What contemporary capitalism needs to learn from fairy tales

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Six years after the collapse of Lehman Brothers and the start of the 2008 recession, David Bosworth takes a closer look at its moral origins. Photo by Flickr user Scott Cawley.

Six years after the collapse of Lehman Brothers and the start of the 2008 recession, David Bosworth takes a closer look at its moral origins. Photo by Flickr user Scott Cawley.

Editor’s Note: Six years ago this month, the financial world was unraveling. On Sept. 15, Lehman Brothers filed for Chapter 11 bankruptcy, and employees soon learned they no longer had jobs. The U.S. would go on to lose 432,000 jobs that month. But the financial crisis of 2008 didn’t just start with some risky lending and greed on Wall Street; its origins stretch deeper into the trenches of American society, writes David Bosworth, the author of “The Demise of Virtue in Virtual America: The Moral Origins of the Great Recession,” published this month. Bosworth teaches in the department of English at the University of Washington in Seattle. In the following post adapted from his book, he traces the Great Recession to what he sees as contemporary capitalism’s corrupting power on America’s civic and moral fabric. In other words, the crisis, and today’s persistent economic inequality, Bosworth contends, has been a long time coming in Virtual America.

— Simone Pathe, Making Sen$e Editor


Earlier this year, after the publication of Thomas Piketty’s “Capital in the Twenty-First Century,” a milder version of the fury spurred by our economic system’s gross injustices finally migrated from the tents of populist activists into the blogs of the chattering classes. The surge in financial inequality that Piketty enumerated is a truly worrisome phenomenon worthy of debate. But, as Ross Douthat has suggested, the emphasis on a strictly monetary measure of contemporary capitalism’s social dangers masks the full range and depth of its destructive impact on our civic character.

“The financial meltdown of 2008 was, at its core, a moral catastrophe.”

To a degree that communism never could, consumer capitalism does produce the goods, even if it distributes them unevenly and often unfairly. Yet, contrary to the Pollyanna theory that has justified 35 years of economic policy, it in no way naturally produces the Good.

As most religions have preached and fairy tales warned, unchecked self-interest — whether in the form of self-liberation for the individual or deregulation for the corporation — is not a plausible route to enlightened behavior. Rather than fidelity to family and community, it leads to dissension, dissolution and addictive consumption; instead of animating a meritocratic marketplace, it produces lobbied loopholes, golden parachutes and stifling monopolies. Disdaining plain speaking in favor of the fog of expertise, it crafts the fine print of “toxic assets.” Fathers fleeing their children for a second bachelorhood and companies deserting their countries for tax-free havens are the unacknowledged ethical twins of our time. As intellectual cult leaders of the 20th century, Wilhelm Reich, the psychoanalyst who promoted sexual permissiveness, and Ayn Rand, the philosopher who thought individualism so important that she called altruism evil, had a lot in common.

“Fathers fleeing their children for a second bachelorhood and companies deserting their countries for tax-free havens are the unacknowledged ethical twins of our time.”

I’m rare among analysts in stressing this, but the financial meltdown of 2008 was, at its core, a moral catastrophe, and one generated by decades of systemic deceit and self-deception whose history I trace in “The Demise of Virtue in Virtual America: The Moral Origins of the Great Recession.” Although our nation’s geographical coordinates are essentially the same as they were in 1946, we are now living in a dramatically different place, our days increasingly enclosed within a physical and digital architecture of windowless malls, office cubicles, and online virtual realities. And because nearly all the domains of this new Virtual America have been ceded to corporate control, the places where we gather, like the shows we stream, are not only “brought to us by” but also for their commercial sponsors.

So it is that the virtues narrowly associated with production and consumption — ruthless efficiency in the workplace and seductive salesmanship in the marketplace — have now suffused American life, co-opting alike the themes of our narratives, the planks of our parties, the practice of medicine, the profession of art, and the most intimate aspects of our personal lives, including our beliefs about God, marriage and childcare. Under this moral regime, the civic center has been replaced by the enclosed mall and the Olympics reduced to a global trade fair. The charitable “volunteer” at your door is just another salesman working on commission, taking 30 percent of each donation toward saving the whales, while the shoes, shirts, and hats that we wear have been hijacked to serve as corporate billboards.

Worse, our storehouse of memories is also overstocked with the logos of commerce. Where poems, parables, and patriotic songs once whispered in our ears to steer us through our lives, we now hear and heed the adman’s jingles and the banal maxims of management gurus. Following their lead, honesty gives way to salesmanship, generosity is reconceived as productivity, heroes are replaced by celebrities, and faith is reduced to “prosperity theology.”

“The charitable ‘volunteer’ at your door is just another salesman working on commission, taking 30 percent of each donation toward saving the whales, while the shoes, shirts, and hats that we wear have been hijacked to serve as corporate billboards.”

Our everyday language reflects this widespread conversion to corporate values. These days, people “shop” for a church; universities work at polishing their “brands,” and, heeding the demands of corporate philanthropists, school principals are recast as “CEOs.” Even those who wish to reform the system are trapped in its tropes, worrying aloud about our rapid depletion of “social capital.” As our promiscuous use of the summary cliché “the bottom line” proves, most evaluations these days, sacred or profane, have become a subspecies of financial accounting. But virtues are not “social capital” and, despite the existential delusion recently re-endorsed by our Supreme Court, the corporation is not a person. It is instead a highly efficient money machine, self-excused by its charter from most of the duties that natively attend good citizenship.

When designing our democracy, the founders focused on prohibiting the two institutional enemies of freedom that they knew best, a centralized church and a monarchical state. Although uncommonly prudent for revolutionary thinkers, they never fully imagined, and so didn’t “check and balance,” the potential threat posed by the modern corporation, the character of whose internal governance — strictly rationalized methods serving narrowly materialistic ends — was neither Judeo-Christian nor democratic in nature. Consequently, the primary ethical challenge to the American experiment other than slavery has been whether the obvious productivity of these essentially amoral money machines — unimagined and so unrestrained by our Constitution — can be yoked to serve the same democratic purposes and Judeo-Christian values that they internally refuse. Not just the subprime scandal that led to the Great Recession but also the broader monetizing of our artistic, scientific, and religious practices highlights our current failure to pass that test.

The ongoing submission of our everyday lives to the ways, means, and ruling ideals of radical capitalism is a grievous error, and one that cannot be amended by a mere technical fix to our financial system. As a precedent to more substantial reforms, we must begin instead by acknowledging some hard truths about this Virtual America that has become our all-enclosing house even as it sheds the duties and delights of a communal home.

“The primary ethical challenge to the American experiment other than slavery has been whether the obvious productivity of these essentially amoral money machines — unimagined and so unrestrained by our Constitution — can be yoked to serve the same democratic purposes and Judeo-Christian values that they internally refuse.”

First, a nation cannot license a set of inherently amoral money machines to run its work spaces, public gathering places, and primary media for telecommunications and then expect the behavior of its people to remain morally sound. The core civic contention of the privatization movement — that ethical behavior is a kind of epiphenomenon of rationalized greed; that inside a fully marketized society, self-interest will, routinely, become enlightened — is a disingenuous delusion. As the housing bubble’s astonishing scale of fraud and folly proved, it is a con game that we have played on ourselves, the particular way that (to cite Hamlet) “reason panders will” in an American accent.

Second, in a digital age, when messages invade every social niche and private space, a telecommunications system whose ruling intention is to promote acquisition will eventually produce an overly acquisitive population.

Third, when the profit motive prevails, when more money matters most, extreme efficiency at work and consumption at home will be pursued without consideration of the collateral social, psychological, and political damages that may result, for such damages no longer “compute.”

Finally, insomuch as human beings are not machines, nor merely the sum of their physical appetites, the unbridled pursuit of efficiency and avidity on behalf of more money is not a ruling purpose worthy of our obedience, nor one conducive to cultural or psychological coherence, and no society (democratic or otherwise) can long survive its conversion to such dehumanizing lies. Charged with justifying the unbidden gift of consciousness in what sometimes seems but a blink of time, a successful life is both richer and harder than the bottom line can ever measure.

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