Saturday, April 23, 2011

Adam Smith On Opulence

PATRICK S. O'DONNELL writes (22 April) on the Ratio Juris Blog (HERE):

David Harvey on the "crises of capitalism"

David articulates a perspective on the world that is more realistic than the usual taunts against capitalism, though it loses its way later. It starts of more realistic that the exponents of anti-capitalist rhetoric, often from the rich heartlands of ultra-capitalist North America, who prattle on about their condition of the North American and Canadian working people – they are hardly a ‘proletariat’ and certainly not ‘lumpen” – blind to the one-way migration of the poor in the developing and non-developing world into North American, with zero migratory traffic the other way to whence the real world’s poor came from).

David quotes an interesting piece from the Marxist economist Meghnad Desai in Marx’s Revenge: The Resurgence of Capitalism and the Death of Statist Socialism (2002), (London: Verso, 2002: 313-314). Desai writes:

“Capitalism is not a kind or a benevolent system. It is the most effective mode of production discovered so far in wealth creation [despite its endemic ‘cycles, with their manias, crashes, and panics’]. It has no overarching objective, since it works through the profit-seeking efforts of millions of capitalists. It generates economic growth, prosperity, and employment as side-effects. It also causes much misery and destruction in its tendency towards incessant change. But over the last two hundred years, it has achieved the largest gain in well-being in all previous millennia. For one thing, many more people are alive now than in 1800 (around six times as many), and they live longer on average—between ten to twenty years longer—than they did then. [….] If length of life can be taken as a crude measure of potential well-being, a billion people living, say, forty years on average in 1800 compared to six billion people living sixty year today speaks volumes for the success of capitalism. In 1800, perhaps two thirds of that billion were poor; today, at most a quarter of the six billion are poor. Yet the reduction of poverty is neither automatic, nor to be taken for granted.

Adam Smith was not wrong, however, in saying that the new system of natural liberty imposed the cost of inequality while delivering a universal betterment of living standards. More people have been brought out of poverty in the last two hundred years, especially since 1945, than ever before in history. The very idea that poverty could be eliminated could not have occurred in any precapitalist stage. Capitalism provides the means for eliminating poverty, but these means were not directed immediately, or evenly, in the course of its development.”

… As Desai [writes David) “makes powerfully pellucid, any economic transcendence of capitalism will have to incorporate a full and honest accounting of its historical accomplishments and economic virtues, or transcendence by way of Hegelian-like negation and sublation. In other words, sloganeering along the lines of “capitalism sucks” or crude anti-globalization polemics is pointless, not unlike (assuming the sloganeering and polemics are sincere) the reasons Marx had for excoriating the socialists of his time and place for “their delusions about the prospects of achieving socialism.”

David also explores propositions derived from statements by Gandhi (and others):

“(1) It is enough to know the means. Means and ends are convertible terms. (2) We always have control over the means but not over the end. (3) Our progress toward the goal will be in exact proportion to the purity of our means. (4) Instead of saying that means are after all means, we should affirm that means are after all everything. As the means so the end.” [He lost me there; GK)

Raghavan Iyer, however, explains these four propositions (The Moral and Political Thought of Mahatma Gandhi. Santa Barbara, CA: Concord Grove Press, 2nd ed., 1983 (1st ed., 1973, Oxford University Press): 58.):

“The first statement rejects the notion that in our actual conduct we can make a firm and decisive distinction between means and ends. Any psychology of action requires this rejection of the conventional conceptual habit which makes us ascribe to ourselves greater knowledge and assurance than we actually possess. We can know, at least potentially, the means available in a way we cannot know the elusive end. Recognition of the interdependence of ends and means implies that we have some knowledge of the moral and political quality of the chosen end, whatever the complex consequences turn out to be. The second statement asserts, as a contingent truth about about the extent and limit of our free will, that the individual’s capacity to determine what he can do in any specific situation at any given time is much greater than this powers of anticipation, prediction, or control over the consequences of his action. The third statement expresses the faith in the law of karma, under which there is an exact causal connection between the extent of the moral purity (detachment, disinterestedness, and the degree of moral awareness) of an act and the measure of individual effectiveness in promoting or pursuing and securing a morally worthy end over a period of time. The moral law of karma has its analogues in the Moirae and Nemesis of the ancient Greeks, the Nornor of Scandinavian mythology, the sense of fate in the Icelandic Saga, and in all religious traditions: ‘As ye sow, so shall ye reap.’ This spiritual conviction cannot be conclusively verified or falsified empirically. The fourth statement is a practical recommendation that we must be primarily or even wholly concerned with the immediate adoption of what we regard as a morally worthy or intrinsically justifiable means. This recommendation may be accepted by those who subscribe to the second statement but it is mandatory for those who share the conviction implicit in the third statement.”

“As Iyer proceeds to point out [continues David], the closest approximation to this formulation of the means-end relationship in political theory and praxis is found in the work of Jacques Maritain. Both Gandhi and Maritain were clear in their repudiation of reliance on “technical rationalizations” and “piecemeal social engineering” in politics and both men were emphatic in their decisive rejection of so-called pragmatist or realist conceptions of politics as well as the correlative dominant moral doctrine of “double standards”cited above.”

David Harvey starts off well (via Desai [whom I met him many years ago at a defence debate and found him thoughtful and articulate but didn’t agree much with his moderate take on the Cold War.]). As his piece and the quotes continue, I think he has a long way to resolving the costs of opulence, if inequality is its main problem.

It is the lack of opulence that is the main problem facing much of the world. That is why the poor vote with their feet to share in it. Adam Smith was right about regard the inequality costs as less important than opulence (even less important than defence).



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