Discover more from The Freemen News-Letter
Free Enterprise isn't Enough
A review of Irving Kristol's "Two Cheers for Capitalism."
This essay is heavy on quotations, because I thought it was best to present Kristol in his own words, rather than to insert too many of my own. There were so many more quotations than I could have included. I will be sharing some of those in Daily Saucer posts over the next few days.
A blurb from the Boston Sunday Globe called Two Cheers for Capitalism, “the single best source of what the neo-conservative debate is all about.” For young conservatives in 2023, some of whom may be confused as to what “neocon” really means, this short book is an excellent starting point.
Two Cheers for Capitalism is an exploration and defense of the market system. “Two cheers,” according to Kristol, is all capitalism needs—unlike other ideologies, it doesn’t aspire to greatness. That is, in fact, the point—capitalism improves material well-being so that people can live happier, more productive lives. Unromantic and unexciting, this system is content with making people content.
And yet that uninspiring character drives some of the discontent towards capitalism:
“What the 20th century has witnessed is the degradation of the bourgeois-capitalist ethic into a parody of itself—indeed into something resembling what the critics of [capitalism] had always accused it of being. These critics, intellectuals and men of letters above all, never did like the modern [free] society because it was ‘vulgar’; it permitted ordinary men and women, in the marketplace, to determine the shape of the civilization, a prerogative that intellectuals and men of letters had always claimed for themselves. (This is why so many intellectuals and men of letters naturally tend to favor some form of benevolent despotism, in our time called a ‘planned society.’) But their criticism was largely ineffectual so long as [capitalism] was contained within a bourgeois way of life and sustained by a bourgeois ethos, the way of life and the ethos celebrated by Horatio Alger… The trouble is that capitalism outgrew its bourgeois origins and became a system for the impersonal liberation and satisfaction of appetites – an engine for the creation of affluence. And such a system, governed by purely materialistic conceptions and infused with a purely acquisitive ethos, is defenseless before the critique of its intellectuals.”
-Irving Kristol, Two Cheers for Capitalism p. 82
In two-hundred-and-fifty pages, Kristol confronts the challenges to capitalism in his day and our own.
On a mundane level, many Americans have always struggled to realize how wealthy they really are. Citizens in the top twenty percent don’t always feel rich because amenities which used to be available to upper-middle class families (ex. servants in the home) are now only available to the top five percent (a function of the rising general prosperity making those luxuries more expensive).
“A society which fails to breed contentment among its more successful citizens would seem to have a rather serious problem on its hands,” because “if one cannot count on these people to provide political, social, and moral stability…how long, one wonders, can that stability and good opinion survive” (p. 33).
But more importantly, “it did not take long for the culture emerging out of bourgeois society to become bored with, and hostile to, a life and a social order based on such prosaic bourgeois values. Artists and intellectuals quickly made it apparent that ‘alienation’ was their destiny, and that the mission of this culture was to be anti-bourgeois. But so long as religion was a powerful force among ordinary men and women, the disaffection of the intellectuals was of only marginal significance. It is the decline in religious belief over the past 50 years—together with the rise of mass higher education, which popularized the culture’s animus to bourgeois capitalism—that has been of decisive importance” (p. 129).
Kristol examines the public attitudes towards businesses and the market. He does point out that “business” and “market” are different things, even though, in the public’s mind, they are sometimes conflated. After all, businesses support restricting the market when it is in their interest.
“The number of businesses which refuse to go bankrupt in order to satisfy the demands of economic rationality is very large indeed….The oil companies at this time are quite prepared to approve the arguments in favor of a free market, but these same oil companies have traditionally supported state regulations to limit the output of individual oil fields.”
-Irving Kristol, Two Cheers for Capitalism p. 86
Corporations, in particular, come in for more than their fair share of public mistrust. Defenders of capitalism sometimes point out that it is unfair for the public to perceive them as being defenders of corporations, and indeed Kristol points out that many early opponents of large corporations attacked them as deviations from America’s market economy. However, Kristol is nothing if not a small-c conservative. He believed in doing the best with the situation one finds oneself in, preserving what is good about that situation, and doing what limited amount one can to ameliorate what is bad about that situation. He did not believe the managerial character of American capitalism in the late twentieth century could be wholly overturned. He was not a libertarian.
If a corporate version of capitalism was what we had, and we weren’t going to get anything better, Kristol believed that in order to defend capitalism, it would be necessary to improve the public image of corporations. And that image was (and is) poor indeed.
In the court of public opinion, “A government-owned or government-operated enterprise is beyond reproach so far as concerns its motives. It is, as we blithely (and mindlessly) say, ‘publicly’ owned and operated, and its rationale is ‘service,’ not profit. That this enterprise may then be less efficient, more bureaucratic, and not at all responsive to public needs somehow doesn’t matter. The Post Office gets away with murder while AT&T is crucified for every fault, simply because in the one case management’s motives are assumed to be ‘pure’ while in the other they are by definition, ‘impure.’” (p. 106).
But Kristol did not endorse what often passes for notions of corporate “social responsibility,” a term he rejected. He defended the shareholder model.
“An act of charity refines and elevates the soul…but corporations have no souls to be saved or damned. Charity involves dispensing your own money, not your stockholders’. When you give away your own money, you can be as foolish, as arbitrary, as whimsical as you like. But when you give away your stockholders’ money, your philanthropy must serve the longer-term interests of the corporation.”
-Irving Kristol, Two Cheers for Capitalism, p. 134
That might sound cold to some ears. But surely the cold corporation should be preferable in the eyes of most people to the horrors of the gulags? Why, then, when those horrors were so evident, did so many people reject capitalism in favor of a planned economy?
“The strength of the collectivist imperative is such that it feeds on…its own failures….One would have thought that the catastrophic condition of agriculture in the Soviet Union, China, and Cuba would have brought these economies into universal disrepute. Yet no such thing has happened. These regimes are extended infinite moral and intellectual credit for their utopian ideals, and their credit ratings seem little vulnerable to their poor economic performance. Similarly, in the Western democracies, the tremendous expansion of government during these past three decades has not [resulted in] more contented people. On the contrary, there is far more sourness and bitterness in our lives…than used to be the case; and these very governments, swollen to enormous size, are visibly less stable than they were. Nevertheless, the response to this state of affairs among our educated classes is to demand still more governmental intervention—on the theory that a larger dose of what should be good for us will cure the illness caused by a smaller dose of what should have been good for us.”
-Irving Kristol, Two Cheers for Capitalism, p. 154
And this brings us to the heart of the problem. Empirical evidence was not enough to sway people from the allure of anti-capitalist ideologies, and it is not enough today to convince people of the merit of the thoroughly unromantic system of free market capitalism. What, if not evidence, sways the hearts and minds?
For centuries, many “could not believe in the importance of ideas—until one day they were shocked to discover that their children, having been captured and shaped by certain ideas, were either rebelling against their authority or seceding from their society.” Merely “a slight change in the intellectual climate can…twist a familiar institution into an unrecognizable shape. If one looks at major institutions of American society today—the schools, the family, the business corporations, the federal government—we can see this process going on before our eyes.” (p. 158)
Ideas, Kristol argued, matter. And anti-capitalist ideas had percolated for decades until they won the hearts and minds of a majority of America’s youth. Where did these ideas come from?
From the people who work with ideas. Older societies afforded a more privileged place to intellectuals, poets, and artists. Commercial society “offered the intellectuals the freedom to write or compose as they pleased and then to sell their wares in the marketplace…this ‘freedom’ was interpreted by—one can even say experienced by—intellectuals as a base servitude to philistine powers.” (p. 167)
Moreover, “it is because ‘high culture’ inevitably has an aristocratic bias—it would not be ‘high’ if it did not—that, from the beginnings of the capitalist era, it has always felt contempt for the bourgeois mode of existence. That mode of existence purposively depreciated the very issues that were its raison d’etre. It did so by making them, as no society had ever dared or desired to do, matters of personal taste…in short, an amiable philistinism was inherent in bourgeois society, and this was bound to place its artists and intellectuals in an antagonistic posture toward it. This antagonism was irrepressible—the bourgeois world could not suppress it without violating its own liberal creed; the artists could not refrain from expressing their hostility without denying their most authentic selves. But the conflict could, and was, contained so long as capitalist civilization delivered on its three basic promises. It was only when the third promise, of a virtuous life and a just society, was subverted by the dynamics of capitalism itself, as it strove to fulfill the other two—affluence and liberty—that the bourgeois order came, in the minds of the young especially, to possess a questionable legitimacy.” (pp. 241-242)
Bourgeois morality is boring and uninspiring. It is good, but not grand. Few people are stirred by it in the way they are by utopian collectivism. But capitalism without bourgeois morality is, at best, cold and empty, and,, at worst, the very bastion of selfishness and greed that critics allege.
Young Natcons today might be surprised to find that, long before any New Right thinkers came along, “the Godfather of Neoconservatism” argued that economic freedom depended on a moral and religious culture. They might be further surprised to find he wanted to save capitalism, not jettison it in favor of economic planning or an integral social order. Kristol, as many will know, was a Marxist in his youth. His migration to the right, which mirrored a similar migration of a cohort of intellectuals who came to be known as “neoconservatives,” came when he was “mugged by reality.” He came to see that communism was impossible, that attempts to achieve it would end in unimaginable horror, and that for all its flaws, capitalism had done much good in the world.
In Two Cheers for Capitalism, Irving Kristol confronts the world as he finds it, not as he wishes it to be. While some of the references are dated to the 1960s and ‘70s, modern readers will find almost every word of it relevant to our own day.
Ben Connelly is a writer, long-distance runner, former engineer, and author of “Grit: A Practical Guide to Developing Physical and Mental Toughness.” He publishes short stories and essays at Hardihood Books. @benconnelly6712
The Freemen News-Letter is an online publication operating under the auspices of The Freemen Foundation as part of its effort to elevate political dialogue and invigorate discussion on America’s written and unwritten constitutions. Please consider joining our efforts as a donor to our efforts.