Subtitle: Capitalism in Western Thought, Random House, NY., 2002, 487
pgs., index, notes, paperback
I learned a great amount from reading this book. And it complements Dr.
McCloskey's three volumes. Here, Dr. Muller refers to his selected authors as
'intellectuals' and of course they are. But for me they are a particular group,
a component of them, not all those who can be classified as 'intellectuals' are
of the 'intelligentsia' - Rather they are what many others (including me) call
the 'intelligentsia' - or Dr. McCloskey calls the 'clerisy'. That is, smart and
well educated people who self-determine that their personal roles are to change
society to what they consider 'the better'. Dr. Muller credits these
individuals, as do many other commentators as well, as among the elite
influencers of 'public opinion'; which was a growing power source in Europe as
a larger and larger segment of the population gained political power. The more
the masses could vote, the more critical it was (and is) to insure that they
vote according to the enlightened thought of their intellectual betters.
Moreover, when they do not, or ignorant politicians seek votes, the envious
intelligentsia must intervene.
As his subtitle indicates, this is not a study of capitalism itself nor of the
economic history of Europe during which capitalism became the driving force.
Rather, it is a study of the thoughts of a selected group of these
intelligentsia members about not only or mainly the economics of capitalism but
its interrelationship with culture, morality, and ethics. Or as he writes in
the introduction: "That is why this is a history not of economic ideas,
but of ideas about the capitalist economy." However, he cites his methods
as an historian which enable him to place the individuals' thoughts in both the
context of their personal biographies and the historical setting in which they
lived. And he does have to outline their views on economics in order to place
their published pronouncements on the cultural and social results of capitalism
in to context. Dr. Muller describes the personal biographical background of
each author in sufficient detail to demonstrate the connection between each
author's life experience and his thoughts - theories - on capitalism. This is a
critical subject because the theories espoused by intellectuals (an anyone) are
developed during their interaction with their environment and education.
The chapter titles indicate the names of these individuals. Most are well known
to general students, but several are almost unknown and not usually included in
such compendiums as Thomas Neill's Makers of the Modern Mind, or Robert
Heilbroner's The Worldly Philosophers. Dr. Muller includes critics of
capitalism as well as its supporters, but mostly critics. For my purpose the
chapters on the most recent authors such as Schumpeter, Marcuse, Keynes, and
Hayek are most important.
As is common about many philosophical issues contention over these same issues
remains central to the political agendas of adversaries today. Definitions of
'capitalism' itself are contentious. Even more so are opposing concepts about
the definition and nature of 'money' and its role in capitalist and other
economic systems - a topic for another discussion. I include Dr. Muller's book
with others in a general survey of current thought about capitalism, markets,
money, and 'social justice'. The reader may notice that much of the criticism
and opposition to 'capitalism' is based not on economics but on concepts of
morality and ethics or about claims that 'capitalism' degrades culture. But
this is a response to the promoters of economic theory who early on viewed
economics in a purely materialistic way, even positing their subject as the
actions of 'economic man' - that is one whose desires and actions are motivated
by purely materialistic goals. Thus the two groups are talking past each other
Professor Muller is also the author - lecturer - of a 36 lecture series
titled "Thinking about Capitalism' published by the Great Courses Company
in DVD and on line on this same subject. In the lectures he presents much more
detail about the background and thinking of the same individuals plus more. I
highly recommend this lecture series.
Bourgeois Role - My summary and comments on all three of the volumes by
McCloskey, Deirdre - Volume I - The Bourgeois Virtues
McCloskey, Deirdre - Volume II - Bourgeois Dignity
McCloskey, Deirdre -Volume III - Bourgeois Equality
The author starts out directly, writing: "We live in a world shaped by
capitalism"... and, "It (the book) is based on the assumption that
capitalism is too important and complex a subject to be left to
economists." Further, "That is why this (book) is a history not of
economic ideas, but of ideas about the capitalist economy."
He notes the development about which I have objected for years, namely, the
separation of economics as a separate academic and professional discipline and
subject matter from its real context as an integral component of
'political/economy'. This, he notes "have come at the expense of
marginalizing many of the issues about the market that are likely to concern
reflective people." But he also notes that 'the moral, cultural, and
political ramifications of capitalism' have recently become the subject of
serious concern and attention for commentators. The resulting losses of the
'forces of commerce' have included civic virtue and the "willingness to
defer gratification upon which capitalism depends.". "Individualism
and selfishness were destroying any sense of collective purpose."
Dr. Muller cites his interest in our contemporary conflicting analysis of the
'virtue' or not, of capitalism and of its manifestation in 'the market' on the
grounds of moral, cultural, and political criteria, of which he mentions many.
He decided to investigate the historical background of these theories and found
that they all have lengthy pedigrees starting from the very origin of
intellectual recognition that something causing radical change in human
relations was taking place.
Recognizing all this, he undertook to research the history of thought about
capitalism as found in the writing of major Western - European - intellectuals
back to the early 18th century. He writes: "I found that reflections on
the cultural, moral, and political effects of capitalism had been central not
only to intellectuals often treated as 'economists' such as Adam Smith and
Joseph Shumpeter, but to figures not usually thought of in connection with the
market, from Voltaire through Hegel, from Edmund Burke through Matthew Arnold
and beyond." The result is this book in which each chapter is focused on
one or several writers. In connecting their views he has found several general
themes, which he has addressed. Among then: "Among the issues that recur
throughout this study is the question of poverty and wealth." "Then
there are questions of capitalism and culture." "How the market
economy affects the family has been another long-standing focus among the
analysts of capitalism." "The relationship between capitalism and
equality is another recurrent theme." "A larger theme, uniting
several of those mentioned so far, is the effect of the market on pre-market
institutions - political, religious, cultural, economic, and familial."
"Because the rise of the market to its position of centrality in modern
European societies coincided with the rise of intellectuals as a distinct
social group, another recurring theme is how the thinkers in question conceived
of the role of intellectuals within a capitalist society."
He writes, "The Mind and the Market moves between practical,
concrete capitalism, and intellectual reflection on capitalism - between what
the Viennese satirist Karl Kraus in his Magical Operetta, called
'tachles' and 'shmonzes'." He continues with a discussion of his
methodology for historical research and his selection of the writers and their
thoughts that he considers most significant. A feature of his method is to
place each author and their thought in the context of their time.
Chapter 1 - Historical Backdrop: Rights, Righteousness, and Virtue
The content of this chapter is an important confirmation of the very same
appraisal Dr. McCloskey presents in her three books on the Bourgeois role in
modernization and expansion of market capitalism. Dr. Muller cites the most
influential authorities going back to Plato and Aristotle and the Bible. All
the intellectual preconditions on which capitalism; modern ideas about money,
markets, competition; and roles of individuals in society are based were
opposed by both civil and religious opinion and institutions. Some of the same
concepts appear, such as honor, dignity, trade, markets and liberty. As he
notes, the fundamental debate is "about the moral worth of a society
organized around markets" Societies were structured on a hierarchal basis
in which everyone had a status and knew what it was. Work, especially artisan
and merchant activities were disdained. Making 'money' was denounced. There was
great 'hostility toward trade and money- making' in both the religious and
civil traditions. He continues: "The most suspect form of commerce was the
making of money from money." Lending money which generated interest was by
definition 'usury'. Wealth itself was 'disparaged' by moralists. Dr. Muller
traces published views on all this from classical and Biblical times through
the middle ages. One powerful classical authority he does not mention is
Cicero, who dismissed all forms of commerce out of hand and preached that
politics was the only really honorable way of life.
He cites the admonitions of St. Bernard of Clairvaux warning about Jewish
influence in money making, even though the Cistercians were noted for their
development of profitable marketing activities. Moreover, he writes: "Thus
began an association of money-making with the Jews, an association that would
further taint attitudes toward commerce among Christians, and that, as we shall
see, would survive in transmitted forms in the reflections of modern
I see a 'feedback loop' here. Jews were denounced because they were
'money-makers' and 'making money' was denounced because it was considered a
Luther was "hostile to commerce in general and international trade in
particular." not to mention usury. And. "That trade was inimical to
communal cohesion was a staple of the civic republican assumptions of early
modern political thought." He cites Machiavelli as a proponent of the
classical view on 'virtue' and self-sacrifice in favor of the community - the
'public good'. "Republican 'liberty was the freedom to take part in
preserving the freedom of the commonwealth from foreign domination." - A
classical Greek conception of the meaning of 'liberty'. Dr. Muller then
discusses the development of civil law in contrast to Christian and classical
Chapter 2 - Voltaire: "A Merchant of a Noble Kind"
In this short chapter we learn a great deal more about Voltaire's personal life
and activities than one finds in the usual essay about his political opinions
and influence. As is his objective with all these intellectuals, we find that
Dr. Muller identifies the way in which Voltaire's personal life agenda and
activities corresponded with his public political pronouncements and how his
theories subsumed his views on economics (especially capitalism) beneath his
theories on culture and social issues. And we learn also about Voltaire's
advocacy for an increased role and power for intellectuals (of a certain sort)
in creation of public political policy.
Chapter 3 - Adam Smith: Moral Philosophy and Political Economy
Dr. Muller devotes much more space here for a fuller description and analysis
of Smith's thought (and real meaning) especially in his two main books. The
Wealth of Nations, and The Theory of Moral Sentiments, but also
other publications, letters, and lectures. Smith's full range of opinions is
revealed to be much deeper and richer than one finds in the typical quotation
about 'the hidden hand'. In fact much of the standard concepts today about
Smith's theories about economics are shown to be misleading at best. He was a
moral philosopher before he was an economist.
Chapter 4 - Justus Moser: The Market as Destroyer of Culture
This German gentleman was a contemporary of Smith's who vehemently opposed
capitalism mostly on cultural and social grounds. But this was in support of
his own class position in medieval society, in other words special interest.
Moser's attack on 'capitalism', 'the market economy', and industrialization was
based largely on his view that these were disrupting established society, which
of course they were. He favored the 'status quo' of feudalism, manorialism,
guild control, hierarchy and 'honor' based on status. In other words, he was a
staunch defender of the conceptions about the superiority of medieval life and
society. But he, himself, was a member of the intelligentsia determined to
advance this category into running the state.
Chapter 5 - Edmund Burke: Commerce, Conservatism, and the Intellectuals
Burke was a British politician whose influence waxed and waned on Parliament.
He is best known to students today for his Reflections on the Revolution in
France, but his speech Thoughts on the Cause of the Present
Discontents brought him to public attention. And his speech Vindication
of Natural Society and lengthy attack on the misconduct of the British East
India Company for its greedy exploitation of India generated much contention in
Parliament and Royal politics.
Chapter 6 - Hegel: A Life Worth Choosing
We learn quite a bit about Hegel in this chapter. Again, it is clear that his
philosophical theories were the outgrowth of his personal experience. He was
another member of the intelligentsia, but a supporter of Hardenberg in the
reform campaign to concentrate power in the bureaucratic state. He stressed
study of history to find the true nature of 'liberty' as opposed to the
excesses of the French revolutionaries. Dr. Muller writes: "Hegel sought
to explain that, rightly understood, the institutions of the modern world were
worth affirming, for modern institutions have their own ethical
dimension." And further: "For Hegel, the fundamental fact about man
is that he is capable of being free." Dr. Muller continues with much more
on Hegel's views of civil society and such important features as private
property. And Hegel believed in the positive role of the entrepreneur in the
expansion of consumers. Dr. Muller writes: "The market, that is to say,
did not just satisfy wants, it created them." And: "The market was a
want-creating machine." And all this was good as it promoted the sense of
individuality as long as the consumer has the self discipline to control his
desires. There is much more valuable expansion of Hegel's philosophy in this
chapter. Dr. Muller concludes with this: "Hegel's influence upon later
intellectuals was formidable, and reached well beyond German-speaking
Chapter 7 - Karl Marx: From Jewish Usury to Universal Vampirism
As usual the author provides a brief but excellent biography of Mars and Engles
that links their thought to their life experiences. This is a lengthy chapter
with a rich content that defies a brief summary. The title indicates Dr.
Muller's exposition of Marx's core belief in the antisocial essence of the Jew.
From an elaborate critique of all the evils that Jews were supposed to embody,
Marx expanded to claim that the central social problem was the extension of
'Jewishness' to all of modern 'capitalist' market economy.
Chapter 8 - Matthew Arnold: Weaning the Philistines from the Drug of
This author was another of those who denounced capitalism on cultural, moral,
ethical grounds but from a practically opposite position to that of Marx. He
favored 'high culture' considered that of the aristocratic class and bemoaned
its being downgraded by the pretensions of the middle class of business and
industrial society. He was an example of the intelligentsia cited by Dr.
Chapter 9 - Weber, Simmel, and Sombart: Community , Individuality, and
Dr. Muller considers all three of these sociologists together because they were
of one generation and addressed the same issues related to 'capitalism' but
from different points of view.
"Setting the terms"
In this introduction he writes, "What is capitalism" as the important
philosophical and academic subject of the age. And further, "Perhaps never
has capitalism received the level of intellectual attention and illumination as
it did in Germany during the reign of Kaiser Wilhelm, in the two decades before
the Great War" "At the center of those debates were three academics:
Max Weber, Georg Simmuel and Werner Sombart". "It was an era when
German universities, research institutions, and museums - paid for by the state
and by state-solicited donations from newly wealthy capitalists - were widely
regarded as the best in the world, and when the prestige of professors within
Germany was at its peak".
Indeed, and the results has been a political, social, academic disaster. This
is the era in which the 'treason' of the intelligentsia as Dr. McCloskey terms
it spread from Germany throughout western Europe and America. This is the time
in which American academics flocked to Germany for graduate study and returned
to the U.S. with 'enlightened' visions of total change of society via educating
the youth to German ideas. That these ideas were promoted by the Prussian
'State' to further its conquest of the rest of Germany did not matter, if it
was even noticed. Thus in economics we have the conflict between the German
Historical School and the Austrian economists - Georg Knapp versus Carl Menger
and Ludwig von Mises. And this Georg Simmel is the intellectual beacon whom
Herbert Frankel singles out in his devastating critique in -
Two Philosophies of Money. of the
'Chartalist' theory of the nature of money. Thus this chapter is a very
significant reference source for understanding the academic situation today.
For the sociologists, Dr. Muller notes: "The debate focused on the
question 'which human type is promoted by modern capitalism'" He addresses
the influence of Ferdinand Tonnies. "There were two fundamental forms of
social life, (Tonnies) asserted. In community, individuals shared a basic
solidarity. They were united by an 'organic will,' by cultural assumptions so
deeply shared that they became virtually second nature, leaving little room for
conscious choice". "He, (Tonnies), saw community in its broadest form
in the way of life of the guilds and villages championed a century earlier by
Justis Moser". (see above).
And this also is the theme of Polyani.
The other 'human type' was that occupying a 'market economy society'. And
Tonnies was very pessimistic about the future of society created in this
Muller writes that Tonnies' book "presented a fundamentally pessimistic
vision of historical development, depicting modern man as moving from the
solidarity of shared aims and beliefs into a calculating society without shared
ideals". "Tonnies' description of modern society and of its central
institution, the market, was heavily influenced by Marx, and though he regarded
himself as a man of the left, his portrait was steeped in the prejudices of the
new integral German nationalism of Paul de Lagarde". "Tonnies
repackaged romantic anticapitalism at a time when Germany was once again being
transformed by the market".
Dr. Muller describes the transformation of German industrial and economic power
prior to WWI.
"Germany was also at the forefront of the development of the most
characteristic feature of the twentieth century capitalist economy: the
In his excellent book, Capitalism,
Geoffrey Ingham goes into more detail, showing the significant
differences between 'capitalism' as it developed in Germany and its development
in Great Britain and Anglo-Saxon countries. But Muller does note one of the
significant differences, that German industrial production remained largely in
ownership by families, but with professional management, with financing by
banks rather than by widespread ownership of stocks.
He continues: "The division of labor, once evident primarily in
production, now became characteristic of management as well". He cites
other results as well.
"Weber: Efficiency and Disenchantment"
Dr. Muller writes his characteristic brief but incisive biographical background
of Weber and notes that "Weber's analysis and policy prescriptions flowed
from his political commitments". Muller notes that Weber was a 'liberal
nationalist'. Weber "was a nationalist because he thought that in the
modern world the nation-state was the broadest framework that could exert real
power, but also because he felt that ultimately Germans ought to put the fate
of their own society and culture above those of other peoples".
Do you see the image of Hitler appearing in the mists? Dr. Muller continues for
many pages with his insightful appraisal of Weber's thought and publications.
For a much longer and detailed description and analysis of Weber one can read
Reinhard Bendix - Max Weber: an Intellectual portrait.
"Simmel: Money and Individuality"
Dr. Muller writes: "The theme of capitalism as the triumph of means over
ends was elaborated by Weber's contemporary, Georg Simmel, who in 1900
published one of the most fertile works of reflection on capitalism and its
cultural ramifications, The Philosophy of Money. In this and other
works, Simmel explained how the development of the market economy made for new
possibilities of individuality". Muller again gives us Simmel's biography
and how that influenced his thought.
"Life in a modern money economy, Simmel stressed, is characterized by even
greater distances between means and ends. Determining how to attain our ends is
a matter of intellect, of calculation, weighting, comparing the various
possible means to reach our goals most efficiently".
Dr. Muller describes Simmel's ideas that with the money - market economy
involving more and more complex means that require decisions the ends sought
become more and more displaced. The exposition of this concept with many
explicit examples of practice requires many pages.
"The Dialectics of Means and Ends"
"To Simmel, money was an example, perhaps the quintessential example, of a
larger pattern in the relationship between men and the objects they
created". This concept, too, requires pages of exposition. But the topic
and its analysis by Simmel is still very important today. As we see in
Frankel's references to Simmel.
"Sombart: Blaming It on the Jews"
"If Weber and Simmel were ambivalent but predominately positive about the
prospects presented by capitalism, Werner Sombart viewed it with despair".
Dr. Muller's biographical sketch indicates that Sombart was a very influential
intellectual figure who published many widely read and influential books.
He "combined economic history with romantic anticapitalism" "He
portrayed the precapitalist economy of the artisan and peasant as 'natural' and
the modern capitalist economy as 'artificial'. "Sombart shared the
romantic prejudice that identified the archaic with the authentic".
Again, see Polyani for a 20th century version of this romantic idealism.
"Sombart began to draw attention to what was to become a leitmotif of his
writing and lecturing for the next decade; the link between capitalism and the
"The World War as Turning Point"
Dr. Muller notes that all three authors supported the war and its German aims
but also had different views about it and their expectations of its results for
societies. He writes that Sombart's "'greater bombast and national
chauvinism... argued that the war had given back meaning and collective purpose
Chapter 10 - Lukas and Freyer: From the Quest for Community to the
Temptations of Totality
Dr. Muller follows the standard academic classifications in considering Lukas
as a 'left wing' communist and Freyer as a 'right wing' National Socialist
(Nazi). But the Nazi's were every but as much revolutionaries (and leftists) as
were the Communists. And, as Dr. Muller shows, both are representative of the
anti-Capitalist thought and critique. He gives us excellent, brief,
biographical backgrounds that show clearly the origins of their ideas. They
were influenced by Weber and Simmel (not Sombart) - showing how the theories
progressed through the generations.
He writes, "Lukas and Freyer provide examples of intellectuals whose
analysis of the cultural effects of the market led them to reject liberalism
altogether and, like so many European intellectuals, embrace totalitarian
solutions to the cultural dilemmas created by capitalism." They were among
the intelligentsia 'traitors' whom Dr. McCloskey describes. Lukas was a Jew,
although not practicing. But he was one of those who was a convenient target
for popular attack.
Dr. Muller writes, "The identification of Jewry with capitalism, which in
much of Europe was a metaphor and elsewhere polemical hyperbole, was close to
exactitude in Hungary. Lukas became a leading Communist theoretician, thus was
an example of both opposite sources of public hatred".
"Capitalism was Jewish, Communism was Jewish" - both were sources of
all social problems. Dr. Muller devotes considerable attention to the growing
animosity against the Jews in Central Europe prior to World War One. With
Communism Lukas was expecting and advocating the eventual elimination of the
'state'. Fryer had a similar view of the cultural and social disaster caused by
capitalism but took an opposite position and developed theories that made the
'state' the ultimate and central power.
Thus they are Muller's excellent examples of the opposite solutions in
totalitarianism. Along with the 'state' Freyer extolled the role of war,
"War for Freyer was the essence of politics." The 'state' was created
to wage war. The 'state' could not exist without 'war'.
There is much more fascinating detail in this chapter discussed with the
following section topics But these German authors have less authority now than
those in the following chapters.
"From Intellectuals to Revolutionaries"
"Capitalism as a System of Illusion"
"Education of the Revolution"
"The Party as Community"
"Freyer: Alienation and the Quest for Community"
"The Particularist Critique of the Market"
"War, the State, and the Preservation of Cultural Particularity"
"Revolution from the Right"
Chapter 11 - Schumpeter: Innovation and Resentment
Schumpeter remains a very influential source of economic theory today.. Dr.
Muller begins by citing his most important book -Capitalism, Socialism and
Democracy published in 1942 by which time Schumpeter was a professor at
Harvard. Shumpeter disagreed with the growing number of socialists who were
using the Depression as ammunition for Marxism.
As Muller writes: "Schumpeter made some startling claims. He argued that
capitalism had been a great source of economic betterment for the mass of the
population, and that despite the current depression there were excellent
reasons to believe that it was capable of alleviating material want. Yet his
paradoxical conclusion was that 'capitalism is being killed by its
achievements'". It was that, "The forces that have made capitalism
the most creative and dynamic economic system in history are creating a social
and psychological backlash that will bring it down".
Again, Muller relates Schumpeter's thinking to his personal biography.
The section topic headings are these.
"Creativity and Resentment in Schumpeter's Early Writings"
In this section Muller describes Schumpeter's early life in Vienna during which
he studied under Eugen von Bohm-Bawerk the original founder of 'Austrian School
Economics' whose subsequent leaders were Rudolf Hilferding and Ludwig von Mises
and later Frederich Hayek. Dr. Muller notes that Schumpeter published four
major books by age 30 and taught in London before moving to the U.S.
Dr. Muller credits the development of of Schumpeter's work to his response to
the collapse of the Austro-Hungarian Empire and the growth of socialist
orthodoxy all around him. And he notes also the prevailing development of
theories about the importance of elites, such as found in Nietzsche.
Muller writes: "Schumpeter would make the theme of creative leadership
central to his conception of capitalism, though he was not the first to do
so". ... "From the very beginning of his career, Schumpeter thought
of creativity, evolution, and superior individuals as central issues to
social-scientific explanation, the implications of which he would explore in
economics and then elsewhere".... "The role of creative elites in the
economic process was the subject of his second major work, The Theory of
Economic Development'".... "Schumpeter distinguished the
entrepreneur from the owner of capital, the inventor, and the manager - roles
with which the entrepreneur was often confused". ... "The
entrepreneur not only fulfilled an economic function, he represented a
psychological type. The psychology could not be explained by the scheme of
motivations usually employed by economists, namely a hedonistic calculus of
carefully maximized well-being". ... "The second Nietzschean theme
that runs through Schumpeter's work is that of Resentment: the
psychological antipathy of the inferior many to the superior few, and the
attempt of the resentful majority to devalue the achievements of the creative
This is also the focus of Helmut Schoeck in Envy: A theory of Social
Behaviour. And also of George Orwell. And it is the psychology that
underlies what Dr. McCloskey denounced as 'the treason' of the intelligentsia,
while appearing at a loss to understand its causes. Of course it is the
mentality also of mediocre politicians who cater to even more mediocre
Dr. Muller continues: "In attempting to account for the appeal of
socialism, Schumpeter borrowed not only from Nietzsche but from the Italian
political theorist, Vilfredo Pareto".
"The Birth of Irony from Catastrophe"
In this section Dr. Muller continues with a lengthy explanation of Schumpeter's
background in Austria after World War I. And one of the results shown in
Schumpeter's theories is very enlightening with respect to socialist ideas
"Socialists had other reasons as well to promote capitalist development,
he argued. They hoped to end the need for economic activity as the prime task
of life. That would only become possible after the buildup of tremendous
capital. but investment comes at the expense of present consumption, and
socialist politicians would find it difficult to withhold present income from
consumption in order to devote it to investment for the future. It was best
therefore to begin socialism from a high level of economic production, which
capitalism was more likely to bring. Because it would have difficulty creating
savings and investment, socialism required demographic stagnancy. Here too
capitalism was preparing the way Schumpeter contended, by suppressing
irrational impulses and bringing down the birthrate".
This is why proto-socialists like Bern Saunders do not advocate preventing
individuals from BECOMING wealthy, because they need wealthy individuals to
create wealth. Rather they plan on extracting the wealth necessary to cater to
"Socialism would slow down economic development, Schumpeter explained, but
that was consistent with the purpose of freeing human energies from economic
"From Prosperity to Depression"
In this section Schumpeter's time in Austria ended in 1932 and he moved to the
U.S. Dr. Muller added some information about the growing scale of production
during this period and how capitalism itself was changing. He comments that
"capitalism was transforming the family as well". He mentions
Margaret Sanger and birth control. Then he switches to comments about the
causes and impact of the Great Depression. He notes that Roosevelt's extensive
interventions failed to 'solve the problem of unemployment". This and
other descriptions of Roosevelt's 'new deal' are background for the next
"Schumpeter's Analysis of the Depression and New Deal"
Dr. Muller writes: "Schumpeter's first major literary response to the
Depression in the United States came in his mammoth work, Business Cycles: A
Theoretical, Historical, and Statistical Analysis of the Capitalist
Process".... "He sought to show that cyclical booms and busts
were an inevitable part of the history and process of capitalist development,
though he thought that the swings of the business cycle could be moderated as
business cycles were better understood by corporations and by
Muller believes that Schumpeter did not agree with the radical Marxist view on
causation. "Schumpeter offered a far less apocalyptic diagnosis, He
maintained that the Depression in the United States had come about as a
confluence of long-term and short-term cyclical factors. The recovery that had
begun to occur in 1933 was due more to the 'natural' effects of the business
cycle than to government policies. But that recovery had been slowed by
government policies such as the National Industrial Recovery Act of 1933".
Further, he comments. "The Keynesian analysis of the Depression held that
contemporary capitalism suffered from a shrinking of opportunities for
investment. Schumpeter concurred, but not for the reasons offered by the
Keynesians. The problem, in his view, was that popular and governmental
hostility to economic elites had led to a situation in which those who ought to
have made the most significant innovative investments were discouraged from
"Schumpeter was skeptical of the government antitrust efforts. He defended
large corporations, part of his lifelong justification of the creatively
"In America too, 'antielitist resentment was killing the capitalist goose,
creating as situation in which neither capitalism nor its possible alternatives
"Capitalism, Socialism, and Democracy"
Dr. Muller continues, "Under such circumstances Schumpeter brought
together ideas that he had been exploring for several decades in Capitalism,
Socialism and Democracy".
"Probably because Schumpeter recognized that the Depression had made
Marxism more attractive than ever, especially to intellectuals, he began his
book with an inquiry into what made Marxism so appealing, and went on to
anatomize Marx's achievements and failures. Thought Marxism condemns religion
as the opium of the masses, it is best understood as a religion itself".
Just what I was teaching 50 years ago without having found the idea in
Dr. Muller devotes the remainder of this section to analysis of Marxism and
Schumpeter's views of it and of capitalism. All excellently analyzed.
"The Role of the Intellectuals"
Now comes the killer comment. Dr. Muller writes, "If capitalism creates
its own gravediggers, Schumpeter suggested ironically, they are the class of
intellectuals - those whom Marx called 'ideologists' of bourgeois origin and
Matthew Arnold the 'aliens', the sort of person exemplified by Georg Lukas or
Hans Freyer. Their power came from their role of shaping the minds of others.
Through teaching, writing, and influencing governmental bureaucracy, they
fashioned the cultural climate of their societies".
Bingo, bravo, the 'traitors' that Dr. McCloskey wonders about. And they now are
filling the faculties not only of colleges but even of elementary schools. They
especially gravitate to careers as economists and political theorists
consulting governments. And the pseudo-intellectuals flock to the entertainment
and journalist fields as well. And boy, are they envious, especially when the
'despicables' don't clamor for their advice.
Dr. Muller continues with further description of the intelligentsia. Then he
concludes the chapter with this.
"As the world formed by capitalism changed, so did the terms of the
indictment, an indictment best exemplified by the work of Herbert Marcuse, but
foreshadowed by John Maynard Keynes".
The intelligentsia will always find issues they can generate to indict
capitalism or actually any and all forms of government or society that do not
place themselves at its pinnacle of power.
Chapter 12 - From Keynes to Marcuse: Affluence and Its Discontents
"The Paradox of Keynes"
This is a play on Keynes's theory of the 'paradox of saving'.
Again, Dr. Muller provides a sufficiently clear but brief, mini-biography of
Keynes to establish the psychological and environmental influences on his
thought processes. Dr. Muller probably recognizes that Keynes is much better
know to the readers than most of the other subjects. And one can indeed read
volumes such as Nicholas Wapshott Keynes Hayek
The Clash That Defined Modern Economics, and Hunter Lewis
Where Keynes Went Wrong, and Lawrence
White The Clash of Economic Ideas .
He mentions that while at Cambridge Univ. Keynes also was a member of the
Bloomsbury sect, where his cultural sensibilities were shaped by his
participation in its famed and flamboyant circle of artists, musicians, and
writers". That is highly understating the group to say the least. But he
does not mention how disappointed Keynes was when his excellent analysis of the
German reparations demands after World War One were ignored. Keynes was highly
ambitious to be seen as an important public policy expert. And he succeeded as
Muller writes; "Keynes became the most influential economist in the
Western world from the 1930's through the 1970's".
Indeed so, and by shifting his published theories as necessary to appeal to
politicians by providing economic justifications for their political policies.
Some examples: "Taking aim at the conception of the economy as a
self-regulating entity, which had come to be seen as the Smithian legacy,
Keynes interpreted the Depression as a product of the mistaken assumption that
the market would bring about full employment on its own"...
"He provided an economic rationale for governments to try to actively
combat unemployment by raising the level of government spending".
"From early on, he portrayed the price of economic progress as the
cultural deformation of those he invidiously dubbed the 'rentier bourgeoise',
who had sacrificed the 'arts of enjoyment' to 'compound interest'".
"Keynes' vision for the future reverted to an older language reflecting a
more hostile sensibility".
"The problem for Keynes, as for the young Marx, was deferred
gratification, what he called 'purposiveness,' which boiled down to being 'more
concerned with the remote future results of our actions than with their own
quality of their immediate effects on our own environment'".
"He disparaged this elevation of the future over the present as an attempt
'to secure a spurious and delusive immortality'".
"Keynes' cultural antipathy to deferred gratification had a decided
influence on his economic analysis and prescriptions".
Dr. Muller compares Keynes' ideas about money to those of Simmel.
"Keynes therefor concluded that there was a need for 'central controls to
bring about an adjustment between the propensity to consume and the inducement
"Keynes defended the expansion of the role of government 'as the only
practicable means of avoiding the destruction of existing economic forms in
their entirety and as the condition of the successful functioning of individual
"The New Affluence and the End of ideology"
"Given a chance, both Schumpeter and Keynes predicted, capitalism could
perform prodigious feats of productivity - though Schumpeter doubted it would
get the opportunity".
"What had been luxuries in the era before the Second World War now became
necessities: refrigerators, clothes washers, telephones, and record
Dr. Muller describes in some detail the economic developments of the post-
World War Two decades.
"The success of welfare state capitalism in diminishing the problems of
poverty, squalor, mass unemployment, and systemic instability seemed to portend
the end of the subversive role of the intellectuals described by
"The European Roots of Marcuse's Thought"
Dr. Muller includes a longer biography of Marcuse. He notes that Marcuse met
Lukacs and read and was strongly influenced by his History and Class
Consciousness. He notes also that Marcuse was a colleague of Max Horkheimer
and moved to Columbia Univ. in NYC. Marcuse during WWII worked in the OSS and
then in the State Department. He then taught at several universities and became
for a while a mentor for the American new left intelligentsia.
"Redefining Oppression as Repression" Dr.. Muller mentions several of
Marcuse's influential books. One of his themes sought to link sex ideas from
Freud with critique of capitalism.
"Domination Through Sex and Affluence"
Dr. Muller asks Marcuse's question: "But why were so few people radically
dissatisfied with their lives under capitalism?" ... "Because,
Marcuse answered, the minds of the masses were controlled by the forces of
capitalist production through the mass media, which kept people' entertained'
while excluding all truly subversive ideas".
In this we see the results today of the influence of Marcuse and the adoption
of his recognition by the generation of his pupils as college teachers who have
adopted the thought to radicalize the next generation. If the masses were
prevented from being dissatisfied - actually realizing that they should be
dissatisfied - by life under capitalism because the capitalists controlled the
media and especially the entertainment industry, then the path to enlighten the
masses by re-channeling their sexual desires - their ideas, aspirations and
Dr. Muller writes: "In characterizations of such as 'totalitarian' and
'slavery,' Marcuse was consciously engaged in rhetorically reversing the
political connotation of key terms".,,,
"Marcuse's purpose was to awaken the population from the anesthetization
of consciousness by the forces of commerce".
"The function of what Marcuse called 'critical theory' was to judge - and
condemn - existing society in light of what he took to be its inherent but
unused possibilities"... "He sought to convince the masses that they
were controlled by pursuit of 'false needs' rather than 'true needs'".
"True needs were the needs that men and women ought to feel and would feel
if they heeded Marcuse's message of the better, happier, less repressed, and
more cultured life that awaited them beyond the threshold of capitalism".
"The novelty of Marcuse's analysis lay in his insistence that contemporary
capitalism was pernicious because it created new needs and then
fulfilled them, leaving individuals feeling happy and satisfied. The
individual becomes a slave to his passions, but passions that are molded and
directed by others who seek to profit from creating the needs for new
commodities and inculcating them through the mass media, through advertising,
and through the means of entertainment".
Marcuse's book One Dimensional Man, "became a veritable bible of
the New Left in Germany, France, and the United States, and Marcuse because an
icon. He was cited along with Marx and Mao by student rebels in Paris in 1968.
He was feted in Berlin and Frankfurt, and from Berkeley to Cambridge."
"Marcuse responded by identifying the student New Left as one of the
forces (together with the blacks and the ghettos and peasant communist
movements such as the Viet Cong) that might indeed lead beyond
"Most students were not radicals, but it was the student radicals of the
New Left who set the tone and increasingly the terms of debate of the
Dr. Muller continues, "The decline of Marcuse's reputation was as rapid as
its rise. His fame paralleled the trajectory of the New Left: launched in 1964,
reaching its zenith in 1968, and all but exhausted by 1973".
"Yet, Marcuse's legacy outlived the 1960's, and his critique was
incorporated into advanced capitalist societies in disparate and diffuse
"The model of the professor as critical intellectual, liberating his or
her audience from one or another variety of false consciousness, became
institutionalized in some academic disciplines, above all literary studies and
sociology". Dr. Muller continues with excellent description of the
continuing expansion of Marcuse's program (without the name) throughout the
academic world, even into business schools.
Alice Widener in her book Teachers of Destruction published in 1970
describes the great influence of Marcuse on the intelligentsia of that era who
became and still are the teachers of today's young students, even now expanding
into high schools.
Chapter 13 - Fredrich Hayek: Untimely Liberal
Dr. Muller provides a short bio sketch of Hayek who was born in Vienna and
served during World War I in the Austrian army in Italy. "Hayek's was a
conservative brand of liberalism, focused on individual liberty and the
restriction of government, not, as with Keynes or most American liberals, on
increasing equality,,, He first came to the attention of a broader public with
the publication of The Road to Serfdom in
"The Making of a Liberal"
"Hayek drew two enduring lessons from his Viennese milieu: that a modern
liberal society must be bound together primarily by factors other than shared
cultural commitments, and that democracy could pose a threat to a liberal
political order". .. "The teacher who influenced him most deeply at
the university was Fredrich Freiheer von Wieser". He "was a pioneer
of marginal utility theory who maintained that economic commodities had no
intrinsic, objective value. They acquired their value only through the market
process, through the relationship of supply to the shifting demand created by
the preferences of individual consumers"... "Hayek was employed by
Ludwig von Mises".
"By his own testimony, Hayek learned more from Mises than from any other
man"... "Hayek's liberalism was a conscious choice, and an untimely
one in interwar Vienna"...
"To appreciate the significance of Hayek's embrace of Mises'
individualist, market-oriented liberalism, we must look at the politics and
society of interwar Vienna".
"Viennese Liberalism, the Jews, and the Defense of Creative
Dr. Muller in this lengthy section provides the 'look' at Vienna he considers
"Hayek's liberalism was not a typical product of Vienna: like much of what
has come to be considered 'Viennese culture,' it was produced against its
Muller's focus is mostly on the Jewish aspects and standard Viennese rejection
- anti semeticism, versus Hayek's personal views.
"For Hayek, there was a close link between anticapitalism and
anti-semeticism, not least because the Jews embodied precisely those
characteristics that were essential to capitalist progress".
Muller quotes extensively from Road to Serfdom, written many years
later, and from The Constitution of
"Rent Control and the Hazards of State Intervention"
"Hayek's skepticism of govenment attempts to control the market was
reinforced by his experience of rent control in the 1920's. It was the subject
of one of Hayek's most searching examinations during his years in Vienna, and
one to which he would return thirty years later, in The Constitution of
Dr. Muller describes the adverse results of rent control in Vienna during the
1920's and Hayek's analysis of the results.
"Socialism, Planning, and the Functions of the Market"
Dr. Muller continues, "In 1931, at the age of thirty-two, he (Hayek) was
invited to the London School of Economics by Lionel Robbins, a British
economist heavily influenced by the Viennese economists, and soon thereafter
Hayek was named to a professorship".
However, soon the trend of British academic establishment economists, led by
Keynes, and influenced by the appearance of success in Russia began to favor
socialism. This von Mises denounced in his writing, and Hayek joined in this
Dr. Muller notes that: "Mises argued that in an economy without private
property and markets the efficient coordination of economic activity was simply
And, "Lenin, like many people without experience of entrepreneurial
activity, fundamentally misunderstood the nature of economics, Mises,
wrote". .. "Without private property, socialism faced another
insurmountable obstacle: the problem of initiative". ..
"In presenting Mises' work to an English-speaking audience in 1935, Hayek
pointed out that the Soviet economy exhibited the massive inefficiencies that
Mises had predicted fifteen years earlier".
"In his subsequent work, Hayek expanded on the role of the market not only
in conveying information ,but also in producing new knowledge".
"As Hayek continued to explore the knowledge generating role of the
market, he concluded that the most valuable effect of competition is not that
is shows the most efficient method of reaching some previously known aim, but
that 'its results are unpredictable and on the whole different from those which
anyone has, or could have, deliberately aimed for'".
"Capitalism as Hayek conceived it, was fundamentally dynamic, and that
dynamism was due to the discovery of new needs and new ways of fulfilling them
by entrepreneurs possessed with 'resourcefulness' - an analysis that owed a
good deal to Schumpeter and jibed with that of Hegel".
Note that this creation of 'new needs' is a central fault of capitalism
according to Marcuse and his followers.
Dr. Muller next focuses on a critical and mostly ignored point.
"Drawing on Weiser's notion that market prices reflect not some objective
quality of quantity but the subjective evaluations of individuals, Hayek argued
that the market did not merely coordinate economic values, because, he
insisted, there is on such thing as 'economic values'".
This is a central concept that I continually stress. "Value' is subjective
and a psychological phenomena and it exactly this that enables trade - exchange
- to be conducted all. Both parties see more 'value' in what they are receiving
than in what they are giving up.
Dr. Muller writes that Hayek spent his last years in expounding on and
publicizing his thought expressed in Road to Serfdom.
"The Critique of 'Social Justice' and the Hazards of the Welfare
Dr. Muller continues by noting that Road to Serfdom gained Hayek some
popular fame. He moved to the United States and was able to obtain a position
at the University of Chicago, but not in economics, rather in social and moral
science. But in 1962 he moved back to Germany. Even so, his thought was more
influential in the US and UK.
He continues: "Hayek's concern was the tensions between liberty and the
welfare state"... "He approved of some of the goals of the welfare
state, and regarded some of them as practicable".
He decided that the chief danger to liberty now was not from the discarded idea
of socialism but rather from the expanding efforts to condition capitalism
itself to achieve 'social justice'. Dr. Muller elaborates on Hayek's thought
about the inherent difficulty of basing economic action on achieving 'social
justice' and preserving a free market economy that could retain individual
liberty. The effort to achieve 'social justice' was based on government
intervention and even coercion.
"What Hayek found particularly worrisome was a growing consensus among
western politicians that government had a responsibility to maintain full
employment, a belief enshrined in the economic doctrine of Keynesianism.
Governments committed to keeping down unemployment, Hayek, noted, could only do
so by increasing the supply of money and credit in the economy. That worked by
causing inflation, which decreased the real value of the wages that unions had
obtained temporarily, allowing businesses to regain profitability".
"Within a decade Hayek's predictions were proving remarkably prescient.
Politicians and policy makers devoted new attention to his writings."
When I study L. Randall Wray's book, Modern Money
Theory, I find exactly the predictions of Hayek on every page and
championed. MMT claims that governments have unlimited ability to create
money-credit by electronic manipulation and the purpose of government policy
should be to eliminate unemployment. The question of what impact this will have
on the 'value' of money is ignored.
"The Intellectuals - Again"
Dr. Muller writes, "Like so many other thinkers whose works we have
explored, beginning with Voltaire, Hayek believed in the power of
intellectuals, who exerted long-term influence over public opinion. Hayek
distinguished between two levels of thinkers: the small number who were
original, and the 'intellectuals' proper, whom he defined as 'secondhand
dealers in ideas' or 'experts in the technique of getting knowledge
"It was futile, Hayek thought, to expect that politicians would strike out
in new directions beyond the horizon of public opinion, which intellectuals did
so much to shape".
Dr. Muller notes that Hayek's influence gained an audience in the 1970's.
"But the rise of Hayek's intellectual stock was due not so much to the
organization he founded or the think tanks that sought to spread his gospel. It
was because by the 1970's his ominous hypotheses about the development of
communism and the western welfare state seemed increasingly to match the
"The Hayekian Moment"
Dr. Muller describes the social, economic, political changes during the 1960's
-1970's in which increasing power of unions and increasing belief in the
tenants of the welfare state were becoming fiscally difficult for governments
to enable and total economic expansion was suffering.
He writes, "The combination of slow economic growth and expectations of
continuous increases in provision of government welfare measures soon had their
effects. Government's share of national income moved ever upward, and
government budgetary deficits ballooned".
He describes the economic political conditions by late 1970's early 1980's of
greatly increasing inflation and also increased unemployment. This was a
refutation of the prevailing Keynesian economic formula. He describes the
response of PM Margaret Thatcher in UK and President R. Reagan in US, both
claiming to believe in Hayekian economic theory. Their policies represent the
'Hayekian moment' Muller titles for this section. He describes much else. Then
writes, 'When Frederich Hayek died in 1992, many nations seemed to be moving in
a Hayekian direction in other respects as well". ... "All in all, the
1980's and 1990's were a Hayekian moment, when his once untimely liberalism
came to be seen as timely".
But it didn't last.
"The Tensions and Limits of Hayek's Thought"
In this section Dr. Muller critiques Hayek's complex thoughts. He notes that
among Hayek's faults were simultaneously espoused opposing policies.
"There were also tensions that arose from trying to incorporate disparate
inellectual traditions into his work". He conflated two different
conceptions of 'spontaneous' when describing the inner workings of free markets
and the historical process by which such markets came to be. He stressed the
idea that markets developed spontaneously yet also believed that perceived
shortcomings in actual markets could be remedied by government action. And,
"But this growing rhetorical warmth toward traditions seemed to be in
tension with his emphasis on the progressive role of social and economic
innovators, who set the example to be emulated by others".
Also, "Sometimes Hayek's tendency to exaggerate his own insights led to
self-contradiction. His emphasis on the limits of human knowledge - the extent
of our ignorance - led him to distrust of all rational institutional design.
But this was at odds with his own suggestions for institutional reform based
upon a rational analysis of the malfunctions of contemporary democratic
"The Centrality of the Market"
"What this book has demonstrated above all else, is the centrality of its
theme for modern intellectual history. The question of the market - of its
moral significance, of its social, political, cultural, and economic
ramifications - has been at the focus of modern European thought".
"Much of the story we have told falls outside the boundaries of modern
academic disciplines and their respective histories".
"Contemporary economics focuses on issues of efficiency in allocation,
political science on the institutions of governmental power, political theory
on questions of justice, sociology on social groups as defined by interactions
outside the market".
"The Roles of Intellectuals"
Dr. Muller comments. "At various times and places, intellectuals have
imagined a range of roles for themselves in a capitalist order. One, of course,
is as opponents of capitalism, and as guides to its overthrow. But that has
been only one imagined role, and by no means the most frequent or
significant". He categorizes his selected authors as: anti-capitalist,
Marx, Lukas and Marcuse, Sombart and Freyer; and pro-capitalism Voltaire,
Smith, Burke, Hegel, Arnold, Weber, Simmel, Schumpeter, Keynes and Hayek. I
would say 'limited' for Arnold and Keynes. And he notes that only Hayek should
be considered as strongly pro-capitalism.
Of course, the intelligentsia throughout history, long before the concept of
capitalism, have considered themselves the rightful mentors and leaders (even
when not rulers) of society.
"The intellectuals' analysis of the market presents us not with a single
moral but with a series of tensions".... "On certain key issues,
Smith and Marx, or Marcuse and Hayek, cannot both be right".
"Self-Interest and its Limits"
"Despite the divergences among the intellectuals we have examined, there
are some broad areas of consensus"... "The first concerns the
productivity of capitalism. All analysts, from Voltaire through Hayek, have
commented upon the increase in productivity that capitalism has brought
about"... "Above all, they have agreed on the importance of the rule
of law, enforced by the state, in preserving individuals from the depredations
of others who, motivated by the desire for gain and unconstrained by law, would
be eager to dominate them".
Of course, this same condition required the creation of the concept of law and
legitimacy of use of coercion by rulers since before the time of pharaohs and
Chinese emperors. The 'desire for gain' has nothing to do with capitalism
"The Necessity of Countermarket Institutions"
"Those intellectuals favorably disposed toward capitalism have tended to
emphasize the need for countermarket institutions"... "The notion
that sociopolitical orders require dispositions or virtues not cultiated by
their dominant institutions is at least as old as Aristotle".
"For many, the family was the most important extra-market institution,
which transformed self-interest into something quite different".
"Another counterinstitution was the state"... "But precisely
because the state was both indispensable for the very existence of the market,
yet threatened by organized interests, intellectual analysts thought it
necessary to cultivate a real commitment to the public good among at least part
of the population".
The problem with this is that the state is certainly NOT indispensable for the
very existence of the market". Markets flourished for thousands of years
prior to the modern, western advent of the abstract concept of 'state' in
Renaissance Italy. And since then it has been an unrelenting objective of those
rulers claiming their legitimacy as agents of the 'state' to harness markets
and all economic activity in their support.
And Dr. Muller also notes that this political propensity of rulers has been
"The trick was ( and is) to have legislators and civil servants who are
public minded and yet capable of resisting the pressures to expand government
endlessly, a temptation built into the reward structures of representative
democracy, and into the natural propensity of civil servants to expand the
purview of their power and control".
"Some of the intellectuals we have examined regarded a concern for the
nation - whether conceived as a distinct ethnic or cultural or political entity
- as another counterweight to the market, an object of allegiance and duties
And again, as 'counterweight some mean total controller and hegemon.
"Intellectuals have also suggested a variety of cultural institutions that
would develop sensibilities, tastes, and traits not fostered by the
"A number of thinkers maintained that meaning and direction could also be
provided by professional associations, such as unions and professional
societies".... "Yet, though many thinkers have thought such mediating
institutions important, liberals of various stripes from Smith on have been
suspicious of them as distinct sources of power. They have feared the power
that such institutions have over individuals".... "Liberals have been
especially suspicious of such associations when they are allowed to pursue
political power, fearing that they will use the power of the state to distort
the market in order to serve particular interests that economists now term
"Choices Devoid of Meaning"
"The importance of such counterinstitutions was connected to perhaps the
most consistent worry of intellectuals: that the market (sometimes in tandem
with other forces in modern society, such as science and technology) would lead
to a life filled with choices but devoid of meaning".
Of course, again, intellectuals claim for themselves the definition of what
'meaning' in life actually is. Just as they claim to identify what 'culture' is
"Fear and Spillover"
"A recurent theme, at least since Burke, has been the fear of spillover;
the notion that values and orientations that were appropriate in the market
would spill over to other forms of human association".. "For at least
two hundred years, then, from Moser and Burke down to Jurgen Habermas in our
own day, intellectuals have repeatedly expressed concern that the modes of
thought and action characteristic of the market would permeate all human
relations. The result, they warned, would be the impoverishment or disabling of
the very institutions on which human flourishing depends".
"Are There 'Market Values'?"
"Yet in apparent contradiction to this venerable line of analysis,
Fredrich Hayek made the provacative but no less plausible suggestion that there
are no market values. Individuals act in the market to fulfill a variety
of purposes, and try to get what the market offers - money - not because they
lack nonmonetary goals, but because money provides a means to attain their
varied goals. In this understanding of the situation. individuals bring to the
market purposes generated in nonmarket institutions".
Dr. Muller continues by describing the variety of such non-economic ends for
which economic activity in the 'market' provides the means.
"Are There nonmarket Institutions?"
In this section Dr. Muller demonstrates how the 'market' (which means economic
activity of exchange) is so central to human activity that all these
'institutions', considered by various intellectuals, are permeated by the same
human desires and decisions to act that constitute the 'market'
"Community and Individuality"
In this section Dr. Muller discusses the contentions posed by intellectuals
that contrast human life within a community and life as a separate individual;
and the effect of 'market' (that is economic exchange) on this contrast.
"Pluralism and Diversity"
"Though capitalism is sometimes blamed for racism, sexism, and chauvinism,
the most sophisticated analysts (whether of the left or the right) have noted
that the market tends to break down barriers between groups".
It seems to me that all this contention over blaming capitalism for any and all
convenient 'faults' especially with respect to culture are self-serving efforts
bent on gaining power.
"Capitalism and Equality"
Dr. Muller discusses another common claim by many intellectuals, that
capitalism is responsible for increased inequality of individuals and groups.
But I claim that the historical record shows that this is false
"Is Capitalism Good for Peoples?'
This is another claim by the many varieties of opponents to capitalism. Dr.
Muller describes some typical ideas about this and shows they are false when
'good for people' is defined as 'living better'. Of course individual
'happiness' is a psychological condition.
"Capitalism and the Jews"
Dr., Muller has identified the belief by some of his selected authors that
there was or is a close link between being Jewish and capitalist and that is
negative for both. Of course in medieval and modern Europe this concept was
used as a hammer by those who had various reasons to do so. Interestingly, he
notes that in recent times this idea has been taken by Islamists as part of
their broader attack on western and European society.
Dr. Muller concludes, "One might say that in the capitalist era, the older
tension between this world and the next have been replaced (or, for some,
overlaid) with a new set of inner-worldly tensions. The tensions between
choices and purpose, between cultivating individuality while preserving the
sense of attachment that gives life meaning, between independence and
solidarity, between collective particularity and cosmopolitan interests,
between productivity and equality - these are the characteristic tensions of
the capitalist epoch, tensions with which we will continue to live".
A few references
Joel Mokyr - Culture of Growth: The Origins of the Modern
Richard Weaver - Visions of Order
Richard Weaver - Ideas have Consequences
Daniel Stedman Jones - Masters of the Universe: Hayek,
Friedman, and the Birth of Neoliberal Politics This is not about Hayek's
total thoughts as an economist, but only his participation with the others in
post - World War II conservative political action.
Hunter Lewis - Where Keynes went Wrong and Why Governments keep
creating bubbles and busts.
F. A. Hayek - Road to Serfdom The book that catapulted Hayek
into public attention
F. A. Hayek - The Constitution of Liberty The main book on
economics and politics