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Untitled Document
Humanity And The Antinomies Of Capital
Dr. Akmal Hussain
Newspaper: The Daily Times
Dated: Thursday, October 09, 2003

In last week’s article I had proposed that the difficulties being encountered in achieving international agreements on a framework for international trade and environmental conservation, are rooted in a paradox within the prevailing international order: The existence of a globalized economy across nation states and the absence of a sense of global human responsibility between nation states. At the very moment when the advanced industrial countries are propounding the way free trade can achieve human welfare, and how it can be sustained through environmental conservation, they are attempting to establish international rules that would benefit the few at the expense of the many.

It can be argued that if we were to seriously examine the proposal of Professor Stiglitz to pursue regulated markets, social justice and democracy on a global scale, we would come up against three constraints, which characterize the contemporary world:

  1. Economic activity in capitalism is mobilized primarily for the continuous expansion of capital rather than the fulfillment of social needs.
  2. Within the contemporary market culture, human welfare is synonymous with a continuous increase in the volume and range of consumption. Moreover the pursuit of individual welfare, which is conducted within nation states, does not consider the needs of individuals in other nation states.
  3. Every state seeks to primarily enhance its power and the economic living standards of its citizens, with scant regard for the welfare of other nations. Humanity rarely informs the conduct of state power in a world of unequal nation states.

I will argue in this article that overcoming these constraints to the achievement of the laudable objectives set out by Professor Stiglitz, (DT, Sept. 28) is not simply a question of changing the policy of the present U.S. government (as he appears to believe), but essentially the emergence of a new, truly humane consciousness, that can form the basis of global market regulation as well as inter-state behaviour.

Let us now briefly examine the imperatives of capital that lie at the heart of the problems being faced in regulating global markets for social justice and environmental conservation. What is capital? It is not quite the same thing as wealth. As Robert Heilbroner (in his book, 21st Century Capitalism) has shown, wealth was an aspect of ancient civilizations such as the Egyptians, the Incas, the Mayans, the rulers of India and China, who accumulated vast treasures of gold. They built splendid monuments to the dead and magnificent palaces for the living. Yet such wealth never became a force for continual economic expansion and social change as it did under capitalism. When wealth (usually money) is invested in the production of commodities for profit, which results in the expansion of the invested amount, then it becomes capital. It is its continual re-investment and expansion through the mobilization of labour, technology and natural resources, which distinguishes capital from wealth. The expansion of capital involves the systematic application of science for increasing productivity, which imparts to capital its unique dynamism, and the associated rapid social and political changes observed over the last three centuries. As Paul Kennedy has shown, by the eighteenth century, when states became aware that economic growth could become the basis of expanding state power, they became systematically involved in creating the conditions for the expansion of national capital. At the same time, it can be argued, the separation of religion from state, the freedom to pursue scientific knowledge without the constraints of national ideology, the decline in the relative power of traditional elites, and the emergence of democratic institutions, were all facilitating factors in the expansion of capital. Equally important for the process of economic growth within the market mechanism, were the establishment of institutions for high quality education and research, tolerance, reason and the rule of law.

What was the historical process that transformed medieval Europe and led to the pre-eminence of capital by the nineteenth century, in the conduct of economic, social and political life? It can be traced back to the time when the Roman Empire began to fall in the 5th century A.D., a cataclysmic event that stretched over four centuries. So long as the Roman Empire was intact its social and economic institutions precluded the emergence of capitalism. Its fall left Europe without law, or an integrated economy, and disintegrated a centralized state into a large number of feudal fiefdoms with localized state power. Yet it was precisely this disintegration that provided fertile ground for the emergence of capitalism. By the 9th century (four hundred years after the fall of Rome began) small caravans of merchants loaded with the produce of old Roman workshops, and accompanied by retinues of armed guards, began to traverse the vast low lands of a lawless Europe, moving from one manorial estate to the other.

Gradually these merchants began to settle in small towns near the feudal estates, to finance the budget deficits of the feudal economy and sell the needed goods. Over the next four hundred years the merchants in the expanding “burg” (urban) life began to acquire not only economic but political power. Their trade and finance were essential for the conduct of the feudal economies. Yet these “burghers” were subversive to feudal society, because they engendered new values such as thrift, the idea that hard work can lead to an improvement in economic status and the view that respect is determined not necessarily by birth but can be achieved through earned income, savings and investment. The values of the feudal order by contrast were based on the idea that ostentation is the emblem of superior status, that social status and wealth is determined by the superiority of birth. Therefore hard work was to be looked down upon, since it was a hallmark of the “inferior classes”.

By the end of the sixteenth century the burghers or the bourgeoisie as they came to be known, became the dominant political class in England. Such was the dynamism of the emerging capitalist order that by the end of the eighteenth century the bourgeoisie acquired political power in France and by the nineteenth century they were the dominant political force in the world. The process of continuous reinvestment of capital, and the continuous growth of productivity through the systematic application of science to industry led to a historically unprecedented growth of economic and military power of the industrializing countries. The industrial revolution and the further expansion of capital in the nineteenth century involved the establishment of colonial empires from where the extraction of resources fuelled industrial growth in Europe. This was the first globalization of the world economy. At that stage in the development of capitalism, the contention between national capitals, pitted the industrializing countries against each other. This conflict brought in its wake two world wars in the first half of the twentieth century. By the late twentieth century the multi nationalization of capital and the revolution in information technology led to the second economic globalization. This new globalization has occurred at a time when after three hundred years of continuous expansion, production has begun to undermine the life support systems of the planet. At the same time poverty in the underdeveloped countries has reached a scale, which threatens the viability of the international institutions which seek stability of the global economy.

The unprecedented degree of economic interdependence at a global level has made the global economy and its financial system far more vulnerable to exogenous shocks than in the nineteenth century. Therefore the world economy for its stable functioning requires a regulatory framework for global production and trade. International agreements on such a regulatory framework are necessary, so that production is consistent with conservation of the natural environment, and can enable trade without disturbing the fragile system of international finance and production. However the challenge is that the sustainability of capitalism in this new epoch requires us to bring to bear our humanity in the conduct of state power as well as in the individual’s ‘pursuit of happiness’.

The activation of human consciousness means the awareness that sociality (not merely the ego) is a vital aspect of the individual self. The aesthetic experience, which informs the human pursuit of truth and beauty, implies a harmony with nature. Therefore the nurturing of our own nature, as well as nature, is integral to the pursuit of individual happiness. Such a human consciousness would involve a new relationship between human beings, commodities and nature. What we may be witnessing is not the “end of history” (as Fukuyama proposes) but rather, a new beginning.

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