Two cheers for capitalism, despite its inherent vulnerability

As part of its recent Capitalist Manifesto series, the National Post had several of its columnists identify 10 essential books on the topic. The selections included offerings from Milton Friedman, Friedrich Hayek, Deirdre McCloskey and Matt Ridley, all of whom are worth reading.

But I was struck by an omission.

Published in 1978, Irving Kristol’s Two Cheers for Capitalism created a bit of a stir in its day.

There was a period when Kristol – dubbed the intellectual godfather of neo-conservatism – was considered one of the most consequential public intellectuals in North America.

Kristol was born in 1920 to Yiddish-speaking immigrant parents. To quote from one biographical note, he “followed what was then the standard educational path of clever New York boys from poor families. He attended City College, where he was drawn into one of the famous cafeteria alcoves of argument. He belonged to the Trotskyist group of Alcove No. One, whose fiercest competitors were the Stalinists of Alcove No. Two.”

However, Kristol’s youthful flirtation with communism didn’t persist beyond his early 20s. In a journalism career that involved wearing many hats – writer, editor and magazine founder – his political orientation began to drift rightwards. It was a process accentuated by the ideological turbulence of the 1960s.

Kristol didn’t invent the term neo-conservative. Rather than being an assertive self-declaration, it was coined as a pejorative by his critics.

But Kristol did embrace the term. Rhetorically effective phraseology being one of his talents, he characterized a neo-conservative as a liberal who’d been “mugged by reality.”

The “neo” prefix also had the advantage of distinguishing his perspective from those strands of American conservatism that were still fighting the political wars of the 1930s. Unlike some on the right, Kristol had no interest in repealing the version of the welfare state created under Franklin D. Roosevelt’s presidency.

In principle, he saw no inherent conflict between a welfare state and conservatism. What mattered was the form the welfare state took.

Conservative politics shouldn’t seek to abolish social insurance schemes for old age, unemployment, disability and health care. Instead, it should aim to shape them in a manner consistent with conservative values, emphasizing considerations like personal responsibility, stable families and long-term sustainability. And it should focus on “satisfactory human results, not humane intentions.”

Two Cheers for Capitalism is essentially a collection of columns and essays originally published between 1970 and 1977. Thus it doesn’t have the seamlessness you’d expect from a work conceived as a single whole.

Much of it also deals with hot-button issues of the day, many of which are still with us in the 21st century. Topics like equality, corporate profits, inflation and social justice get a workout. Although his data is now dated, Kristol’s analyses illustrate a logical, skeptical mind. You may not agree with him, but you’d be hard-pressed to consider him a fool or ill-informed.

There’s also an insight that was new to me when I read the book 40 or so years ago. Kristol puts his finger on capitalism’s inherent vulnerability.

Compared to other socio-economic systems – historical or current – capitalism has an enviable track record in a couple of key respects.

First, it’s superior at delivering the tangible goods. Whether measured by material living standards or longevity, the broad mass of people in modern capitalist societies have a much better life than others. Our ancestors would find our material circumstances mindboggling and the flow of people wishing to migrate to the Western capitalist world speaks for itself.

Second, capitalism “is peculiarly congenial to a large measure of personal liberty.” Kristol doesn’t claim that capitalism is identical to personal liberty or a sufficient condition for it. Just that it seems to be a necessary condition.

But these virtues notwithstanding, capitalism makes no attempt to address the ostensibly bigger issues. It has “no transcendental dimension.” It leaves you to seek the meaning of life elsewhere.

And traditional religion, which once provided that missing dimension, no longer does so for many. That leaves some people psychologically adrift in search of something bigger than themselves. So when secular religions – Marxism being an example – come along, the lure of the utopian dream can fill the void.

In comparison, capitalism seems prosaic and uninspiring. All it does is deliver relative prosperity and facilitate personal liberty.

Troy Media columnist Pat Murphy casts a history buff’s eye at the goings-on in our world. Never cynical – well, perhaps a little bit. For interview requests, click here.

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