Question Everything: Is Greed Good?

By

Mark Featherstone

As George Osborne, Chancellor of the Con-Lib Coalition government announced the ‘emergency budget’ to try to balance Britain’s deficit, I was put in mind of last week’s BBC Hardtalk interview with Hugo Chavez, President of Venezuela, and subject of Oliver Stone’s forthcoming documentary on the return of socialism in Latin America, South of the Border. Although this may seem like a strange comparison, I think that drawing a contrast between Chavez and Osborne is interesting because it sheds light on both the nature of contemporary society and in my view the key purpose of sociology today.

In the BBC interview, Chavez, who rarely talks to the western media, told us that not only does capitalism not work, but also that it is destroying the world. Unsurprisingly Osborne speaks of ‘economic emergency, toughness, and a prosperous enterprise led future’. Immediately, the difference between the two speakers is clear. The contrast between Chavez and Osborne could not be more stark. In Chavez’s talk the key point is the transformation of capitalism as a system of exchange, which is, in his view, inherently exploitative.

In Osborne’s budget speech the idea of the form of the economic system is bracketed out in favour of an attempt to re-balance the economy, cut debt, and create equilibrium. Clearly, from the realist’s point of view, Chavez’s talk represents a kind of utopian rhetoric. How is it possible to change the system today? Surely the idea of criticising capitalism itself, the system of economic exchange we live by, is madness? The Cold War is over. In the wake of Margaret Thatcher and Ronald Reagan, all sane people accept that ‘there is no alternative’.

However, once we accept this position we close off the possibility of radical change and George Osborne is one of two characters pushed centre stage. The other is, of course, Gordon Brown. Whereas Osborne represents one phase of capitalism, bust, and the attempt to restart the economy from a stable base, Brown represents the other side of the capitalist economy, boom, characterised by the good times, when we spend money we have not got and worry about it later. George Osborne is bust, worry, and recession embodied and his best hope of maintaining any level of popularity is to try to blame everything on his alter-ego, Gordon Brown, and continue to talk about over-reaching, over-spending, and the over-inflated credit bubble of the New Labour years. Osborne and Brown are, therefore, the two faces of capitalism and they cannot be seperated.

But while these two characters represent the intra-systemic function of capitalism, which is why we will never see an Osborne or a Brown think about the value of the system itself, Chavez sits outside of capitalism and is in this respect extra-systemic. Chavez recognises the evils of capitalism related to poverty, inequality, domination, exploitation, and environmental destruction. He is, however, not the only extra-systemic character on the scene. The other character who reflects properly on the wider system is represented by another Oliver Stone invention, Michael Douglas’ brilliant Gordon Gekko, who famously told us in 1987 that ‘greed is good’.

Why is Gordon Gekko extra-systemic? Gordon Gekko is extra-systemic because he is not concerned with either boom or bust, but rather the ethic of the system. For Gekko the system is not evil, in the way it is for Chavez, but rather good in the original ancient use of the word, meaning the best way of living. Gekko sees opportunity everywhere. There is money to be made in the good times, and as Naomi Klein has recently shown us in her book on disaster capitalism, there is certainly money to be made in the bad times. This is why Wall Street, and Gordon Gekko, are such important cinematic creations. They tell us a lot about the contemporary world. In many respects the dominant philosophy in the world over the last thirty years was summed up by Gekko, ‘greed is good’. We don’t need to say any more.

And one would have to say that greed has been very good for a lot of people in the world for a very long time. The 1980s, 1990s, and much of the first decade of the 21st century have seen massive economic growth across the world, but also an ever widening gulf between the world’s haves and have nots. Supporters of capitalism would, of course, tell us about ‘trickle down’ and the ‘invisible hand’, explaining that society benefits from greedy people making money for themselves in the shape of job creation.

Unfortunately, this does not really help those people who suffer when the bubble bursts, the economy crashes, and we enter a period of bust. For this reason, and because it takes social effects as a by-product that either happen or do not happen, what we might call the social ethic of capitalism is profoundly asociological. The wealth of the greedy individual always comes first in capitalism. If there is a social effect, it is an unintended consequence, a kind of risk of the enterprise, a cost built into the project of making money in the shape of the inevitability that the capitalist will always lose some profit in social effects, thereby inadvertently wasting money giving to others.

However, perhaps even here, in wasting money on others, there is profit to be made if one plays the ethical card, thereby justifying one’s own greed by saying that it is in fact a socially responsible vice whereby making money for oneself makes money for others who are unable to do so for themselves. So update Gekko slightly, telling everybody greed is ethically good, and you can continue to make a fortune at everybody else’s expense, and avoid criticism. It is, of course, enormously important to be able to do this.

The capitalist philosophy of greed is enormously seductive, but it is also sleazy and needs to be kept out of sight, hidden behind a veil of respectability. This is why Gordon Gekko is such a brilliant characterisation of capitalism. An obscene or pornographic invention who says too much, tells it like it is, and reveals everything: greed is good, which one of us would not want to live a life of luxury, riches, and vice, if society allowed it?

For a long time of course this life was the province of the adventurer, the philanderer, the cheat, but what has happened recently is that capitalism has more or less legitimised the pursuit of luxury in line with Gekko’s advice in the creation of a society organised around the principle of enjoyment and pleasure. But quite apart from the fact that legitimation takes all the fun out of fun, the social effects of this transformation are disastrous, and this is part of what has happened in what David Cameron calls contemporary broken Britain. When the individual has no responsibility to anybody but themselves and their own enjoyment, society is in trouble, and no amount of attempts to attach a minimal sociological dimension to greed by talking about trickle down and the socio-economic benefits of consumption will change that fact.

The problem of the capitalist philosophy of greed is, therefore, that it is enormously seductive, because it taps into our base desires, and it produces a normless society, that is endlessly on the edge of collapse, and for this reason makes the philosophy of greed, pleasure, and enjoyment even more seductive. What we can see then is that the kind of society this philosophy produces is not really one anybody would want to live in unless you could be sure you would be able to satisfy your desires and would not consigned to the mass of people consigned to the endless frustration at not being able to enjoy in a society geared around endless enjoyment.

And this is not the worst of the story. The division between those who enjoy and those who are frustrated probably marks out the key division in rich western nations, but the problem of the haves and haves not takes on an entirely new dimension based on survival when we turn out attention to the relationship between the west and the rest. It is here, in the division between two kinds of inequality (rich societies based on a division between those who enjoy and those who are endlessly frustrated versus a global economy of haves who live in luxury and have nots who struggle to survive), that the difference between Osborne and Chavez resides, and the reason why it seems so strange to compare them.

An effective comparison between them requires us, rich westerners, to make a shift in perception, suspend our normal view of reality, and see the world from a different point of view. We have to move from thinking like Osborne, who talks about the economy of enjoyment and frustration, in a society where people more or less accept capitalism as a good way to live, to thinking like Chavez, who talks about the economy of luxury and immiseration, where the situation is more or less intolerable for the majority of people who live on the edge of survival. This is properly sociological.

But making this shift throws up new questions. Why is making money, why is greed, always exploitative? Why can’t I be greedy, have things my own way, and forget about other people. Do I have to hurt other people? Is capitalism really a zero-sum game, where my making money means you must live in poverty? Does capitalism have to divide over enjoyment and frustration and luxury and immiseration? The answer to these related questions sends us back to classical sociology. Karl Marx teaches us that like society, capitalism is a relation, a relation based on unequal exchange and exploitation, and that there can be no real equality under capitalism. If I make money, I make money out of you, and you are exploited. My enjoyment is premised on your frustration and so on.

In light of this recognition one can see that it is perhaps the greatest trick that capitalism has ever played, a trick it has been able to play particularly well over the last thirty years, to conjure the idea that capitalism is fair and that is possible to have some form of equality in capitalist social relations.

In the first phase of industrial capitalism there was little sense that this was a system based on anything but naked exploitation. Hence, the rise of socialism and communism. In the wake of the first great crash in the 1920s, a new form of capitalism emerged based on social responsibility, but the problem with this was that it was honest to its word. The result of this honesty was a contraction of capitalism as a profit producing machine. Hence the rise of the current brand of capitalism based in naked exploitation and the fantasy of reform aimed at producing more equal societies, and a more equal world.

The evidence of this new fantastic brand of capitalism is everywhere. Consider the third way, which suggested that it was possible to have free market profiteering, and a society based in greed, and social welfare, and a fair society. And what about philanthropic capitalists? Contrary capitalist who make enormous amounts of money, only to give a small portion back to the people they exploited in the first place, once they have made their money and secured their position at the top of the economic food chain.

There is no doubt that there is a great deal of fantasy about the new brand of capitalism, but the problem may have been that too many people let the fantasy run away with them and actually bought into the idea of endless enjoyment without exploitative social relations. The problem with the fantasy here is whether it was consciously understood to be a fantasy and was therefore a cynical attempt to deceive people, dampening down their unrest, unhappiness, and frustration, or whether the exponents of the third way actually believed in the fantastic idea of socialistic capitalism.

Regardless of what one thinks about this, it seems that today the idea of endless enjoyment is over, and nobody believes that it is possible to have this, that, and other without paying for it, with the result that we are now entering the so-called age of austerity where we will have to suffer and stop enjoying ourselves. I think that it is likely that the result of this belt-tightening will be the rise of a new form of class consciousness, a new sensitivity to exploitative social relations, similar to that rehearsed by the recent ‘outing’ of the financial sector and bonus culture and MPs and their corrupt expenses culture, and that this will make Chavez’s extra-systemic anti-capitalist message more relevant to those in rich western countries, who have for too long ignored the socialist critique of global capitalism because they simply did not need to bother about the poverty of those in far off places.

It may be the case then that after twenty or thirty years on top Gordon Gekko, the philosopher of capitalism unleashed and desire realised, may be about to give way to Chavez, the champion of public ownership, free health care, and free education, as we are forced to do what Marx told us to do long ago, and good sociologists should always do, question everything, including and especially those things that seem absolutely beyond question, such as the capitalist system itself.

The Credit Crunch or the End of the Capitalist Utopia

By Dr Mark Featherstone

We are currently living through the worst economic crisis the world has seen since the early 1930s. In response to this situation the famous American economist Joseph Stiglitz recently declared the ‘end of neo-liberal capitalism’. Stiglitz explained that the current crisis, signaled by the bursting of the ‘credit bubble’ which has sustained more or less continuous economic growth since the mid 1990s, was a sign of the collapse of the validity of the neo-liberal theory supported by Gordon Brown and George Bush and before them Tony Blair and Bill Clinton.

But what is the significance of the current economic situation for sociologists? What the current economic crisis signals is the end of the idea of endless credit. Over the course of the last ten years we have come to believe that it is normal to ‘buy now, pay later’. But this worldview, encapsulated by the idea of instant enjoyment or what we might call ‘climax culture’, is no longer viable today. The neo-liberal utopia, where we can have whatever we want, even if we have no money to pay for it, is finished. As such, we are currently living through the end of an ideology, the end of a utopian idea which has sustained our lives for the last decade.

But what is, or rather was, neo-liberalism? Unlike liberal theory, which championed individual freedom from excessive social constraint, neo-liberal ideology focused the idea of freedom upon freedom from economic constraint. In other words, neo-liberalism wanted us to be free to make as much money as possible or alternatively fall into absolute poverty. This idea was then related to consumer culture, the idea that personal happiness is found in the consumption of things, and the struggle to make more and more money in order to buy more and more things.

If the pursuit of the utopia of capitalism, characterised by consumer happiness, provided the pull factor to encourage people to try to make it big under capitalism, the possibility of the fall into total poverty, the threat of becoming a resident of the dystopia of the same market society, provided a very urgent push factor. Thus neo-liberal society, realised by Margaret Thatcher and Ronald Reagan in the 1980s, and augmented by Bill Clinton, Tony Blair, George Bush, and Gordon Brown in the 1990s and early 21st century, was characterised by voracious desire, enormous excess, complete precariousness, and a heightened state of fear.

These conditions, desire, excess, precariousness, and fear, which have more or less characterised society since the early 1980s, were largely caused by the neo-liberal refusal to interfere with the economy on the basis of the idea that politics could never really manage economics effectively. The idea that the market should govern itself can be dated back to the 18th century founder of economics, Adam Smith, and the later American economist Milton Friedman, who argued that economic crises were normal and that squeamish politicians should not interfere with the market even when economic fluctuations begin to hurt normal people, because eventually the market will stabilise itself and find a new equilibrium.

Smith’s idea were extremely popular until the early 20th century when the Wall Street Crash and the related rise of Nazism in Germany led most political and social commentators to reach the conclusion that some kind of economic management was necessary to maintain social order and ensure that radical political groups did not come to power on the back of economic crises. Following World War II the idea of the social state dominated Western Society. Although Eastern Europe was controlled by so-called Communists, the capitalism of the west was no longer totally untamed. Instead, it was controlled by the state in order to ensure some sense of social security.

By the late 1970s the Anglo-American elites threw out the idea of the social state in favour of a new idea of pure capitalism on the basis that the working classes held too much power and had begun to interfere with productivity and profit in the major capitalist countries. Thus Margaret Thatcher and Ronald Reagan destroyed the union movements in Britain and America and started to champion the idea of unfettered individualism. The idea of self realisation became the new secular religion of capitalist society. People no longer thought about how they could improve society, but rather spent time trying to achieve personal happiness through consumerism.

The problem with this idea was, of course, that the pursuit of happiness through consumption requires money and not many people had an endless pot of money to pursue personal happiness, which is by definition not something that we can ever really achieve. Hence we witnessed the emergence of the credit society, premised on the idea that we can ‘buy now, pay later’, and the fantasy of endless enjoyment, which was sustained by the fact that nobody worried about the harsh reality of scarcity or the unpopular truth that there is simply not enough money or resource for everybody to consume endlessly.

The convenient by-product of this situation for everybody was that more consumption meant more production which meant more consumption and so on ad nauseam. Hence, we found ourselves locked into a cycle of apparently endless economic growth and began to forget about the essential problem with this situation: the entire edifice was premised on credit that we could only manage if prices were kept artificially low by political interference and we never had to confront the truth of scarcity.

Unfortunately, it is this situation, the harsh truth of scarcity, that confronts us today. The fantasy of endless credit, debt which could be endlessly deferred into some fictional future when we would have to make our repayments, has collapsed before the truth that we do not actually possess the monetary resources our consumption habits require. In other words, the truth that most of us have been living beyond our means for many years has been cruelly exposed by the realisation of scarce raw materials on the global market.

That this situation was, in many respects, fated by planned de-industrialisation in the 1980s, which meant that western nations had to import cheap fuels that have since become extremely expensive, simply confirms that the utopianism of the credit society, built on the belief that we would never have to repay our debts, was supported by another utopian belief, the idea that the world’s raw materials would never become expensive scarce commodities. This fantasy of abundance has been similarly exposed by the contemporary credit crunch.

On an everyday level, what this means is that the enormous rise in the price of food and fuel has caused people who were largely ‘living in credit’ to find themselves unable to keep up their repayments. Thus the credit society has begun to collapse before the truth of scarce raw materials. Consequently, as our ability to manage our credit has collapsed, so lenders have begun to tighten their own belts, consumption has started to fail, with the knock-on effect that the entire economic cycle of western society has begun to stall. But where will this end? What the failure of the credit system is likely to produce, beyond the economic shock waves caused by the fundamental inter-relatedness of the world finance system and a renewed trend towards monopoly capitalism, is even more urgency on the part of nation states to posses the scarce raw materials that form the bedrock of economic value.

We have seen the first example of a major ‘resource war’ in Iraq. I think this trend towards what Karl Marx called ‘primitive accumulation’, that is the attempt to obtain scarce raw materials through violence, is likely to continue over the course of the next fifty years. Given this turn to imperialism, brutalist politics is also likely to become more and more popular with the masses, who are likely to turn on the other, the stranger, in response to their dire economic situation, simply because it is easier to understand economic pain in terms of fantasies about strangers stealing our jobs than it is to fathom the complexities of the world economic system.

We have, of course, seen many examples of the turn to xenophobia in response to economic crises, but reference to the economic situation of early 1930s Europe which perhaps best parallels our current predicament, provides a truly horrifying comparison. We know that the economic crisis of the 1930s eventually led to the rise of Nazism and the Holocaust. We must be aware of the parallel between the 1930s and the contemporary economic crisis today.

It may well be the case, as Joseph Stiglitz suggests, that neo-liberalism and the capitalist utopia is dead, but we really have to keep an eye on the kind of political form that steps into the breach. This is surely why sociology is today more important than ever before. What is sociology if it is not the form of knowledge which enables us to connect our private fears to public understandings in order that we might avoid repeating the terrible mistakes of the past?