In the preceding HPR essay, Kapitalism on The Couch (April. 23, 2009; http://www.hpr1.com), capitalism was nudged up onto the analytical couch of Karl Marx and Carl Jung. Our analytical dialogue begins by examining the nature and logic of capitalism, which will address the dialectical approach to knowledge, a materialist approach to history, the psyche-social-analytical method, its commitments to individuation and socialism, and finally a look at how Marx’s visionary concept of society might be fulfilled in a future dialectical corporation. As stated in the first essay, The Mathematics of Faith (February 25, 2009; http://www.hpr1.com), the objective of these essays is to understand how the unconscious side of the individual psyche and the hidden side of capitalism impact our system of political-economy and in this essay we look at the nature of capitalism.

The “Nature and Logic of Capitalism” is economist Robert Heilbronner’s answer to the question, “What is capitalism?” Is the core of history found in the description of its “social formations” as Marx proposes? Or does its core lie in the realm of ideas as modern economist Joseph Schumpeter (Capitalism, Socialism, and Democracy) maintains? At the center of this dialogue is the philosophical thought of Hegel – a dialectical approach to knowledge, which plays a central role in Marx’s social-analysis of capitalism. This dialogue was addressed in Fukuyama’s essay, The End of History?, which argues that history ended when the “idea of Communism” died in 1989 with the fall of the USSR, leaving the idea of the liberal democratic state the winner. However, in Marx’s view an era’s “social formation” determines history and continues to evolve aided by an important variable – technology.

Robert Heilbroner

History became a real interest of mine in the summer of 1959, when I read Shirer’s “The Rise and Fall of The Third Reich” and Gorlitz’s “The History of the German General Staff.” That fall I entered Fargo Central High School and one of its inspirational teachers, besides Ed “Gadfly” Raymond was Bill Barney. I wrote two book reports for Coach Barney on my summer’s readings and was hooked on history. Later at UND I struggled with a decision to major in history or psychology – psychology barely won. Years later I realized that behind the thoughts of the worldly philosophers is a history of supporting thought. In Jung’s case his studies of the Gnostics, Alchemy, and the I Ching provided confirmation for individuation psychology. Later we will explore how these ideas are relevant to our study of global capitalism but now the existential issue is this – how does an idea arise?

For Marx, ideas arises the same way as British historian Jacob Bronowski in this book and TV series “The Ascent of Man” suggests – the evolution of the opposable thumb, man’s ability to grasp and fashion tools drives the development of the mind. In Marx’s terms at the center of history is its “social formation”, or more specifically its “distinctive arrangement of its social arrangements of productions” (Heilbronner 1985:14). Marx’s approach to the study of history is to examine these social arrangements of production or its “modes of productions.”

A rough taxonomy of history to apply this to is the primitive, imperial, feudal, and capitalist eras. Each of these eras has a unique mode of production to produce and commandeer its wealth – primitive society produces hunters and gathers, imperial/feudal society produces peasants/warriors and lords, and capitalist society produces workers and capitalists. Except for the primitive, which really does not have history, the imperial and feudal eras both had a capitalist element but it was not the centralizing mode shaping these societies. When the mode of trade and manufacturing moved to center stage, economists designated the era capitalism. This era has undergone significant change and continues to evolve, as the current global economic meltdown testifies to (Frontline, The Global Meltdown). We will address the evolution of capitalism, which some suggest is moving toward “socialism” but first, the nature of capitalism.

The era of capitalism begins around 1700 and while it has changed these ensuing 300 years, it has maintained the same “specific determinative forces.” Understanding these forces has been a central task of the great economists. Adam Smith, 1776, not able to decipher this complexity, simple saw the forces as a deity, “the invisible hand,” directing the drama onto beneficial paths. For Marx, 100 years later, the directing force in an “internal dialectic that asserts its sway through a ‘fetishism’ that blinds men to their real social situation” – hiding the real relationship between labor and capital. We will be examining this internal dialectic later.

Adam Smith Invisible Hand

For modern economists like Schumpeter the determinative force is individual (laissze faire) efforts to acquire wealth, which is the force driving society toward a state of “general equilibrium of wants and capabilities.” In all of these explanations, business activities are viewed as being directed by hidden forces beneath the surface of economic life. And as pointed out in a previous essay, Marx’s discovery of an “unsuspected level of reality beneath the surface of capitalism” is visionary and very relevant today – that is, to become aware. (Heilbronner 1985:17).

To study these “agency forces” Heilbronner (1985:19) proposes a framework, where the nature of any social system refer to its “behavior-shaping institutions and relationships,” and its logic as the “pattern of configurational changes generated and guided by this inner core”. The nature of a social system can be divided into three categories. The first is givens like geography, climate, and natural resources, which are not that important in the overall scheme, as the resource-poor Japanese success testifies to. Far more important is the second category, which is the drives and capacities (psychic energies) of individuals and how these are transformed from the raw state of the child into a socialized adult fitting into its social system. This is a central idea of Adam Smith – the wealth nations are its citizens, one area we will examine deeply. Remember from the first essay, Christ’s main concern is to take the bean out of one’s eye – that is, to become aware.

In looking into this key source of wealth, individual drives and capacities, we will rely on the work of Marx, Freud, Jung, and others. We will examine the capitalist’s socializing/indoctrinating educational system, a topic on the front burner of every national dialogue. An issue deep inside this dialogue is the topic of innovation and this is not just about new commodities to sell the Chinese but innovation in new ways to think, feel, and live. We will look at how Hegel and Marx’s dialectic will directly contribute to our dialogue on creativity/innovation and how Marx and Jung’s thought play an interdependent role in the ecological challenge facing the world.

The third category of nature is a society’s institutions, organizations, and belief systems. These have been created to receive man’s psyche energies and now act as channels directing these energies. Institutions that oversee indoctrination, education, and sustain the social-legal framework are vital to maintaining societal harmony. The Christian belief-system and its underlying logic (The Mathematics of Faith February 25, 2009; http://www.hpr1.com) also needs to be further addressed in understanding of capitalism (Max Weber, The Protestant Ethic and the Sprit of Capitalism). We will also closely examine the transnational corporation’s (TNC) role and a key variable under its control – technology. With technology as the dynamo behind globalization (Friedman, “The World is Flat”), globalization has been called the new magmus opus of our time and its driving logic, profit maximization, depends on technology (Giegerich, The Opposition of ‘Individual’ and ‘Collective’ Psychology’s Basic Fault). We will examine this thought and the new psyche-ecological ethic that surfaces.

The socializing process this third category imposes upon society is by no means smooth. The institutions molding behavior are themselves directed by inner logics that may take the form of “class against class, against tribe, civilization against civilization, or focus on color, religion, or sex.” Involved in all these logics are issues of domination and oppression, which invariably leads to alienation. In spite of capitalism’s wealth, it is difficult to find anyone not alienated by its nature and logic – why? As we will uncover, it is all about money – money money, money – wealth, who produces it, who gets it, and why? Next, we examine the logic of capitalism.