Heilbroner’s View of Capitalism

Against the Current, No. 9, May/June 1987

Howard Brick

The Nature and Logic of Capitalism
by Robert Heilbroner
New York: W.W. Norton & Company, 1985, $15.95

IN THE Communist Manifesto, Marx and Engels credited the bourgeoisie with carrying out a harsh program of enlightenment, with tearing the veil of sentiment off social relations of exploitation and compelling man “to face with sober senses, his real conditions of life.”

Rather than becoming transparent, though, capitalist social relations have grown more opaque, as complex systems of finance, production and exchange have encircled the globe.

Indeed, as Marx’s discussion of commodity fetishism showed, capitalism has unique powers of mystification, a set of masks and disguises so effective that today even “naming the system” we live under as a capitalist one becomes a controversial statement.

In his latest book Robert Heilbroner, renowned for his accessible surveys of economic doctrine and economic affairs, confronts the seemingly simple question: What is capitalism?

The Nature and Logic of Capitalism offers a lucid account of the basic form of capitalist relations and the rough trajectory of capitalist development. His account owes much to what Heilbroner, elsewhere, has called Marx’s “socio-analysis” of capitalism-a method of inquiry, like psychoanalysis, that dismantles the self-representations of a society to find the underlying, determining forces which those representations both express and conceal.

In some ways, The Nature and Logic of Capitalism is more ambitious than Heilbroner’s earlier works, even if its key question appears more modest. The ambitious element lies in Heilbroner’s effort-in the end none too successful-to frame his analysis of capitalism with discussions of grand theory.

His opening chapter attempts to define “nature” and “logic” as basic terms for investigating social reality, and his closing chapter treats “the limits of social analysis” that should make us cautious in predicting the course of events. The first attempts to sketch a general theory of social structures; the second broaches perennial problems in the philosophy of the social sciences.

Nature & Logic

By “nature” Heilbroner denotes those “behavior-shaping” conditions and institutions that lie at the heart of a type of social system, and by “logic” he means that systemic movement which emerges in time out of the characteristic behaviors bequeathed by its nature.

It seems that Heilbroner wants to use these terms to escape the alleged reductionism of historical materialism. He seeks the recognition that different societies move according to different principles, perhaps under the prevailing force of kin­ ship ties or a monarch’s search for dynastic alliances rather than the struggle of classes rooted in the organization of production.

Yet without defining the terms “nature” and “logic” more precisely and merely pointing to unique types of societies, Heilbroner cannot achieve what a general theory requires: a common framework for investigating diverse social orders.

In his last chapter, Heilbroner seems most concerned with excusing himself from having to face the challenge that the recent revival of market ideology poses to the prediction offered in almost all his previous works: that capitalism is drifting into a statist form that would pave the way for a gradual mutation into socialism.

In the chapters bracketed by these excursions in grand theory, Heilbroner applies the concepts of “nature” and “logic” to his principal object, capitalism, and here, however loosely defined, the terms serve adequately.

He examines the nature of capitalism by blending themes of Marx, Freud and Weber. From Marx, Heilbroner draws the concept of capital, not as an entity but as a social process and relation embodying exploitation.

From Freud comes the idea of drives and the unconscious as the universal foundation of human behavior; from Weber, the insistence on understanding the springs of motivation behind typical forms of economic behavior and the idea of “the disenchantment of the world,” the process of rationalization that underlies the capitalist world view.

All societies above the level of primitive communities, Heilbroner begins, depend on the extraction of some social surplus. What defines capitalism is the fact that surplus is extracted in the form of capital. Borrowing Marx’s well-known formula, M-C-M; Heilbroner in tum defines capital as that process by which money is exchanged for commodities, reworked only to be exchanged again for a greater sum of money. In other words, wealth consists of abstract exchange value augmented in production.

The key to understanding capitalist society, Heilbroner suggests, is to see that this process is as political as it is economic. That is, it presupposes and expresses the use of power, manifested in the prerogative of owners of capital to withhold it from use, in the “silent clause” of the wage contract conferring control of the product on the owner of capital, in the capitalist’s role in disciplining social labor, and in the siphoning of wealth upward into the hands of an elite.

Nonetheless, capitalism is unique among human social orders for ridding productive activity by and large of direct coercion, the publicly sanctioned use of force that marked the directors and beneficiaries of social labor in previous societies as the powers of the state.

Thus, while power and production actually continue to be intertwined, capitalism sets off separate spheres of economics and politics. This is the cardinal fact behind the mystification of capitalism, a society that provides for the exercise of domination while systematically obscuring it from the view of those bound up in it.
The varieties of ideology developed in capitalist society follow from the ostensible separation of spheres: the notions on the one hand of market freedom, presumably sealed off from the uses of power belonging to the state, and on the other hand of political liberalism, which defines democracy as the exercise of equal rights outside the sphere of economic decision and action.

Too Much Abstraction

All of these judgments are cogent. At points, too, Heilbroner is especially incisive, noting the ability of the system to deflect or shunt aside criticism, as at present, when the defaults of capitalism stir popular resentment not against the social relations of production but instead against the bureaucratic state.

Yet in reading The Nature and Logic of Capitalism, one hankers after greater specificity. If the key to capitalist ideology is the separation of economics and politics, for instance, how has this motif been expressed in the modem period when the state has edged in on the market to regulate and guide it?

How can we explain the fact that so much of modern social science-a vast ideological reserve in contemporary bourgeois society-professes hostility toward the metaphysical individualism and rationalism of classic liberalism modeled on the market?

As for the issues of motivation and behavior, Heilbroner remains unenlightening. Speaking in Freudian terms, he judges that the drive for libidinal gratification and the regressive urge to recapitulate infantile experience in relations of sub- and superordination are universals that appear in social action, respectively, as quests for prestige and power. Under capitalism, these assume the form of the drive to amass capital.

This does not get us far. The task of building a unified theory of motivations should explain not how the psyche, at its roots, is the same under capitalism as under other regimes, but how specific and unconscious impulses and complexes take shape under capitalism and foster appropriate behavior.

Freudian analytic techniques might also help us understand how ideology works to mask social reality by explaining how emotional energy may be displaced from its real locus. But Heilbroner, despite his sensitivity to the complementarity of Marx and Freud, does not pursue this tack.

Heilbroner would deflect such criticism with his frank avowal that his project of defining capitalism assumes a “stratospheric level of abstraction.” His discussion of the system’s “logic,” however, seemingly moves back toward concreteness.

The characteristic movements of capitalism, he writes, are captured in the notion of “long waves,” developed recently by Ernest Mandel in Late Capitalism and by David Gordon and associates “in their discussions of discrete, successive “social structures of accumulation” — more or less settled means of managing social conflict for the sake of accumulation, means that gradually become barriers to the growth they originally fostered.

Hence Heilbroner marks off several developmental periods in the history of capitalism, starting from Adam Smith’s age of small-scale enterprise and leading to the rise of Keynesian policy and its failings in the current crisis. In each period he examines the changing value of certain key variables: the size of enterprises, the sources and the economic role of technical innovation, the means of controlling labor, the modalities of state intervention.

However, a crucial element of this developmental logic does not appear: the international dimension of capitalism, particularly the flux of imperialist relations over the last century which so crucially underpins key turning points.

Heibroner’s focus, for instance, on “statification” — specifically, government management of demand in response to underconsumption-as the key trend marking the end of the third period of development (1893-1941) and the beginning of the fourth (1941 to the present), remains too abstract.

It ignores, in particular, the facts of war. Whatever the original economic causes of the business slump of the 1930s, historian Charles Kindleberger has pointed out, the reason for its depth and longevity must be sought in the absence of a hegemonic power able to balance world trade and accumulation.

In other words, the decline of British imperialism after the first World War pro­ duced a crisis resolved only with the vic&tory in World War II of the United States and its replacement of Great Britain as the pre-eminent imperial power.

Making Sense of History

Utimately, it seems to me, Heilbroner’s background in economics leads him to slight those features of capitalism and its development that cannot be explained in objective “systemic” terms but require attention to the historical course of political action. He has not learned well enough the lesson he preaches of overcoming the ideological rupture of economics and politics.

Thus, in his final chapter on the philosophy of the social sciences, he concludes that the course of development within the boundaries of any given social structure of accumulation can be explained and predicted with some degree of accuracy, while the shift from one structure of accumulation to another eludes analysis.

Behavior, he suggests, becomes regular, and more or less predictable, largely under the orienting force of market relations, however they may be structured at any one time. But this judgment renders the course of history ultimately unintelligible, for history consists precisely of those significant turning points when social structures are reshaped.

It is telling, in this regard, that Heilbroner de-emphasizes class struggle in his depiction of capitalism. While he assumes the capital relation to be an exploitative and contentious one, he considers class and class conflict, at most, as characteristic features of capitalism, not potential agencies for changing or surpassing it.

The virtue of Marx’s approach to his tory, however, was that classes of people, emerging under certain more or less stable structures of social relations, tend to act purposefully on behalf of certain interested aims that, at crucial points, escape the boundaries of those constitutive structures and lead them to construct — more often than not without a clear design-new patterns of interaction.

Perhaps his skepticism of social prediction and his reluctance to analyze the direction of change implicit in the current long-term crisis testifies to an impasse Heilbroner has reached in his thought.

Since his first work, The Worldly Philosophers (1953), Heilbroner has predicted a long-run, gradual tendency, rooted in the nature of things, from capitalism toward some kind of state socialism, a process that no longer seems so likely or so untroubled as it once might have.

At the beginning of his career, he foresaw the end of the “economic revolution” — the rise of the market-based society that spawned the study of economics — as government intervention promised to superimpose moral goals on the bare economic calculus.

In The Limits of American Capitalism (1966), Heilbroner counted on the growing weight of science in production and public policy to act, like the corrosive effect of money on feudal relations, to infiltrate, transform and ultimately supplant business motivations.

In Business Civilization in Decline (1976) and Beyond Boom and Crash (1978), he asserted that the stresses of the new crisis would drive toward a “planned capitalism” that would serve as a “transition between the still business-dominated system of our age and the state-dominated system of the future.”

Whether he cited, at one moment, the spiritual effects of affluence or, at another, the approaching “end of growth” as the salient factor undermining capitalist institutions, the advent of planning and the demise of capitalism remained central to Heilbroner’s view.

As the crisis has continued and intensified, Heilbroner has been forced to recognize the inadequacy of such prognoses. His return to Marx shows his recognition that the nature of capitalism limits the extent to which it can change itself.

And yet his scenario, no matter how darkened by doubt, remains essentially the same. Defining the current crisis as a “crisis of intervention,” which witnesses the drawbacks of the old solution to crisis, Keynesian fiscal policy, Heilbroner sees greater intervention-planning that goes beyond mere regulation and demand-management-as the way toward re-establishing a suitable capitalist social structure of accumulation.

Faced with the virulence of Reaganism (like Thatcherism in Britain), Heilbroner notes ruefully, ‘We cannot rule out the possibility that the United States will persevere in its efforts to disengage government from the economy,” and hence “tum back” from the only effective line of march.

Still, he sees statist measures of guided investment in Europe and Japan as possible “staging areas in which some of the institutions of capital … might be adapted to social control as part of a new, more ‘constitutional’ regime of democratic socialism.”

The old dream of a gradual mutation toward socialism dies hard. Again, we see a social democrat failing to recognize that any kind of planned capitalism, elusive as it is, could not provide the basis of the kind of planning socialists aim for.

More importantly, the political struggles that accompany change, and alone make it, do not appear here in Heilbroner’s portrait.

In the end Heilbroner’s judgment about the difficulty of understanding, explaining or predicting transitions between “social structures of accumulation” allows Heilbroner to beg the question: What is the emerging shape of the next “social/structure of accumulation” that may allow the capitalist class to escape the crisis and renew a wave of growth and prosperity?

Granted, such questions can only be answered in a speculative fashion. Yet it is just such a discussion that is most important to contemporary radicals.

In assessing the possible directions of crisis-resolution, we may gain insight into the changing conditions of class formation and activity that present us with the given terms-the impediments, possibilities and requirements-of political practice; and we may learn where key social stresses hold open hidden potential for change.

We must ask not only “what capitalism will become,” but also “what can we make of it.” Heilbroner’s economistic bias toward searching out objective, systemic processes pays little attention to the force of politics, or purposeful action that aims to take advantage of given conditions to make something that is not given by them: a humane society.

May-June 1987, ATC 9

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