Tuesday, November 29, 2005

The reformation of capitalism

Jim Lewis at CSIS got me thinking about passing the buck, sorry, the torch: to whom could the US hand off its imperial responsibilities when the burden becomes too much bothersome? There aren’t any obvious candidates. We do seem to be living in a multi-polar world of networked power with no inside and no outside, though the United States is the pre-eminent power.

It reminds me a lot of Europe in the late Middle Ages. There were a handful of contending powers, with second-tier sovereigns in loose orbits around them: Spain, England, the Papal States, and the Holy Roman Empire. In spite of the continual wars, Europe was united by the Romans’ legacy of a communications infrastructure: Latin and the roads, which under-pinned a world-wide trading network (world=Europe at that time). The analogies to English, the Internet, and “globalization” are obvious. [1]

The dominant ideology – Catholicism – fractured at the end of the Middle Ages. This suggests that the dominant and largely uniform conception of capitalism of the last few decades could be short-lived. Ideologies evolve in different ways in different cultures, and theories of capitalism are as likely to diverge as to converge. Capitalism’s dominance also means that it will become ground over which disagreements rooted in other areas will be played out, just as arguments over medieval theology were a front for political struggles.

We should expect a radical rethinking of capitalism, of the scale of Adam Smith or Marx, to emerge in the next 10-20 years. This reformation could be adopted by a significant number of power players as part of their geopolitical struggles with the United States. I expect that the Luther or Calvin of this reformation will be Asian, and probably a Chinese who’s in a graduate school class in Shanghai right now.

We should expect the reformation of capitalism [2] to be messy and violent. People will kill each other over physical necessities, but it takes esoteric questions like justification through faith vs. works to bring out their viciousness. As the recent anniversary of the end of the Bosnian war reminds us, neighbors make the most brutal enemies. The nastiest conflicts will not be across oceans (US vs. China, US vs. Europe) but across the back fence: Japan/Korea/China; Germany/Eastern Europe; US/Latin America.


[1] Aside on legitimacy: The contests of the Middle Ages were played out between kingdoms, whereas today’s players are nation states. Kingdoms were geographically dispersed (a duchy here, a land claim by marriage there), whereas today’s countries are compact. However, both built their legitimacy on a concept whose existence wasn’t predicated on daily politics: heredity in the Middle Ages, and territory today. I’m reminded of Antonio Damasio’s insight in The Feeling of What Happens: Body and Emotion in the Making of Consciousness that consciousness is built on a steady stream of “I’m still here” sensations from an organism’s body. The body is the invariant substrate on which consciousness can rely both to deal with an ever-changing environment, and to anchor the perspective from which the environment can be known. Heredity and territory are two viable substrates for a body politic: they continue to exist without having to be maintained, provide a reference for inputs, and anchor a state’s perspective. Any replacement for territory in a new kind of sovereignty will have to meet the same requirements, particularly having a prior basis outside of day-to-day politics.

[2] I could be wrong about the bone of contention being capitalism; it could be “democracy”. Either way, it reminds us that having shared values at a deep level is no guarantee of amity; quite the opposite, in fact.