Every mode of production produces or must produce its correspondent culture. It is, using more general Marxist terminology, part of the superstructure.

By "culture", I mean it in the broadest sense: the set of moral and ethic conventions, taste in art, customs and habits, sense of what is polite and what is not, beauty conventions (in the broadest sense of the word: human beauty masculine or feminine, fashion, use of color and materials you should use in this or that stuff, etc.), and, most important, the average level (basic) of education of the population, by class.

So, for example, every capitalist child must learn Math to some degree and how to read and write in its national language. That alone is much more knowledge a child and even an adult in feudalism or antiquity ever learned; by high school, the average child has already more accumulated knowledge than the even most prosperous feudal and ancient men. This high level of minimum education required changed the way the capitalist society saw children: they were children even at 12 years old, and became teenagers/adolescents until 18, when they finally became adults; in Ancient Rome, a boy became a man at 9 years old and a girl became a woman at 12 or 13 years old, there was no concept of adolescence.

Capitalism promotes "greed" because that's how people must behave in order to survive in it. Since it is necessary, then the culture must adjust accordingly, making "greed" a positive cultural trait. First, since the word "greed" has negative connotations, it must be changed e.g. "entrepreneurial spirit" in Keynes, "ambition", "hard work", "providence" (Calvinism) etc. etc.

When the system starts to fail -- and all of them start to fail eventually, because Marx demonstrated all of them are historically specific -- what was culturally good dialectically start to become bad: it becomes "greed" again in the example we're working with. In philosophy, we say the system entered its historically "negative stage", the phase where it becomes reactionary and not revolutionary; where it becomes deleterious instead of advantageous.

But the maxim remains the same: it is, ultimately, the material base (economy) that determines the superstructure (culture and the State). The economy is the "environment" that determines the "fitness" of all possible (in potentia) forms of culture. The USA has evolved into the purest form of capitalism ever, it necessarily must have generated the correspondingly purest form of capitalist culture ever.


P.S.: And this is also a huge challenge for China. As the socialist society of the 21st Century, it must be aware of the fact that they must build a culture that corresponds to its system. That's why I think the CPC's insistence in maintaining some fossils of the imperial era is a mistake, e.g. Chinese Traditional Medicine, which is a pseudoscience, but has even colleges. Socialism, being the next stage after capitalism, must have an even higher basic level of education and enlightenment than capitalism; science must be the moral and ethic guide of the average socialist person, which means pseudoscience, superstition and religion are pure poison to socialism.

The original Bolsheviks had this cultural aspect very clear in their minds, and failed in the task of building a socialist culture because the capitalist world successfully deprived it of the material (economic) means: the Tsarist Empire was a very backward region of human civilization, and WWII destroyed too much of the USSR's material base to allow it to ever recover. The CPC must seize this positive phase of Chinese Characteristics Socialism to start to weed out the ossified habits of the Chinese Empire.

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Jun 2, 2023Liked by Branko Milanovic

Love this analysis

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This is reading far too much into Succession.

Branko is analyzing the show as if it were a representative sampling of real world dynamics, and concludes, "This is telling us that there's no ethics in capitalim."

But the show is not that - it's a dramatic narrative. If it wanted to tell us that, it would have done so the in the only way a dramatic narrative can: It would have shown an attempt at ethical capitalism failing, contrasted it against the successful non-ethical version, and let us draw the conclusion. Obviously, we got nothing of the sort.

In fact, I would argue that NYT is closer to the mark in its appraisal of Succession, if they claim that the show is addressing how a media business affects politics. They show us Shiv's approach ("We shouldn't support Fascism"), they show us Roman's approach ("Fascism shamsism, as long as I get mine"), and they show us how Roman has failed ("Oh no, I helped the Fash but didn't get mine, I was a fooool!")

The idea that Adam Smith was wrong re. ethical capitalism is a *fundamental premise* of Succession, not a *theme* it deals with. No one in the show ever tries to prove it because no one contests it. So yeah, Branko is reading too much into it.

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The fundamental flaw with Adam Smith’s “capitalistic ideal” is the fact that competition always will generate different conditions quite sooner than later. There never have been nor ever will be equilibrium markets and perfect competition. It is not even a pipedream but fundamentally impossible, which has the whole economic edifice of Adam Smith collapsing. If people - and primarily mainstream proponents of his market theory - would actually read Adam Smith instead of just quoting him they would have to admit that he never spoke of equal opportunity as they claim but of equal conditions - which never would materialize at large scale - something of which he himself was perfectly aware of. Karl Marx on the other hand built Capital around that fact - imperfect competition leads to crisis ridden capitalism. Mainstream economic theory - i.e. neoclassicists and utility theory has been distorting Adam Smith to fit it in, has been putting Ricardo on the shelf and reduced Marx to a footnote. For neoliberal theorists and proponents reality is an aberration of their theory. We all can see what predatory neoliberal capitalism has been producing in the name of Adam Smith. He would be spinning in his grave. Though he had a lot of meaningful things to say - and I am a great fan of him as one of the greatest economic theorists of all time - the way capitalism has played out one should take Adam Smith with a grain of salt.

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Thanks, the movie (?) sounds interesting. I think Adam Smith’s ideal society doesn’t work when the democratic system is based on elections which place no limits on campaign financing and a media that profits from rivalry. I haven’t considered whether ethical capitalism is possible if the political system and media were not susceptible to capture by the few. But from your post, it seems even if the political system and media weren’t dysfunctional, ethical capitalism isn’t possible.

Perhaps the best that can be said for Adam Smith’s optimism about capitalism is that it would “less unethical” than a society that is has monopolistic markets.

China seems to think that public ownership together with a dominant political party that holds itself accountable to improving the wellbeing of people can work.

I know there is a lot of scepticism among economists and political scientists about China’s model, but they should at least take a good look at China’s successes vs failures and not assume it cannot work.

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Is re-starting capital gains taxation of inherited assets on a "stepped-up basis" in the modern US political economy analogous to the English policy of entail in Adam Smith's time?

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The illusion of ethical power is with us more than ever. "Democratic control of the economy" means only that the powerful have a mandate to serve the interests of the majority, as they see fit.

There's nothing democratic about that.

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That might be true, but you are comparing something that exists (i.e. the world we live in where power isn't ethical) with something that doesn't exist (i.e. "democratic control of the economy"). The fact of the matter is we can speculate about whatever we want but we don't actually know if ethical power would still be an illusion if there was democratic control of the economy.

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It's not my phrase. I just described what it means to those who use it.

Keynes hated the labour party; he thought it was made up of dead-enders who did nothing but get in the way of reform of management. And I'm not a radical democrat. I'm all in favor of the PMC, and so is every communist. Democracy is secondary to making sure the peasants have enough to eat. But power is a problem, and I'm amazed at the number of liberals-who-call-themselves-leftists who follow technocrats in fantasizing a future out of Star Trek who ignore that Starfleet is a navy. "Aye Captain" So f'kng democratic.

No one with a Che or Fidel poster on their wall was ever defending democracy. The smart ones knew that at the time, but the smart are always few and far between.

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The problem with stressing the rules of capitalism is that people playing according to them will be confused to think that their behavior is ethical. They will consider they owe their incomes and assets as they have been “rightly” deserved and they will resent and resist any attempt to redistribution.

The other question is about efficiency: even if you think Adam Smith’s invisible hand to work in an ideal world without powerful actors, you must recognize not only that our real world is not ideal but also that playing along the rules of capitalism means trying to acquire power… and that some will succeed. The ideal world is not in a stable equilibrium.

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Trying to acquire power isn’t a rule only for the capitalist game. The same rule existed if you wanted to play the game in the communist countries. You probably also had to join communist party first, but that's a minor detail.

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"...The use of power can be brought to minimum if there is full competition so that actors cannot influence prices and conditions" You (Branko Milanovic) seem to have more or less the right idea but there is something wrong here. The emphasis is a little bit wrong. Very common experience I have, when reading your stuff. best, Jacob

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I've never seen "Succession," but your post inspired a lot of thoughts:


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well Branko, I could help you. Here is a cut and paste then: "the end of the illusion of ethical capitalism. " Was it an illusion? Is it an illusion? Is it a rarity but not entirely impossible? All these possibilities could be discussed. Or is it an illusion, depending on what you do? There are policies to put into play, or not to. This is called "regulation" in the ideological debates. Regulation, if used to support better outcomes, could help support the "illusion" and that might have its uses. The realities of a regulated capitalism are not those of a Wild West, unregulated idiot free-for-all which is the stuff we have got now in this world. All due to these bastards who were always saying "don't regulate." I do not absolutely count out all the "illusions," because it could be something that could have some real influence or sway or say. So, this is the discussion of whether they are illusions, or indeed whether there could be some reality.

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This is a good analysis but I think you could do something similar in a Feudal society with low-levels of commercialization. Or look at the violence Charlemagne imposed on his family, that high point of feudal Europe...

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uses art to make broad generalizations, as though they were facts.

thumbs down

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These were powerful insights into what Branko calls "really existing capitalism". The phrase contrasts well with what was well known as "really existing socialism" and we all know what happened to it. If the former is immoral but efficient and the latter is the other way around (was it?), what is a better solution for the human condition? Is there a "third way" (a bit less efficiency and a bit more morality) or extremes always win?

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For the efficient third way to exist you have to have the first and the second way fighting each other (in a way which is not a world war) and then the third way can enjoy the benefits of the balance of power game.

For example Yugoslavia (communist) or Singapore (capitalist).

The third way requires significant flexibility. If it losses that it's going to fail spectacularly.

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