Last May, Harvard economic historian Niall Ferguson stepped on a cultural landmine. He joked that sainted liberal economist John Maynard Keynes supported deficit spending because he was gay. Spoken by an “effete” childless homosexual, Keynes’s famous bon mot “In the long run, we are all dead” takes on a special meaning, Ferguson mused. Why not live — and spend — for today?
As I wrote at the time, Ferguson’s mistake was to have missed the fact that the statute of limitations had expired on such observations, never mind that — unfair to Keynes or not — the thought had been utterly mainstream not long before. Conservative intellectual historian Gertrude Himmelfarb and left-wing economic journalist William Greider both speculated similarly. In his 1946 obituary of Keynes, no less than Joseph Schumpeter wrote that Keynes “was childless and his philosophy of life was essentially a short-run philosophy.”
But Schumpeter’s jab, to be fair, wasn’t aimed at homosexuality but at childlessness or, to be more accurate, what he called the “decline in philoprogenitivity” — the desire to have as many kids as God or nature will allow. This desire was deeply tied up in an “extra-rational” worldview of bourgeois morality that, according to Schumpeter, was responsible for the success of capitalism. Capitalism wasn’t born from the discovery of credit, surplus capital, the rule of law, underpants gnomes, or even private property — as various theorists, of varying quality, have surmised. What created capitalism was the sudden social acceptance of the nobility, or at least respectability, of the entrepreneur and the innovator. Starting in the 1700s, writes maverick Schumpeterian economist Deirdre McCloskey, “a great shift occurred in what Alexis de Tocqueville called ‘habits of the mind’ — or more exactly, habits of the lip. People stopped sneering at market innovativeness and other bourgeois virtues.” (The Oxford English Dictionary didn’t even allow a positive sense of “innovation” until well into the 19th century.)
Schumpeter noted that such men were driven by a romantic and heroic — not necessarily a rational — desire to build up, and provide for, a sprawling philoprogenitive home. “Economists have not always given due weight to this fact,” Schumpeter observed. “When we look more closely at their idea of the self-interest of entrepreneurs and capitalists we cannot fail to discover that the results it was supposed to produce are really not at all what one would expect from the rational self-interest of the detached individual or the childless couple who no longer look at the world through the windows of a family home.” The economists assumed Homo economicus was selfish Randian Man, when he was in fact romantic Family Man.
But there’s an ironic catch. Perhaps Schumpeter’s most brilliant insight was to notice how the capitalistic Family Man tended to breed the anti-capitalistic Ungrateful Man (or ungrateful brat, if you prefer). The successful businessman’s children don’t become businessmen; they become lawyers, journalists, poets, social workers, writers, teachers, academics, activists, and the like — in short, the intellectuals. They can do this because education guarantees a nice minimum income. Risk-taking is where the real money is, but risk-taking is by definition risky. Lawyers move out of the house; failed inventors never leave the basement.
Intellectuals are the storytellers of civilization, and in capitalist societies the stories they tell are usually some variant of Balzac’s dictum that “behind every great fortune lies a great crime.” The richer the body politic gets, the more intellectuals it creates, much the same way the human body produces more and more of the bad kind of cholesterol. The result is the same. The arteries harden.
The New Class long ago achieved class-consciousness, recruiting the best and brightest even from the ranks of the poor and disadvantaged, teaching them to reject capitalism for a better way. The fruits of this effort have been well chronicled in these pages and elsewhere: a wave of rent-seeking, cronyism, and corporatism has been unleashed to the point where the greatest profits lie in the manufacture not of things but of laws. “Stakeholders” are rewarded for their subservience to the state by being permitted to circle the wagons against the innovative Huns. A new kind of noblesse oblige holds that we must in effect socialize health care in order to liberate workers from paying jobs so they can become, in the words of Nancy Pelosi, “poets.” And, as the family continues to melt away, the state acts in loco parentis for the Julias left behind.
President Obama is a throwback not so much to Marxism but to the old norm of sneering at innovativeness and the bourgeois virtues. As a politician, he has use for the language of bourgeois dignity but, as a member of the New Class, he has very little passion for it. The passion is reserved for sneering comments like “You didn’t build that.” He recalled his one stint in the private sector as working “behind enemy lines.” His wife is quite fond of boasting how she turned her back on the big money of the private sector, preferring the fairly large money of the public sector. (Again: The New Class takes care of its own.)
The capitalist revolution happened exactly once in human history. On that timeline it is very young indeed. And during its brief time on this earth it has alleviated more poverty than all the systems that ever came before it. The problem, as Friedrich Hayek noted, is that “capitalism depends upon values that it did not create and cannot replace.” The burning question is whether the culture outside of capitalism is capable of replenishing capitalism. If it’s not, then Keynes was right: Live for today, for in the long run we’re all dead.