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(R)evolutionary economics and the system (under) pressure

Marx's critique of capitalism is based primarily on a moral criticism, not a performance one. Even Marx himself, the greatest critic of capitalism, admits that the system itself is the most powerful system of governance humanity has ever—in its history—experienced. Today, even the 'poor' actually live richer than the kings of the Middle Ages, enjoying longer lifespans, healthier lives, undergoing less pain; they do not have to worry about what they eat, what to put on or whether their habitation remains heated through the winter.

Nevertheless, the Marxist criticism of the capitalist system (which surprisingly still has its supporters) survives due to the feeling that somehow the system oppresses us, takes something from us, depersonalizes us, and that this is unfair. However, this sense of "being thrown into the world" and of the injustice of the world is a general feeling of man, and a critique of capitalism cannot be built upon it. Thus, the main argument of the Marxist critique lies in the fact that Marx, in his critique, missed the target. The features described above are attributes of the human condition, not capitalism.

Growth as a left-wing sensation

If the left wants to criticize the dehumanization of the system, then it must be acknowledged that dehumanization is more or less the result of industrialization, specialization, and perhaps urbanization—things which, in themselves, do not have so much to do with capitalism. In other words, industrialization, specialization, and urbanization are phenomena that might make the person feel impersonal, but maybe we'll find some sense of community in other establishments; perhaps we will find none at all. After all, historical experience shows that countries which once tried to operate according to communism were fascinated by industrialization and mass production, perhaps even more than Western countries. The same goes for economic growth—it was a somewhat planned economy in its being self- fascinated by growth. Communist countries wanted to show growth all the time. To industrialize and always outperform some target quota—that was the point of five-year plans. Their planners strictly measured every nuance of performance to increase it in order to catch up and surpass the West which was growing, but not quite as quickly as socialist states. Therefore the idea of 'not to grow' is not aligned with socialism—quite the contrary. Sociologist and economist Thorstein Veblen, in his most famous book Theory of the Leisure Class, sees one of the main characteristics of the affluent society (or at least the wealthiest segment of society) as idleness - they do not have to toil away their days; the luxury of the rich (or, rather, supporters of the right-wing) is actually idleness.

But back to the system of oppression which, in the opinion of many, makes us unfree and dehumanizes us, which is not fair: this is 'nothing new under the sun.' For example, the writers of the New Testament noticed that with the world as it is, we will feel uncomfortable in it no matter what system emerges (and it is not a characteristic of capitalism which would be resolved by simply replacing capitalism with something else—even in a new system people will feel the same or even more lack of freedom and dehumanization). In this sense, the "atheistic" Marx believed in Christian ideals far more radically than most believers. The radical replacement of the existing system with some other seems to offer interesting possibilities, but in reality, it ends tragically and the flaws of human condition are not solved. Tellingly, none of the countries that have flirted with communism had success with the project—China grows richer just by leaving communism behind. And I do not know anyone in the West who would be so fascinated by the Chinese system that he would like to apply it here. How could he compare the incomparable?

After all, these two systems are not even comparable. If you were to try a communitarian experiment within the framework of capitalism, which does not use money, banks, or factories, but lives off the fruits of your labor, you would probably find that you are within a network of nice people and nobody or nothing would do anything to hinder its smooth operation. On the contrary, these communities are perceived by the media and the public as very positive, so instead of oppression, you would get more recognition. However, the inverse does not work: rarely did anyone in socialist countries attempt voluntary capitalist experiments, and if they had, they would have been harshly penalized. Thus comparing these two systems is de facto not possible, because one provides a possibility for cohabitation with the other, while the other does not.

(R)evolutionary economics

A much better alternative to hoping for some sort of idealistic (and insanely dangerous) castle Revolution (and exchanging the current system for something different, dreamlike) is to rely on the adaptive capabilities of the current system—essentially, on its evolution. This is exactly the view offered by Joseph Schumpeter, a world economist of the Austrian tradition (who was born in Vysočina). He believed that the system involves 'solidarity' elements and will vary depending on how people want it to change. In other words, once Western civilization liked to smoke tobacco in insane amounts (they even believed that it was healthy and that it helped lose weight); now we are over this trend and most people are trying to stop smoking. However, civilization must discover this on its own, and that is the moment something will change. Likewise, the perception of a systemic change is influential. Thus, the system must be constantly re-designed to meet the perceived needs and demands of those who live at a given time and place. Democratic capitalism is not perfect, but just this awareness allows us (even forces us) to constantly adapt. A grand system, or one that claims to be so, or even a belief in the possibility of such a system, is not possible without change.

Translated of an article published in Hospodářské noviny

About the Author: Tomáš Sedláček (1977) is a Chief Macro-economic Strategist at ČSOB. He served as a non-political expert advisor to the First Deputy Prime Minister and Minister of Finance of the Czech Republic, with special responsibility over fiscal consolidation and the reform of the tax, pension, and healthcare systems. He also served as an economic advisor then-president of the Czech Republic, Václav Havel. (