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Jedediah Purdy: Being America
There's some sleight of hand here: note the casual equivalency of "global capitalism" and "markets" and "market society," which works to obscure the very real differences between real global capitalists and the idealized free entrepreneurs of Smith's market society. More generally, this obscures the basic fact that unfettered markets are more often than not opposed by real capitalists. (Look in every business plan for the section on "barriers to competition"; while competition may be a sacred principle of capitalism, it's hard to find any real capitalists who don't seek to undermine their competitors.) But first, let's start out with the second sentence, which anthropomorphizes markets, transforming them into actors instead of the more conventional use of the word, more akin to the stage. "Markets produce wealth": it's hard to construct a sentence this simple that misses the boat so many ways. Let's start with "wealth": what is that? Roughly speaking, it's the accretion and consolidation of value; i.e., it's value that persists over time (that is not immediately consumed). Where does value come from? For all intents and purposes, value comes from labor. (This is what Marx called "the labor theory of value," and while that was not an original idea, it is the absolute basis for the whole of Marx's economic thought.) This isn't to deny that raw materials and energy have value (although you can also think of them as potential value: value that requires some addition of labor to realize), or that capital is usually needed to realize value. But the first thing that the sentence hides is labor, which is the first thing that you have to have: wealth comes from labor, not from capital and not from markets. And from this basic fact many things derive, including the contributions of equality and liberty and freedom, because those are attributes that encourage people to produce greater value through their labor. (There are, of course, other systems which also compel labor and thereby produce value and wealth -- slavery is the classic example -- but it should be clear by now that free labor outproduces them, just as that free access to markets more effectively distributes the goods and services produced by free labor.) Since markets don't produce wealth -- indeed, don't produce anything -- just what are markets? Well, a market is a system of distribution through exchange. The market doesn't act; it's merely a stage on which people act, in the roles of sellers and buyers. Or more abstractly (markets need not be physical), it is the context in which exchange acts take place. There are lots of things that can be said about markets, but I want to just mention two here. The first is that access to markets rewards overproduction. If there were no markets, the only reason for labor would be self-sufficiency, and there would be no need to produce anything that cannot be self-consumed. But most goods and services can in fact be produced more efficiently in bulk, and since access to a market makes it possible to exchange excess production for other useful things, it generally becomes advantageous to produce more than is needed for self-sufficiency, up to the market's limit to consume. This in turn leads to differentiation, division of labor, etc., which generally make labor more efficient and productive, which leads ultimately to a surfeit of value and wealth. This is why markets facilitate the development of wealth, but it is fundamentally wrong to say that they produce it. The second point is that there are real differences between the sort of ideal markets that Adam Smith was so enamored with and what we actually see in real markets. In particular, ideal markets are distinguished by the buyers and sellers having perfect information about the goods and services being offered for sale, and that the exchanges are politically unfettered. Markets which approximate the ideal are often described as being "free markets," and the measure of how free a market is may be how closely it approximates the ideal. The big advantage that free markets have over less-than-free markets is that they more efficiently transfer value from seller to buyer. (Note that price and value are often independent attributes here; one way to measure the inefficiency of less-than-free markets is to note the variation between price and value, although since value is so abstract, variability of price irrespective of demand is another indicator). We can think of markets functioning in terms we borrow from physics, including resistance (the loss of power due to friction), inertia, and entropy. The other two parts of the second sentence are also flawed in various ways, beyond the obvious anthropomorphic faults. "Markets . . . disrupt settled customs" -- he probably means pervasive changes, such as the opening of markets that were closed or shuttered before. "Markets . . . pry open the barred gates of hierarchical societies" -- in this case, the opening of markets changes the balance of power within a society, in effect becoming a political weapon. In both of these cases, we are not talking about intrinsic properties of markets so much as specific historical effects of coercively opening certain markets in societies that have not had time to adjust to them constructively. That the opening of markets can be viewed as a political weapon is something that has been overwhelmingly established by now: England's war to force the Chinese to open their domestic market for opium is perhaps the classic case example here. This, by the way, puts the emphasis in the first sentence not on "freedom" but on "triumph." Indeed, there are many examples where capitalists have flourished with very little in the way of freedom: pre-WWI Germany is a classic example, pre-WWII Japan another, cold war Korea a third, and it looks much like contemporary China is/will be another. Note that I used the word "capitalists" in the previous sentence instead of "capitalism." If in theory capitalism is wed to freedom, in actual practice capitalists have always tried to consolidate their gains (Marx's concept of "surplus value") as power, which almost always opposes freedom. Global capitalism may or may not be a triumph of freedom here, but freedom is perhaps the last thing it holds in store for the rest of the world. Purdy then backpeddles a bit in the following paragraph:
It's easy enough to recognize much of what he talks about here, but it's hard to ascribe them even metaphorically to markets. In this guise, a market is nothing more than a front, vouchsafed by our most exalted economists, for extending the power of the capitalist rich, with little or no regard to the consequences. If Marx were still alive today, I have no doubt that he'd see right through this as class war. That Purdy cannot see something so clear leaves him seriously confused, and consequently makes the book much less useful than what is needed. Funny thing is that I've spent the last 20+ years shying away from any sort of Marxian analysis: as early as the time when I was conceiving of my never-to-be-written Secret Agents book I had written Marx off as a hopelessly archaic bourgeois remnant. Still, when guys like Purdy throw out the labor theory of value, or indeed the very notion of class, and treat history just as a big pile of news, they're not moving beyond the antiquated ideas of the past: they haven't even caught up to them. As I write this, I've only managed to get to page 232 of Purdy's book, and it's due for return to the library. Glancing ahead, I notice the bibliography, which looks to be worth reading. I also ran across another more explicit Marx-related quote (p. 296):
I stopped before it started getting stupid again. ("The free market also produces factory towns that, although they offer better lives than those in some Cambodian and Indian villages, are defined by desperation and vulnerability.") But as far as I went, this isn't terrible. Certainly, Marx expected capitalism's contradictions to do it in, whereas in fact it mostly escaped revolution by moderating itself, and by extending rights to most/all people beyond the ranks of the capitalists. And Marx may have overrated the power of economics (e.g., personal and class interests) to direct human behavior: clearly the pursuit and defense of power for its own sake has had a marked effect on human history, often in defiance of economic reason. But a more interesting argument is that capitalism harbors more fundamental contradictions that have had (and will continue to have) more profound effects: in particular, that the principles and freedoms of the bourgeois revolutions form a long-term check on all powers (including the capitalists) that in the long run moderate and equalize its behavior, and that the enormous increases in productivity generated in free and equitable societies will eventually lead to the marginalization of economics as the dominant fact of human life. Walter Benjamin once wrote that Baudellaire was a secret agent -- an agent of the bourgeoisie's secret discontent with its own rule. The point of my unwritten book was that Marx and his whole cadre of followers were secret agents too -- agents of unfulfilled bourgeois desires. As history rolls on, as things change, the specific forms and arguments of such agents fade into irrelevance, which is largely what has happened to Marx. Purdy is another such secret agent: a guy who's very much a part of his time and country and class and who has enjoyed the many benefits his upbringing has offered him, yet still he feels a sense in which his wonderful world has to keep changing in order to better secure what's wonderful about it. posted 2003-06-11 |
I've been trying to read Jedediah Purdy's Being America: Liberty,
Commerce, and Violence in an American World (2003, Alfred A. Knopf).
It's basically a defense of liberalism, and it scores its best points
in arguing that liberalism is the best thing that the U.S. has going
for it in the world, and that illiberalism in U.S. policy works against
that advantage. Still, I've never had much truck with liberalism, so
if that's the best Purdy has to offer I can't say it amounts to much,
other than confusion. The best things in the book are the little vignettes
of Purdy's travels in the outer world (Egypt, India, Indonesia, China --
although the latter chapter is rather fussy). Most of what they show is
confusion as well: mixed feelings over America's ubiquitous civil culture,
and apprehensions over America's imperial visage. But Purdy doesn't make
much out of what he discovers, and if anything throws his hands up when
faced with such a big old complicated mess of a world. The problem, I
think, is that he doesn't begin to understand economics. And I suspect
that the reason here is that he's so young that he just reflexively
rejected anything remotely Marxian without bothering to learn a thing
from it. While it's true that most lefties have reduced Marx to a few
overly simplistic anti-imperialist platitudes, Purdy just throws the
baby out with the bathwater. Consider this quote: