In defense of the capitalist economy against theories of “left-liberal illusions”

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To the supporters of this point of view, an era is taking place in which Protagor’s principle “man is the measure of all things” gets the possibility of systemic embodiment and the era of real humanism begins. The quintessence of this point of view is as follows – “The world turns to the left – towards a person. A fundamentally new, egocentric or, which is the same thing, sociocentric reality is being formed. Its meaning is that a person is not mediated (it has always been so), but directly and immediately becomes a real system-forming “center of perspective”. The logic of economic determinism inherent in the realities of industrial capitalism is becoming a thing of the past. ”

Something similar was said in their time by popular people of the early 20th century – the international left revolutionary Leon Trotsky and the British philosopher Bertrand Russell. The latter asserted – “The existing capitalist system is doomed. Its injustice is so striking that only ignorance and tradition make the wage earners tolerate it. Perhaps, under the influence of America, the capitalist system will last fifty years, but it will gradually weaken and will never return the positions it held in the 19th century. Trying to support it is a waste of energy that can be used to build something new. ”

But, as we can see, nearly a thousand years of world capitalist development (if we count capitalism from the first Burgs of Flanders and the city-states of Italy in the XII-XIII centuries), this prophecy survived safely. While the socialist experiment in the Russian Empire, which began in 1917, ceased to exist just 74 years later, dragging away many millions of human lives along the way.

The economic system – capitalism – is under attack, within which the industrial revolution took place in Britain in the 19th century, and which radically changed the face of the world for the better. According to the Lindy effect, the longer a technology has been around, the longer it can hold out in the future. I believe this effect extends to social innovation and technology. The Lindy Effect suggests that the moment we are in is the middle of the lifetime of a given technology. Capitalism is a social practice, in a sense, a technology of economic activity that people have generated in a free evolutionary process, and which has existed for at least 700 years. It is doubtful that, like this, at once, in the foreseeable future, he ceased to exist.

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There are also many critics of capitalism and inequality among contemporary authorities. This includes the Nobel laureate Joseph Stiglitz, who since the crisis of 2008 has been preaching center-left capitalism (calls it “progressive capitalism”), emphasizing the containment of globalization and the movement towards economic equality, strongly criticizing liberal capitalism in general. This is the French economist, author of the bestselling Capital of the XXI Century, Tom Piketty, who opposes the concentration of wealth and financial capital (his book is an upgrade of Capital by Karl Marx). This is the University of Chicago professor Luigi Zingales, the author of the popular book “Capitalism for the People”, the title of which speaks for itself, advocating pressure on business to reduce inequality in the welfare of people.

Paul Graham, one of the world’s best programmers and an efficient venture capitalist, writes in an essay that further drift to the left and the elimination of economic inequality in the world can deprive the innovation process of the necessary driving forces. What we now take for granted in technological development is in fact in no small measure a function of human greed. Graham argues that the people who are needed for tech startups must be prepared, above all, to bear heightened market risks. And they are ready to carry them exclusively in an effort to get rich. Let’s remember one of the greatest entrepreneurs in the world, Christopher Columbus, who petty bargaining for his trading share, if the expedition to America was successful, with the Spanish monarchs Ferdinand and Isabella!

Man is so evolutionarily arranged in reality, and not in words. Paul Graham argues in his essay Inequality and Risk that the pursuit of income inequality is “the water that pours into the mill of technological progress.” He writes: “Reducing economic inequality means taking money away from the rich. If the risk and reward are equivalent, reducing the reward will automatically temper the willingness to take risks. Startups are inherently risky. Without expecting an appropriate risk reward, founders will not invest their time in a startup. Founders are irreplaceable. Therefore, by eliminating economic inequality, you will eliminate startups. ”

“Left” development in the USSR showed that countries without economic inequality are not able to systematically develop original technological products, but are only able to clone some of those that were produced within the framework of the capitalist system by successful risky entrepreneurs. One of the prominent Soviet economic planners even said that after the triumph of the world revolution, at least one capitalist state must be preserved in order for it to develop technological innovations. Having destroyed the existing system of technological entrepreneurship, which is an integral part of the technological development of mankind, we will return to the era of pre-capitalist development with its meager growth rates and stagnation in the quality of life. However, who would now want to return to the pace of economic progress, say, X-XII centuries AD?

As long as a person is born naturally from a woman, it is unlikely that before the era of transhumanism (if it comes at all, of course) we will see a humanity in which everyone is equal. Today, people are genetically unequal, unequal due to the education they receive, and it is unlikely that the onset of property equality will force people to do something worthwhile in the economy, despite all the beautiful words of Leon Trotsky, Daniel Bell and Anthony Giddens, which, by the way, in the case Trotsky, were completely at odds with the case. It should be remembered what he dreamed about – about “labor armies”! Those who know firsthand about the organization of the technological process in the modern era should be horrified by this. And we know about the labor armies in Kampuchea and the activities of Pol Pot.

Capitalism is always blamed for its selfishness and ruthlessness towards those who stumbled in the race to survive. Yes, it is, capitalism is ruthless to those who have lost the competition. But not everyone understands the fact that this quality is precisely the very main factor of prosperity, thanks to which mankind in such a short time by historical standards (only 200 years!) Was able to achieve such unprecedented technological progress in history. When the unnecessary, ineffective, obsolete are discarded. And, for example, for the first people to master the skills of just trading, as the British scientific journalist Nicholas Wade writes, it took 50,000 (!!!) years. Feel the difference, as they say! Who is ready to wait so long for positive changes? Especially after we became so impatient in anticipation of the social transformations we need, and we were taught to this by none other than modern capitalism. But we do not notice the positive in capitalism, but we clearly see mainly its vices. And as Paul Graham warns (and should he know, as one of the most influential technological innovators in the world) – we, having abandoned the individual inequality on which capitalism is based, and choosing a “dematerialized sociocentric economy”, are ready to throw out the child with water – that is, the technologies we need!

After putting at the forefront of a person with some incomprehensible social ideas of equality, and not his passion, we can get one of the dystopias of George Orwell or Yevgeny Zamyatin, in which the “brave new world” will be completely not as benevolent as we would like it to be (as a rule, the good intentions of social reformers always end with this – “the road to hell is paved with good intentions”).

In addition, since the 1930s, the economic theory and practice of Western states has done a lot to fundamentally mitigate the excesses of capitalist development, to move away from free (“wild”) capitalism towards a “welfare state”. This happened to such an extent that now realistically thinking European intellectuals and economists talk about the growing lag of Europe, the former “citadel of technological civilization”, from the United States and the countries of Southeast Asia, and the need to add “more capitalism” to its development.

In Goethe’s Faust, Mephistopheles says that he is part of the force that does good, always wanting evil. Capitalism leads to unprecedented social and technological development when economic individuals pursue individual goals of banal personal enrichment. And all the alternative, left-wing social doctrines have led, are, and most likely will only lead to human suffering. Look to Cuba and Venezuela, where the engaging and humanitarian speeches of the leaders of these states and the deeds based on them lead to economic devastation.

The modern technological paradigm was formed by the activities of technological entrepreneurs who, at their own risk and peril, made production and investment decisions in the capitalist economy. The activities of capitalist entrepreneurs – such as Andy Grove, Steve Jobs, Craig Venter and Mark Zuckerberg – are examples of how former social margins can reach the very top of technological and economic development. And these their achievements were provided precisely by the desire to rise through the use of the most revolutionary technologies in their activities, and not by something else. Take away from them the opportunity to realize their aspirations in this way, and society will see neither the computer on which I am writing this article, nor the drugs that we use to save ourselves from diseases, nor communication on social networks, which sometimes solves a considerable number of business and communication problems.

Capitalism is not antagonistic to man, on the contrary, it helps him to reveal all his talents and creative intentions. And this happens by the decision of the people themselves who want to engage in social creativity (to which, of course, entrepreneurship in general and technological entrepreneurship, in particular) belongs, and not by the decision of higher government bodies.

Discussions about the need to replace capitalism with some unknown social system and mode of production, which is not easy for a professional economist to conceive, and which is “on the other side of material production,” divert public attention in an unnecessary direction. And they do not bring society closer to prosperity.

In Ukraine, on the contrary, today we need more capitalism, more capitalist production, because the modern economy is far from limited to a post-industrial contour, the basis of which is the provision of services. A person still needs something to eat, somewhere to sleep, he moves by means of transport. All of this is material in nature, and must be produced somewhere. And, if all this is not produced by us, then we depend on the country where it was released, to a much greater extent than we would like. Remember that it was Steve Jobs’ physical iPhone that turned the global economy upside down, not the software “apps” built to run on it. Without this material device, there would be no applications.

And we need to understand this existing order in the world, as well as the corresponding dependence – what depends on what, what is determined by what. The virtual cannot simply “hang in space” like a coat without a hanger, without means of its development and its transportation, namely the material artifacts of the Internet that ensure its operation. The future of society and its economy are inseparable from capitalist production, which will continue to be the foundation of everything. Of course it will be different production – in versions 3.0, 4.0, etc. In it, software will have an increasingly strong influence. It will be inseparable from production. But humanity cannot do without the material aspects of production and entrepreneurial intentions based on human passions and emotions, which are primarily biological in nature, and therefore will be based on capitalism, and not on some other unprecedented social structure.

This should be understood by the current politicians of Ukraine. If you look at the content of the methods they propose, they are mainly from the arsenal of methods of socialist regulation. But if we left them in 1991, then it is not clear why we should return to such methods again. On the contrary, we need to do everything to help open up the capitalist economy in Ukraine, albeit with national specifics. We cannot sacrifice the future economic well-being of the next generations of Ukrainians to political populism. Namely, this will be a consequence of the application of a set of those methods that are offered by the majority of Ukrainian politicians. There are economic methods that work well, and there are those that work, but not very well, or even completely bad. Those who want to replace capitalism with a sociocentric economy, forget that it was recently, forget about how unsuccessfully they were looking for the essentials for life in stores from the times of the USSR, another left-wing economic system, to which, by historical standards, a part of the world also recently ” turned around “? Do we want to repeat this experiment again?

The socialist economic system has historically lost the competition to the capitalist one. Despite the fact that the slogans of socialism are always attractive, and the capitalist ones, on the contrary, are not very attractive, it was under capitalism that humanity achieved all its main social achievements. A return to socialist populism would be the ultimate economic disaster for us today. We cannot pay such a high price just for the desire of this or that politician to show off on TV screens as an “implacable fighter” against social injustice in Ukraine.

Rather, it will be relevant for society not to consider marginal, alternative to capitalism, social projects, but, only, to consider projects for its modernization. This is a much more realistic path than floating in philosophical clouds. That is, we should simply continue to do what modern world economic science and practice is doing now.

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