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Fortune Telling

The Limits of American Capitalism

by Robert L. Heilbroner
Harper & Row, 150 pp., $4.95

Robert Heilbroner has a well-deserved reputation for being the most readable economist writing. This might be interpreted as rather faint praise in view of the character of most writing in the field, but I would be prepared to go even further and nominate Heilbroner for the position of most readable writer on any serious technical subject, if such a position existed. The present short volume does nothing to destroy this reputation. The style is limpid, the ideas flow easily and one receives a strong impression at the end that something substantial has been said. The only slightly gnawing hesitation one feels is that after the first reading one is not quite sure what has been said and it is almost necessary to go back and read the book again. The very limpidity of style may almost hide the fact that Heilbroner is struggling, not always successfully, with very difficult and important problems.

The subject of the book is nothing less than the interpretation of history and the question of what stable dynamic patterns can be perceived in it, especially as applied to American society now and with a view to the next few decades. The book consists essentially of two rather separate essays, the first of which looks at American capitalism, if that is the right name for it, as it exists today, and where it has been tending and the second asks what is likely to happen to it in the next generation or so. The first essay argues that American capitalism has achieved a certain stability in the sense that the structure of society is not undergoing any rapid changes, and that the society itself is successful enough so that it has virtually no serious internal challenges, and that even the external challenges are either apocalyptic or unreal. It is a society dominated by large corporations, yet there are no signs that they are going to take over the whole economy. The proportion of the gross national product indeed produced by them is either stable or slowly shrinking, as the fields in which they are mainly found—manufacturing, communication, and utilities—shrink in relation to the tertiary and service industries, which are not so well adapted to large scale organization. What is good for General Motors may or may not be good for the country, but at the moment, at any rate, it doesn’t look as if General Motors is going to take over the country. There may be only eleven other countries with a gross national product larger than the total sales of General Motors (this cheerful fact I dug out myself and Mr. Heilbroner is not to be blamed for it), but even General Motors produced only 2 1/2 per cent of the US gross national product.

THE MOOD of the second essay is surprisingly different from that of the first. The first suggests stability and indeed almost complacency, whereas the second drags up a fearsome dialectic out of the intellectual undergrowth and brandishes it over the fat prosperous head of American capitalism, suggesting that just as the market and the slow rise of the money economy, extravagant tastes among the nobility, and the skills of entrepreneurship, destroyed feudal society, so a new society is again growing like a splended cancer within the well-padded body of the old. The new society is not this time the proletariat, which in the United States has by now been reduced to a small and impotent fraction of the total population, but comes rather from the rise of science and the scientific community as a challenge to the ethic and the sub-culture of the market place. As in most other dialectical visions, the new world of the future is not spelled out in any great detail, and it is not clear whether we are facing a utopia of benevolent and superlatively informed white-coated rulers who will do all things for our clearly well-defined good, or whether we are facing an anti-utopia in which the mad scientist seizes hold of the reins of a virtually omnipotent government and grinds us poor common folk under his diabolical heel.

One cannot help feeling that while the questions with which Mr. Heilbroner is struggling are of enormous importance, and tend rather to be pushed under the rug in our complacent and affluent society, one is not so sure about the answers he gives. The real problem here is that he is dealing with the dynamics not so much of the economy as of another part of the social system. He is concerned not with wealth or even power, but with legitimacy, that is, the degree to which particular institutions are accepted by large masses of people as satisfactory, acceptable, and worthy of loyalty and support. The problem of the dynamics of legitimacy is part of the still larger problem of what might be called the “integrative system.” This consists of those institutions, experiences, policies, and decisions in society which generate, conserve, or destroy such things as love, loyalty, legitimacy, the acceptance by persons of an identity, a role, a status, an identification with the community, and so on. The very idea that there could be an integrative system, that is, a dynamic pattern in society by which the distribution and the objects of love, loyalty and legitimacy are created and destroyed, is foreign to most of our thinking today. We tend to regard these matters as purely private or, if public, as random and not subject to investigation. This view I believe to be profoundly mistaken, and I suspect that Heilbroner would not disagree with me about this.

Nevertheless, Heilbroner is primarily an economist and nobody has ever taught him about the integrative system, mainly because nobody knows very much about it. When it comes to economics Professor Heilbroner shares with the other worldly philosophers an elegant and powerful analytical apparatus. We know roughly what the parameters of the system are, we know pretty well what we have to do to cure unemployment, and we even have some notions about how to get economic growth, though we are less sure of this. When it comes to the integrative system, however, no such body of technical and analytical competence exists. There are important hints, especially in the classical sociologists, like Max Weber and Durkheim, but there is really no body of integrative theory about the system as a whole, and very little indeed about its dynamic properties.

THE MAIN QUESTION which Heilbroner raises relates to the legitimacy of a system of private property and exchange. In the socialist world these two institutions have largely lost their legitimacy, though there may be economic and political forces at work attempting to bring about a partial restoration. In the United States the legitimacy of these institutions is almost unquestioned. Nevertheless, as Heilbroner points out, these institutions do involve privilege in the sense that the owners of property occupy a certain power position in society: economic power—that is, purchasing power—rather than political power, which is only loosely connected in our society to wealth. We can say that whereas wealth cannot necessarily buy political power, poverty removes all means of purchasing it.

The question is therefore how long will we continue to regard this particular form of privilege as legitimate. Unfortunately, no really clear answer to this question emerges from Heilbroner’s argument. He draws only on rather vague dialectical analogies, especially the analogy of the replacement of feudalism by capitalism. But while these analogies are useful in raising questions they do not necessarily provide answers. It is by no means clear that the conditions which gave rise to the loss of legitimacy of the feudal system are also at work undermining the legitimacy of capitalism. One could argue, for instance, that it is not necessarily the market and institutions which are likely to lose legitimacy, in our society, but the institution of the national state itself. Oddly enough in the strange dynamics of legitimacy it is often at the moment of greatest power and prestige of an institution that it suddenly collapses. Witness, for instance, the absolute monarchy after Louis XIV, the empire after Queen Victoria, and so on. It is not the institution of the market, however, that is at its height today, but the institution of the national state itself. This is most noticeable in the socialist countries where the national state has acquired a monopoly of power that is almost unprecedented in human society, but it is noticeable also in the capitalist world, where most national states control at least a quarter of the total economic system directly and hold in their slippery fingers the lives and happiness of all their citizens. It could be, nevertheless that the legitimacy of the Coca Cola corporation might survive that of the United States. The Coca Cola corporation, after all, does very little harm apart from contributing to dental decay. It goes around the world quietly cleaning up water supplies and introducing people to a drink which is almost certainly less damaging to health than those they are now using. The United States, by contrast, spends most of its resources on threats and very unpleasant forms of violence. It is true that in the dynamics of legitimacy it is the useless and costly institution that attracts love, loyalty, and sacrifice, and the useful donkey gets nothing but kicks. Mr. Heilbroner may be quite right, and the alternative dynamic which I have suggested may be grotesquely wrong. What we do not know, however, is how to decide between these two views, because we have really no intellectual apparatus that is capable of testing the validity of propositions in the field of the dynamics of legitimacy.

ONE MIGHT ADD a final word on the impact of science on the social system and on the future of economic and political institutions. Heilbroner is unquestionably right in assigning to this an enormous importance. The scientific revolution and the growth of knowledge really only began to make an impact on the economy about 1860 and we are still very far from having pursued all its implications. In political life the impact of science is probably still to come, even though its byproduct in the shape of weapons has totally transformed the international system, and indeed made it almost unworkable. What is not clear, and Heilbroner pays little attention to this, is the possible impact of the social sciences. We are all aware of the enormous impact of the physical sciences every day of our lives. The full impact of the biological sciences is probably still to come and it may well be that the next fifty years will be dominated by them for good or ill. Certainly, control of the genetic process, which may be just around the corner, with the possibility of the creation of new forms of life, the possibility of breaking through the barrier of aging and so on, represents a Pandora’s box which, if it can be opened, probably will be opened. That the social scientists could have an equal impact hardly seems possible at the moment. Nevertheless, the social scientists operate in the same field as the political and economic decision-maker. If they develop any genuine skill and establish any monopoly of it, the social scientists will be in an enormously powerful position, which indeed their practitioners may not be fit to occupy. The possible replacement of the folk knowledge by which the great decisions of the world are mostly made by a more exact knowledge may unquestionably bring longrun benefits, but its intermediate stages, especially when we have the little learning which Alexander Pope warned us against, opens up quite frightening prospects. One wishes that Heilbroner had gone into these questions. Perhaps he will in another book.

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