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Sunday, February 1, 1987

A Reviewers Notebook: The Capitalist Revolution

In his The Capitalist Revolution: Fifty Propositions About Prosperity, Equality and Liberty (New York: Basic Books, 262 pp., $17.95), sociologist Peter Berger provides his own synoptic review in five pages of his chapter ten. Since the “fifty propositions” are in themselves often redundant, it points to a deficiency in the Berger method of presentation.

Berger has a tendency to labor his analyses. But the good things in his book are practically innumerable. So what if his Proposition One (that “industrial capitalism has generated the greatest productive power in human history”) is practically the same as his Proposition Five (that “advanced industrial capitalism has generated, and continues to generate, the highest standard of living for large masses of people in human history”)? Berger’s intention here is to link the past and future tenses of a general proposition, which is certainly helpful, even though the bit about the “large masses” is implicit in Proposition One. As Isabel Paterson once said, “Standard Oil didn’t produce kerosene to pour it down the sink.”

Berger’s method is relentlessly empirical. He claims that he has no a priori intention of disparaging socialism or any of its “mixed economy” variations that are more socialistic than capitalistic. What he wants to do is to study the movements of men in making their livings. If the empirical evidence is that men do better for themselves in the aggregate under conditions of freedom, then so be it.

The Berger method reminds me of my wife’s exposition of Doris Humphrey’s modern dance technique, which is to study the natural movement of people (“walking, running, jumping”) to overcome the forces of gravity. Humphrey spoke of the “arc between two deaths,” meaning that life—and the dance—consists of avoiding total immobility at one extreme and a frenzy of unsustainable motion at the other. It was “fall and recovery” with Humphrey.

To keep the human body in condition to live in Isaac Newton’s gravity-bound world, man has to provide himself with food, clothing, and shelter. So what is more natural than to appropriate raw materials from nature to fill one’s stomach and put a roof over one’s head? The act of appropriation from nature creates private property. Freedom of exchange follows when one has appropriated more than is necessary for simple existence. This is Robinson Crusoe economics. Though men have departed from it for periods of time in which human predators intervene, insisting at spear point or gunpoint that individuals ask permission for access to the fruits of the earth, the natural tendency of human beings to revert to private ownership and free exchange reasserts itself.

Berger explains the simplicities of natural movement very well. He also does well with the complications that come with the development of modern technology. These may have introduced a sharp increase in income and wealth distribution that favored a few people at the outset of the industrial revolution, but when the Napoleonic wars were over and world trade resumed (with Scandinavian lumber moving into Britain for houses) there was a sharp decline in inequalities.

It is at this point that Berger introduces the concept of “modernization.” What the capitalist countries had developed could, with import help, be imitated by socialist and Third World societies. It could also pay, in taxes and inflationary money issues, for an increasing amount of welfare at home. (The complication here is that welfare “transfers” dampen the willingness of the producing members of society to work.)

Berger does not deny that socialism “works” after a fashion. But it is dependent on importing the results of the “bourgeois” cultural components of “activism, rational innovativeness, and self- discipline.”

British Individualism

In his byplay Berger introduces several other concepts than the one of “modernization.” The English of pre- and post-Magna Carta times were feudalists, taking title to their lands from a Plantagenet king, but they were “individualists,” too. They could afford to be because they were separated from continental Europe by water which made invasions difficult. (William the Conqueror, the last man to get away with an invasion of Britain, had considerable luck on his side.)

The individualism of the British set the stage for the “glorious revolution” of 1688, the year in which John Locke codified the natural rights of men to life, liberty, and property, meanwhile asserting that property originated in the “mixing” of one’s labor with the offerings of nature.

Berger is especially interested in what he calls “a second case.” This is the development of capitalism in East Asia after World War II. The East Asian “case,” he says, “disconfirms” the old thesis that early economic growth under modern capitalism must “necessarily” increase income inequality. The East Asian case has also “falsified” the thesis that “a high degree of state intervention is incompatible with successful capitalist development.” What Berger seems to be saying here is that the Japanese decided to go capitalist by edict. He gets himself out of some hot water by adding that “the values of individual autonomy are undermining East Asian communalism.”

Socialism still has a mythic appeal, particularly to so-called intellectuals who want to be part of a permission-granting elite. Schumpeter thought this might do capitalism in. But it isn’t working out that way. The “neo-capitalists” among the intellectuals are increasing night and day.

  • John Chamberlain (1903-1995) was an American journalist, business and economic historian, and author of number of works including The Roots of Capitalism (1959). Chamberlain also served as a founding editor of The Freeman magazine.