[108192] in Cypherpunks
CDR: Turbo-Calvinism
daemon@ATHENA.MIT.EDU (John Young)
Mon Feb 8 12:46:16 1999
Date: Mon, 08 Feb 1999 12:24:31 -0500
To: cypherpunks@einstein.ssz.com
From: John Young <jya@pipeline.com>
Reply-To: John Young <jya@pipeline.com>
The New York Times, February 8, 1999
Side Effects of the Growth of Wealth
Turbo-Capitalism
Winners and Losers in the Global Economy
By Edward Luttwak
290 pages. HarperCollins. $26.
By Christopher Lehmann-Haupt
By the term turbo-capitalism, Edward Luttwak means turbocharged
capitalism, or the state of today's American economy, which has
been "unleashed by the abolition of anti-competition laws and
regulations left over from the 1930's, by the technological
innovations thus allowed, by the privatization of whatever could
be privatized, and by the removal of most import barriers."
Turbo-capitalism has been sweeping the world since the 1970's,
Mr. Luttwak says, when, first in the United States and then in
Britain, it replaced the controlled capitalism that had been in
place since the Great Depression of the 1930's.
It has resulted from spectacular gains in productivity brought
on by the computer revolution, and it has made many people very
rich. But has it been a good thing for society as a whole? This
is the question debated engagingly in "Turbo-Capitalism" by Mr.
Luttwak, a senior fellow at the Center for Strategic and
International Studies in Washington and the author of numerous
books on military strategy.
Turbo-capitalism has worked thus far in the United States for two
reasons, Mr. Luttwak argues somewhat mordantly. The first reason
is the American legal system, which protects turbo-capitalism from
the kind of corruption it suffered last year in Indonesia, South
Korea, Malaysia and Thailand. The second reason is the invisible
but lingering influence of Calvinism.
In what is perhaps the liveliest section of his book, Mr. Luttwak
explains that three Calvinist rules shape "both everyday choices
and fundamental attitudes" in American life. Rule One is for the
winners and dictates that wealth is not only praiseworthy but a
sign of moral achievement as well. The only catches are that you
aren't allowed to enjoy it (witness the boring food in most
Caribbean resorts) and that you have to give it away.
Rule Two is for the losers and, conversely to Rule One, holds
that "failure is the result not of misfortune or injustice, but
of divine disfavor." Rule Two "explains why the United States has
never had a significant socialist party: losers blame themselves
rather than the system, they hate themselves instead of resenting
the winners."
As for Rule Three, it is for the non-Calvinists who reject Rule
Two, "who are not paralyzed by guilt and who are too uneducated
to express their resentment legally." For them "there is only one
possible form of expression: to break the law, by engaging in
criminal activities such as murder, armed robbery, violent assault,
rape and the smoking of marijuana in pipes or home-made
cigarettes." Followers of Rule Three end up in prison.
But elsewhere in the world advanced turbo-capitalism won't work
so well, Mr. Luttwak predicts. That's why France and Japan have
rejected it in favor of controlled capitalism. For them, he adds,
economies exist to serve the needs of societies, not the other way
around.
And in the United States the contradictions of turbo-capitalism
are increasingly evident. Using the Microsoft Corporation as his
benchmark, Mr. Luttwak says that the new high-tech titans produce
much capital but relatively few new jobs. The rich get richer, but
those driven out of work by the computer revolution are forced to
take lower-paying service jobs. The unskilled they displace turn
rationally to criminal activity like drug dealing.
The resulting strains on society include the breakdown of
community, the return of poverty, an addiction to consumption, the
rise of debt and a "destruction of authenticity" that is evident
everywhere from medicine to sports to book publishing.
"Turbo-capitalism" is one of those books that offer the reader
perspectives on practically everything, often enough an unexpected
one. For instance, Mr. Luttwak argues that Russia has successfully
made the transition to a market economy, that "the fat cows that
yield their abundant milk in advanced economies" all began as
"lean and hungry wolves . . . seizing profitable market
opportunities in any way they could." As "the original
entrepreneurs and investors become rich, the wolf loses its fangs,
gains weight and size, grows udders."
True, some of the book's arguments are a little pat. While Mr.
Luttwak's linking of unemployment and crime makes some sense,
he doesn't really prove the connection. And it seems a shade
far-fetched to blame the insecurities produced by American
turbo-capitalism for the return of the death penalty, the movement
against smoking, the disapproval of topless bathing, the
prohibition of pornography and all forms of political correctness.
Still, much of what Mr. Luttwak writes makes sense, particularly
his discussions of industrial policy, or government assistance of
select industries ("The strongest argument for industrial policy
... is that the government of almost every advanced country already
has one"); of free trade as an ideology ("The god of the
market-worshipers that celebrate the glories of turbo-capitalism is
Adam Smith, but theirs is a devotion that crucially depends on not
reading him"), and of the prevalence these days of central bankers
who shun whatever is inflationary and worry not in the least about
its opposite, "deflationary" (which "is heard as a merely technical
expression, not as a powerful condemnation of over-restrictive
fiscal and monetary policies that strangle growth, and which in the
1930's brought about the Great Depression, political chaos,
dictatorships and war").
In the end, he offers no prescription for turbo-capitalism, merely
predicts that "the wave of the future could be populism," the
essence of which is always "a revolt of the less educated against
elite rule, elite opinions, elite values and the elite's consensus
on how government and the economy should be run."
He concludes: "As compared to the slavery of the defunct communist
economies, despiriting bureaucratic socialism and the grotesque
failures of nationalist economics, turbo-capitalism is materially
altogether superior, and morally at least not inferior, in spite of
all its corrosive effects on society, families and culture itself.
Yet to accept its empire over every aspect of life, from art to
sport in addition to all forms of business, cannot be the culminating
achievement of human existence. Turbo-capitalism, too, shall
pass."
[End]
