Values vs Capitalism

The conflict of the future

Magazine Desk

Underlying every economic system is a social contract setting people’s norms, values and beliefs and how the economy is to be run. But capitalism has rendered this social contract materialistic in nature due to which it is increasingly failing to address basic needs of the citizens. This materialistic social contract rests on philosopher and economist Adam Smith’s principle of the invisible hand, whereby people pursuing their own self-interest in free markets are led to make everyone in society as well off as possible. In many countries, however, this economic model has generated rising inequality in one or more of various dimensions—income, wealth, education, health, skills, and social esteem. The approach has also generated falling social mobility, rising social fragmentation, a widespread sense of disempowerment in response to the vagaries of globalization and automation, and resentment among many people that their hopes for a good life are being ignored.

If the concept of globalization was about the accessibility of goods, services, human resources, information and technology without borders, it was entirely meaningful only when meshed together with the concepts of freedom, human rights, egalitarian and inclusive development. When the Berlin Wall collapsed in 1989, the arisen wish was that not only had the Cold War ended but also the walls separating countries in terms of values were destroyed.

For this reason, the prospect of creating a combination of values in the name of a brighter future was prioritized through strengthened international institutions. The past 30 years left behind a heavy experience of insincerity for values that need to be strengthened in the name of humanity.

The leading countries of the world have been unable to put forward a common stance, sincere cooperation, togetherness, a plan to counter hunger and poverty, a fight against terrorism, solutions for climate change, inclusive health care facilities and inclusive development under the umbrella of international institutions and associations, especially the United Nations.

Countries claiming to be the cradle of democracy have not been successful in protecting the values gained from the concept and together, we have witnessed the eerie rise of populism and right-wing extremists.

Countries that are far from democracy, on the other hand, have hardly taken any action in this regard. More painfully, due to their role in the world economy and energy supply, and thanks to special privileges they provide some leading countries, they have not received proper pressure about establishing democracies and protecting human rights. This is why the concept of so-called globalization was empty, being limited to only the dimensions of the trade of goods, services and capital movements. Worse, on a regional scale, countries have focused on resurrecting the walls between one another. We can now hear the footsteps of a new Cold War.

The coronavirus pandemic came along during this sad, pessimistic situation. At a time when these same countries’ international institutions and organizations were experiencing a lack of cooperation, the pandemic caused a disruption in terms of adherence to values and respectability of institutions. A disturbance from which a new awakening and togetherness is urgently needed for us to recover. We have an arduous and crucial period ahead of us, where we have to again seriously tackle and embrace values and institutions for the present and future of the world.

From now on, if countries, instead of being questioned as to whether they are democratic or autocratic, would be described according to concepts such pragmatic or scattered in terms of global problems or sharp-stable or soft-unstable, and if we devalue or make meaningless the whole of values that must be emphasized for the future of the world, we would carry out the worst for future generations. This would be a lost world for the Z and Alpha generations.

Capitalism’s war with humanism

The 20th century passed as a rather harsh conflict among scientists in the field of economics in terms of different approaches to economic theory. The neoclassical school and the neoliberal approach, which continues today, defend a market economy run with the private sector in full competition and with the idea that there should never be a public intervention in the economy, and that private property and capital accumulation should be prioritized.

The neoclassical school and neoliberal understanding have a micro-based view that prioritizes the interests of companies and individuals rather than focusing on macro issues concerning the country’s economy or the world economy. This is why it was heavily criticized for its inadequacy as it had had no suggestions for a solution during the Spanish flu outbreak of 1918 and 1919, the Great Depression of 1929 or the 2008 global financial crisis.

John Maynard Keynes’ approach, on the other hand, has a point of view that focuses on macro issues concerning a country’s economy or the whole of the world economy, advocating that “public intervention in the economy” is inevitable to solve national and global problems.

The Keynesian approach stands out as a more humanist approach, with many of its dimensions focused on the expectations and problems of the whole society. The main political, economic and social changes and conflicts that took place during the 20th century have started to accelerate, deepen and reach such complexity in the 21st century that it is not possible for economic theory to produce solutions with stereotypical approaches, and the pressure on it to produce solutions will increase even more.

We are moving toward a new era where the economic approaches now put people at their center, where the principle of let man live so long as the state lives is being formed. If capitalism, on the other hand, would exist as an economic-political ideology, a model, it has to reshape itself with humanism. A new world must emerge that prioritizes social profit rather than “market profit,” prioritizing production, employment, added value, exports and fair income distribution, not financial speculation. A state must produce the highest quality service for its citizens in matters such as health, education, essential goods and services, justice and freedom. Economic losses can somehow be compensated. But if the EU, which is seen as the cradle of civilization, and especially the  US, which is viewed as the cradle of wild capitalism, do not change their priorities to focus on humanism, it will be really difficult to compensate for the sociopolitical price of this.

Does Capitalism Destroy Culture?

One of the most enduring critiques of capitalism is that it is morally and culturally corrosive. Even if we grant that capitalism is more efficient than planned economies, the question remains: are the economic gains worth the cultural cost? Since the cultural critique comes from political observers at almost every point on the political spectrum, and since the bureaucratic-capitalist economies of the world really are cultures in crisis, the criticism is worth attending to seriously.

Perhaps the first cultural critique of capitalism is that it destroys traditional culture and ways of living. One of the main ways the market does this is through innovation. As new technologies, industries, and goods and services emerge, they make older ones obsolete; old industries are shut down and new ones emerge. New forms of management and technology and division of labor transform traditional work and social relations, and new technologies alter traditional roles of women and men in the house. These sweeping changes can also destroy traditional work and social relationships that play an essential cultural and economic role in the lives of a community or nation. Some traditional and artisanal trades are lost forever and this can be a cultural impoverishment.

One of the most passionate critiques of capitalism is really aimed at something else: industrialization. Capitalism and industrialization are related, of course, but they are not the same thing. The rise of capitalism predates the industrial revolution by centuries. International banking and a capitalist economy emerged in Northern Italy as early as the 8th century, and among the Dutch and English and other parts of Europe by the high Middle Ages. Even more obviously, industrialization has taken place in non-capitalist societies like the Soviet Union and communist China, and at times with a soul-crushing aridity that makes an American mall seem aesthetically pleasing by comparison. The reality is, many of the critiques of modern capitalism especially aesthetic and cultural critiques, are more precisely critiques of industrialism than of capitalism or the free market per se. 

Finally, while capitalism does indeed transform, and even destroy, aspects of traditional cultural life, the most destructive global forces of cultural transformation especially in the developing world come less from market economies than from the Western, secular, organizations like the United Nations, the World Bank, the NGO industry, and the U.S. and European governments. These powerful institutions wield “soft” and “hard” power to foist a reductionist vision of life upon millions of the world’s poor.

Capitalism has profound effects on culture and it is a mistake to think that that the market economy is neutral or that markets left to their own devices will work everything out for the best. It is also a mistake to blame capitalism as the cause of cultural destruction. Market economies come with trade-offs and cultural dysfunction and cultural renewal are complex and cannot be explained by economic analysis alone.