Thinking about capitalism

The other day I was reminded of a presentation given by my friend Daniel Hausknost at a conference in Manchester back in 2008. Though coming to all this from a rather different normative perspective, Daniel talked about how the capitalist market had emerged as an opaque, autonomous domain apart from the state and how this has allowed the state to shield its responsibility for the provision of social reality. This “invention” meant that the state, while maintaining sovereignty, could nonetheless construct itself in opposition to something else, even if that “else” was just the aggregate, uncoordinated effects of millions of decentralized financial transactions in society.

As much as radical socialists would like to abolish the market as an institution and replace it with either centralized planning (ol’ good state communism) or decentralized small-scaled farmer collectives (as favoured by degrowth enthusiasts), here is a thought worth pondering: if the market is indeed abolished, the state/collective immediately becomes politically responsible for the provision of social ontology in its entirety. Without the market to blame for the ills of society, everything becomes a political act and, what was previously enforced with abstract money, must now be enforced through other forms of power. Maybe the utopian socialist thinks that all people will voluntarily contribute with their labour towards the politically chosen aims, but what if some people do not? What to do with those who resist the socialist project altogether? What to do with those who in secret begin their own processes of capital accumulation (maybe by growing their own vegetables or baking their own bread) without sharing the profits?

These are important questions and the lack of compelling answers to them is indicative of a deeper lack of social theory among radical socialists. But before kicking in yet more open doors, let us take a few steps back and return to the fiction of the market as a domain apart from the state. If we think of the state as governed by progressive ideals, this fiction allows the state to be all benign in the eyes of its citizens while “outsourcing” all morally problematic, yet necessary, tasks to the market. Considering that the state already has a monopoly on violence, such a division of labour seems highly desirable if any freedom is to be preserved. Instead of having to lay off people in unproductive sectors of the economy, the state can simply blame the market and focus its energy on offering retraining for the unemployed. Similarly, instead of having to solve social conflicts directly, conflicts can be resolved through a system of courts and abstract bankruptcy laws.

This does not mean that all is well. We should make no mistake, capitalism is inherently socially destructive. But part of that destruction is in fact needed to discipline our energies and to make the kind of painful decisions that we rather like to put off to another day. However, in order to make society work, the capitalist market must constantly be balanced by a progressive state which not only cares for the old and the infirmed but empowers people throughout society through education and other forms of social investments. Only if such a progressive state is strong enough can it keep the capitalist spirits in check and, paradoxically, only through such checks and balances can capitalism itself survive in the long run.