Foretelling the End of Capitalism

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By Daniel Luban:

"Foretelling the End of Capitalism moves briskly across a century and a half of intellectual history, from Marx and John Stuart Mill in the mid-19th century (when the term “capitalism” entered the lexicon) to the aftermath of the 2008 crash. The intervening cast of thinkers is large, if almost entirely European and American: Max Weber and Rosa Luxemburg in the beginning of the 20th century, John Maynard Keynes and Joseph Schumpeter in the middle, Daniel Bell and Francis Fukuyama more recently, along with dozens of others. Boldizzoni’s subtitle, Intellectual Misadventures Since Karl Marx, indicates his generally low opinion of their collective efforts, and the last part of the book ventures a general account of how they went wrong.

Boldizzoni divides the prophecies he examines into a few basic categories. The most prominent is “implosion,” the suggestion that capitalism will collapse due to its own economic contradictions. Much of the Marxist tradition falls into this category (although, of course, not all Marxists have imagined that capitalism will inevitability implode), and Boldizzoni draws out a few distinct Marxist theories of economic crisis: overaccumulation, underconsumption, disproportionality.

A second vision of capitalist collapse is “cultural involution,” framed around the system’s cultural or political contradictions rather than its strictly economic ones. This notion is more common on the right and in the center than on the left; a classic instance is Schumpeter’s claim that “the capitalist order not only rests on props made of extra-capitalist material but also derives its energy from extra-capitalist patterns of behavior which at the same time it is bound to destroy.” (Although Boldizzoni restricts himself to the past two centuries, such accounts often echo much older narratives of virtuous austerity undone by luxury and decadence.)

Other genres of prophecy dispense with the notion of a final dramatic collapse altogether. Boldizzoni suggests that “exhaustion” theories, which imagine capitalism petering out with a whimper instead of a bang, form their own distinct category. Although there are pessimistic versions of the theory—perhaps Larry Summers’s recent revival of the concept of “secular stagnation” qualifies—Boldizzoni’s chief exemplars were more hopeful. Mill and Keynes both invoked the postcapitalist future in warmer English pastoral tones, looking forward to a world in which the imperatives of accumulation and growth come to a halt and abundance produces a general subordination of economic values to human ones.

Boldizzoni’s final category is “convergence,” the view that capitalism will gradually evolve to become indistinguishable from socialism. If Marx already hinted at this view, developed forms of it can be found throughout the 20th century: Berle and Means’s The Modern Corporation and Private Property (1932) provided an upbeat version, Friedrich Hayek’s The Road to Serfdom (1944) a despairing one. (Here Boldizzoni’s book might have benefited from some engagement with the major study of this theme, Howard Brick’s Transcending Capitalism, from 2006.) A notable early formulation came from the German sociologist Werner Sombart, who coined the term “late capitalism” soon after World War I (in reference to what we now consider the “classic” capitalism of the mid-20th century). But at the same time he suggested that it ultimately made little difference whether an economy was nominally late capitalist or socialist. “The difference between a stabilized and regulated capitalism and a mechanized and streamlined socialism is not very large,” Sombart wrote, for “in both cases the entire economy rests on the basis of depersonalization.”

Surveying this wide range of theories, Boldizzoni’s verdict is simple: Their forecasts “never came true.” Capitalism has not ended, and although we can assume that, like all historical phenomena, it will eventually give way to something else, there’s no reason to think that its end will come soon or that it will be replaced by something better. The failure of all these prophecies, he insists, reflects a set of recurrent errors. Capitalism’s obituary writers rest their arguments on an assumption of human progress; they indulge in a utopian hope of discovering the laws of social evolution; and above all, they fall prey to an “underestimation of culture as a social force.” Capitalism stems from the specifically hierarchical and individualistic nature of Western cultures, and these underlying traits are likely to persist well into the future. In light of these considerations, Boldizzoni writes, “we would do better to focus on the present and improve life under capitalism.” He suggests that doing so would involve a renewed push for social democracy within the bounds of the nation-state."