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What’s wrong with capitalism? Answers to that question today focus on material inequality. Led by economists and conducted in utilitarian terms, the critique of capitalism in the twenty-first century is primarily concerned with disparities in income and wealth. It was not always so. In The Moral Economists, Tim Rogan reconstructs another critical tradition, developed across the twentieth century in Britain, in which material deprivation was less important than moral or spiritual desolation. Examining the moral cornerstones of a twentieth-century critique of capitalism, The Moral Economists explains why this critique fell into disuse, and how it might be reformulated for the twenty-first century. Read on to learn more about these moral economists and their critiques of capitalism.
You begin by asking, ‘What’s wrong with capitalism?’ Shouldn’t we start by acknowledging capitalism’s great benefits?
Yes, absolutely. This was a plan for the reform of capitalism, not a prayer for its collapse or a pitch for its overthrow. These moral economists sought in some sense to save capitalism from certain of its enthusiasts—that has always been the project of the socialist tradition out of which these writers emerged. But our question about capitalism—as about every aspect of our social system, every means by which we reconcile individual preferences to arrive at collective decisions—should always be ‘What’s wrong with this?;’ ‘How can we improve this?;’ ‘What could we do better?’ And precisely how we ask those questions, the terms in which we conduct those debates, matters. My argument in this book is that our way of asking the question ‘What’s wrong with capitalism?’ has become too narrow, too focused on material inequality, insufficiently interested in some of the deeper problems of liberty and solidarity which the statistics recording disparities of wealth and income conceal.
Was this critique of capitalism also a critique of economics, and if so what do these critics add to the usual complaints against economics—about unrealistic assumptions, otherworldly models, indifference to historical developments such as financial crises, etc?
Yes, the moral economists were critical of economics. But although their criticisms might sound like variations on the familiar charge that economists make unreal assumptions about the capacities and proclivities of individual human beings, the moral economists’ challenge to mainstream economics was different. The most influential innovators in economics since the Second World War have been behavioral scientists pointing out that our capacity to make utilitarian calculations is not as high as economists once took it to be. Part of what the success of this series of innovations is that the ideal of reducing every decision to a calculation of utility retains its allure, even as we come to realize how fallible our real-time calculations are. Behavioral economists have found our capacity to think like rational utilitarian agents wanting. But when did the capacity to think like a rational utilitarian agent become the measure of our humanity? This is the question moral economists have been asking since the 1920s. Initiated by historians determined to open up means of thinking outside economic orthodoxy, since joined by mathematically-trained economists concerned to get a more realistic handle on the relationship between individual values and social choice, the moral economists’ enterprise promises a far more profound reconstitution of political economy than behavioral economics has ever contemplated.
Doesn’t the profile of these writers—dead, male, English, or Anglophile, writing about a variety of capitalism long since superseded—limit their contemporary relevance?
No. Their main concern was to discover and render articulate forms of social solidarity which the dominant economic discourse concealed. They found these on the outskirts of ‘Red Vienna’, on railroads under construction in post-war Yugoslavia, but most of all in the north of England. They believed that these inarticulate solidarities were what really held the country together—the secret ingredients of the English constitution. Though they belonged to a tradition of social thought in Britain that was skeptical towards Empire and supportive of the push for self-determination in India and elsewhere, they raised the prospect that the same dynamics had developed in countries to which British institutions had been exported—explaining the relative cohesion of Indian and Ghanaian democracies, for instance. More broadly E. P. Thompson in particular argued that factoring these incipient solidarities into constitutional thinking generated a more nuanced understanding of the rule of law than nineteenth-century liberalism entailed: in Thompson’s hand the rule of law became a more tensile creed, more capable of accommodating the personal particularities of the law’s subjects, more adept at mitigating the rigors of rational system to effect justice in specific cases. The profiles of the late-twentieth century commentators who continue the critical tradition Tawney, Polanyi and Thompson developed—especially Amartya Sen—underscore that tradition’s wider relevance.
Aren’t these writers simply nostalgists wishing we could return to a simpler way of life?
No. Tawney especially is often seen as remembering a time of social cohesion before the Reformation and before the advent of international trade and wishing for its return. This perception misunderstands his purpose.
Religion and the Rise of Capitalism draws sharp contrasts between two distinct iterations of European society – the late medieval and the modern. But this was a means of dramatizing a disparity between different societies developing in contemporary England—the society he encountered working at Toynbee Hall in London’s East End, where social atomization left people demoralized beyond relief, on the one hand; the society he encountered when he moved to Manchester to teach in provincial towns in Lancashire and Staffordshire, where life under capitalism was different, where the displacement of older solidarities was offset by the generation of new forms of cohesion, where many people were poor but where the social fabric was still intact.
The demoralized East End was the product of laissez faire capitalism—of the attempt to organize society on the basis that each individual was self-sufficient, profit-minded, unaffected by other human sentiments. The political crisis into which Britain was pitched in the late Edwardian period underlined how untenable this settlement was: without a sense of what more than the appetite for wealth motivated people, there could be no ‘background of mutual understanding’ against which to resolve disputes. At the same time the answer was not simply stronger government, a bigger state. The latent solidarities Tawney discovered in the north of England carried new possibilities: the facility of market exchange and the security of an effective state could be supplemented by informal solidarities making everyday life more human than the impersonal mechanisms of market and government allowed.
Polanyi and Thompson brought their historical settings forward into the nineteenth century, making their writings feel more contemporary. But they were both engaged in much the same exercise as Tawney—using history to dramatize disparities between different possibilities developing within contemporary society. They too had come into contact with forms of solidarity indicating that there was more than calculations of utility and the logic of state power at work in fostering social order. Polanyi and then especially Thompson advanced their common project significantly when he found a new terminology with which to describe these incipient solidarities. Tawney had talked of ‘tradition’ and ‘convention’ and ‘custom,’ and Polanyi had followed Tawney in this—refusing to associate himself with Ferdinand Tonnies concept of Gemeinschaft and Henry Maine’s system of ‘status’ when pressed to, but offering no cogent concept through which to reckon with these forms of solidarity himself. Thompson’s concept of the ‘moral economy’ made the kinds of solidarities upon which they had all focused more compelling.
Does subscribing to a moral critique of capitalism mean buying into one of the prescriptive belief systems out of which that critique materialized? Do you need to believe in God or Karl Marx in order to advance a moral critique of capitalism without embarrassment?
No. Part of the reason that this critique of capitalism went out of commission was because the belief systems which underpinned it—which, more specifically, provided the conceptions of what a person is which falsified reductive concepts of ‘economic man’—went into decline. Neither Tawney nor Thompson was able to adapt to the attenuation of Christian belief and Marxian conviction respectively from which their iterations of the critique had drawn strength. Polanyi’s case was different: he was able to move beyond both God and Marx, envisaging a basis upon which a moral critique of capitalism could be sustained without relying on either belief system. That basis was furnished by the writings of Adam Smith, which adumbrated an account of political economy which never doubted but that economic transactions are embedded in moral worlds.
This was a very different understanding of Adam Smith’s significance to that with which most people to whom that name means something now have been inculcated. But it is an account of Adam Smith’s significance which grows increasingly recognizable to us now—thanks to the work of Donald Winch, Emma Rothschild and Istvan Hont, among others, facilitated by the end of Cold War hostilities and the renewal of interest in alternatives to state- or market-based principles of social order.
In other words there are ways of re-integrating economics into the wider moral matrices of human society without reverting to a Christian or Marxian belief system. There is nothing extreme or zealous about insisting that the moral significance of economic transactions be recognized. What was zealous and extreme was the determination to divorce economics from broader moral considerations. This moral critique of capitalism represented a recognition that the time for such extremity and zeal had passed. As the critique fell into disuse in the 1970s and 1980s, some of that zeal returned, and the last two decades now look to have been a period of especially pronounced ‘economism.’ The relevance of these writings now, then, is that they help us to put the last two decades and the last two centuries in perspective, revealing just how risky the experiment has been, urging us to settle back in now to a more sustainable pattern of economic thought.
You find that this moral critique of capitalism fell into disuse in the 1970s and 1980s. Bernie Sanders declared in April 2016 that instituting a ‘truly moral economy’ is ‘no longer beyond us.’ Was he right?
Yes and no. Sanders’ made this declaration at the Vatican, contemplating the great papal encyclicals of Rerum Novarum and Centesimus Annus. The discrepancies between what Sanders said and what Popes Leo XIII and Pope John Paul II before him said about capitalism is instructive. The encyclicals have always focussed on the ignominy of approaching a person as a bundle of economic appetites, on the apostasy of abstracting everything else that makes us human out of our economic thinking. Sanders sought to accede to that tradition of social thought—a tradition long since expanded to encompass perspectives at variance with Catholic theology, to include accounts of what a person is which originate outside the Christian tradition. But Sanders’s speech issued no challenge to the reduction of persons to economic actors. In designating material inequality the ‘great issue of our time,’ Sanders reinforced that reductive tendency: the implication is that all we care about is the satisfaction of our material needs, as if redistribution alone would solve all our problems.
The suggestion in Sanders speech was that his specific stance in the utilitarian debate over how best to organise the economy has now taken on moral force. There is an ‘individualist’ position which favors free enterprise and tolerates inequality as incidental to the enlargement of aggregate utility, and there is a ‘collectivist’ stance which enlists the state to limit freedom to ensure that inequality does not grow too wide, seeing inequality as inimical to the maximizing of aggregate utility. The ‘collectivists’ are claiming the moral high ground. But all they are really proposing is a different means to the agreed end of maximizing overall prosperity. The basis for their ‘moral’ claims seems to be that they have more people on their side—a development which would make Nietzsche smile, and should give all of us pause. There are similar overtones to the rallying of progressive forces around Jeremy Corbyn in the UK.
The kind of ‘moral economy’ Sanders had in mind—a big government geared towards maximizing utility—is not what these moral economists would have regarded as a ‘truly moral economy’. The kinds of checks upon economic license they had in mind were more spontaneous and informal—emanating out of everyday interactions, materializing as strictures against certain kinds of commercial practice in common law, inarticulate notions of what is done and what is not done, general conceptions of fairness, broad-based vigilance against excess of power. This kind of moral economy has never been beyond us. The solidarities out of which it arises were never eradicated, and are constantly regenerating.
Tim Rogan is a fellow of St. Catharine’s College, Cambridge, where he teaches history. He is the author of The Moral Economists: R. H. Tawney, Karl Polanyi, E. P. Thompson, and the Critique of Capitalism.