First Principles March 2006

Capitalism: The Movie

Why Americans don’t value markets enough—and why that matters

Capitalism is not much loved, even in the parts of the world it has served best. If only one country were to dote on free enterprise, America surely ought to be it. With world-beating companies, breast-beating CEOs, a timid political Left, dwindling and unpopular labor unions, and extreme prosperity (by international standards), one might expect the prevailing climate of opinion to be ardently pro-capitalist. But no. American enterprise has its spokesmen, brasher than most, just as it has its critics, as fierce as any. In the main, however, when intelligent Americans with no axes to grind contemplate the market economy, they are neither angry nor adoring, just wary and distrustful. It was ever thus.

Seen a movie lately? Watched television or read a newspaper? The culture that speaks to Americans, and hence to the Western world, radiates suspicion of free enterprise—cordial and restrained, as a rule, but dubious nonetheless. Yes, the system does work, says this culture, and there appears to be no alternative. But what a shame this is, it continues, because capitalism rewards our worst and most selfish instincts. “Greed is good” may stock the shelves, but is somewhat less than inspiring.

Popular culture understands that the market economy creates material prosperity, albeit for some more than others. It seeks out and worships business celebrities. But at the same time it sees the system as spiritually—and politically—corrupting. As viewed from Hollywood, workers are usually downtrodden, bosses are usually grasping, consumers are usually gulled, and shadowy global finance is always calling the geopolitical shots. We manage to prosper, most of us, but this system of ours is not very noble.

What is most striking, so far as the movies’ treatment of capitalism goes, is not the hostility of films whose main purpose is actually to indict corporate wickedness (Wall Street, Erin Brockovich, A Civil Action, The Insider, The Constant Gardener, and so forth). It is the idea of routine, reckless corporate immorality—maintained as though this premise were inoffensive, uncontroversial, and hardly worthy of comment—that drives movies whose principal interest lies elsewhere, whether in the human drama of contemporary geopolitics (Syriana, to cite a recent instance), knockabout comedy (Fun with Dick & Jane), children’s fantasy (Charlie and the Chocolate Factory), star-crossed romance (In Good Company), or, classically, in some dystopian near or distant future (Alien, The Terminator, Blade Runner, Robocop, and many others).

The point is not that such movies, or the culture more generally, argue that capitalism is evil. Just the opposite: it is that they so often merely assume, innocently and expecting to arouse no skepticism, that capitalism is evil.

In this, of course, the culture is not really driving attitudes. It is expressing widely held (though not very closely examined) beliefs; it is itself responding to demand. And disenchantment with commerce goes back an awfully long way. Samuel Johnson was already confronting an age-old tradition 250 years ago when he said, “There are few ways in which a man can be more innocently employed than in getting money.” So was Adam Smith, shortly after, when he wrote, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Smith was not praising selfishness, by the way; he did not believe that greed is good. He was explaining how commerce can spontaneously harness a base worldly instinct to an enlightened social purpose—an idea that people, one Industrial Revolution later, still find implausible.

Capitalism is prey to excesses, self-evidently, and it creates, or leaves unattended, a host of problems that decent societies must address by other means. Even so, the prevailing culture of suspicion and disappointment is at odds with the facts. Mainly, what is missing is awe. Premodern scholars (Karl Marx is an exception) could scarcely have imagined the material advance that capitalism has delivered. Certainly Adam Smith never dreamed that his “invisible hand” would arrange things so well.

In the late 1980s, as Mikhail Gorbachev embarked on his perestroika program of economic reform, Soviet officials were sent abroad to see how things were done in the West. One visited London’s main vegetable market. He asked how the market was organized, and how prices were set. He was told that the individual traders bought whatever quantities they wished, and set their own prices, and that these fluctuated throughout the day as the balance of supply and demand changed. At this, the Soviet visitor laughed. He said he understood that this was the official line—but, please, how did the market really set prices?

That, in fact, was the reaction of an intelligent man. It is fantastically improbable that markets work, at scale, as well as they do. It is astonishing that in an economy of America’s size—to say nothing of the world economy as a whole—a limitless variety of goods and services is continuously offered at prices people are willing to pay, without persistent gluts or shortages, entirely without central direction. That the system also calls forth an endless flow of innovation and improvement is a miracle. The man from Moscow was right to be incredulous.

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