Capitalism and the United Order – Pt. 1

September 8, 2016    By: Jeff G @ 5:45 pm   Category: Ethics,Happiness,Life,Money and getting gain,Mormon Culture/Practices,Politics

This will be a new series of relatively short posts that will center around Jerry Z. Muller’s lecture series “Thinking About Capitalism” (follow the link for transcripts of the first 18 lectures).   In previous posts, I have strongly recommended his “The Mind and the Market“, and I wish to reiterate that recommendation.  While there is a lot of overlap between the lecture series and the book, I will stick to the former since 1) it breaks things down into manageable, 4,000 word chunks and 2) it doesn’t require anybody to go out and buy a book.  For these and other reasons, I strongly suggest that people read the lectures that I have linked above.

First, a little overview of what to expect.  Muller is an intellectual historian who has a clear but guarded preference for free-market capitalism.  He knows that capitalism is not perfect and is fraught with several dangers and moral costs, but thinks that its benefits justify those costs.  Like most liberals (I will insist upon the European sense of this term while reserving “socialist” for left-wing despisers of the free market), he has a tendency to draw strong connections and parallels between right and left-wing critics of free market liberalism.  While we should be on guard for this, his approach does provide a lot of historical context and continuity to various left-wing criticisms of capitalism.  Now, moving on….

Muller’s first lecture, “Why Think about Capitalism?” is mostly a preview of what is to come.  Nevertheless, he does raise a few questions that address the ambiguous relationship between the united order and capitalism.  If there is any person in the church that hasn’t wondered what differences, if any, exist between communism and the united order, I haven’t met them.  On the one hand, during and after the Cold War quite a few church authorities strongly declared that the united order was grounded in private property.  On the other hand, we read in Acts that the saints had all things in common.  I don’t think it’s unreasonable if this gives us a little bit of confusion.

Perhaps the worse thing we can do when approaching this question is to phrase our options in terms of an either/or.  The united order was quite obviously not the state ownership of the means of production since 1) there wasn’t a very powerful state, let alone one that owned the early church members’ land and 2) there wasn’t really any industrial means of production that could have been nationalized and/or given to the workers.  If these things are what one means by “private property”, then the united order was absolutely compatible with it.

But this does not automatically imply that the united order was fully compatible with capitalism either.  A lot of this has to do with what one means by “capitalism”.  Consider the Muller’s list of economic changes that taken place in the West and see if you can confidently decide which features a capitalist society must have or which are fully compatible with the united order:

  1. The mass increase of overseas trade that was pioneered by the Portuguese, then the Spanish, then the Dutch.
  2. Cottage industry where a household makes a surplus of some good with the aim of selling or trading that surplus at the local or national market.
  3. The financial revolution where national banks created a market for state bonds and low-interest loans.
  4. The consumer revolution where households begin purchasing “luxury goods” that had previously been available only to the relatively well to do.
  5. The industrial revolution where factories based in a strong division of wage labor mass produced goods for the purpose of trading them within the larger, international market.
  6. The invention of limited liability corporations, where ownership extends far beyond a single person or family thus diversifying liabilities and minimizing loses of each investor.
  7. The bureaucratic revolution where a salaried management becomes something totally separate from ownership.

And so on….  The point is that “capitalism” is not a simple or uniform practice, and we should not expect an unambiguous answer to the question, “Is the united order compatible with capitalism?”  This is especially the case since the united order was implemented within a historical context in which many of the practices and institutions above simply did not exist yet.

That said, Muller does focus on three features that he (and I) will take to define capitalism:

  1. Private property that excludes the moral, traditional or legal appropriation of property against the owners will after the manner of fiefdoms.
  2. Exchange between legally free individuals through contracts, wages and prices rather than centralized redistribution or collectivist provision.
  3. Production and distribution is operate primarily through the market mechanism, rather than being geared toward household subsistence.

Such a definition suggests that the united order was not at all compatible with capitalism.

Before addressing the incompatibilities, I will deal with that aspect that the united order absolutely did endorse: private property.  In order to understand what private property was, it is important to understand what it arose in opposition to.  Traditionally, all land was owned by the King who granted land to nobles while retaining ownership rights.  In other words, the King retained the right to re-appropriate this land at will to his own purposes.  This same relationship basically held all the way down the great chain of being.  Private property said that from nobles all the way down to peasants, the owner of some property did not stand in any continuing moral dependence or obligation to their lord.  The united order to absolutely compatible with this…. Although we will complicate this picture in later posts.

Let’s skip to (3).  Production and distribution within the united order were clearly not done “primarily” through the market mechanism.  The united order functioned much more like a large, collective of households – ideally tending toward one, collective household – in which at least 90% of what a household consumed was produced by and within the household itself.  Yes, some things were bought and sold within a very limited market, but this is not the defining feature of capitalism.

Now for (2), which is the most difficult to answer in any definitive sense.  The starting point should be an understanding the difference between exchange and reciprocity.  Within smaller, tribal communities, different people produce or gather various forms of subsistence for the entire group.  This process is regulated by moral condemnation and social status.  Thus, such societies are very much structured around charity and gift giving.  As these groups grew over time, they introduced a form of centralized redistribution where goods flow into a centralized, governing power who then distributed these goods along traditional and morally enforced lines.  (The bishop’s storehouse is a partial example of this.) The main point is that neither of these types of groups are structured around exchange.  Communists love this point since it shows that the supposedly “timeless and universal” laws of modern, free-market economics are nothing of the sort.  The united order agrees with the communists’ criticism, but totally rejects their solution, but I’m getting ahead of myself.

While the above mentioned societies are structured around reciprocal charity rather than self-interested exchange, they almost always did engage in self-interested exchange with outsiders.  The easiest way to understand this is the difference between the goods and service we provide for our spouse, children, siblings and parents vs those that we provide to complete strangers.  The traditional “household” was a larger version of this familial relationship that included several families that lived within the same “oikos” (oikos is the Greek word for “house” and is the origin of the word “economics”).  Civic republicanism, as advocated by the Ancient Greeks, sought to extend these same reciprocal relationships – to some extent – to the entire polis (this being the obious root of the word “politics”).

It is in this same sense that the Deuteronomy says that usury should never be charged to a brother, but only to outsiders.  Communism takes this point to the extreme by suggesting that we extend this reciprocal relationship to the entire world, thus abolishing exchange altogether!  Whereas most moralities have sought to either reinforce or perhaps expand the boundary between reciprocity and exchange, capitalism seeks to shrink this boundary, if possible, all the way to the individual.  It is in this sense that the united order is a rejection of (2): it seeks to – at minimum – preserve relations of reciprocal charity and gift giving within Zion.

That said, the united order most definitely did endorse the “freedom” of labor such that a person was not legally bound to any guild or occupation within or without the united order.  The legal freedom that communists often dismiss as “merely formal” played an integral part within the united order.

In summary and conclusion, the united order absolutely did accept private property and in this sense cannot be conflated with communism.  It also accepted the importance of formally free labor in which no person is legally bound to some profession or land.  It did not, however, seek to structure Zion along the lines of self-interested exchange – this rejection is pretty much its defining feature.  Finally, as a matter of historical fact, it did not orient production to the market either.

 

15 Comments »

  1. I assume the purpose of understanding the distinctions between the United Order and capitalism and communism is not to understand the United Order. It is to try and pass judgement on capitalism or communism. If the United Order is God’s “official” or ideal economic system, then capitalism and communism can be judged based on how closely they come to that ideal. Is that your basic objective?

    But when trying to pass judgement, should we also take into account that the fact that the United Order was a dismal failure, communism was a catastrophic failure, and capitalism was a resounding success? Even if the United Order was some sort of divinely authorised ecclesiastical attempt to live like the ancient apostles, does this mean that it necessarily has any sort of intrinsic spiritual value? Or could God have just let the Mormons try it out just to see what miserable selfish wretches we were? Does a failed doctrine of a past prophet have any bearing on how we should judge things today?

    Comment by Nate — September 10, 2016 @ 5:09 am

  2. “not to understand the United Order. It is to try and pass judgement on capitalism or communism.”

    Not really. My goal is much more aimed at understanding than advocacy – specifically gaining some distance from our taken for granted, capitalist sensibilities in order to understand the united order better.

    A useful way of understanding my approach would be in terms of W&T’s patron saint: Jonathan Haidt. His work has had a huge influence on my thinking, but the problem is that his approach is so limited. He presents different political orientations as if they were merely interesting correlations and tendencies… and that’s it. He gives no attention whatsoever to the history of these political orientations, the means by which they reproduce themselves over time, how they have evolved in order to defend themselves against their competitors, what types of social organization to which they were/are adapted, and so on. In the end, he plays it far too safe by limiting his approach to his own field of expertise – social psychology – thus leaving his approach all too shallow. This series will be aimed at providing a bit more history, sociology, philosophy and economics to the political differences that Haidt tracks.

    “the fact that the United Order was a dismal failure, communism was a catastrophic failure, and capitalism was a resounding success?”

    A resounding success by what standards? If you merely mean that it beat out its competitors, then you’re right… but that doesn’t mean all that much. The only reason why liberal capitalism survived WW2 is because it aligned itself with communism in order to defeat the fascist threat. Had they not formed this alliance, I have very little faith that capitalism would be the “resounding success” it appears to be today.

    “Even if the United Order was some sort of divinely authorised ecclesiastical attempt to live like the ancient apostles, does this mean that it necessarily has any sort of intrinsic spiritual value”

    No, it doesn’t. But a very large portion of modern day revelation deals with or presupposes it, so it would be very nice to understand its relationship to the capitalism that came afterwards.

    Given how inclined the bloggernacle in general is to “looking over the fence” to other religious traditions in order to gain some critical distance from our own religious beliefs, it would be very strange indeed if they weren’t willing to do the same with regard to their own socio-economic beliefs.

    Comment by Jeff G — September 10, 2016 @ 8:34 am

  3. I will say, however, that capitalism has brought more people out of poverty than anything else, ever. This is huge by anybody’s standard.

    The problem is that we have been taught by that system to think that this is the most important, if only only thing that matters. 1) It is quite obvious that survival and material well-being are not the only things that matter, and 2) most societies until very recently didn’t even accept that they were the most important things.

    Hopefully these posts will help us understand these other perspectives and standards.

    Edit: The opening to Geoffrey Miller’s book Spent provides an interesting contrast that helps us appreciate a few of the trade-offs that capitalism entails. This doesn’t mean that any of us would like to go back to the premodern way of life, since our whiggish preferences have themselves been shaped by modernity. It does mean, however, that many premodern would not want to jump forward to our time either:

    “Consider the average Cro-Magnon of thirty thousand years ago.She is a healthy thirty- year- old mother of three, living in a close- knitclan of family and friends. She works only twenty hours a week gatheringorganic fruits and vegetables and flirting with guys who willgive her free- range meat. She spends most of her day gossiping withfriends, breast- feeding her newest baby, and watching her kids playwith their cousins. Most evenings she enjoys storytelling, grooming,dancing, drumming, and singing with people she knows, likes, andtrusts. Although she is only averagely intelligent, attractive, and interesting,most of her clan mates are too, so they get along just fine. Herboyfriend is also only average, but they often have great sex, sincemales have evolved wonderful new forms of foreplay: conversation,humor, creativity, and kindness. (About once a month, she hooks upsecretly with her enigmatic lover, Serge, who has eleven confirmedNeanderthal kills, but whose touch is like warm rain on Alpine flowers.)Every morning she wakes gently to the sun rising over the sixthousand acres of verdant French Riviera coast that her clan holds. Itrejuvenates her. Since the mortality rate is very low after infancy, shecan look forward to another forty years of life, during which she willgrow ever more valued as a woman of wisdom and status.

    “Now consider the average American worker in the twenty- first century.She is a single thirty- year- old cashier, who drives a Ford Focusand lives in Rochester. She is averagely intelligent (IQ 100), havinggotten Cs in a few classes before dropping out of the local communitycollege. She now has this job in retail, working forty hours a week atthe Piercing Pagoda in EastView Mall, fifty miles from her parentsand siblings. She is just averagely attractive and interesting, so she hasa few friends, but no steady boyfriend. She has to take Ortho Tri-Cyclen pills to avoid getting pregnant from her tipsy sexual encounterswith strangers who rarely return her phone calls. Her emotional stabilityis only average, and because Rochester is dark all winter, she takesProzac to avoid suicidal despair. Every evening she watches TV alone.Every night she fantasizes about being loved by Johnny Depp andbeing friends with Gwen Stefani. Every morning she awakens to thealarm clock next to the fake Chinese rubber plant in her six- hundredsquare-foot apartment. It wears her out. Thanks to modern medicine,she can look forward to another forty- five years of life, during whichshe will become ever less valued as an obsolete health- care burden. Atleast she has an iPod.”

    Comment by Jeff G — September 10, 2016 @ 9:02 am

  4. I enjoyed the Geoffrey Miller thought experiment. If happiness or contentment are the standards by which we judge the success of a particular economic system, it is clear that the “more is more” philosophy of unbridled capitalism is not very successful. There is however a statistic that I think reveals a lot: in America, a person who makes 50K a year is about as happy as a person who makes 5million a year. But a person who makes 50K a year is MUCH happier than a person who makes 25K a year. So there is a law of diminishing returns at work in capitalism.

    At the same time, a thriving middle class is dependent upon a thriving upper class, if you believe in trickle down economics.

    Comment by Nate — September 11, 2016 @ 12:04 pm

  5. Yes, but a person with $15k in a society where the average is $25k is happier than a person with $20k in a society where the average is $75k.

    While both Muller and I are, for the most part, on board with capitalism, I do want to show that the benefits are balanced against SOME costs as well.

    Comment by Jeff G — September 11, 2016 @ 5:11 pm

  6. Agreed, there are “some” costs for sure. Just out of curiosity, when judging the virtue of these various economic philosophies, how much do you use “by their fruits ye shall know them” as a measuring rod?

    If the Law of Consecration was authorised by divinely appointed prophets, that certainly gives it some spiritual cache´. But what if it bears no fruit? And if capitalism seems to capitalise on some of mankind’s baser instincts, and yet bears such extraordinary fruit, what sort of legitimacy should it have in the eyes of someone who seeks to judge things from God’s perspective?

    Comment by Nate — September 12, 2016 @ 4:46 am

  7. “By their fruits” is, contextually, a way to judge whether prophets are truly from God or not. It’s not a way to judge economic philosophies.

    There are many reasons why capitalism thrives in a telestial world that has nothing to do with its eternal merits. The Law of Consecration is built upon a foundation of people who are capable of “being one,” of being exalted.

    Like democracy, capitalism is merely the best we can do under present circumstances.

    Comment by SilverRain — September 12, 2016 @ 7:40 am

  8. While the united order had private property it handled it in a different way from capitalism. I’d add that there wasn’t a United Order but quite a few different experiments in living the principle (most of which failed) The united order in many ways is more like a cooperative and many of those are still going.

    It seems to me that within capitalism there’s more than enough room for cooperatives and so forth. Indeed typically the cooperatives need capitalism outside of their borders to be successful.

    An interesting case of seeing this are groups who still live by cooperative or communal economic programs within their communities. (Most but not all of these started around the time of Joseph Smith, typically all tied to early Anabaptist groups) Much like at least some of the experiments doing by Joseph Smith or Brigham Young these were very poor agrarian communities. Some of the non-agrarian united order attempts are more interesting though.

    The main problem with such groups is that most people don’t want to live at an Amish level of poverty.

    Comment by Clark — September 12, 2016 @ 8:03 am

  9. Jeff (2) “The only reason why liberal capitalism survived WW2 is because it aligned itself with communism in order to defeat the fascist threat. Had they not formed this alliance, I have very little faith that capitalism would be the “resounding success” it appears to be today.”

    I don’t know enough about Hitler’s economic proposals to say much there. My sense, perhaps incorrect, is that while the fascists weren’t open market they didn’t tend to want the widespread control of the means of production that socialists do. (It’s interesting that with the recent rebounding of socialism controlling the means of production isn’t a focus anymore)

    In either case I think war is a special case. The bigger issue is just in meeting economic needs. Even in countries with lots of natural resources communism hasn’t led to the economic gains other countries have.

    However to perhaps agree with the points you made, in the 1920’s through 1950’s typically the main capitalist governments made huge reforms moving towards many socialist demands. In some cases this significantly hurt the economy (Britain before Thatcher’s reforms) but while most countries like Britain or the Scandanavian countries went too far in the aftermath of WWII during the 80’s and 90’s most moved back towards capitalism and became quite successful.

    How much this “neoliberal correction” is still capitalism is debatable. It does seem clear that if one goes too far past the neoliberal consensus that problems soon pop up. However 2008 showed that even the neoliberal consensus has problems as well although people debate the reasons. (Some say it’s actually due to governments tending to rescue banks and other financial institutions rather than letting them go under; others say it’s too much integration; while others say it’s neoliberalism itself that’s the problem)

    My own biases probably are apparent in all this. However if we view success as being able to do research and then implement the gains as technological products that capitalism is essential. On the other hand the Amish and other Anabaptist groups show that perhaps that’s not everyone’s goal.

    Comment by Clark — September 12, 2016 @ 8:12 am

  10. Nate,

    Again, my goal will largely be expositional in purpose. I want people to understand objections and alternatives to capitalism so that they can 1) gain some critical distance from our current mindset, and 2) be able to have been engagement with the detractors of capitalism – whether these detractors are SJWs or dead prophets in the scriptures. How poignant a criticism of capitalism is will largely be left to discussion in the comments.

    Clark,

    I’ve been thinking something very similar. I would be very interested to see a comparison between the united order(s) and the first attempts at socialism in the early 19th century be Robert Owen, Charles Fourier, etc. Unfortunately, my understanding of these communities is very shallow.

    “My sense, perhaps incorrect, is that while the fascists weren’t open market they didn’t tend to want the widespread control of the means of production that socialists do.”

    This is roughly right. The Germans were the first to invent large scale bureaucratic organizations in which ownership was separated from management. This process alienated most petite bourgeoisie, artisans and lower middle class people in general – the very demographics that would most strongly support the rise of National Socialism. This political movement supported the nationalisation of all major, bureaucratized industries, the self sufficiency of the national economy, and a high standard of living for every German family. These included significant amounts of vacation time for every family and the ownership of a car to take those vacations in – thus leading to the inventions of the Volkswagen (the people’s car) and the autobahn.

    Were it not for their psychotic racism, and expansionist policies, this particular alternative to the free, international market could have been a viable alternative to capitalism…. The problem is that expansionism and racism were inseparably built into these economic policies (the connection between Jews and capitalism, Jews and Communism and expansion for the sake of Lebensraum and economic nationalism will all be addressed).

    It is the tight connection between cultural elements like this and capitalism that this series will try to explore.

    Comment by Jeff G — September 12, 2016 @ 8:49 am

  11. What you describe doesn’t sound much different from the so-called neoliberal consensus now operative in much of northern Europe including Germany beyond perhaps more nationalization. What was the nature of nationalization as that does sound a lot like socialist controlling the means of production. (Look at say Britain in the post war era after Churchill lost control of the government to Labor)

    Comment by Clark — September 12, 2016 @ 12:11 pm

  12. Well, it depends on what one means by “neoliberalism”. If we are talking about a Hayekian approach, then his model was quite explicitly opposed to National Socialism – they having too much in common, he thought, with Marxism. Of course, the Communists thought that both Democratic Socialists and National Socialists were toeing the capitalist line, but the similarities that they perceived weren’t totally off either. The national socialists were for business, but not big-business.

    The main point is that all utilities and major industries were nationalized and extremely high tariffs were imposed on international trade… which is exactly why they “needed” Lebensraum in the east – for the sake national economic self-sufficiency. Adam Smith thought that interantional, free trade was the path to enriching the Volk, so to speak, and the National Socialists absolutely denied this. International trade, not only did not enrich the Volk (it only enriched international investors and largely Jewish run banks), but destroyed the national unity and particular culture as well.

    If one takes Marxism and replaces “proletariat” with “Volk” and “economic base” with “genetics”, we get a pretty good outline of what the National Socialists were going for. They thought the difference between owners and workers was totally beside the point and class antagonism on either side of the divide was dealt with quite swiftly and harshly. What matters is that people were German. They wanted to place economics, not under collective ownership, but toward a higher, more spiritual end.

    Another way of approaching the issue is that the National Socialists saw capitalist individualism and communism and two side of same overly-economized and over-judaized coin. Economic interests in general, both bourgeois and proletarian, were the enemy.

    Comment by Jeff G — September 12, 2016 @ 12:34 pm

  13. Yes, in some ways “neoliberal” is a pejorative term without a lot of meaning. In other ways it means a strong embrace of the market while still providing a strong safety net and certain services for all. How those are provided differ. (One need only compare Germany, Canada, and the US to see significant differences) Typically though it characterizes an embrace of the market in a fashion the far left finds distasteful.

    As I said I’m surprisingly ignorant of German economics prior to WWII. If we’re throwing out counterfactuals one would have to wonder how National Socialism would have changed had they not made the fateful (and ultimately decisive) choice of attacking Russia. I suspect they could have made peace and ended up not that different from what happened in Britain only to see it become necessary to refine that after a few decades.

    Comment by Clark — September 12, 2016 @ 12:56 pm

  14. “it means a strong embrace of the market while still providing a strong safety net and certain services for all.”

    I this only sounds right in one keeps things at a very vague level. Neoliberalism is very much committed to each person having the change to make their own way, with certain safety nets in place in case we fail or risks down turn out well. National Socialism was against all of this. They saw the market as a means to a higher and shared/ascribed end: the Nation. Thus, the social services were not “safety nets” or some kind of back up in case your pursuit of your own, self-interested plans do not go well, but mechanisms and institutions of empowerment for the German people.

    Think of Hegel’s idea of the role that state institutions are to play by way of integrating family and market relations in one national whole. This was an imporant precursor. Petite bourgeoisie, artisans and farmers thought that their way of live was the German way of life that was being eroded by big, international business and profiteering in general. This theme had echoed through German society every since Napoleon came trouncing through the country. (It is also worth pointing out that Marx did not become a socialist until after he had move to Paris. Until then, we was a relatively run of the mill left-Hegelian.)

    Anyways, I’ll stop rambling on this topic, since it will be addressed much more directly in later posts.

    Comment by Jeff G — September 12, 2016 @ 1:10 pm

  15. Well as used the few decades neoliberal is a pretty vague term. LOL.

    Comment by Clark — September 12, 2016 @ 1:26 pm

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