The Mind and the Market:
Capitalism in Modern European Thought

Jerry Z. Muller
Alfred A. Knopf, 2002, 487 pages

lthough Western Europe is no longer the vital center of capitalism and is now gradually inching away toward a planned economy, many of capitalism's early ideas were created there in the ferment of intellectual ideas that was the spirit of liberalism (in the older sense of the word, before the meanings of liberal and conservative somehow became switched around) that took root after the religiously-motivated carnage of Europe's Thirty Years War.

In those early days, Christianity was hostile to capitalism and imparted a moralistic tone to anticapitalist arguments, arguing that greed and profit were sinful. Before the concept of creation of wealth was discovered, people conceived of trade as a zero-sum game, in which one person's profit was equally balanced by the other person's loss. This idea still resonates today among anticapitalists who complain of the "exploitation" and "greed" of modern-day capitalists. Yet today, capitalist societies are the most advanced, peaceful, egalitarian, and powerful, while societies that control the market or eliminate it entirely falter and collapse by depriving themselves of the power of harnessing mankind's innate drive to become wealthy.

Capitalism is therefore well worth studying not only because of its unmatched ability to create wealth in a democratic system, but also because the international ties it creates are the most secure guarantor yet found of global stability and peace.

The moralistic basis for condemning the profit motive was eloquently repudiated by Voltaire, whom Muller describes as France's merchant of capitalist ideas, but who was also a dishonest anti-Semite who engaged in shady financial dealings. Voltaire believed that since humans are intrinsically social creatures, there was nothing that was good for the individual that was not also good for society. He wrote:

It is as impossible for a society to be formed and lasting without self-interest as it would be to produce children without carnal desire or to think of eating without appetite.

This philosophy was developed by Adam Smith whose ideas in The Wealth of Nations, with its timely publication in 1776, laid the foundations for modern capitalist society.

Each chapter in The Mind and the Market describes the history of one intellectual and his ideas, such as Edmund Burke, who wrote devastating critiques of the French Revolution and the British East India Company; Friedrich Hegel, who ironically started out justifying the market economy and the value of customary morality or Sittlichkeit ; and Justus Möser, who expressed reservations about the deleterious effects of capitalism on individual skill and public virtue. Muller tells us that Burke believed that "without a stake in the existing social order, intellectuals in power were disposed to treat the country as an object for intellectual experimentation." This experimentation led to the slaughter of France's ruling class in their Revolution that so horrified British and American observers.

Although the intellectuals in this book are described in their historical context, their ideas are treated antiseptically as if springing from and growing in a philosophical and cultural vacuum. There is little discussion of Rousseau, for example, and no explanation of the Romantic conception of man and nature that exerted such a large influence on writers like Karl Marx. Only in the chapter on Marx does Muller spring to life with critical analysis of his subject's economic theories. He points out, for example, that Marx's Capital: Volume 3 is based on a theory that contradicts that in Capital: Volume 1. In this respect, Marx inspired later philosophers such as Jean-Paul Sartre, who halfway through his 800-page tome Being and Nothingness changes his mind and spends the second half of the book debunking the first half.

Heinrich Marx read Voltaire to his son Karl, proof that bedtime stories must indeed be chosen very carefully. Few of the anti-globalization activists running around loose today will admit openly that their views equating capitalism with exploitation are Marxist. But Marx and Engels, the archetypal atheists, were instrumental in the restigmatizing the concepts of avarice, competition, spiritual poverty and "exploitation" that had worried the Medieval Christians, throwing in "alienation", shaking it up, and equating the mixture with capitalism.

The traditional European antisemitism exhibited by Marx and his colleagues, too, has its echoes today in the anti-Zionist and antisemitic views of much of the anticapitalist Left. But Muller missed an opportunity to explain the psychological and aesthetic appeal these philosophies exerted for so many of Marx's followers; even for those of us who fell asleep in economics class (or who practiced writing chemical structures instead of paying attention), the book sheds little new light on the philosophical roots of today's utopianist Westerners who consciously and unconsciously parrot Marx's diatribes. Marxism has in fact become the default ideology for anyone alienated from modern society but unable to create a novel ideology in which to frame their discontent.

Economists, like weather forecasters, have the uncanny ability to be completely wrong about almost everything and yet still be professionally successful. They tend a vast, dynamic machine with only a vague understanding of the forces that make it work. Unlike weather forecasters, however, the politicized views of economists like John Maynard Keynes led some of them to a sense of revulsion against the basic forces that drive the economy. Other economists tried to expand into the domains of Freudian psychology and sociology. Muller's prose comes alive in the chapter on the 60's Marxist guru Herbert Marcuse, where he says, "By the time of his death in 1979, Marcuse's star had faded; paperback copies of his works filled the shelves of used-book stores, supply having overcome demand."

The last chapter describes the brilliant economist Friedrich Hayek, who argued that socialism inevitably leads to totalitarianism and that special-interest groups each calling for their particular brand of "social justice" would result in an ever-increasing expansion of state intervention. Hayek and his followers, who included Ronald Reagan and Margaret Thatcher, scaled back the Keynesian welfare policies that had led to huge inflation in the 1970s.

History shows that the most influential intellectuals were those like Adam Smith and Karl Marx who relentlessly pursued a single, overarching radical idea in tune with the Zeitgeist. Communist Manifesto, for example, appeared in 1848, the year of widespread revolution. Meanwhile, those who warned about the excesses and failings of those ideas, however brilliant or prophetically accurate their criticisms, were consigned to the sidelines of history. Who today remembers the names of those who warned that "from each according to their means, to each according to their needs" would be a really bad idea? The ideas of extremists are easier to remember and make better slogans than those of a depression-era economist like Joseph Schumpeter, who had gloomy feelings about the futures of both capitalism and socialism. History is not the story of the sensible, cautious or depressed, but in large measure the story of maniacs and fanatics and the colossal messes they have created.