Greg 00:02 [Intro] As Toni Morrison has put it, “The destiny of the 21st century will be shaped by the possibility or collapse of a shareable world.” Welcome to our podcast where we explore the history, theory and practice of democratic socialism with our guide, Big Mike. What can we learn from the past to help us create a better, more shareable world in the future?
Greg 00:32 All right. Welcome everybody to A Shareable World, the history, theory, and practice of democratic socialism, uh, where we learn about such things from our expert, Big Mike.
Mike 00:42 Well, I wouldn’t say expert.
Greg 00:44 Well, you know, more than I do, probably.
Mike 00:49 Knowing more than other people doesn’t mean very much. [laughs]
Greg 00:53 Uh, so we’re kind of figure this out a little bit right now, but, um—and we never, we won’t know, of course, who has listened to what, so—as a kind of freestanding podcast the, the subject of late has been history.
Mike 1:09 Right, I want to go on with that.
Greg 1:11 Well, let me—so, the things I think we’ve covered about it. Um, so you can tell me if I’m right. Uh, one is just the importance of history to solving our crises, our contemporary crises—
Mike 1:22 If we haven’t established that by now…
Greg 1:25 Right. They’re rooted in the past, but the past is also not the thing that has brought us to the crises, but also a place where social experiments have happened, where things have taken place that maybe we’ve lost track of that might be helpful now. So that’s in two ways. And then last time we talked expressly also about history as a discipline and how in academia we’ve kind of divided up the world in a way that may be obscuring the holistic nature of the problems we face. And so as we look at history, we need to have this more holistic view. Those, those would be my summary points. How do those sound and what would you add?
Mike 02:09 I think what I would like to talk about today, moving on from there, is not about history, but about the historical conditions surrounding democratic socialism that have brought us to the dilemma we have today. In—on the left, we have a real dilemma on the left today. You know, it’s in all the newspapers and all, you can’t escape it. Everybody, including many people on the left and to no small extent, including me, myself, uh, are quite convinced that the left has somehow failed. It has failed in some way. Um, and I certainly believe deeply, and I’ve been—I like to say this a lot, especially to my students—that what the left needs is to find a new foundation or a new point of departure for developing a new kind of analysis inspired by Marxism, inspired by the history of social democracy and democratic socialism.
Mike 03:18 Though they are different, and I’ll come back to that again and again and again, but they are different, and to, to um, try to explain—I think it’s very important for us to try to understand how we got into this bind that we’re in. And that has a lot to do with modern history. And I think perhaps [with] recasting modern history in a slightly different light. So I’m not going to begin at the beginning when there is no God to have created the world. So we won’t do that. But I, I would like to start with the fact, as I’ve said before and I want to repeat ‘cause it’s very important, that uh, the, the, the idea of socialism arose along with, as the twin of, the actual rise of capitalism and the appearance of capitalist theory—[with the rise of] the field, of political economy and eventually of modern capitalist economics.
Mike 04:25 So this, the great change, what [political economist Karl] Polanyi calls The Great Transformation, right, occurs very much because of social and technological changes that take place in the period of time we, we call the Renaissance, and the Enlightenment. But as people begin to reflect on that change, that’s at the point at which modern political theory gets born, is that this change is going on. Eventually that change achieves a sufficient substance to existence. They, they, they know it, they see the change, what, what, what previously had, had maybe not even fallen into the realm of their senses. They now begin to feel and then they’d be able to intellectualize about it. So that’s one thing that has to be kept in mind that in fact, historically people are talking about socialism under one guise or another, at the same time that they begin talking about capitalism. So for example, Adam Smith, who some people have claimed—falsely!—that he is the father of modern capitalist thought—he certainly isn’t, but that’s what they claim.
Mike 05:38 And he publishes his most important work [The Wealth of Nations] around 1775. By 1800 we already have social democratic, what we would call social democratic experimentation taking place in England, looking for alternative ways to organize society because there’s something wrong with capitalism. People instinctively know from the beginning. Adam Smith knew there was something wrong with capitalism. So the question is—what’s wrong with capitalism? And the reason why that’s a really important question to ask is because today in our schools, our universities, in the press, etc., we assume capitalism is an object of nature. And uh, we assume it’s a, it’s a, a perfectly healthy system which sometimes gets hiccups and maybe a cold. And so an awful lot of our politics—witness the, the campaign in the, uh, for the 2020 election for president, an awful lot of our politics are about trying to find solutions for the cold that capitalism occasionally causes. But the truth is that capitalism has been very successful in certain respects and extraordinarily a failure in other respects. And that was true from the very beginning. So I want to rehearse that very carefully because I think that’s important.
Mike 06:59 From the beginning, capitalism was very successful in engaging man with nature. The really great division—the division between man and nature that sets off [separates] the world after the rise of capitalism from everything else before, and separates the West from the non-West, is the idea that nature is a natural resource for man to exploit for man’s own interests & benefit. I use the word man there in a gender-free concept, needless to say, when asked to give voice to that all the time. So before that, people didn’t think much of the opposition, conflictual opposition between man and nature. Uh, it was not a major theme in society. Uh, and certainly we have romanticized—but there’s a foundation for it—places like China and Japan where people appear to, uh, develop cultures more attuned to nature, more in harmony with nature. When you’re an agricultural society, the calendar is very much a natural calendar.
Mike 08:13 You know, you have to plant and you have to reap and the rains come and you have to irrigate. You have to do all those things, uh, based upon rhythms and cycles that are beyond human control. What’s significant about capitalism and industrialization—and those two things go hand in hand—what’s significant amount capitalism and industrialization is that they provide the material basis for the separation of man from nature. So that for example, with the rise of, of, of, of the modern, technologically—going all the way back to electricity and uh, the electric light and all of those things, um, I can change night into day. You know, in traditional China, the emperor met his court at Dawn. Well, you know, it’s pretty darn difficult to see in the dark, in the dark, and you didn’t want people stumbling all over the courtyard on their way to see the emperor.
Mike 09:08 So they’d wait until the sun rose and then they go to the emperor. Well, when electric lights are introduced, after electricity is discovered, et cetera, uh, you can then stay awake until 10 o’clock at night and, uh, you can lighten up the world. That’s a very, very profound change that—that shift to the electric light, for example, really marks the difference, the departure of the modern from the pre-modern because it makes it possible for us to distance ourselves from the rhythms of nature. We’re no longer dependent upon them. We’re independent. We now are living through an age where that’s reversing itself because we’ve used up nature. So we’re talking really about a certain finite period of time. Sometime, say in the 18th century, maybe—you can’t really date these things—down to the first part of the 21st century. It’s a finite period of time in which we can see this distance, a productive distance of man from nature, which capitalism initiates and exploits successfully. One of the great accomplishments of capitalism is that for a significant number of people, uh, through the use of machinery and the use of the kind of social change and management that, that technology allows, they’re able to, they were able to improve the, what we call the standard of living. Mind you, not necessarily mental health—but the physical standard of living our food is better, our medical care is better for good or ill, all of these things are measurably different than they were 300 years ago. No question. And that is undoubtedly the major achievement of capitalism that some of us in the world are living better than anybody ever lived before in, in human history.
Mike 11:07 Negatively—and this is really important. Several things occurred and this began to be perceived from the very beginning. Uh, you see it in the British Romantic poets, you see it in [William] Blake and so on. Negatively, first of all, uh, it introduced a kind of inequality that never existed before, whereas before inequality was a consequence of birth, hierarchical. But you know, the, the Lord also had trouble finding—it’s often pointed out, for example, that the peasants only ate meat a couple of times a year in Europe. Most of their protein came from maggots and worms that were in the bread, they cooked bread a few times a year, it would grow moldy and had maggots in it. And so their protein developed along with the bread.
Mike 12:05 Well, the Lords live better. They could probably have more bread and fresher bread and eat real meat more often, but not that appreciably different, not like the difference between say a—a worker in the Ford motor company and the Ford family, right? So inequality of a huge kind becomes part of capitalism and creates a great deal of ressentiment, a great deal of anger and resentment, which erupts in revolutions from time to time. Uh, and that inequality is also more visible than, say, feudal inequality would have been because that inequality now is an urban inequality. We live so concentratedly that I only have to walk from here—if I were going to do so about a half an hour—and I’m in the wealthiest neighborhood in North America, right? And I can see that difference. And these people who live, you know, 30 minutes from me, it’s not even thirty, by car it, it’s 10 minutes.
Mike 13:09 Right? And they live on big estates and I live on a little piece of land. So the, the inequality is not only measurable, it’s visible in my daily life. I drive by their estates all the time on the, on my way to the market or whatever you think of. Um, that’s extremely important. Uh, secondly, um, it is unstable. Capitalism is unstable. The great unsolved problem of capitalism is that the daily life of every member of society who is not in that 1% or whatever that percent would have been a hundred years ago. Every member of society was not in that 1% lives a life in which the future is uncertain. The market may fall. Um, the economy may collapse. And, and I can’t afford now to buy a car, which I could have done five years ago, but now I can’t. Uh, my salary has declined.
Mike 14:15 Um, so that instability is, is where we experience capitalism in our daily lives. If capitalism delivered a stable existence—and if people hid their wealth so I wouldn’t see it—you know, I would, it would be more tolerable. But the problem is that capitalism doesn’t do those things. In fact, instability seems to be built-in. And one of the issues that all of our policies are about is how to deal with these unstable periods of time, which seemed to become, seems to be rather regular. I mean, for example, in 2008—the latest one, right? And before that there was 1970 or whatever in our own lifetimes—in my lifetime, I was born, in many, many years ago during the great depression, right? Which changed the world. We’ll come back to that. And, and this kind of thing becomes steadily… I cannot predict that in five years from now, uh, I will be able to afford what I can afford now.
Mike 15:15 So that’s a great, great problem with capitalism and lately—and I might do, there are many other problems. I’m just trying to give you a sense. And then lately of course, uh, most, uh, most disturbingly is that capitalism is beginning to run out of material resources. As I say, we’re beginning to use up the world. Capitalism depends upon the use of the natural resources of the world. And it’s fine for people today to talk about automation and so forth and so on or we’re still going to have to have food and clothing and things of that sort. And we may not produce them on in America, but they’ll be produced in China—wherever they are produced, they use up more and more of our natural resources. And we’re now at the point. And that’s what we mean by the ecological crisis—we’re at point on the one hand of using up our natural resources and on the other hand, we’re at the point of so dirtying the world with the consequences of the industrial system that it will be increasingly difficult to live.
Mike 16:18 So just think about the, the storms that have been taking place in the last couple of years, making the daily life of a large proportion of the population of North America very difficult. So this using up of the, of the world and its making the world dirty, um, is not a, um, an abstraction. People feel it in their daily lives because of the ideological structures within which we live our lives. And because of the, the propaganda—which I think is the right word here—that, uh, that forms the substance of, of the way we intellectualize problems these days. People see storms as a consequence of nature alone and perpetuate that man versus nature problem. But ecologists are telling us that these storms are very much a consequence of human, um, human action on nature. So we are experiencing through these storms the effects of, of capitalism, capitalist culture, etc. In our daily lives. And you go back—as you go back to the beginning of the romantic period, for example, in, in, um, in England, and, and Blake, the great poet says, oh, he talks about “these dark satanic mills.’ You know, he saw the smoke belching up from the fire them making, making whatever they were making and, and how this, this problem of man inflicting himself on nature. The whole Romantic movement was because nature was brought, being brought into question.
Greg 17:56 And what, so I asked one thing about that seems connected to that as well is the inherent demand for growth in capitalism too. So it’s not, we’re not using resources to find a steady state.
Mike 18:08 Both. Yeah. Growth it has become really uh, a kind of um, slogan. Everybody likes to talk about the growth, talk about zero growth, non-growth, all that kind of stuff. There’s a real problem with that in my opinion. The only way you can ever arrive at a situation, there aren’t—there are very few paths to arrive at a situation where, um, you can live in a world without growth. And it’s not inconceivable that capitalism could survive doing that. But the way you get there is, well, well, let me illustrate what I’m trying to say. As long as we propagate. Yeah. Now, one thing you could do is you could say: if you lived in an Orwellian world, uh, we could argue that, um, we should go a whole generation without having any children. There are ways and ways of preventing children from being born, right? Um, we could live like monks and nuns for a generation. I don’t think many people would do that. Uh, we could have a mandatory abortion for a generation in which I suspect the Catholic church would not appreciate, um, and so forth and so on. So they’re not very nice. Or we could accept the fact that we are going to account for using up resources by accepting a declining standard of living. We, it’s already not uncommon to hear people say, my children will not live as well as I did. Right now that’s a consequence of the fact that we are running out of, uh, sources. But if it were to be a policy, if we could, how would we go about engineering a world in which people would agree on an ever-declining standard of living, proportionate to the growth of the world’s population? It’s just—
Mike 20:10 So I think this argument about no growth is, um, is, is, is not very useful. I don’t believe that, that the issue of growth is—and one more thing, and that is that of course we need growth. If we’re going to keep improving the standard of living of anybody in the world. We have, you know, how many billions of people living out there in the world below the level of poverty. Uh, one only needs to think of South Asia for example, or parts of Latin America, Africa, where the only way they’re going to get anywhere near the way we live today, much less the way we’d like to live in 50 years, is a huge amount of economic growth. So the issue is not no growth. I’m sympathetic with people who say zero population growth—uh, I’m quite sympathetic. But how you do that would require a cultural, psychological, mental revolution of proportions that had never taken place in, in history.
Mike 21:08 So the problem is to figure out how to grow the economy without injuring the world. That’s the issue, not how to prevent growth, but how to—so for example, we know that certain kinds of, we’ve been, we’ve not been unsuccessful in this. We know that certain kinds of fertilizer applied to the soil are very injurious. So we’d begun to produce fertilizer that is not injurious to the soil or injurious to human beings. There’s a lot of work being done on that, so that—that’s possible. All, all the while that that’s possible, we also know that that kind of scientific discovery and development doesn’t take place as rapidly as the problem develops. So we still need some controls over these things and some social change. But, uh, I think the argue of no growth, the argument of no growth or, or, or, uh, even anti-growth just is not possible if we’re not going to cull the population. And that idea is a very frightening idea.
Greg 22:11 Yeah. So just to clarify my question, I think for a lot of people—so you talked about the positive aspects of capitalism, which in many ways are a growth story of what was able to be provided to the world. In terms of healthcare and goods and all of that stuff. And then, and then so people think that capitalism is the thing that can provide that.
Mike 22:35 Well, let me make, let me, let me go on and make another point here because I was, I was emphasizing that along with the successes of capitalism was there also these enormous failures. But there’s one other factor that we need to always have in mind and this comes directly from Marx and is one of, I think, the most important sort of large ideas that Marx introduces, um—which are true regardless of the specifics of his application of these larger ideas. Um, and that is that capitalism is a necessary period in the history of the development of humankind. People think Marx was anti-capitalist. Marx was repelled by capitalism. If you read Das Kapital, one of the most interesting things about Das Kapital, which is an empirical study of capitalism in the middle of 19th century England—uh, and probably the best empirical study that we have—on a, on, on the whole system. [One of the most interesting things is that] Marx relies very heavily on important documentation, such things as parliamentary commissions, government report, newspapers, et cetera.
Mike 23:52 When you read it, you find studied through that very ponderous work, uh, vignettes that he gets from the newspapers. The one that has always stuck in my mind for years is of a woman who was found dead in a, in a, in an attic of a building with several of her children all lying around her and they were all covered with chicken feathers because that’s all they could get to keep warm in the winter. How or why, rather in this study, very technical study of capitalism, does he cite a woman covered with feathers dying—dead in a room with her children? Well, the answer is very simple. It was the daily life that resulted from capitalism that repelled him, that he found, found damnable. As would any human being. So his response to capitalism was a very human, I dare say, almost Christian, uh, kind of response because there was no way that—that could possibly be justified in his mind.
Mike 24:57 On the other hand, capitalism as a system, as a period in the process of human development, he thought was absolutely necessary. So, and this is a very interesting problem—the history of Marxism, of course, what—what is equally necessary is overcoming capitalism. We have to find a more successful way to create a fair and just society. Capitalism is not a fair and justice society, we have to find another way to do it. And that’s what, that’s—from the point of view of his thinking and his followers—the genesis of the idea of socialism today, where socialism has a much earlier history going back to the beginning of capitalism. But, but nonetheless, that point is important to keep in mind. So we, we talk about trying to fix capitalism, but Marx introduces to the idea that, that, um, that we need to change the system.
Mike 25:54 And I think that’s an extremely, um, fertile idea. It doesn’t mean we have to do it the way he defined it, but the idea that we need to change the system, not just fix it, but change it—and that history shows that, that if you… He derives this observation from the study of history, he said, if I look at history, I, where do we start? And I’ll go back to prehistory. What do I find? I find people going around with spears and whatnot and they’re picking, you know, Adam and Eve right there picking the apples off the trees and they’re, they’re uh, spearing. Uh, they tie a stone to a, to a stick and they use it to spear fish in the, in the river. So, and then, but then gradually power enters in, right? And you begin to get from first you’ve got that hunting and gathering.
Mike 26:42 Then you get great empires, you get—which are expressions of power—which, they have long histories, but nonetheless. You have empires. Then you get feudalism. This is the breakdown of central power. And then you get the development of technology, which gives rise to capitalism. Well, capitalism is necessary, but now we’ve got to think about moving on to the next days—that’s what Marx’s argument is. So the idea—but the idea of socialism, as I said, is born with capitalism. So you already get, for example, with Robert Owens back in the beginning of the 19th century, he’s already seeing the fact that what’s going on in England (and England was the most advanced industrial society, uh, in the whole world at the time) capitalism was most advanced in England and therefore it’s not unnatural that anti-capitalism would develop in England at the same time.
Mike 27:33 And, and [Owens] is already discovering that he’s—or thinking rather than he’s got to develop some alternative to, there has to be a better way to live than in the slums of Manchester. And you know, with child labor and no education, all of those terrible things, when—just read Charles Dickens to get an image of that. So he decides to start a, um, he’s a moderately wealthy man. He can do things. And he builds a colony in Scotland, Northern England. He builds a colony, uh, where he tries to create a model society, a cooperative society based upon equality, using education, um, a more just distribution of products, et cetera, et cetera, to create a healthier society than the one that capitalism is producing. And that idea, which he pioneers but which begins to spread has, interestingly, a tremendous effect on North America. He himself came to the United States, uh, in its early years and, um, a lot of other colonies that people came to the US and they establish these, what we now call utopian communities, some of which still exist around North America, all of which were based upon this idea of finding a more just way to live than capitalism allowed.
Mike 29:07 Perhaps the greatest single experiment was one would not be aware of if you took it on its present form, but one of the greatest single experiments in the attempt to create a more justice, it was the Mormon church, right? Uh, which, uh, which actually developed a cooperative society. Its, its, social foundations were, uh, was cooperativism—that the way for people to live properly is to live in a cooperative way. Eventually that falls by the wayside. But that’s a major experiment. And, uh, and Mormonism should be studied more and more for what it contributes to this kind of, uh, to this kind of thinking. So the, the kind of social experimentation and we’re talking about, as I said, starts right away almost at the very beginning, along with capitalism. And indeed, Adam Smith himself suggests that capitalism rests upon questionable foundations. Um, he, he makes it clear that capitalism rests upon greed and the exaggeration of self-interest.
Mike 30:18 And while on the one hand, it is that greed and self interest that make economic interchange—upon which capitalism rests—necessary. On the other hand, it develops characteristics which he finds very reprehensible. Uh, so, uh, even Adam Smith had doubts about the health of capitalism from a moral perspective, uh, one which we need to talk about. And, and, and will as time goes on because, because, uh, in a curious kind of way, the thinking about capitalism is, is very materialistic. Not surprisingly so, but we, the left has kind of lost sight of the moral argument. And we’ll come back that though I think that’s where the left has to look for its new beginning. So having said all of that and having pointed out that one of the issues of capitalism is instability. Perhaps the, the, the greatest modern example of the instability of capitalism was the Great Depression beginning in 1929.
Mike 31:31 Now, one of the, one of the hallmarks of capitalist of, of, of fundamental capitalist—fundamentalist capitalist thinking, which survives very strongly in America in propaganda though not necessarily in real policy, is the idea of the free market. It’s from the idea of the free market that the very false connection is made that claims that democracy and capitalism require each other. They don’t. They’re in fact, they’re often in conflict with each other historically. But, um, one of the areas, one of the periods in which the free market was extraordinarily free was the period of course of the 1920s. And when we look back from today at the 1920s in the arts and literature and society at large, um, partly perhaps as a reaction to the First World War, whatever, it was an incredibly free period. I mean, public values were extraordinarily liberal when you think about it—certainly in Europe, certainly in Germany, um, the amount of wealth that was accumulated was immense.
Mike 32:49 Inequality became incredible. And of course the, the, the wealthier you were the freer you were because it freed you from the necessities of everyday life. And then for reasons which we won’t go into—serious, but we don’t have the time—it all crashes in 1929, that’s, that was the stability already built in to the capitalist model. But it hit everybody and it’s within almost living memory. Right. And it changed the world. And beginning from 1929 on—some of the seeds of this were earlier—but it brings it out to the fore again, my, my point that, that historical developments have to reach a certain density before we become aware of them. Right? I can, I can have the sniffles, but that’s not a cold. It’s only when my sniffles become really very strong that I begin to realize it’s not an allergy, it’s a cold or even pneumonia, something like that. So from 1929 on through the end of the, of the Second World War, we can see very clearly how seeds planted a little bit earlier blossomed into alternative ways of organizing society. And I want to briefly look at that ‘cause I think that’s, we live the consequences of that to this day.
Mike 34:09 So—and what’s very interesting about them is that none of them were capitalist in the sense that the 19th century or classical economics thought of them as that. Let’s review this very quickly. Um, you already have—when, when, when the, when the, when the, when the, um, Depression hits and the consequence of the Depression was really calling into question the fundamentals of capitalism—in America and North America and countries closely associated with United States, we get developed what we now call the New Deal, but what was the New Deal, really? The New Deal really, in terms of what I’m trying to talk about this morning, the New Deal really was a proposition that says free market capitalism isn’t going to work. We have to manage it in some fashion. Now managed capitalism does not mean state control of capitalism or state ownership of capitalism. What it does mean is that capitalism cannot satisfy a lot of needs and we have to step in. The state has to step in and in one way or another make up for the errors of capitalism.
Mike 35:32 It took a long time before this penetrated economic theory. It really wasn’t until the very late ‘30s this idea enters into the theoretical formulations on the part of economists, but already with Roosevelt at the beginning of the thirties this is a practical consideration, right? Right. Again, often things begin with practice and then become theory—once we have time to see them and reflect on them. So in the course of the, uh, of the development of the New Deal, Roosevelt becomes aware of the fact that he’s got to control price. He’s got to do something to interfere, to make prices rise because people were producing things and they couldn’t sell them because they weren’t going to get enough money. It was cheaper to dump the milk in the rivers than it was [to sell it], so since we can’t sell the milk, let’s dump the milk in the rivers in order to make milk a little bit more scarce and thereby raise the prices.
Mike 36:22 So the farmers have reason to keep feeding their cows and so forth. It makes a lot of sense if you think that’s management. A large part of the country had been left out of the, uh, electrification. Lenin already says at the beginning of the 1920s—some people think it was Stalin. But anyway, one of the two of them says that what is, what socialism is, is the electrification of the country, right? That you have to bring everybody into that most important form of fuel, which allows for capitalist society or any modern society—electricity. So he goes into the Tennessee Valley Authority, which harnesses the rivers that at the same time provides jobs. The state must step in and provide jobs. When you haven’t got jobs, people have to be able to eat, to buy things. You need to have a—you need to have people.
Mike 37:15 You don’t have a market if you don’t have people to buy the goods you produce. And if you don’t have people to buy the goods that are produced, you’re not going to produce them and the system collapses. Henry Ford understood this very early when he raised the wages for his workers and people said, you’re crazy. Why are you paying them more than you have to? He said, because I want them to be able to buy my cars. It was very important. Right? So with Roosevelt, you already get in the New Deal, what we now call social democracy. I want to make clear that we’ll, we’re explaining the difference between social democracy and democratic socialism. You begin to get the first glimmerings of the idea [of social democracy] through practice that the state must account for what capitalism cannot accomplish, or for the weaknesses of capitalism. In Britain—the best example of this is of course the, the thinking in policies proposed by John Maynard Keynes. John Maynard Keynes, is a, is a great economist for many reasons, but, but in the long term of history, he perhaps can be counted as, as, as significant for being one of those who begins to think theoretically about the practical issue that capitalism has presented. So, so he is trying to find those instruments. He was not a socialist, he wasn’t a social democrat. He believed that capitalism was the best system and he so, but he’s trying to find what levers he can use to move capitalism in such a way that it will resolve the problems that it creates more easily and with the least possible damage to human beings.
Mike 39:05 So he becomes very important. Eventually he comes to America. And of course by this time Roosevelt is doing something similar, but Roosevelt was not a trained economist and Roosevelt didn’t like John Maynard Keynes very much and didn’t really understand what he was doing. Uh, and he dismisses him at first, even though he’s doing very much what John Maynard Keynes would have recommended he do. So, so he began to get that. So you get a kind of what today we would call social democracy. Looking for ways to ameliorate capitalism, not to change capitalism fundamentally, but to ameliorate it. Social Security is only if people don’t have jobs. You’re gonna introduce unemployment insurance that people don’t have jobs. People get old and are laid off or they want to retire. What are they going to live on?
Mike 39:54 And you also want them to be able to buy stuff. So you want to give them some money so you give them Social Security. All of these things are ameliorations of capitalism, but they’re meant to solve problems that are inherent to capitalism. The system isn’t solving them. It’s specific policies developed to solve these problems. Another very important solution to this issue of capitalism, of—of free market capitalism, liberal capitalism was fascism. In my opinion, a lot of people don’t agree with this, but I believe this, that fascism is a coherent solution to the organization of society, particularly under capitalism. And to put it—and fascism begins in Europe at the beginning of the 1920s, we already have fascist regimes, 1922 in Italy, 1924 and Hungary long before Hitler comes to power in Germany, capitalism says, yes. I mean fascism says, yes, capitalism is the right kind of society, but the state must be the primary control mechanism of capitalism.
Mike 41:05 So that doesn’t again mean that the state owns the economy. What it does mean is the state partners with or directs the heights of capitalism, the wealthy capitalist investors, the industrialists, the bankers, and that in order to assure social peace—because one of the problems that capitalism does, right? Remember, you have these economic, uh, crises they create and you have inequality. And all of that creates a profound social, psychological resentment about the system in which people live, so fascism comes along and says, no, we’re going to change that by organizing society in such a way that everybody is organically a member of it. And the way we do that in fascism is we organize vertically. So if you work in the automobile industry, you will be part of a vertical organization. At the top is the state, then are the capitalists. You go right down and your life is involved in that industry and we will have vacation places for you to go to and you’ll join clubs and so forth.
Mike 42:19 So you become a member of an organic member of society. And indeed, this was very much what Mussolini was thinking of in Italy. When you get to fascism in Germany, which has overtones to it that didn’t develop in Italy until very late in the ‘30s under German influence. In, in, in, uh, in Germany, the idea of the state managing things was approached in a slightly different way, still fascist, but approached it in a way that made the state coterminous with society itself so that everybody in the society was psychologically subsumed into the state. So my primary loyalty is to the state. Hitler is my father, my mother. I will have children for Hitler, right? That, that whole psychology. So what you do is you try to, you have an Alliance with the conservative capitalist elite. That’s not always easy to come by, to establish, but it does happen.
Mike 43:24 But psychologically, socially, ideologically, um, emotionally, uh, you try to give every individual the sense that he or she is a participant in the state itself. And one of the mechanisms for that are these fantastic mass rallies. You know, you cannot help but look at, say, the, the mass rallies that Hitler held in Nuremberg, the, the, the what were called the Reichsparteitag, the party day, usually choreographed by a woman named [Leni] Riefenstahl who was a famous film director. They are cinematic, graphic events, right? Where you have tens of thousands of people all doing exactly the same thing at the same time, where you begin to lose your sense of being an isolated individual, and you realize you’re a part of something greater than yourself. That’s very much a part of this fascist mentality. And that was a solution to the instability of capitalism, right? And the state does step in and it makes sure everybody has a job.
Mike 44:30 And so forth. It subsidizes or encourages us and, and, and um… so fascism is a second alternative to capitalism. The first is social democracy, a kind of ameliorated capitalism, then you get fascism. And the third great—the third great response was of course communism, right. Communism, beginning of course in the 19th century, deriving theoretically from Marxism though more from Lenin. And I think what we, what we today talk about when we talk about communism is not really Marxism, it’s Leninism with a lot of Marxism intermixed, but it’s primarily Leninism, uh, it’s a system which, it’s an idea was says we must replace the capitalist society completely. And we must do that by revolution. It has to be done by revolution. Maybe it could be done some other way, but by and large history says, it says it has to be done by revolution and it requires a destruction of or replacement of all the institutions of society under capitalism with new, what they called socialist.
Mike 45:43 But we need to use the word communist to differentiates from what we’ll call later, democratic socialism—um, as a way to replace all these institutions. So when I say replace the institutions of capitalism, I mean that very fundamentally. Not only do you replace the capitalist, bourgeois state, whatever form that state may take: it may be an authoritarian dictatorship. It may be a parliamentary system of government, whatever; you replace it with a system which is run by an elite party. And by elite I don’t mean economically or socially, but historically elite. That is to say people who have understood what history is all about and come into the party, become members of the party. They earn their place in the party by understanding themselves as instruments of history. So—this is very important to understand that you really need to understand—you join the party because you felt you were in fact, this was your, this is what made you part of history.
Mike 46:56 Otherwise you’re an isolate, right? Right. So the party replaces the state. It may use state mechanisms, the government, but the basic instruments aside… So not only do you want to replace—you want to replace the market. The capitalist market which is one of the, which is after all the heart of capitalism. You replace it with a planned economy. Um, as a great Harvard economist once pointed out on a visit, said to a group of us in the Soviet Union (at the time, I was a student, an American student there) and he met us and he says, you know, he says, the problem with planned economies is not the planning, it’s that they don’t have computers big enough yet to do the planning. And it was very interesting that he understood the problem of planned economy from a technological, not from a theoretical or philosophical perspective, right?
Mike 47:46 So they replace the market where they planned economy. In the early days, especially of radical communism, they even would replace the family. The family itself was seen as a mechanism for the exercise of interpersonal bourgeois power. And we do that. If you think about the way we talk about our families, ‘how are your children doing?’ What do you mean your children? ‘Here’s my children.’ I possess those little…? Why are they my children? They’re independent. They’re—you know. So even in the way we talk about our families, there is this power inequality, which theoretically communism in its original pristine form wanted to overcome. It quickly got rid of that because you can’t run a society without the family, in fact, we know that. But the, uh, but it was very radical in those terms.
Mike 48:35 So a lot of the way in which we can understand the 1930s up through the Second World War through the end of the Second World War in the West, a lot of the way we can understand it is the competition between these three tremendous ideas about how to solve the problems of capitalism. Again, the problem of ameliorated capitalism [social democracy], of fascism and of communism. What’s interesting from this perspective is that when you look at the non-West, remember the Second World War really was a Western war. When you look at the non-West, you’ll find that the two great powers from the non-West, that, that actually were very problematic and participant—one was China, which wasn’t capitalist and it wasn’t socialist, it wasn’t communist, it was it, it… Even Marx understood that China might be something a little bit different as, as kind of society. After World War II China becomes communist but not… right. And Japan. And Japan was embarking on becoming a capitalist country by the end of the 19th century and indeed enters into the Second World War much the way the fascist powers and the capitalist powers and the West were in the war. And while in the First World War it’s just getting started, it’s on the side of what we now call the Allied powers, the Second World War, because of, for various reasons, it aligned itself with the Germans, right? And the uh, and the Italians. But Japan is entering into this. So Japan’s participation in the Second World War, from the long… view of history that I’m trying to give voice to, really, it was one of entering into this conflict between these three systems and choosing in the end the losing side. But nonetheless, right. So in the, in the Second World War, you’ve got an Alliance between ameliorated capitalism and communism to defeat fascism. And it is true that the basis for that alliance was not a shared idea about how to solve capitalist problems.
Mike 50:47 But I think that it, the, the, it was a power question. Um, Germany was a—Japan remember, doesn’t attack; isn’t involve, it attacks America in 1941 but in 1939, the war begins in Europe and goes on in Europe for two years before the Japanese make their mistake and attack America. So the, uh, the, the, um, the word, the alliance between the Soviet Union and the West was really an alliance of necessity based perhaps on a sense that fascism was too powerful a system for either side to overcome by itself. Certainly on a shared horror about what Nazism, not fascism, but Nazism was doing, um, the postwar division between the West and the Soviet Union was almost built into the very idea of competing systems that I’m trying to give voice to, before the war. The war was a temporary respite in the, in the conflict between them. Um, but then after the war, the story of the conflict between these systems picks up with, with great effect. It was just… we’re still living in the trail of that effect. And so maybe that should be the next subject.
Greg 52:12 Yeah. Well we, I don’t want to end yet. I want you to add the final note of why, I mean, I think, a question certainly I have, and I think the average listener would have is why not think in terms of ameliorative capitalism now? So if you thought you were building partly to establish democratic socialism—
Mike 52:34 No, we’re going to come to democratic… I want to talk about that separately, but, no, but I think that that question you asked is absolutely the right question. That’s what we’re talking about in America all the time, isn’t it? And I think the reason is that we don’t know how to do it. The idea of ameliorative capitalism really depends upon the prior, illogically prior idea of a change in human nature. Now, I don’t believe in human nature. I got to say, well, we’ll probably discuss that at some point, but, but, um, if it is true that greed is the fuel that makes capitalism work, um—we can justify greed in many ways. Protestantism, especially Calvinism, had a very strong argument to justify greed as a sign of being the elect of God! But it’s still greed nonetheless. Um, you need to really think about how to change, uh, the culture itself in order to eliminate greed as a primary motive and capitalism, even ameliorative capitalism, rests upon greed, by greed, I mean acquisition. I have to acquire more wealth. After all I cannot—we’re caught. One way of suggesting this is that we’re caught in a set of contradictions. I cannot provide sufficient unemployment insurance and Social Security to the population (this is going to become a huge problem in the next few years as our population grows older) unless I raise the government’s income, that means raising taxes. But the power elite of capitalism, as we have just witnessed under, under this president who should not be named, um, want to lower taxes and they can lower taxes while convincing the people that they’re lowering the taxes for you and me, but they’re not. You and I haven’t experienced that. They’re lowering the taxes for the wealthy. Right? So the propaganda machine of the capitalist system is so powerful that it can hoodwink, you know, half the American voters into believing that they’re going to have lower taxes, but actually they’re not. You have to be able to seriously increase the income of the state in order to, right? You really got to control the distribution of goods, services, income to bring down inequality, to have social peace. Yesterday or the day before the newspapers reported that the, that the inequality, the genie number, the inequality in American society today is higher than at any point since inequality has been measured in American history. Any point, right? The inequality, which, which means, it suggests. It’s a very interesting history. Um, you know, we didn’t have statistics at the time of the, of the revolution. Alexander Hamilton is looking for ways to describe American wealth. He has lots of trouble finding statistics. By the time of the civil war, they began collecting statistics. And our inequality today is higher than at any previous time in American history that we have record though. So the state has to step in who’s going to do that? Christianity has failed. And I’ll say this very bluntly, Christianity has failed to change what we call human nature. I don’t notice that after 2000 years of Christianity, human beings are less greedy and selfish than they were in, uh, in, uh, on the day that Jesus Christ was crucified. Right? So it hasn’t had that effect. We have to ask ourselves why and what does that mean? So ameliorated capitalism requires a change so profound that we don’t know how to bring it about. We haven’t succeeded in bringing it about. And that’s not just a change in values, but it’s also a willingness to have increased taxes, to have lower income levels. It’s just, it’s not happening.
Greg 57:12 So to make sure I have this right, they ameliorated capitalism as a kind of, um, compensatory strategy, that capitalism has these flaws that you fill in for.
Mike 57:22 And the reason I argue, and now this is a window on the future. The reason I argue that they say Scandinavia is not social democracy, but what I call democratic socialism is because these things are different. And these issues are different there. There I see what we look to and see all these societies that appear to have equality—it’s several [things]. We need to ask what institutional, psychological, philosophical, etc. etc. etc. conditions were necessary for that to happen because the opposite is happening in America.
Greg 57:54 Right. Okay. Got it. Uh, thanks for joining us everybody on A Shareable World. We’re going to pick up from here next time. Thanks Big Mike. [Outro] Thanks for listening to another episode of A Shareable World. To find out more about this podcast, visit us at ashareableworld.com.