What’s Wrong with the World

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Cohen on Kristol

Writing in the latest number of National Affairs, Eric Cohen ably memorializes the “moral realism” of the late Irving Kristol, greatest of the neoconservatives. Cohen’s focus for most of the essay is Kristol’s searching examination of capitalism, which featured prominently through his entire career as a writer and editor. Never let it be said that Kristol was an uncritical promoter of the capitalist form of political economy. Cohen quotes at length from a speech in 1991, when capitalism was at its very zenith of prestige:

In a sense, it is all Adam Smith’s fault. That amiable, decent genius simply could not imagine a world in which traditional moral certainties could be effectively challenged and repudiated. Bourgeois society is his legacy, for good and ill. For good, in that it has produced through the market economy a world prosperous beyond all previous imaginings — even socialist imaginings. For ill, in that this world, with every passing decade, has become ever more spiritually impoverished. That war on poverty is the great unfinished task before us. The collapse of socialism, along with the vindication of a market economy, offers us a wonderful opportunity to think seriously about such an enterprise. Only such an enterprise can ensure a capitalist future.

Cohen recapitulates this point repeatedly, and with increasing insistence: “in the end, as Kristol argued, our destiny will depend far more on our cultural and spiritual lives than on our regulatory and tax policies.” “Building a family requires precisely the virtues and spiritual purpose that the capitalist order fails to nourish, while the future of the capitalist order — and, more significantly, the future of a morally decent, democratic, and prosperous modern civilization — requires flourishing families.” “Perhaps the most important work before us — which Kristol, a Jew in largely Christian America, could not do — is to reform and re-invigorate Christian political theology, for it is on this that the spiritual vitality and moral-political sanity of American civilization likely now depends, both for better and for worse.”

Well worth a read.

UPDATE: By the strange twists of memory, the mystic chords even, I am reminded of this fine essay by Cohen, which had a dramatic effect on me almost ten years ago.

Comments (15)

This really stood out to me:

But we should not grow too sanguine. If years pass when recent college graduates cannot fnd the work they believe they deserve, and when men and women in their six-ties and seventies cannot aford the retirement they have truly earned, then it is hardly impossible that democratic capitalism might again be shaken to its foundations.

In other words, when the economy doesn't hand out six figure salaries to people who majored in subjects that they could have studied with a library card and doesn't allow elderly workers to sit on their asses watching TV, we'll become a nation of nihilists.

Anyone else read that paragraph and think that if that is actually true that our country is so spiritually FUBAR that the devil is sticking a fork in us right now to see if we're done?

I think you're reading too much into that, Mike T. The entitlement mentality is certainly part of the grim tally against the pretensions of the modern age. It's a feature of our world. He's not endorsing it.

"Never let it be said that Kristol was an uncritical promoter of the capitalist form of political economy."

Ummm...was there ever anybody stupid enough to say that he was?

He was alway, quite obviously, a demi-red.

What's a "demi-red," Steve?

The school of thought Kristol founded is commonly thought to be far too uncritical an apologist for the late-modern wreck of a political economy.

Sorry, I know two comments in a row is bad form, but I read through the linked article with mounting disgust, as I was reminded of more and more of that ol' time Irving Kristol schtick - and I must say, any unrepentant defender of the welfare state has to have a lot of nerve to complain about the demoralizing effects of "capitalism."

Ah, thanks, Paul, for saving me from a solecism. I guess I should have previewed.

No doubt Irving Kristol was "far too uncritical an apologist" for all sorts of things, perhaps including "the late-modern wreck of a political economy."

But *capitalism*?

Surely you jest.

You know, this may be merely terminology, Steve.

By capitalism I mean precisely "the late-modern wreck of a political economy."

By capitalism you mean (I think) what I would prefer to call "free enterprise."

Now men like us can entertain ourselves at length with the charms of terminological and semantic discussion, so it is with some trepidation that I present here my explanation for this preference:

Free enterprise is characterized by a wide private field for business competition and innovation, operating under a structure of laws analogous to a good referee in a ball game. Savers, under free enterprise, extend their capital to the successful enterprisers in the community. The economy is not isolated -- some of its magnates aspire to national or even world prominence -- but its core is local or regional. Its health is the effective and trustworthy bestowal of the capital of the older folks of the community, who have savings, upon the industrious and virtuous of the younger businessmen. There is definitely risk in the system, but it is risk faced primarily on a personal level. The man of means wants to know the men he invests his capital in. He'll ask about their families. He'll take his risks based on his gut sense about a man. The great seaports of New England in colonial and early Republican America are exemplars of the free enterprise system. It is manifest that remarkable risk was undertaken in the whaling trade, when ships and stores and whalers were out to sea for a year and more, or any of the other thousand seafaring enterprises the New Englanders braved to generate their wealth.

I contrast this with the kind of political economy America has had for the past 30 years or so. (Its roots go farther back than that.) It makes good sense to call this Capitalism, I think. Its fascination is with capital. In the past 30 years a decisive shift occurred, away from the local and human-sized model and toward an engineered world of abstraction. The shift came from private enterprise, but it was aided all along by the state. The referee was favoring one team: the financiers of globalization. The future of the American economy was hitched to a peculiar system of finance, which grew into a vast and stupefying infrastructure of debt that became the conduit by which capital from the most far-flung corner of the world to flowed into US securities markets, above all those attached to real estate.

Capital was protected through most of this. "Three decades of subsidized risk." Always the financiers were rescued. Continental Illinois and the Resolution Trust Corporation in the 1980s. The "private" rescue of the geniuses at Long-Term Capital Management in 1998. The rise of shadow banking. The removal of the firewalls between deposits and exotic securities. The transformation of investment banks from private partnerships into public corporations. The tale is a long and intricate one. (Self-promotion alert: I'll have an essay in a forthcoming New Atlantis discussing some of it.) The point here is that recent revelations shown us pretty dramatically that finance capitalism is not the same thing as free enterprise.

With respect to Kristol, then, when I said, "Never let it be said that [he] was an uncritical promoter of the capitalist form of political economy," I had in mind finance capitalism and globalization, this integration of world capital markets which has dominated our economic vision. Neoconservatives are often accused of a far too uncritical embrace of this status quo. Cohen gives us a good reminder of Kristol's ambivalence about it.


I wasn't calling out the author. I was pointing out that the neoconservative hope is probably in vain if that premise is true.

For me, the issue hits close to home because I'm 26 and graduated 4 years ago. I've seen first hand how so few of my peers even grasped that their "educations" were worthless to their career prospects. They act outraged that no one finds a liberal arts or general business degree from a good state university to be an exciting career qualification that will earn them a high salary.

I don't see the issue getting any better because there are so many Americans who just don't get that "working hard," while admirable, is meaningless to the economy if it isn't productive. I think the reason why so many people actually buy into liberal economics is that they genuinely don't understand the relationship between producing wealth and their own paycheck.

That is not to downplay non-economic callings, but in the past, people who had such callings likely understood the fact that their callings are supported by people who work in the market producing goods and services.

"The point here is that recent revelations shown us pretty dramatically that finance capitalism is not the same thing as free enterprise."

One of the 12 Southerners, I disremember which, argued in I'll Take My Stand (published in 1930, mind you) that a big change occurred when corporations managed to sell the American populace on the notion that owning stock is the same thing as owning other property, esp. real property. I've never followed up on that argument in any detail, but on the surface it makes a fair amount of sense.

That's interesting, Rob G. As it happened, one of the main themes of my forthcoming New Atlantis essay is the abstraction of property. My feeling is that bond markets are more important in this respect than equity markets. A stockholder (unless he is a complete fool) knows that there is no guarantee on his holdings. Shareholders get wiped out when a company fails -- even now that is still true. Thus the risks are more well known. A stock is simply a claim on the future profits of the company. A bankrupt company, of course, has no future profits.

I would say that the introduction of much of the volatility of stocks into the world of bonds is right at the heart of the transformation of finance. For centuries bonds were borin, if reliable investments; in the last 30 years they have become the Wild West.

Thanks, Paul - I think that resolves my issue with you.

"As it happened, one of the main themes of my forthcoming New Atlantis essay is the abstraction of property."

You're well aware, I'm sure, that the 'abstraction of property' has been a concern of agrarians, Distributists, and the like for many a moon. We've ended up with what Wendell Berry calls, if memory serves, a "paper economy," not just in terms of fiat money, but in the fact that much of the transaction that goes on isn't in any true sense "real," it all happens on paper, so to speak, and has no solid connection to the "stuff" of life. In any case, I look forward to your essay.

And think about the digitizing of it! It's all computer commands. The rage on Wall Street now, I gather, is this "high frequency" horse hockey, this arbitrage of the infinitesimal. Use computing power to find and trade the momentary fractional irrationalities in some bond market. We are far gone from the gritty reality of the real businessman, from the healthy spirit of human enterprise.

The rage on Wall Street now, I gather, is this "high frequency" horse hockey, this arbitrage of the infinitesimal.

The devolution of modern "capitalists" from great hunter fish to catfish...

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