March 2014
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Capitalism and Causation

by Jonathan Wallace

I had some trouble picking a title for this essay. I started with "Elephants in the Room", considered "The Official Narrative and the Things We Don't Say" and passed by "Capitalism and Responsibility". I picked this present title, "Capitalism and Causation", because it seemed punchiest, in part because most specific, and also, as a sort of corrollary, because it dealt with the substantive (what we don't talk about) rather than the procedural (the phenomenon of not talking).

We rarely talk about capitalism and causation, and a major part of the reason is that we rarely talk about capitalism. When was the last time you heard anyone say the word "capitalism" at the dinner table? At most American family gatherings or groups of friends, it would be considered rude, infringing a basic rule of brainless etiquette, never to talk about politics. I recently found an entertaining collection of etiquette rules for children, which included the unforgettable number 6: "Nobody cares what you dislike". This is a rule adults apply to conversation also.

If you think about it, one of the reasons the word "capitalism" is disfavored in America is that it has become overly identified with the far left, with Karl Marx in particular. Only a lefty would routinely use the word "capitalism" in conversation, right? Try saying a relatively neutral sentence using the word in company you don't really know well and you will get yourself pegged as a suspicious leftist even if the other words of the sentence were completely unobjectionable.

There exists one other group of people who might use the word in conversation: Wall Street types using it defiantly, as a transgressive word. It was in this sense that Forbes business magazine used to run an ad, and for all I know still does, calling itself "Forbes: capitalist tool". But if you were to say at a dinner conversation "Forbes Magazine is a capitalist tool", many of the people present would assume you were a wild eyed radical.

Perhaps "capitalist" has become a word reserved for certain uses, like "Communist" or "socialist"? I have written about the fact that "socialist" in American discourse has come to mean nothing more than "I don't like you", and that most of the people tagged with that label don't come anywhere near starting to commence to begin to believe that the workers should own the means of production (our centrist president Barack Obama, whose Justice Department has refrained from prosecuting any capitalists for mortgage fraud, being an excellent example).

Our American political vocabulary has mainly been captured and defined by the right, in the last fifty years or so. That's why the word "liberal", which growing up in the sixties I thought had an easygoing, pleasant connotation, is so frequently accepted as a word of extreme vituperation, to the point where most mildly left-leaning people don't like to refer to themselves as "liberal" any more. So if "capitalism" is not used in conversation, its probably because the right has ruled it out of the vocabulary as an impolite word of difficult connotations, leaving a few people ready to declare defiantly "I am proud to be a capitalist", the same way that a few people might say,equally transgressively, "I'm proud to be a gangster".

A lot of the time, when we rule a word out of bounds, its because we prefer a synonym we find more genteel. My whole life, I have been very used to hearing it said that someone is Jewish, but if I hear "He's a Jew", alarm bells start sounding. Of course, in politics especially, we try to win dialectical battles by picking words; witness the opposition of "right to choose" vs. "right to life" when abortion is the topic. But what is the substitute word for "capitalist"?

There isn't one, really. We might say "businessman" or reference "Wall Street". But then, in my opinion, we are not quite using a synonym. The best analogy I can come up with is if I wanted to tell you something about the status of the people who lead armies, but couldn't use the word "general". It doesn't matter, for the purpose of this thought experiment, whether I am trying to communicate that they are all corrupt and stupid, or unusually honest, intelligent and good-looking. If the word "general" is ruled out of bounds, I might say "soldier", but then I am forced to generalize about a much huger class of people than I intended. If I am forced to identify them by the location from which they are commanded, and say "Washington", I have just been vaguer still. Yet these are the equivalents of refering to "business" or "Wall Street".

Put another way, I would typically use "capitalists" in conversation to designate the people who run the system, much as I would say "generals" if talking about the people who run the army. "Bankers" or "CEO's" is also not a true equivalent. "Capitalists" is one word I could use as a category-word that would include the CEO's of Citibank, Google, General Motors, huge consulting firms, and venture firms, and probably also the president of the Fed. There really is not another convenient category-word which would capture all these people in one sentence, without a lot of explanation.

The reason we don't use this word is because, in the Official Narrative, we usually don't like to remember that these people exist. Not as a category. If we recognize them as such, we might spend a little more time thinking about what they might do acting as a group. When they cross our radar screens, it tends to be in a very specific and particularized way, as "Citigroup CEO Michael Corbat" or " billionaire Donald Trump", in a story about an official Citibank statement or a gossip item about behavior in a restaurant.

Something you may never have thought about is the meaning, the deep semiotics, of your local daily newspaper having a "business" section. It doesn't after all have a "war" section or a "Mafia" section; reporting about the fatal detonation of an improvised explosive device in an Afghanistan roadway, or the arrest of an aging Mafioso for a murder thirty years ago, would go in the news section. The existence of a business section actually means that your local daily paper has a dual, and contradictory function, as a source of general news and as a trade publication for business people. Yes, you and I may read the business section to acquire some information about what business is doing, but is there any question that the section is largely a safe place for businesses to report earnings, tout new products and services, and buy full page ads bragging about their social responsibility? The word "capitalism" is very rarely used in the business pages, which do not exist to specialize in investigative reporting on mortgage fraud, predatory pricing, monopoly, pollution, contracts of adhesion or any of the other venial sins or glitches for which capitalism has been criticized. The New York Times business section from that point of view is morally only slightly superior to Guns and Ammo magazine, in which you are unlikely ever to read that a particular weapon has become the most popular for drive by shootings or that its design has no other purpose than to permit the user to kill as many humans as possible in the shortest time. Businesses have to cross a very severely drawn line, set very far towards the edges of civilized behavior, in order to warrant an article reporting negative or critical information. The papers mainly restrict themselves to telling us when a company has been sued by the Justice Department, or has filed for bankruptcy, while rarely reporting beforehand on the behavior or misadventures that got the company to that crisis.

A very specific example of the invisibility of capitalism in the New York Times occurred during the height of the Occupy Wall Street protests, when the paper did something uniquely shameful and staged a news event, a "dialog" between an Occupier (naturally an unemployed barefoot man wearing multi-colored tights) and a denizen of Wall Street. The latter, rather than being Michael Corbat or Donald Trump, was a struggling young middle class broker, with a wife and several children living in a modest Queens neighborhood--as if he was the "1%" against whom Occupy organized its demonstrations.

The existence of capitalists of course contradicts the "invisible hand" narrative of the Libertarians, who at this late date still argue with a straight face that all market effects are produced by the decisions and actions worldwide of millions of small business folk and consumers acting in rough equality, and never as a result of the intentional manipulations of small numbers of people with large numbers of dollars. What is so remarkable about all of this is the bizarre and counter-intuitive result that the people whose existence is unreported have become emboldened to behave more badly in public, while still cloaking themselves in the Official Narrative of their invisibility, like Oz wandering out from behind the curtain. I could easily come up with three hundred pages of examples, but will give just the first one that comes to mind: hedge fund billionaire William Ackman, who is openly using the government as a club to crush Herbalife, because he made a one billion dollar investment shorting their stock. OK, here's a second example: the two right wing Supreme Court justices, Scalia and Thomas, who openly appear at billionaire Koch Brothers events where the sole topic of discussion is how to crush the left and ensure the permanent victory in America of the Koch Brothers agenda.

This leads inexorably to the second part of my title, "causation". Many times over the twenty years I have published the Spectacle, I have written of the decline of the concept of responsibility in our society, from the self confident and highly moral perception of President Truman that "the buck stops here" to the careful and self exculpatory phrasing of President Reagan when he said of Iran-Contra that "mistakes were made". More recently, I have noted the casual and convinced behavior of capitalists such as Rupert Murdoch that anything bad which happens on their watch, such as phone hacking, is the fault of subordinates, as if responsibility did not travel upwards in a hierarchy.

This is actually a throw back to the bad old days of the British or French monarchies, when the Official Narrative said that the king could do no wrong and that anything bad which happened was the fault of his ministers. Its a truism even in the business schools that authority and reponsibility are conjoined, that authority without responsibility is extremely dangerous (think Stalin, Napoleon, Hitler) and that responsibility without authority is a terrible prison. Yet we seem to be creating an exception for the extremely wealthy (or really confirming one which has always existed) that they can do whatever the fuck they please, without any possibility that anyone, armies or governments, will be able to interfere. I remember a tall, powerful teenager at Midwood High School, nicknamed Zeus, of whom even the teachers were frightened: when he punched me one day, the teacher who witnessed it merely warned me against provoking him. In the 1980's, as a young lawyer I took on a law suit against a famous attorney, and was personally warned by the judge, "Do you really want to go up against this guy? He has a lot of pull at the bar association". If you're still not buying it, shoot me an email; I am looking to hire someone to act as publisher of a weekly newsletter called "Koch Watch", reporting on the activities of the Koch Brothers. That wouldn't make you nervous, right?

Because it would be very shameful (in what we still insist on regarding as a democracy), to admit that billionaires can act with impunity, we commit another sin of illogic, so that we don't even have to have that conversation. We simply ignore the concept that certain human events have a cause. I am a reasonably intelligent person, yet it took until I was in my forties to figure out that bubbles and slumps are not the exception on "Wall Street", but the rule: the stock world is really just a succession of bubbles and slumps. In my lifetime alone, we had the 1980's savings and loan thing, then the 1990's Internet bubble, then the mortgage bubble right on its heels, and now we are clearly working on Internet Bubble #2. Its obvious, and yet I was so intellectually sluggish, as you are probably too, because the press, in fact the entire zeitgeist, speaks of the collapse of Wall Street bubbles as if they were natural events like thunderstorms or earthquakes, just disasters that mysteriously come out of nowhere rather than being caused by reckless, greedy humans making unconscionable gambles. A few of them lose their own shirts (Lehman Brothers) and the rest become richer, but it shouldn't matter: if we really saw them, we could push back and regulate their behavior in order to protect ourselves (I lost about thirty to forty percent of my net worth in 2008 even though I didn't have a mortgage and hadn't invested in anything which I knew to be anywhere near the mortgage-backed security or derivative marketplace). But if its all just weather, then we are all just passive victims of torrents and landslides, wandering helplessly around in the ruins, unable to do anything to protect ourselves. Which leads me back to my new favorite quote, which everyone thinks is from The Usual Suspects but which I found in a prose poem of Baudelaire's from 1864: "the most beautiful trick the devil ever played, was to persuade you that he does not exist."