of property as capital: does capital lead to prosperity for all, or for many, or for only a few? Does capitalist accumulation tend to undermine the prosperity it creates, or has the potential to create, by disabling the market systems it fosters and on which it depends? Assessing consequences has been a primary purpose of economic theory since the late eighteenth century. There are also, however, questions that do not depend on our assessment of consequences. We might ask, for example: is the use of property as capital in some sense an inalienable right, the violation of which undermines all possible institutional forms of right? Is the prosperity made possible by capital conducive to wellbeing or not; is having more always, or ever, a good thing? In other words, we can also concern ourselves with the nature of wellbeing, and our judgment of what it means to thrive will affect how we judge a use of property whose end is to produce more.

Beyond the issues of what is right and welfare, there are other important questions that can be asked about capital. These are questions having to do with why anyone would want to take advantage of the opportunity to use property to acquire more, a question linked to the question, “why do legal systems develop to facilitate the accumulation of capital?” Thus, if we assume that legal systems develop to serve interests, and we need not make that assumption, then we might answer the question “why legal systems protect the right to use property to accumulate wealth” by saying that those who benefit from this right exert undue influence on the process of lawmaking and institutional development. But, this still leaves open the question: why do individuals imagine that accumulating wealth benefits them?

Legal systems may develop to serve interests, but a long-standing myth about the origins of capital conceives the process differently. According to this myth, capital comes into existence because individuals decide to refrain from consuming their property in order to assure that there will be property available in the future. In the primitive creation myth about capital, individuals refrain from consuming their property to assure their subsistence in hard times. Hard times may come every year in a predictable sort of way, for example with the changing seasons. But, hard times are not always predictable, and the limited forms of saving—storing, freezing, drying—also have a limited capacity to deal with those hard times that are not so predictable, or that, even if predictable, occur in a time frame inconsistent with attempting to secure future subsistence through adapting the things we need so they do not spoil and can be available to us in the future. We may need to hold goods for future consumption in a more durable form.

Storing goods in the traditional ways just alluded to does not yet result in anything we could reasonably call capital. But, moving toward more durable forms of storage at least suggests the possibility that capital might enter the picture. This is because the problem of storing goods in a more durable form for an indefinite and unpredictable future can be solved only by finding some good that, by its nature, does not spoil. In the first instance, this good is money, that “lasting thing that men might keep without spoiling, and that, by mutual consent, men might take in exchange for the truly useful but perishable supports of life” (Locke 1955\1689: 38). Money makes it possible to store the capacity to acquire goods in the future and in that respect is well suited to the purpose of saving up for hard times. But money can serve this purpose only if goods are available in the future and if it is meaningful to transfer claims over them from present to future. Consuming less of what we produce in the present does not mean there will be more, or even as much, available in the future. What connects present to future in a way that provides this assurance is not money but capital.

This is an important theme in Keynes’s theory. Keynes argued that by holding money we reduce the level of demand for and therefore production of goods and therefore that saving, so far as it means holding money, results in our having less in the future. For Keynes, it is not the acquisition of money, or monetary assets more generally, that assures there will be goods to consume in the future, but the acquisition of the capacity to produce goods—capital investment—that secures the provision of goods in the future. Keynes argued that, contrary to the way of thinking that predominated in economics at his time, acquisition of monetary assets does not in itself stimulate the acquisition of new capacity to produce goods.

The idea of capital is the idea of a good that does not get old, does not lose its ability to satisfy need, is not limited in that ability or have that ability erode over time. For this, money is not good enough, since its ability to satisfy need in the future depends on something it cannot do, which is to produce wealth in the future; capital in the form of productive capacity is the only enduring good that has the potential to hold and increase its value. Put another way, capital has to do with the way wealth endures across time, subsumes individuals into a sequence beyond their particular desires and finite lives.

If our concern is with hard times, capital may not be our only, or even our best, option. We may instead seek assistance from others who do not share our hard times, or are not affected so much by them. Then, we depend not on our private property for our subsistence, but on our community. A community is also a reality that endures, subsuming its members and their particular lives into something not dependent on what is unique and finite about them. In this respect, capital occupies a space in some ways similar to the space occupied by community.

If capital is a use of private property, then it develops where we do not depend on the community and therefore do not conceive livelihood to any significant extent as a communal obligation. Like community, capital is a way we can secure our livelihood when we are unable to produce it for ourselves. But, while capital may secure our ability to acquire our livelihood over time, capital also undermines our ability to produce our livelihood for ourselves. To acquire capital we must acquire a durable good that is not subject to the deterioration that is the fate of all real, particular things. To acquire this good, we must have the money with which to buy it. And, to acquire money, we must have something to exchange for it. So, rather than producing our livelihood we must produce something that can command money in exchange, then use our money to acquire capital so we can acquire livelihood.

Where livelihood depends on exchange, capital becomes essential to livelihood. Adam Smith develops this argument when, in the Wealth of Nations, he considers the relationship between the division of labor and the accumulation of stock:

In that rude state of society in which there is no division of labour, in which exchanges are seldom made, and in which every man provides every thing for himself, it is not necessary that any stock should be accumulated or stored up before hand in order to carry on the business of society . . . . But when the division of labour has once been thoroughly introduced, the produce of a man’s own labour can supply but a very small part of his occasional wants. The far greater part of them are supplied by the produce of other men’s labour, which he purchases with the produce … of his own. But, this purchase cannot be made till such time as the produce of his own labour has not only been completed, but sold. A stock of goods of different kinds, therefore, must be stored up somewhere sufficient to maintain him . . . till such time at least as both these events can be brought together. (1976/1776: 276)

Thus, the accumulation of stock is, as Smith puts it, “previous to the division of labor” (277). But, the accumulation of stock not only makes the division of labor possible; it has another important consequence. Once the individual has accumulated sufficient stock, which is to say means of subsistence beyond what he himself needs, “he naturally endeavors to derive a revenue from the greater part of it” (279). This is the point at which capital is born, and, according to Smith, it is also the reason capital arrives on the scene.

For Smith, the accumulation of stock may be said to protect against hard times, but the hard times it protects against become a possibility because of the division of labor, which prevents us from producing our own subsistence while also separating us from the community we might otherwise depend on for subsistence in hard times. The division of labor makes livelihood depend on exchange, therefore on others we relate to on the basis of quid pro quo. Hard times can now result from a new factor, which is our inability to find a market for what we own, or a price adequate to assure that we can acquire what we need in exchange for it. Yet, according to Smith, the division of labor arises because of the human propensity to “truck, barter and exchange;” so, it could be said that Smith offers an argument in which each conclusion is also used as a premise and therefore sends us around in circles. This is, no doubt, the case, at least on the surface. We should not, however, allow the back and forth of Smith’s presentation of his argument to entirely obscure what he is attempting to say about capital, exchange, and the division of labor, which might be summarized in the following way.

Where individuals are no longer bound together by communal obligation, any provision of need will depend on a quid pro quo. Thus, should anyone want to have access to the stock I have accumulated or what that stock produces, that individual cannot call on my obligation to satisfy his or her need because I have none. Rather, a quid pro quo is required. Smith assumes that, in the case of use of accumulated stock, that quid pro quo must take the form of revenue. In other words, to acquire the use of stock from its owner, we must return to him an amount greater than the amount made available to us.

Though Smith does not state why this is the case, the reason presumably has to do with the dominance of self-interest, private property, and the separation of persons. Because my stock is my private property, I will part with it only when doing so serves my interest. The fact that another person needs my property does not, by itself, constitute a reason for my giving him or her use of it. In this world, need does not create a right to use or place any obligation on others. This means that the older solution for dealing with hard times—sharing—no longer carries authority. So, in this new world, we cannot claim what we need but do not have; rather, we must contract for it. And those with whom we engage are outside community; so we must give for what we get. This giving for what we get is the real origin of capital. We must not only hold a stock to get us through hard times; we must hold our stock in a form that has enduring value, in other words, as capital: wealth held in a durable form for which we expect to receive a flow of revenue over time.

Smith begins his account of capital with the accumulation of stock. But, the link between capital and revenue suggests that what is really distinctive about capital is not that it stores wealth in an enduring form, but that it represents a claim over revenue in the future; or, more accurately, what it means for wealth to endure over time is that it takes the form of a stream of revenue reaching into the future. The “stock,” so far as we can continue to conceive it that way, takes its value from the revenue it generates and simply represents that revenue as an object, or commodity, valued in the present according to the magnitude of the revenue its owner expects to receive in the future. Individuals can acquire this claim over future revenue in the usual way: they can buy it. But, for this to be possible, capital must become available as a commodity for purchase; that is, someone must produce or create it.

Since revenue in the future does not exist in any tangible form in the present, there is substantial room for subjective factors in determining the value of capital, especially those factors linked to desire, hope, and fantasy. Valuing capital thus combines subjective and objective elements, elements having to do with reason and evidence and elements that deny reality testing in favor of the translation of desire into belief. The value of capital, as Keynes emphasizes, depends on our expectations about an unknown, or at least imperfectly known, future.

I suggest above that the motive for owning capital cannot be the simple matter of dealing with the possibility of hard times, since there are other ways of doing that.¹ Yet, acquiring capital remains a way of taking action in the present that shapes want satisfaction in the future. And, while capital may be used to deal with what I have referred to as hard times, because of the availability of alternatives, dealing with hard times should not be considered its primary reason for being. The alternatives to capital—such as sharing and intergenerational transfer—work well when the problem is to insure the continuity of consumption across time. They work well, that is, when the problem is not to have more in the future, but to have the same amount. Capital becomes the dominant option when the goal is not continuity but something else.

This “something else” has to do with having more. The matter of having more enters the picture when our hope is that want satisfaction in the future will differ in some important respect from want satisfaction in the past. This difference has to do with limits. Owning capital offers us the prospect of breaking limits on want satisfaction associated with work and income from work. But, not only does owning capital free us from the necessity of working for a living; it also frees want satisfaction from the limits of whatever finite accumulation of wealth we might possess in the present. It enables us to take what wealth we possess and turn it into more. If the accumulation of wealth we happen to have is an expression of our past, of who we have been and what we have done, then turning our wealth into capital separates future from past. So, the importance of capital is that in acquiring it we acquire the power to separate income from work and future from past.

Separating income from work becomes important when our goal is to live our lives without the necessity that we do work, in other words to achieve freedom from work. Freedom from work can have two meanings. According to the first, it means having others work for us. According to the second, it means that the production of the things we want requires no one to work. Both of these involve a desire to be free from work, but they differ in that the first also engages a desire to have others work for us. To gratify this desire, it is important that we be free of the necessity to work while others are not.

Both Smith and Marx attribute the ability of accumulated wealth to produce revenue to a division between those who must work for a living and those who need not work because others work for them. In Smith’s language, the owner of the stock, the capitalist, uses it to hire workers to produce goods, workers who must, because they own no stock of their own, share the product of their labor with those who do: “In the early and rude state of society . . . the whole produce of labour belongs to the labourer;” but “[a]s soon as stock has accumulated in the hands of particular persons, some of them will naturally employ it in setting to work industrious people … in order to make a profit off the sale of their work” (1976\1776: 65–6). Under these conditions, “the whole produce of labour does not always belong to the labourer. He must in most cases share it with the owner of the stock which employs him” (1976\1776: 67). Understood in this way, the ability of accumulated stock to produce revenue for its owner derives from the neediness of those whose labor will produce goods in the future. Because of their neediness, they must contract to share the product of their labor with those who own the stock of subsisten...

Table des matières

• Cover
• Title
• Introduction
• 1  Capital
• 2  The Disease of the Infinite
• 3  Spirit of Capitalism
• 4  Creative Destruction
• 5  Political Consequences
• 6  Conclusion
• References
• Index