Global Financial Crisis 2008 – Article No 14
by Humphrey McQueen
Greed
The Right-wing Reverend Rudd has been preaching against “extreme capitalism” and its driving force “greed”.
This time last year, the cherub was singing from a different hymn sheet. Then, it was, “Get real. This is the twenty-first century”. Rudd aimed that profundity at workers calling for industrial action beyond individual enterprises and during only bargaining periods. Rudd accused them of living in the past when strikes might have been justified because capital was still predatory. That era had passed: “Get real. This is the twenty-first century.”
At the time, Crikey carried my catalogue of what else Rudd would have to throw out to get real in this brave new world. First to go would be the Eighteenth-century Adam Smith, followed by the Nineteenth-century joint-stock company and its successor in the corporation; next in line for the chop were its twentieth-century restructures into multi-divisional and multi-national conglomerates. You could not get more extreme in your anti-capitalism.
Does it matter if Rudd is a worse theologian than an economist? Perhaps, because there is an economy but there is no god. The choirboy’s brain is like a flypaper for discredited bourgeois excuses. He presumes that good capitalism is built on restraint, with profit as the reward for abstinence.
To this fairytale he attaches the pretence that “profiteers” were the naughty profit-takers, distinct from those stuck with average rates. (This fallacy is dissected in ‘Don’t pick on bankers” and The market for futures”.)
The current crisis is not the outcome of greed any more than greed embodies “extreme capitalism”. If anything, the reverse is true. Extreme capitalism is when capitalists outlay as little as possible on their own wants. Marx identified a Faustian dilemma between the desires of individual capitalists for conspicuous consumption and the need of aggregate capital for expanded reproduction.
The capitalists can either squander all their profits on champagne and jewels, or they can reinvest the profits they have appropriated from their workers so as to extract even greater profits from their labour power, and on it grows. If capitalists spend up, they cease to personify capital. If they reinvest, they drive capital to its extremes of expropriation and monopolising.
In short, greed disrupts accumulation. It is neither extreme nor temperate capitalism. It need not be capitalism at all. Of course, capital produces needs in workers in order to realise profits from the sale of the products embodying their labour power. That drive to satisfy the needs of capital by stimulating debt is at the heart of the current crisis. (For the Rev. Clive Hamilton’s version of “greed” as the root of all evil see the attached review of his Affluenza.)
By focusing on ethical flaws, Rudd is fiddling with the conventional ignorance about a Protestant ethic’s giving birth to capitalism. That view is attributed to the German sociologist Max Weber (1864–1920). Although the proletariat terrified Weber, he was too intelligent and honest to pretend that the class struggle wasn’t happening. He was also too well informed to believe that capitalism could thrive on an idea. On the contrary, he saw that the Protestant ethic had flourished only because peasants had been subjected to labour discipline, what he described as “a long and arduous process of education.” That indoctrination followed the students being freed from the burden of a patch of land from which they could live without becoming wage-slaves.
Rudd didn’t understand capitalism a year ago and he doesn’t understand its illogic any better now. What he knew then, and knows more keenly now, is that he has to protect real existing capitalism from itself. As the personification of the bourgeois state, he is paid to organise capital and to disorganise labour. To those ends, he and his ilk will go to any extreme.
Next: To be a dinosaur