Washington DC
Robert Heilbroner describes capitalism as an overarching social formation, not simply an economic system. In The Nature and Logic of Capitalism, he calls capitalism a “regime” whose essence and patterns create stratified social structures in which capitalists hold and use profit to accumulate prestige and power.
Heilbroner’s proposition raises more questions than it answers, which is his intent. After all, the existence of dominant and subordinate social structures and the drive for prestige and power are hardly new developments. History is abundant with ideologies and social formations used by small numbers of people to achieve wealth and domination. Nonetheless, a key element of Heilbroner’s work is to ask why capitalism is different as a means for understanding its past, assessing its future and considering its relationships to democracy and education.
Heilbroner, Zakaria (2004) and others remind us that the major social formations predating capitalism were religious, imperial or statist by nature, with logics all their own. For example, clerical and monarchical structures placed boundaries around individual opportunities for growth, development and social mobility, limiting formal education to certain elites. On the other hand, capitalism places great value on individual energy, experience and expression, opening the social order to the benefits of broad-based education, employment, entrepreneurialism and the emergence of a middle class.
Heilbroner builds on the work of Smith, Marx and others to strengthen what was already by 1985 a safe argument that capitalism is a clear departure from the past. The great appeal of Heilbroner’s work, however, is found in the search for clarity and that is, itself, a hallmark of liberal inquiry by educated people. Heilbroner reminds us that while previous social structures limited the individual pursuit of education, as much for purposes of self-preservation, capitalism is relatively comfortable competing with other ideologies and with the questioning of its own righteousness. Indeed, sorting out competing ideologies to Heilbroner is itself a competitive engagement in the marketplace of ideas. Where monarchies and theocracies once positioned themselves as having all the right answers – and some still do – it is capitalism rooted in democratic traditions and fueled by broad-based education that values asking the right questions. Indeed, we have found that the answers serve to protect our liberties and produce our great innovations.
Premise as Promise: The Role of Education
Far from limiting social mobility, mass education or the expression of competing ideological points of view, capitalism readily encourages them. The porous nature of capitalist social structures provides individuals with opportunities to migrate from the powerless to the powerful, often through this lubricant of education. Heilbroner says that while capitalism can create and harden social formations and class divides, it also has the paradoxical capacity for transcending them, especially as mass education and widespread technological innovation continue to disrupt old orders. That’s why the premise of capitalism – that some combination of knowledge, skills, luck and a dose of Weber’s work ethic (1958) – is its greatest promise.
This is just one of the contradictions of capitalism that Heilbroner raises, which is another essential element of his book. Exploring contradictions can make him seem ambivalent about what capitalism was, is and might become, but that’s because he is showing us both the limits and possibilities of capitalism while, importantly, also asking us to work with him through what he calls “Delphic inquiries” (p. 179) to assess the future of capitalism as a social formation based on “the loosely knit ties of frail wisdom, imperfect knowledge, and variable hope.” (p. 206)
How far can one take individualism in any collective construct? What is the bright-line test for knowing when the pursuit of individual liberty so valued by Zakaria, for example, violates the collective good? Furthermore, who is to make these decisions about the limits of capitalism, the government? Intentionally carrying the argument about individual primacy to extremes, as if to challenge Friedman, Hayek and the other free-market advocates, Galbraith (1977) once stated, “If an individual in pursuit of his own interests can do no wrong, it follows that he need not be guided, directed or coerced by authority?” (p. 83) The fact that individuals do violate the public trust, however, is one reason that Keynes, Galbraith and others recoiled at the notion of unbridled laissez-faire capitalism.
Education has at least two major roles in capitalist societies. Yes, it educates ever-larger numbers of us in technical skills needed to compete in the commercial marketplace. This shapes development of a middle class and, with it, a meritocratic business class. That’s the simple relationship between education and capitalism apparent in Heilbroner’s book. Education enables us to do something productive.
However, education should encourage us to compete in the marketplace of ideals, too, if we are to understand the limits of individualism and free-market capitalism suggested by Heilbroner. That’s the more complex and problematic relationship between education and capitalism found in Heilbroner’s book, raising as it does human proclivities that produce corporate scandals such as Enron.
Education enables us to engage in legal, ethical and moral behaviors that help us be something greater than employees and employers. Smith (1776) introduced this notion of fellow feeling or the common good into discussions of capitalism. Even the roughest of roughriders, Teddy Roosevelt (1900), understood the need for a human face of capitalism, “Neither our national nor our local civic life can be what it should be unless it is marked by the fellow-feeling, the mutual respect, the sense of common duties and common interests.” (p.1)
Let’s illustrate the relationships between learning how to do something and to be something. Bell (2006) reinforces that China’s capitalistic ascent in recent years has been fueled by a pervasive commitment to education. Yet, to this observer, it is a technical, almost soulless education based on mercantilism and, as yet, without a clear moral foundation. Bell believes that modern Confucianism, not democracy, may provide the social construct that gives capitalism its needed moral compass. This will require adjustments to the Chinese education system, no doubt. Interestingly, Zakaria believes that by investing in capitalism based on the rule of law China will naturally evolve toward democracy. On the other hand, Bell maintains that western notions of liberal democracy may never be appropriate for China.
The Future of Capitalism: What’s in a Word?
Heilbroner said he did not want his book to result in a “miasma of uncertainty.” (p. 206) One might argue, however, that this is exactly what he did in order to help us ask the right questions about capitalism. The complexity of his task is made all the more apparent today, some 20 years later, as the gaps between rich and poor in the United States have increased and the lines between dominant and subordinate structures actually seem less permeable to many Americans today. This is precisely what Ehrenreich (2001) addresses when she writes of “not getting by in America” today.
That’s why another essential element in Heilbroner’s work is found in revealing the historic reluctance of economists to define the term “capitalism.” Here’s where his strengths as an unconventional economist, philosopher and social theorist are best displayed. In seeking clarity for the term and its underlying framework as a social system, Heilbroner does not simply engage in semantics. Rather, he pursues something of a Socratic endeavor with the reader that, interestingly, reinforces the very nature and logic of education itself. It’s striking to note that in the complex, sometimes symbiotic relationships among capitalism, democracy and education how interdependent the concepts and terms become. Zakaria illustrated some of these intricate relationships between capitalism and democracy, maintaining that education is essential both to economic productivity and informed citizenry. Heilbroner would agree, but add that serious inquiry must start with creating a useful conceptual and semantical framework.
Heilbroner tells us that many wise men have avoided defining the term capitalism –“relegating it to a kind of limbo” (p. 15) – in order to get on with the work of analyzing the particulars of economic and business systems. This search for clarity on Heilbroner’s part moves us from utilitarian considerations of, say, Marx’s MCM formulation. To Heilbroner, these economic frameworks seem almost reductionist and miss the larger societal point and, with it, a deeper understanding of the true role of education.
Heilbroner believed that capitalism was more about relationships than things. He maintained that the discussion of capitalism must achieve a vocabulary beyond market mechanisms and commercial values, moving us instead to a more enlightened understanding of capitalism as a powerful social formation, warts and all.
References
Bell, D. A. (2006). Beyond liberal democracy: Political thinking for an East Asian context. Princeton, NJ: Princeton University Press.
Ehrenreich, B. (2001). Nickle and dimed: On (not) getting by in America. New York Owl Books.
Galbraith, J. K. (1977). The Galbraith reader. New York: Bantam Books.
Heilbroner, R. L. (1985). The nature and logic of capitalism. New York: W.W. Norton & Company.
Roosevelt, T. (1900). Fellow feeling as a political force. The strenuous life: Essays and addresses. New York: Century Company.
Smith, A. (1776, 1976 reprint). The wealth of nations. Hammondsworth, England, UK: Penguin Books.
Weber, M. (1958). The Protestant ethic and the spirit of capitalism. New York: Charles Scribner's Sons.
Zakaria, F. (2004). The future of freedom. New York: W.W. Norton & Company.
Robert Heilbroner describes capitalism as an overarching social formation, not simply an economic system. In The Nature and Logic of Capitalism, he calls capitalism a “regime” whose essence and patterns create stratified social structures in which capitalists hold and use profit to accumulate prestige and power.
Heilbroner’s proposition raises more questions than it answers, which is his intent. After all, the existence of dominant and subordinate social structures and the drive for prestige and power are hardly new developments. History is abundant with ideologies and social formations used by small numbers of people to achieve wealth and domination. Nonetheless, a key element of Heilbroner’s work is to ask why capitalism is different as a means for understanding its past, assessing its future and considering its relationships to democracy and education.
Heilbroner, Zakaria (2004) and others remind us that the major social formations predating capitalism were religious, imperial or statist by nature, with logics all their own. For example, clerical and monarchical structures placed boundaries around individual opportunities for growth, development and social mobility, limiting formal education to certain elites. On the other hand, capitalism places great value on individual energy, experience and expression, opening the social order to the benefits of broad-based education, employment, entrepreneurialism and the emergence of a middle class.
Heilbroner builds on the work of Smith, Marx and others to strengthen what was already by 1985 a safe argument that capitalism is a clear departure from the past. The great appeal of Heilbroner’s work, however, is found in the search for clarity and that is, itself, a hallmark of liberal inquiry by educated people. Heilbroner reminds us that while previous social structures limited the individual pursuit of education, as much for purposes of self-preservation, capitalism is relatively comfortable competing with other ideologies and with the questioning of its own righteousness. Indeed, sorting out competing ideologies to Heilbroner is itself a competitive engagement in the marketplace of ideas. Where monarchies and theocracies once positioned themselves as having all the right answers – and some still do – it is capitalism rooted in democratic traditions and fueled by broad-based education that values asking the right questions. Indeed, we have found that the answers serve to protect our liberties and produce our great innovations.
Premise as Promise: The Role of Education
Far from limiting social mobility, mass education or the expression of competing ideological points of view, capitalism readily encourages them. The porous nature of capitalist social structures provides individuals with opportunities to migrate from the powerless to the powerful, often through this lubricant of education. Heilbroner says that while capitalism can create and harden social formations and class divides, it also has the paradoxical capacity for transcending them, especially as mass education and widespread technological innovation continue to disrupt old orders. That’s why the premise of capitalism – that some combination of knowledge, skills, luck and a dose of Weber’s work ethic (1958) – is its greatest promise.
This is just one of the contradictions of capitalism that Heilbroner raises, which is another essential element of his book. Exploring contradictions can make him seem ambivalent about what capitalism was, is and might become, but that’s because he is showing us both the limits and possibilities of capitalism while, importantly, also asking us to work with him through what he calls “Delphic inquiries” (p. 179) to assess the future of capitalism as a social formation based on “the loosely knit ties of frail wisdom, imperfect knowledge, and variable hope.” (p. 206)
How far can one take individualism in any collective construct? What is the bright-line test for knowing when the pursuit of individual liberty so valued by Zakaria, for example, violates the collective good? Furthermore, who is to make these decisions about the limits of capitalism, the government? Intentionally carrying the argument about individual primacy to extremes, as if to challenge Friedman, Hayek and the other free-market advocates, Galbraith (1977) once stated, “If an individual in pursuit of his own interests can do no wrong, it follows that he need not be guided, directed or coerced by authority?” (p. 83) The fact that individuals do violate the public trust, however, is one reason that Keynes, Galbraith and others recoiled at the notion of unbridled laissez-faire capitalism.
Education has at least two major roles in capitalist societies. Yes, it educates ever-larger numbers of us in technical skills needed to compete in the commercial marketplace. This shapes development of a middle class and, with it, a meritocratic business class. That’s the simple relationship between education and capitalism apparent in Heilbroner’s book. Education enables us to do something productive.
However, education should encourage us to compete in the marketplace of ideals, too, if we are to understand the limits of individualism and free-market capitalism suggested by Heilbroner. That’s the more complex and problematic relationship between education and capitalism found in Heilbroner’s book, raising as it does human proclivities that produce corporate scandals such as Enron.
Education enables us to engage in legal, ethical and moral behaviors that help us be something greater than employees and employers. Smith (1776) introduced this notion of fellow feeling or the common good into discussions of capitalism. Even the roughest of roughriders, Teddy Roosevelt (1900), understood the need for a human face of capitalism, “Neither our national nor our local civic life can be what it should be unless it is marked by the fellow-feeling, the mutual respect, the sense of common duties and common interests.” (p.1)
Let’s illustrate the relationships between learning how to do something and to be something. Bell (2006) reinforces that China’s capitalistic ascent in recent years has been fueled by a pervasive commitment to education. Yet, to this observer, it is a technical, almost soulless education based on mercantilism and, as yet, without a clear moral foundation. Bell believes that modern Confucianism, not democracy, may provide the social construct that gives capitalism its needed moral compass. This will require adjustments to the Chinese education system, no doubt. Interestingly, Zakaria believes that by investing in capitalism based on the rule of law China will naturally evolve toward democracy. On the other hand, Bell maintains that western notions of liberal democracy may never be appropriate for China.
The Future of Capitalism: What’s in a Word?
Heilbroner said he did not want his book to result in a “miasma of uncertainty.” (p. 206) One might argue, however, that this is exactly what he did in order to help us ask the right questions about capitalism. The complexity of his task is made all the more apparent today, some 20 years later, as the gaps between rich and poor in the United States have increased and the lines between dominant and subordinate structures actually seem less permeable to many Americans today. This is precisely what Ehrenreich (2001) addresses when she writes of “not getting by in America” today.
That’s why another essential element in Heilbroner’s work is found in revealing the historic reluctance of economists to define the term “capitalism.” Here’s where his strengths as an unconventional economist, philosopher and social theorist are best displayed. In seeking clarity for the term and its underlying framework as a social system, Heilbroner does not simply engage in semantics. Rather, he pursues something of a Socratic endeavor with the reader that, interestingly, reinforces the very nature and logic of education itself. It’s striking to note that in the complex, sometimes symbiotic relationships among capitalism, democracy and education how interdependent the concepts and terms become. Zakaria illustrated some of these intricate relationships between capitalism and democracy, maintaining that education is essential both to economic productivity and informed citizenry. Heilbroner would agree, but add that serious inquiry must start with creating a useful conceptual and semantical framework.
Heilbroner tells us that many wise men have avoided defining the term capitalism –“relegating it to a kind of limbo” (p. 15) – in order to get on with the work of analyzing the particulars of economic and business systems. This search for clarity on Heilbroner’s part moves us from utilitarian considerations of, say, Marx’s MCM formulation. To Heilbroner, these economic frameworks seem almost reductionist and miss the larger societal point and, with it, a deeper understanding of the true role of education.
Heilbroner believed that capitalism was more about relationships than things. He maintained that the discussion of capitalism must achieve a vocabulary beyond market mechanisms and commercial values, moving us instead to a more enlightened understanding of capitalism as a powerful social formation, warts and all.
References
Bell, D. A. (2006). Beyond liberal democracy: Political thinking for an East Asian context. Princeton, NJ: Princeton University Press.
Ehrenreich, B. (2001). Nickle and dimed: On (not) getting by in America. New York Owl Books.
Galbraith, J. K. (1977). The Galbraith reader. New York: Bantam Books.
Heilbroner, R. L. (1985). The nature and logic of capitalism. New York: W.W. Norton & Company.
Roosevelt, T. (1900). Fellow feeling as a political force. The strenuous life: Essays and addresses. New York: Century Company.
Smith, A. (1776, 1976 reprint). The wealth of nations. Hammondsworth, England, UK: Penguin Books.
Weber, M. (1958). The Protestant ethic and the spirit of capitalism. New York: Charles Scribner's Sons.
Zakaria, F. (2004). The future of freedom. New York: W.W. Norton & Company.