An Unquestioned Truth
Capitalism is not the only answer
The fissures and contradictions of capitalism are obvious. One cannot turn away from increasing inequality of income and wealth, and the social upheaval that it causes. The warnings of experts are ominous. Take Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, and his recent essay on the deleterious consequences of “easy money.” Or see Larry Fink’s annual letter to BlackRock shareholders, where he exhorts companies to take responsibility for their social and environmental impacts. Then there are the social commitments that corporations make these days, notwithstanding the Friedmanite imperative that they ought to focus only on increasing profits. A recent full-page ad in the New York Times, for example, read, “Putting affordable homes within reach — this is our commitment today and always.” It was authored by one of the world’s largest financial institutions, Wells Fargo. One is compelled to ask, Did it not play a part in creating this unaffordable reality in the first place?
Now the renowned social activist and lawyer Julius H. Grey adds to the critical conversation about capitalism — its benefits and failures. With Capitalism and the Alternatives, he is intent on presenting a different arrangement, in which democracy, liberty, and capitalism can coexist, while supporting individual expression, moral certainty, transparency, and social justice. Grey divides his book into two main parts: first a biting criticism of “aggressive capitalism” and then a handful of principles that could guide society in valuing freedom and equality. And while he admits that his “alternative” social-cultural-economic system may be unrealistic to implement, one feels the depth of his convictions.
Capitalism is destructive. At its core, it is a dog-eat-dog structure built on privileging short-term advantage over long-term wisdom. Capitalism is rapacious and speculative and cannot, by definition, be “open, totally transparent, or compassionate.” Its benefits are never evenly distributed. Echoing other critics, Grey asserts that the real power of capitalism “is vested in the business lobby and its interest will always prevail.” Built on the idea that hard work will be rewarded, it perpetuates a powerful myth that cloaks its true corruption and exploitation. Even as they know the odds are stacked against them, “people cling to that notion that our society is fundamentally just.” This, according to Grey, is a true “public relations coup.”
Ferocious and uncontrollable, capitalism is destroying the environment, weakening governments, exacerbating tensions between ethnic and national groups, commodifying every aspect of our daily lives — all the while pretending that it’s based on reason. It wants us to trust it, Grey argues, but “trust in the market mechanism as a solution to economic problems is unfounded.” He calls on the likes of Theodore Dreiser and David Hume to show how capitalism is run by the emotional demands and needs of those who control its levers.
Grey concedes that capitalism has unequivocally improved material life, but it is also responsible for the “decline of culture and thoughtful discourse and humanism.” He is determined in his condemnation, but his credibility is uneven. When he marshals Amartya Sen’s description of social development in India, for example, one nods in agreement. When he makes sweeping historical assessments, claiming that the entire twentieth century was a “revolution against Victorianism and puritanism,” one cringes at the inaccuracy.
The laws of the market, Grey argues, have commodified all aspects of human life. They reduce our human complexity and threaten our individuality. That which translates human life into tradable goods — reifying what makes us human — demands our attention. Uber has turned “unused car time” into a commodity, for one thing. Airbnb has done the same with “unused housing space.” These developments intensify traffic congestion in one instance and endanger affordable housing and community in the other. Indeed, capitalism creates seemingly unsolvable social conundrums. For Grey, the individual is in peril. But he then swiftly dismisses the #MeToo movement, because it signals the triumph of personal integrity over “all competing rights and especially the right to fairness of the accused person,” and he condemns multiculturalism as, in effect, the death of compassion. Such unmeasured pronouncements cast doubt on his judgment.
How does Grey propose we redress the threat that capitalism poses to our environment, our freedoms, our culture? In the second half of the book, he outlines five principles, and then an overarching need. The first principle is a “healthy public sector,” with an emphasis on public health and education, without preferred access to either. The second is institutionalized equality, through minimum and maximum incomes. (Yes, this means limiting the wealth and acquisitions of any one individual.) The third principle is economic regulation: deeper and more firmly imposed rules governing all aspects of the financial sector.
These three principles are nothing new. Because corruption, bribery, and pollution are the “natural consequences of untrammeled capitalism,” Grey asserts that we require deeper, heftier rules. So he proposes a fourth principle, which places a “new stress on leisure and culture.” He wants us to value “equality and freedom over financial success.” A “balanced life” would start with longer holidays and a classical-style education that champions culture. Grey’s fifth principle is “personal freedom and personal romanticism,” in which individuals could enjoy total freedom (from): “freedom from convention, political correctness, and tradition”; “freedom from ethnicity and collectiveness”; and, perhaps most challenging of all, freedom from identity. He fully acknowledges the challenge that would persist: reconciling personal freedom with the public good, the very issue that gave birth to modern economics.
Even more essential than Grey’s five guiding principles is his view of growth — a particularly corruptive aspect of capitalism. Growth demands constant change and continuous consumption, while fostering a conformity that threatens individual liberty and expression. Unchecked, it “threatens both freedom of thought and the long-term survival of humanity.” Grey wants to create a humane, values-based capitalism, and abandoning the unrelenting “cult of growth” is a crucial step.
Unfortunately, Grey stops where he needs to start. His isn’t “a repudiation of the laws of economics nor, notably, of supply and demand.” But — and this is a significant but — it is precisely these laws that enable and perpetuate human reification and commodification. These “laws” were created by political economists who attempted to answer the same quandary that troubles Grey: How can self-interested individuals form a society that respects the individual and creates the best possibilities for all? How can we reconcile private interests and the public good? Centuries ago, the mechanistic principles of supply and demand were offered up as one possible answer. Yet today, they are unquestioned truths, blinding us to true alternatives.
If we agree with Grey that capitalism, democracy, and liberty are an uncomfortable trio, we need first to question the purported laws of economics. Indeed, they are the foundation for the inhumanity that worries Grey. If there is any possibility of creating a true alternative to the destructive forces of capitalism, we need to challenge the existing system’s central laws. If we don’t redo the foundations, we can do only an inadequate patch job on the fissures.