The Culture of Capitalism

Private enterprise yields public rewards the world over, a sociologist argues.

THE CAPITALIST REVOLUTION
Fifty Propositions about Prosperity, Equality, and Liberty
Peter L. Berger
New York: Basic Books, 1986

Peter Berger, an eminent sociologist from Boston University, has written a lucid and provocative book about the origins, history, and future prospects of capitalism. Berger writes well, his arguments are reasonable and coherent, and the conclusions he reaches are persuasive. Yet, in the end, Berger leaves many critical issues unresolved.

The task Berger sets for himself is awesome. In 224 pages, plus notes, he surveys the entire history of capitalism and offers his assessment s about what lies ahead. He contrasts capitalism with Marxism and socialism. He discusses the development of capitalism in the West as well as its newer forms in East Asia. Berger's sweep is large; he has become a grand theorist. His synthesis stands in marked contrast to the narrowness and highly specialized focus of most of today's social science research. In painting a large canvas with broad brush strokes, Berger revives the older tradition of theorizing that ranges across disciplines, continents, and centuries. He writes in the tradition of Adam Smith (and more recently Michale Novak); his fiol and bete noir is Marx.

Berger's conclusion, buttressed by erudition and impeccable logic, is one that many scholars and politicians have been reaching lately, though many of the former are afraid to say so publicly because it is in violation of the prevailing orthodoxy on too many university campuses. His basic argument is that socialism does not work and capitalism does. Further, there is an intimate connection between freedom in the political sphere. State control of the national economic life (even if it is called democratic socialism) is unlikely to guarantee freedom for long in the political sphere. Only democracy and capitalism, or democratic capitalism, are likely to be conductive to both economic growth and freedom. It is a controversial argument certain to cause a stir. Berger's book makes one of the best cases available in the literature for this conclusion.

Empirically Based Theory

Berger presents an empirically based theory of capitalism. That is, he grounds his model on facts and evidence, not romance or wishful thinking. He offers a series of hypotheses, or building blocks--what the book's subtitle calls "Fifty Propositions About Prosperity, Equality, and Liberty. "These propositions are couched in careful, guarded and qualified form. Berger is neither a dogmatist nor an ideologue. Rather, his is a fine mind that, in the best scholarly and academic sense, genuinely explores an issue and thinks through its implications.

Berger scatters his fifty propositions throughout the book and then brings them together in the concluding chapter. The following is a sample of the provocative points Berger sets forth in his book:

1. Industrial capitalism has generated the greatest productive power in human history.

16. Capitalism is a necessary but not sufficient condition of democracy under current conditions.

25. The inclusion of a Third World country within the international capitalist system tends to favor its economic development.

41. There is an intrinsic linkage between socialism and the pervasive bureaucratization of the economy.

His ideas fly in the face of much established opinion on our campuses, and his praise of capitalism will help and socialists and social democrats up the wall. All the more so because his prepositions are presented in such a reasonable, logical and persuasive way as compared with the flawed and entirely romantic ideas that many nostalgic defenders of capitalism present.

Berger begins with a nation of economic culture. The term in akin to what other scholars call "political culture." Economic culture has to do with the whole set of values, beliefs, practices, and institutions to which distinct economic arrangements give rise. Berger sees two main economic cultures: the capitalist and the socialist. In numerous respects, he finds the socialist economic culture sorely wanting. One might question, however, how Berger's sociological notion of superstructure differ from the Marxian conception.

Berger's book is not an unqualified apology for capitalism. But the evidence he accumulates points indubitably toward a procapitalist position. On the basis of reading and observation about capitalist and socialist regimes, Berger finds capitalism a "morally safer bet" than socialism. This conclusion is based on empirical evidence and logic, not mere ideology. Nonethless the conclusion is clear (Which Berger happily admits) that while most of his colleagues in academia have been going to the Left, he has been moving to the Right.

Berger is a classic sociologist, writing in the tradition of Durkheim and Weber. That is, he wants to know the origins of capitalism, its social and cultural implications, and its performance as compared with socialism. Intellectually, Berger is particularly close to Weber, with his nondogmatic and scholarly explorations of the relations between capitalism, culture, and political development. It is, of course, the Webrian tradition that stands in contrast with, and as an answer to, that other grand tradition in modern sociology: the Marxian.

Berger finds that socialism historically, and across continents or political regimes, is closely related to large-scale bureaucratization on the one hand and to inefficiency on the other. He sees from his empirical work a close correlation between the centralized command economy of socialism and a centralized command polity. In contrast with the "political pilgrims" (Paul Hollander's apt phrase) who have consistently romanticized socialism and constantly found new socialist regimes first to admire and then become disillusioned with (from the Soviet Union to China to Cuba to Nicaragua), Berger suggests a consistent intermeshing between socialism and authoritarianism. He is particularly suspicious of the close association between socialism and what he calls the "totalitarian project" for society--whether that impulse emanates form full-fledged Marxist-Leninists or from those myriad government officials, planners, and agencies who insist on "rationalizing" and thus controlling all aspects of our lives.

Capitalism Favors Democracy

In contrast, successful capitalism generates pressures toward liberty and democracy. It allows for "space" in which the state cannot interfere. It means freedom, or at least the maximum degrees thereof, in both the economic and the political marketplaces. Whereas there is one kind of affinity--an authoritarian and even totalitarian kind--between socialism in the economic sphere and excessive statism in the political, there is another kind between capitalism, freedom, and democracy. The experience of the twentieth century, Berger concludes, is that capitalism provides growth and democracy, while socialism breed inefficiency and dictatorship.

Liberty and democracy are compatible with (and even supported by) capitalism; they are not supported by or compatible with socialism.

Berger makes a powerful case that private enterprise is not only better for growth and liberty but also for equality. In contrast, the re-distributionalist governments that are so prevalent in the Third World not only inhibit growth, but they also introduce distortions in the development process itself that further undermine equality. By seeking to redistribute growth before they have achieved it, these socialist cum statist regimes often end up with neither: precious little growth and such distortions (in the form of a "new class" of exploitative bureaucrats, military, and government officials enriching themselves at the great public though) that equality becomes a sham as well.

Berger is therefore suspicious of the trends in the various halfway houses that have been erected. He has little use for the shoddy and growth-resistant socialism of many Third World regimes. Nor is he convinced--contrary to the liberal credo--that democratic socialism, as practiced for instance in the Scandinavian countries, is viable in the long term. He believes that private property and a marketplace independent of the state are the best guarantors of democracy. It is necessary to maintain economic independence, he argues, as a means to maintain political freedom. Berger suggest that democratic socialism may be a contradictions in terms, and he points to disturbing trends (for example, the radical ideology of the left wing of the Swedish Socialist Party or the British Labor Party) in a number of social democratic movements that he worried may lead them in the direction of totalitarianism.

At the same time, Berger is sufficiently balanced that he recognizes the case of East Asian capitalism is a mixed bag. On the one hand, he is fascinated by the economic miracle that has occurred in East Asia: Japan, South Korea, Taiwan, Singapore, Hong Kong. But on the other, Berger recognizes that the relationship between capitalism and democracy in Asia is ambiguous. Some of the most capitalist and productive economies (South Korea, Taiwan) have not been models of democracy. The statist system of Japan is also worrisome from his viewpoint. Berger has been writing extensively on East Asia recently, and his chapter in this book exploring the cultural and historical as distinct from structural and institutional causes of the Asian success stories is extremely rich in ideas--particularly because these cases provide many contradictions and challenges to his own conclusions.

There are numerous other intriguing lines of argument in the Berger book. Berger deals not only with developed countries but also developing ones in which he again finds capitalism and development to be capitalism and development to be positively correlated. He has a marvelous discussion of how in the West a new "knowledge class" (academics, journalists, editors, clerics) is replacing the old business class, and why and how this new class is strongly anticapitalist. Berger is similarly suspicious of the argument that it is possible to liberalize the socialist economies--whether it is Poland or the Soviet Union--because he knows that the apparatchik of these societies also know that economic liberalization could not occur without ushering in political liberalization, which the socialist countries cannot permit. Therefore, he is less than sanguine about the prospects for a major and sustained "opening" in the socialist countries, in either an economic or political sense.

Berger's book, impeccably argued, elegantly written, and endlessly challenging, raises a host of questions for further and more detailed analysis. One may be in agreement with the main argument and conclusions of the book, but the methodology, the omissions, and the glossing over of some difficult lines of argument leave on troubled.

To begin, Berger places himself strongly and self-consciously in the Weberian tradition of sociological inquiry, which he then contrasts sharply with the Marxian. Marx presented a theory of economic development that was at one and the same time dogmatic, deterministic, and undergirded by a strong moral vision. Weber in contrast is undogmatic, scientific, and empirical. Most social scientists have long been more comfortable with Weber than with Marx. But the question needs to be raised: Are Marx and Weber the only two traditions available in the social sciences? I think not; moreover, by casting the issues in such dichotomous categories--a frequent problem in the literature of development--we may have obscured our understanding of the processes involved and done something of a disservice to many nations.

Unresolved Issues

Most scholars of development no longer believe there are just one or two paths (Marxian and capitalist) to national modernization but multiple paths. Nor do all "traditional societies" begin at the same staring point. Rather than one or two paths, the metaphor we should have is that of a lattice, with many routes, numerous starting points, possibilities for regression, various crisscrossing patterns, and also multiple end points. In Latin America, for example, it is appropriate to suggest there is a Thomistic-Suarezian-Rousseauean model of change and sociopolitical organization that is at least as powerful as the Marxian or Weberian ones. We are now similarly becoming aware of an Islamic social science of development, an African social science of development, and many others. We need to recognize the considerable variety of sociological traditions and developmental routes and to adjust our analyses accordingly.

A second issue has to do with the classification of the world's socio-economic systems. Berger uses two categories, capitalist and socialist. The United States is the paradigm capitalist nation and the Soviet Union the paradigm socialist one--again a dichotomous classification. These types, however, may also be seen as occupying the polar ends of a spectrum, which thus provides a different system of classification. Research on many developing nations (such as Mexico, for example), or on such developed nations as France, leads one to conclude that strung out along this spectrum there is a third type (and with numerous other halfway houses), which can be called state capitalist. State capitalism occupies a position intermediary between socialism and capitalism, having neither a full-fledge command economy nor a completely free one, and may hence be thought of as a separate category. State capitalist regimes have dynamics, both economic and political, of their won; nor is there any reason to believe state capitalist systems must inevitably or necessarily gravitate toward one or the other end of the spectrum. Our classificatory scheme, therefore, needs to be thought of as a continuum and not as an either/or situation.

A third though-provoking issue relates to the causes of national development. Most economists, naturally enough, see the motor force as being economic quickening and the industrial revolution, but Berger examines also the cultural causes of the early takeoff. He explores Weber's famous thesis of the relations between capitalism and the Protestant Reformation. He has an intriguing and highly original analysis of the cultural current within Confucianism, Buddhism, and Taoism that (in contrast to Weber's earlier interpretation) are conducive to capitalism and growth. Weber, it will be recalled, doubted that capitalism could arise in Confucian, Hindu, or Buddhist societies, but the experience of Japan and other Asian-Pacific countries demonstrate that Weber was wrong in this regard. Berger wrestles with the issue of how these countries achieved such impressive economic growth when they lacked what classic sociology suggested was the necessary cultural necessities--as distinct from the view in a great deal of development literature that assumes the traditional institutions must give way or be overcome before development can take place.

Even in England, the cradle of modern capitalism and the industrial Revolution, Berger cites evidence that may indicate it was early individualism (a cultural condition) that helped give rise to economic growth rather than economic growth giving rise to individualism. Berger is also interested by the differences among socialist regimes (that is, between the Soviet Union and Hungary, for instance) that in part he ascribes to cultural factors. He concludes with a balanced and sophisticated position in which economic, cultural, and institutional factors all contribute to the type of system that eventually emerges.

A fourth question (and related), which the author does not explore, is why the statism of East Asia is successful and why the statist regimes of Latin America have been significantly less so. Does it have to do with cultural factors, the reputed discipline, organization, and "homogeneity" (as Japan's Prime Minister Nakasone recently told us) of the East Asian societies, as compared with Latin America; or does it have to do with the proximity of markets and resources, or with other economic factors? Related is this question: If Latin America and East Asia are both penetrated by outside capital, why has East Asia managed to absorb and use that capital so successfully while Latin America is limited to lamenting its "dependency?"

The Limits of Sociological Theory

Peter Berger is a world-class sociologist, but he is still a sociologist. Thus, his intriguing and erudite book on the origins and history of capitalism, on the sociological ramifications of capitalism's rise, on cultural and class variables, and on the benefits of liberty, equality, and democracy nowhere tells anything about political variables. Nowhere in this discussion of democracy and liberty is there any information about how democracies emerge, grow, consolidate, or institutionalize. Rather, like so many sociologists, Berger tends to assume that political out comes flow automatically from their economic and sociological underpinnings. Politics becomes a "dependent variable."

One hopes and tries to avoid these exercises in disciplinary imperialism. But lamentably, because the same mistake is repeated by many sociologists and economists, the point must be raised here. Politics, as any Washingtonian can attest, is not merely part of the "superstructure," dependent on socioeconomic determinants. Rather, political variables have an independent life of their own. The literature is so abundant on this point (most of it written by political scientists, of course) that it hardly seems necessary to make it. In this sense, Berger's analysis in some places falls sadly into a number of the same overly determinist traps as the Marxist Leninist writers he criticizes. The oversight of political variables is particularly lamentable in this case because his arguments for capitalism and democracy would be greatly strengthened if he paid serious and systematic attention to the forces, dynamics, and institutions by which democracy is established and nurtured. Moreover, in some of Berger's earlier and equally rich studies of what has been termed "mediating structures," he offers evidence of being able to integrate these political factors into his analysis.

The last problem is Berger's heavy reliance on "Germanic" sociology. Both Marx and Weber were great figures in this tradition and in the emergence of sociology as a discipline. But they were both formed in the "German school" of sociology, the categories and philosophical approaches they used were derived from Germany, and their analyses were based upon, derived from, and had application mainly to European society--as both writers themselves admitted. They were thus products of a particular time and particular place. Their relevance to different times and to the rest of the world is open to considerable doubt.

One becomes a bit impatient with the application of concepts meant for one time and place to others--or even applied universally--to the exclusion of other concepts of at lest equal relevance for societies not found in the Western European and Germanic mold. Where, for example, in Berger's discussion of democracy is there mention of the American tradition of Jefferson, Madison, Hamilton or Tocqueville? The answer is, there is none (except for a single passing mention of Tocqueville). Or where is there discussion of those Third World leaders who are seeking to balance and reconcile the imported and Western notions of democracy and liberty that do not always work well in their contexts with their own indigenous traditions and practices, and the efforts to weld these into a democratic and developmental frame-work that works? Again, they are not dealt with here. These omissions are particularly lamentable since a discussion of these authors and efforts would strengthen the case Berger is seeking to make.

Problematic Definitions

There are other questions raised by the book that need to be addressed. Berger makes a powerful case that democracy and capitalism are not only compatible but necessary for each other, but he has not dealt adequately with the opposed arguments that suggest incompatibility. Even his intellectual precursor, Weber, doubted if democracy could survive under the weight of the bureaucratization of modern mass society. Unless further evidence is presented, one need not be as pessimistic as Berger is concerning the possibilities for mixed systems or for European-style social democracy. In addition, the Third democracy. In addition, the third World is far more diverse -one could say almost infinitely variable--than Berger suggests, and his dismissal of the possibilities for change within socialist systems may be too simple, given the domestic pressures for change within these societies.

Another problem is Berger's definitions of both democracy and capitalism, which may be too narrow and too closely tied to the U.S. experience to have universal applicability. And, as indicated, there are quite a number of methodological and political problems in this study that need to be addressed. Berger's book is likely to be strongly praised in conservative circles and strongly criticized by the Left, but a more balanced (and nonideological) reading indicates that there is much to be learned in this book. There are numerous unanswered or inadequately answered questions as well.

Berger's book is actually part of a larger oeuvre. He has been wrestling heroically and articulately with these issues for a long time. The volume here under review represents a particularly elegant, readable addition to this work and a quantum leap forward in the logic, sociology, and (to return to Berger's term) 'culture' of capitalism. One trust that in the followup and integrating volumes that will be forthcoming from Berger's powerful pen that these other themes and the problems of analysis mentioned will be fully covered.