Creative Destruction?

Can capitalism survive? No. I do not think it can.

     [Joseph Schumpeter, Capitalism, Socialism and Democracy, 1942, in the Prologue to Part II]

What’s interesting about this quote is that it comes from the well-known economist, Joseph Schumpeter (1883-1950) who made the phrase creative destruction widely known. Since then it has graduated to become the all-purpose explanation and justification for whatever chaos comes down to us from the business sector. The phrase is used as if it were a law of nature. Hey, things fall down. It’s gravity. Throw up the hands, look heaven-ward—by way of saying, What can we do? It’s written in the stars. All of our blessings come by its way, as all life comes from the sun—that also rises.

David Brooks got me thinking about that. For the last two weeks or so, he has been invoking the Holy Words on radio, television, and today in an op-ed piece in the New York Times, each time defending the likes of Bain Capital.

Although the phrase is his, Schumpeter got the idea from Marx. Marx repeatedly pointed to economic crises and their destructive tendency—not only destroying production but also productive forces. A relevant summary comes from the Communist Manifesto (1848): “And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other by the conquest of new markets, and by the more thorough exploitation of the old ones.” The first is Schumpeter’s “destruction,” the second his “creative.” But while Schumpeter streamlined Marx’s diagnosis, he also noted that the destruction of capitalism reaches beyond the economic; it also destroys and transforms the social. And in the long run capitalism therefore destroys itself.

Law of nature it isn’t, actually, creative destruction. If I look around for somewhat analogous actual laws, what I see is birth and death, growth and decay, and interwoven living systems well-known for their stability and resistance to destruction: ecosystems. When a person lives a healthy and well-adapted life, that life will end in death. And yes, What can you do? It’s written in the stars. But when a person dies because of an overdose of heroin, after a brief life of absolute frenzy, that’s creative destruction. But should we really call it that?

One Ring

One Ring to rule them all, One Ring to find them,
One Ring to bring them all and in the darkness bind them.

[J.R.R. Tolkien, The Fellowship of the Ring]

It seems to me that with increasing complexity, reality, as it were, becomes more dense, substantial, and therefore meaningful. The corollary? As a system declines, it breaks apart and loses its complexity. Its parts no longer talk; in consequence something is lost. One of the interesting phenomena observable in the centuries since the French Revolution (to pick a date more or less at random—thus to mark the passage from one state to another) has been the rise of “single-minded” explanations of everything conceivable, in and beyond philosophy.

To document this with a gesture or two, consider George Berkeley’s Perception (a radical idealism) and Karl Marx’s Materialism, Schopenhauer’s Will and Sigmund Freud’s Libido. In the political arena we have Patrick Henry’s slogan, “Give me liberty or give me death,” vulgarized into freedom as the only value. And then we have Friedrich Hayek, beloved of right-wing propagandists. He associated the rise of civilization with private property and gave the price mechanism the same exalted role as language. These two concepts, fused together, give us the one ring that’s supposed to rule us all, the Free Market.

I can’t help but contrast our stark, monistic world with that of the organically interwoven character of the medieval, with its great estates, its hierarchical arrangements, is complex balances of obligations, sophisticated philosophies, beautiful architecture, intricate morality, and its infinite, vertical vector.

Now I’m not stupid enough to think that the balance of evil has shifted. One needs but study those times to know medieval talent for mischief, its brazen embrace of hypocrisy, its depth of cruelty. We didn’t invent torture to deal with Al Qaida. But in that time, when physical life was a great deal harder, it was easier to find life’s meaning. In that system the One remained transcendent; in ours it has sunk into the fogs and mists; in its descent it has lost all virtues except power; and here it serves dark lords who cynically rule in secret.

Tolkien—as great poets sometimes succeed in doing—wonderfully diagnosed the sickness of his age. He also knew the solution. The power of that ring must be resisted. We must recover our gift to think and feel comprehensively. The least, it seems, must lead—the Hobbits among us, the stout, the brave. Frodo is everyman. In fear and trembling he climbed the steep sides of Mount Doom and tossed the cursed ring into lava.

A good start might be reading The Lord of the Rings rather than just seeing the movie. Good Lord! Three books? Look at all those pages, pages, pages….