Muller on Capitalism

Jerry Z. Muller, author of the classic The Mind and the Market: Capitalism in Western Thought, is my favorite intellectual historian. Evidently I am not alone as the Journal of Applied Corporate Finance has brought together Five Essays by Muller, these are:

  • The Neglected Moral Benefits of the Market
  • Capitalism and Inequality
  • Capitalism and Nationalism
  • The Threat of Democracy to Capitalism
  • Capitalism and the Jews Revisited

All are excellent and to the point. Here is one bit from The Neglected Benefits of the Market (no indent);

Adam Smith famously wrote that

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens.

This passage is almost invariably cited as a statement of the potential social efficacy of self-interest. But notice the strength of its suggestion that dependence upon the benevolence of others is morally degrading and, hence, something to be avoided if possible. Thomas Carlyle—and later Marx and Engels—would deplore this system of mutual appeals to self-interest as evidence of the tyranny of “the cash nexus.” But the flip side of the cash nexus is, first of all, the freedom and self-determination that comes from having cash. Second, the fact that relations based on cash do not involve the total subordination of one individual to the will of another represents significant progress when set against the older, prevailing characteristic forms of human relations under slavery, serfdom, or indentured servitude. Nor does the use of cash involve the subordination of the individual to the will of the state and its officials, one of the defining characteristics of socialism. That is why Hegel, who certainly appreciated the role of the state, insisted that supporting oneself by earning a living is one of the most important ways in which men get a sense of themselves as autonomous individuals. What Hegel called “the ethic of bourgeois society,” includes a commitment to “the activity of supporting oneself through reason and industriousness.



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