Stereotyping Capitalism is Bad for Strategic Thinking

[Reproduction of my 2009 essay on lazy stereotyping of capitalism and its disastrous impact on strategic thinking]

Introduction

I believe that strategic thinking and public policy has to be based on conceptual clarity, a firm grasp of historical facts and events, objective analysis of the current situation and on examining future potential and possibilities. It should not be based on a stereotyping of capitalism. The two main stereotypes of capitalism see it as the root of all evil and see it as a system for ruthless exploitation without a conscience.

The danger of stereotyping capitalism is the impact it can have on restricting strategic thinking into myopic routes and restricting public policy choices by following these myopic routes. I believe that broadening of strategic thinking and looking at wider public policy options can lead to better government on a national and international level.

I want to look at a few examples of the behaviour of capitalism in its development and its present day to show that broader thinking can open up strategic thinking and public policy making. My strategic framework is ‘ethical globalisation’ with its recognition of the dynamism of capitalism at a global level and the need for progress on questions of social welfare issues, political freedoms, environmental concerns and cultural issues to create a more ‘humane’ world. In this framework, it is important to examine capitalism in a multi-dimensional way. This is not designed to be a definite assessment of capitalism, but an exploration of it to examine some of its stereotypes and to seek to question them.

The proposition I want to make is that, contrary to the cynics of the left and right (who judge only on the basis of materialism in some Marxist and free market schools), there is strong evidence that capitalism was built on a foundation of a vast sweep of modern ideas, which expanded the space for critical scientific, cultural, social and governmental thinking. I term this ‘idealism’ – although it encompasses the richness of science, the elevation of the cultural imagination, the power of the social movement, the depth of commitment of religious beliefs and the political freedom to challenge the power of the powerful.

I have not sought to cover the whole history of capitalism or even its full global picture. I will explore the relationship of capitalism to different continents in future article. This article concentrates on European and American capitalism. I have used a number of historical references to make my argument: Renaissance; Enlightenment and Democratic Revolutions; Industrial Revolution; American War of Independence; Race Issues in American History; Racist Nationalism in Europe; Communism and Capitalism; and finally American Imperialism.

Renaissance

Renaissance Europe, from the C14^th to C17th was a period of the emergent modern ideas. It opened up the door to modern European thinking, which foundation stone of modern capitalism.

For instance, the old ‘flat-theory of the earth’ was challenged in the C14th to show the earth was not flat. Instead the earth was ‘round’ or spherical (although it is not a perfect round shape).

This was the beginning of the move away for the ‘dark age’ in medieval Europe. It was based on the challenge to medieval scholasticism through the philological study of original classical Greek texts – the so-called ‘ad fontes’ principle – back to the sources of the Latin texts of the period.

It adopted several methods from the Greek classics.

The Aristotelian method of concentrating on the observable properties of the physical world influenced the development of science in Europe. In 1610, Galileo embraced ‘heliocentricism’ (earth rotating the sun) and challenged ‘geocentric (earth as centre of the universe view) - being condemned to house arrest for his remaining life by the Church for it.

Another example is the birth of European ‘humanism’ in this period. The line from a drama of Terence, Homo sum, humani nihil a me alienum puto (or with nil for nihil), meaning "I am a man [i.e. human, not 'male'], I think nothing human alien to me", known since antiquity through the endorsement of Saint Augustine, gained renewed currency as epitomizing the humanist attitude.

There was an intellectual revolution. Universities came alive to the revolution in thinking. Old ideas were challenged and new ideas were put into place. European culture was opened up to fresh thinking on a vast scale.

It is ironic that modern religious though of the ‘fundamentalist’ variety should revert to the medieval ‘dark ages’ period of thinking – and see itself as counter-posed to science and even more ironic that public policy makers and slight levels of strategic thinking should adopt this pre-capitalist mindset.

Enlightenment and Democratic Revolutions

The enlightenment period in European and American history was a challenge to the philosophical foundations of the institutions of the medieval era – the absolute monarchy, the nobility and the church.

For instance, the European ideas of C18th enlightenment challenged existing notions about political philosophy (e.g. creating a philosophy of natural rights as opposed to the orthodoxy that monarchs derived their authority from God – with writers such as John Locke and Jean-Jacques Rousseau), challenged religious notions of ‘fate’ through satire and analysis (e.g. Voltaire attacking Leibniz through his novel ‘Candide’ and his philosophical dictionary challenging the medieval philosophical ideas through evidence-based modern ideas), etc. It was a period of the great fermenting of ideas. These ideas weakened the political legitimacy and moral standing of the old order – and questioned the unlimited power of taxation by monarchy, nobility and the church. They led to the French Revolution and influenced the American Revolution. Incidentally, the English revolution was also based on a challenge to medieval institutions, but it was based on a philosophical foundation of Protestantism and religious utopianism.

There were some philosophical upholders of the old order. The argument between the Englishmen Thomas Paine in his ‘Rights of Man’ and ‘Edmund Burke’ is his ‘Reflections on the Revolution in France’ centred on the merits of revolution to abolish these institutions or reform to keep these institutions by upholding their strengths. The arguments of Edmund Burke on ancient institutions were to be repeated by Disraeli half a century later in a famous speech in Manchester. However, Burke and Disraeli did not argue with the power of the elected element in the British unwritten constitution. The tradition of Great British ‘compromise’ in this area continues by giving nominal power to old institutions and real power to the elected elements.

Modern France and America were founded on the basis of new institutions and new ideas. Ironically, in modern France the enlightenment ideas on an institutional challenge to the power of the Church has been equated with anti-religion policy of the state in some sense -beyond the philosophical attack on ‘privileged’ and ‘superstitious’ religious views - and in modern America, the great sophisticated alliance between religion and reason in ‘deism’ has recently been broken by the resurgence of religious irrationalism in the ‘creationism’ theory and a concerted attempt to influence public policy.

I would argue that the vast seismic political shift political away from the ‘divine absolute rule’ of the monarchy towards rule by the elected assembly of the people was the precursor of the economic revolutions – the birth of modern capitalism. The role of ideas in all spheres cannot be under-estimated in this process (scientific, cultural, political and all sorts of other ideas).

Industrial Revolution

For instance, the Industrial Revolution in England was the first capitalist revolution in the world – and was preceded by a history of English ‘firsts’ in the field of successful political ideas and innovation. England was the first country to unite in Europe, the first to adopt a charter on liberty of the person from arbitrary arrest in the Magna Carta, the first to abolish the absolute right of the monarchy and lay the foundation for the sovereignty of elected rulers in the English revolution, the first to create a united Kingdom of several nations in Europe, etc. This level of revolutionary change created modern Britain.

The UK Industrial Revolution founded on these vast political changes on top of vast ideas about a new society. To put it strong and clear terms: Democracy (defined as rule and power of an elected assembly) created Capitalism and the idea that Capitalism created Democracy is chronologically false and makes elementary confusion between cause and effect in the history of capitalism.

The Industrial Revolution itself did not stop its creative thinking and freedom of the imagination.

Invention and innovation was at the heart of the Industrial Revolution – steam power and engine, cotton processing machines to the later stages of creating the London underground and the transatlantic telegraph. Scientific and technological revolution was at constant feature of economic development and the rise of modern British capitalism. Think big ideas, turn ideas into reality through invention and turn inventions into industrial business propositions through attracting capital investment and project managing their completion: these were the guiding principles of the first modern capitalist economy in the world.

Equally, the period of the economic take-off in the UK was not based on solely on ruthless exploitation in the ‘dark satanic mills’ alone. This is a stereotype – and a modern myth about capitalism.

On the contrary, this was a period of great social and political reform. Capitalism was humane and pluralistic as well as an engine of economic change.

For instance, during the rule of William Gladstone and Benjamin Disraeli as Prime Ministers (a period I studied in depth for my ‘A’ levels in the late 1970s with these two as my favourite Prime Ministers - alongside Winston Churchill, Clement Atlee and Harold Wilson - which has excited me even more recently), the landscape of the newly urbanised Britain was changed for the better with free schooling for children, slum clearance and good housing, introduction of municipal local government such as free libraries, clean water and sanitary conditions, etc. Working conditions were improved by industrial legislation – ending practices such as child labour and limiting dangerous working by the introduction of the ten hour bill.

The successful Education Bill requiring £10 million taxation was called “tyrannical”, free libraries were “founded upon theft and upon the violation of the most sacred in the world, the liberty of your fellow man” and the attempt to mitigate the condition of labour in the nail-making industry by appointing inspectors to report on them was attacked as “violating the sanctity of the English home”. In early C19^th a Bill to prohibit the use of small boys as chimney brushes was defeated. Lord Lauderdale said: “Such things as this ought to be left entirely to the moral feelings of perhaps the most moral people on the faces of the earth....If the legislature attempts to lay down a moral code for the people, there is always a danger that every feeling of benevolence will be extirpated.” These arguments were defeated then, but they have been revived in the modern age in the free market lobbyists and writers.

At the same time, democracy (elected assemblies) was universalised to all classes of men (women got the vote after the war in). The first attempt at such change failed in the early C19^th and only succeeded decades later in the successful passage of the 1832 Reform Act.

The period saw more big ideas and not less. Change was in the air. Even the question of the British Empire was heatedly debated. Obviously, the British Empire was expanded in this period with the crowning of Queen Victoria as Empress of India by Disraeli. Gladstone had very different ideas. His view that the British Empire was ‘liberty for ourselves and slavery for the rest of mankind’ showed that not everyone agreed with the idea of the empire. Gladstone also attempted to grant Ireland home rule. The lack of success did not indicate total consent – even the most formidable Prime Minister of this era sought change. Equally, Gladstone sought to separate the church from the state.

The dynamism of big ideas was important at all levels and in all spheres of life to the dynamism of capitalism in its first Industrial Revolution in Victorian Britain making it humane and progressive.

America War of Independence

Across the Atlantic, the USA also showed the importance of ideas. I just want to mention a few of them: independence from colonial rule and racism.

The first idea was the one of the right of countries to be independent and to beak off from colonialism. The USA in its war of independence was one of the first nations to be free of European imperialism. To spell it out contrary to another myth about capitalism: white people of European background fought a war against British colonialism and won it. A struggle over oppressive taxation turned into a full-blown revolt against rule by the ‘mother’ country. America was born out of colonialism and this impacted on its view of imperialism in a very deep way. So I do not subscribe to the simple equation of American capitalism to imperialism.

The ideas of the American Revolution were deeply connected to the French enlightenment, but they were transformed into working out a form of government that would create consensus on a democratic basis – republicanism combined with a separation of powers and a modern constitution.

Race Issues in American History

Whilst many think that racial injustice was a small sideline issue in American history, it was a vital issue and was raised as an issue at the very beginning of the American Revolution, when slavery was not abolished. The contradiction between universal human rights and the ‘slavery’ of people on the basis of the colour of their skin (or on any other basis) was to explode in the USA.

Cries of human injustice, captured in the fight against slavery through national campaigning and actions such as the ‘slave underground railroad’ to help free slaves, turned into a critical issue for the future of the United States. It was the northern capitalists in America who fought the southern slave-owning aristocracy on the question of slavery in one of the biggest events in American history: the American Civil War. So contrary to the view that slavery was readily accepted in the USA, it actually tore up American society from top to bottom. The side that championed the freeing of the slaves won led by Abraham Lincoln, who coined the famous modern phrase ‘government of the people, for the people and by the people’. He paid for this success by his life (a President assassinated for his courage). The American capitalists fought against slavery and the neutral position on this question adopted by the Founding Fathers was overturned.

In modern America, further progress on race was required a century later to rid America of the post-civil war racism – a lot of it in the south – segregation. This created another giant capturing the progressive ideals of American society: Martin Luther King Jnr. He too succeeded. He too paid a price with his life. Modern American capitalism has a legacy of the fight against racism – closely associated with the attitudes of one great political family, the Kennedys, who also paid with their lies for idealism. The equation of American capitalism with racism is a stereotype – and another modern myth of about capitalism. The election of the first black President Barack Obama is in some ways a fulfilment of the dreams of Abraham Lincoln rather than a departure from it (and he echoed this in his train journey to Washington DC prior to being sworn in as President).

Racist Nationalism in Europe

In Europe, the ideas also played a major role. In the French revolution, the idea of the universal Rights of Man was stated. This was a great step forward in European and world thinking.

However, I want to look at the reverse side of the picture. The most negative role played by ideas was through the racist nationalism ideas of Nazism and fascism. Hitler symbolised the worst of European thinking. It was using industrialism to conquer territory, impose dictatorship in Europe and to kill vast numbers of innocent people on the basis of their race or minority status in the ‘holocaust’. This was Europe sinking to the depths of depravity. Most of Europe fell to Hitler and many Europeans collaborated or actively supported Hitler.

However, the fight against Hitler was fought and won. UK, USA, Russia and many freedom fighters and allies contributed to defeating this level of reactionary evil in Europe. The costs of the war in human terms were estimated to be over 55 million dead. Its values were questioned and after the war a new Universal Declaration of Human Rights reaffirmed the best of European values. European imperialism was questioned and eventually dismantled giving way to new nations across Africa, Asia, Caribbean and Latin America.

Recently, the rise of racist nationalism in Europe is a cause for concern. Europe is sinking into a political backwardness again. The causes of this can be many. There is a global issue of the ‘fear’ of the vast forces of globalisation. The European Union is an aspect of globalisation – a facet of it in terms of territorial zone of expansion with a classical imperialist power emanating in the centre of the European Union bureaucracy and national components. This fear is translated to ‘nationalism’ including racist nationalism with hatred of minority races and cultures in Europe amongst other types of nationalism. There is a myth-building in this form of ‘racist nationalism’ – myths similar to the ones created by Hitler and similar racist nationalisms. This can be seen by some as a reversion to the glories of European imperialist powers and by others as a tool of competition through a form of political and cultural protectionism to create an economic protectionism.

It is clear that the destruction of European idealism will harm the emergence of Europe as a global driver of progress in the world. It may restrict or even retard the development of the dynamic features of European capitalism. The historical lesson of racist nationalism is not a positive one for Europe. Today, the forces of globalisation are more able to resist a turn back towards racist nationalism. The myth of racist nationalism does not equate to dynamic capitalism. On the contrary, in European history the ‘Rights of Man’ (humanity) is a cause for real celebration. Nationalism was a progressive feature of Europe, giving rise to new capitalism during the formation of different European nations (specifically in the C19th), this has ceased to be a progressive feature of it long ago. Nazism spelt the death knell for European power instead of energising it. This is the most serious challenge for the European strategic thinking requiring the injection of global idealism into all its parts – to paraphrase the advertisement for a well-known European beer.

Communism and Capitalism

Communism too was found wanting. It’s suppression of political dissent and totalitarianism was defeated in the Cold War. Now, the biggest Communist state in the world has adopted a capitalist economy. It too is facing big changes – mostly at an economic and cultural level. The Tiananmen Square protests two decades ago reaching right to the top of the Communist government showed that democracy was an idea in China too. The current arrangements in China fit neatly with the materialist and cynical view of capitalism – without political freedom or without social conscience – and I do not believe they have a long term future. Change may come internally or may be combined with external campaigning pressure. However, I am not pessimistic. I can see things bubbling beneath the surface in China which give me signs of hope without being complacent or without endorsing any suppression of freedom.

The power of the Chinese middle classes is an energising force in China. There is cultural renewal (not in Maoist sense of ‘imprisoning’ and destroying the progress of cultural ideas at the professional, artistic and educational level). China has embraced the key features of globalisation including external investment, trade, global markets, access to global resources, etc. Global culture and companies are part of the Chinese landscape. There are also global standards in various parts of Chinese economic life. As a global economic power, China wants to be part of the world. It is restricted by its outdated view of territorial ‘spheres of control’ – with a slight imperialist outlook on this question in Asia, it’s alliance with dictatorships although this is heavily conditional and not necessarily a permanent feature and, most of all, it’s internal policy of the suppression of political freedom and dissent.

Democracy is a possibility (I would argue inevitable) in China – in the sense of full political freedom. The issue is about the timescale and the process. In most other respects, China is open to scientific innovation and creative capitalism.

American imperialism

Equally, American capitalism has not had a very easy relationship with ‘imperialism’. Contrary to the stereotype, the USA did not follow the British model of territorial ‘imperialism’ because it too fought the American War of Independence to free itself from colonial rule.

The argument for the characterisation of USA as ‘imperialist’ is based on two ideas: equating global economic, military, political and cultural power and influence with imperialism. However, I will show that this is a specific use of the term ‘imperialism’ without its territorial aspect. It is undeniable that USA has become a superpower – the real sole superpower in the world prior to it making a strategic error when it equated its military power with political strength in the world. Its victory over ‘communism’ in Soviet Union and east Europe was turned into a disaster.

Its role as the sole superpower gave way to perceptions of an active global bully in terms of the strategic doctrine of the project for the American century and the adoption of the strategic philosophical framework of the ‘clash of civilisations’ based on a ‘religious imperialism’ based on a Christian fundamentalist lobby and vote bank.

It tried to change this perception by the adoption of the goal of democracy in its international policy. This zeal was still equated with imperialism – in a Cromwellian sense (of committing atrocities in the name of a just cause). At the same time, the US made strategic alliances across the world on the basis of democracy. It adopted a broader attitude towards business with emerging powers in Asia. Now, it is seeking a policy of ‘engagement’ rather than confrontation to repair the damage done to its global image.

America in my opinion has always been a ‘poor’ imperialist power. This may due to its isolation from the vast Eurasian and African continental land masses. I believe that it is also connected with its mindset inherited from its foundation as the country that fought a war of independence to free itself from colonial rule. It’s public opinion is outside its comfort zone when dealing with questions of empire-building or fighting to be the world’s policeman. The strength of American public opinion on Vietnam war and now Iraq shows that contrary to the modern myth that American capitalism is comfortable with imperialism.

The critics of American ‘imperialism’ have different views on different subjects. There is a political spectrum of opinion in this unholy alliance rather than uniformity of views. These range from competitors for American economic and military power in the world (e.g. European Union as an economic competitor to Russia as a military competitor) to the peace and environment movements to those who wish to overthrow every piece of progress since the medieval times (e.g. the Taliban-al Qaeda terrorist network and their political sympathisers in Afghanistan/ Pakistan and around the world).

America is a major global democracy with widespread individual freedom and constitutional checks and accountability of its government. In this sense, the critics of American capitalism have no real valid case. The equation of democracy with ‘plutocracy’ (power of the rich) has some merit, but it is a false device of criticism. Democracy and freedom has to be measured in its own terms. Unlike many other countries, American tanks do not dictate who governs. The recent change in US policy happened through the power of the ballot box rather than the barrel of a gun. Elsewhere – another critic of US ‘imperialism’ – are the political dictators in the world who crush public opinion and dissent (e.g. in Burma, Iran recently, North Korea, Venezuela and even in China – some of whom are mutual allies).

There is a complete misreading of the situation to use relative differences in application and then equate American democracy with dictatorship – with its attempt to undermine democracy as a whole in the world and give some comfort to dictatorships. The concept of an alliance of democracies has a merit in the context of seeking diplomatic solutions to complex problems of the behaviour of non-democratic states and seeking alliances to ‘isolate’ the non-state terrorist insurgency movements from wider global public opinion.

Global democracy as an ideal in the modern world is a powerful driver for progress. However, it cannot be imposed under the barrel of the gun. There has to be a battle for hearts and minds – or ideals. In this context, the USA is a superpower amongst many others. Its democracy is more like other democracies in its power than any sole use of military might. To engage in this process is a lesson for modern globalisation after the ‘wasted period’ of American military power based on ‘imperialist’ ideas. The power of political idealism, scientific and social progress is the power to be mobilised to tackle the vast challenges in the world such as global poverty and deep levels of social inequality, the 21^st century challenge of conserving the scarce resources of the world and the need to renew the fight to end global discrimination and prejudice.

Conclusion

The energy of capitalism cannot be easily contained. It has a long history of an intrinsic connection with free ideas and freedom of people as well as an intrinsic deep connection with democracy and the social welfare of people – often led by these vast scale ideas. I do not think it is right to see capitalism in a stereotyped way (as some of its Marxist critics and materialist supporters do) and restrict it to an exploitative economic function. I believe that strategic thinking and public policy should be informed a multi-dimensional view of capitalism with its fresh developments based on new ideas in all spheres of human existence. There is a need for the renewal of ‘idealism’ in strategic thinking and public policy. A fresh sense of a global mission is urgently required to fight for the best of humanity alongside a new exploration of intellectual and scientific paradigms to expand our horizons. The right of the people of the world to exercise sovereignty on matters of governance including through new thinking about the right governance structures in the age of globalisation is anew imperative. ‘Ethical Globalisation’ is possible.