Too successful for its own good. Should we save capitalism from itself?

There are many kinds of capitalism. Free market capitalism, which easily morphs into the dominance of corporations. Or social market capitalism, in which there is a larger role for the state and workers are represented on company boards. There is even state capitalism, in which everybody works for state enterprises, which pass themselves off as socialist, but exploit people just the same.

But now perhaps there are only two kinds of capitalism which count. Successful capitalism and capitalism which is too successful for its own good. The consequences of each are different but equally horrible in their own way.

Back in the roaring nineties successful capitalism was thought to be the only game in town. In Britain, Tony Blair’s New Labour exemplified the social democratic acceptance of capitalism. The “market” would hum along unmolested in the background and the government would skim off the tax revenue. Labour spokespeople waxed lyrical about the wealth-creating genius of the private sector and spent the proceeds on tax credits for the working poor, the National Health Service – health spending went up by 30 per cent – and relieving child poverty. It was, in essence, a deal.

But, said Left and green critics of capitalism, this was a myopic accommodation, trading short-term advantages for long-term disaster. Growth – the social ecologist Murray Bookchin said expecting capitalism not to grow was like expecting a lion to become vegetarian – might support enlarged public spending but would eventually make the planet unliveable.

In 2007, a British professor of engineering worked out that, based on an economy growing at three per cent a year, we would consume resources equivalent to all those we have consumed since humanity began as a species by 2040. In 33 years. I think the word you are grasping for is unsustainable.

As the writer Mark Fisher has said, successful capitalism was based on a fantasy: “A presupposition that resources are infinite, that the earth itself is merely a husk which capital can at a certain point slough off like a used skin, and that any problem can be solved by the market”.

To believe in successful capitalism you had to stick your index fingers in your ears and sing “la, la, la” very loudly. But both celebrators and critics agreed that capitalism worked.

Oh shit

But just as capitalism was swaggering around the globe, assured in its invincibility, disaster struck.

The global economic meltdown happened, the worst economic contraction since the Great Depression. $14.5 trillion of value was wiped from global companies.

The former masters of the universe, who meet at Davos, now speak of a “dystopian future” destroying the gains of globalization.“For the first time in generations, many people no longer believe that their children will grow up to enjoy a higher standard of living than theirs,” they warn.

Something had gone badly wrong.

The conventional explanation was that investment banks were too reckless, financial speculation overreached itself and the economy became dangerously skewed. But, in truth, capitalism had become too successful for its own good.

In the US, where the crisis was hatched, wages had stagnated since the mid-70s, while productivity – worker ouput that the employer benefits from – raced ahead. The result was not only spiralling inequality (the US was actually more equal than many western European countries in early ‘70s) and burgeoning corporate profits, but an orgy of personal borrowing so that consumption could be maintained despite the fact that earnings weren’t going up.

A cursory look at recent US economic history shows a series of bubbles. A massive stock market crash struck in 2000. The price of shares is dependent on the expectation of future corporate profits so crashes occur when there is a realisation of total over-optimism about profits. The crash was stopped from turning into a recession by reducing interest rates to below the rate of inflation for three years. Borrowing doubled – the house price and house building bubble ensued – but when that burst so spectacularly in 2007 there were no more bubbles left. Reality – the reality of stagnating earnings – could be evaded no longer.

A dusty old critique of capitalism suddenly became remarkably persuasive. That held that capitalism was inherently self-destructive. Each employer tries to keep wages, which are just another cost, as low as possible. But if they are too successful in that endeavour, the same workers with the low wages won’t be able to play their other vital role in capitalism, that of consumers of goods. Economic health depends upon the employer impulse to keep wages down being frustrated by another countervailing power. Capitalism can be too successful for its own good.

Flatliners

Worryingly for economic health, the US capacity for stagnating earnings has proved a very effective export. In the UK, earnings grew strongly throughout the ’80s and ‘90s but have flat-lined since 2003, four years before the onset of the ‘great recession’. Worker productivity, meanwhile, has kept on steaming ahead. Post-downturn wages rises in Britain are currently half the rate of inflation. Average wages are forecast to be no higher in 2015 than they were in 2001. France and Germany have followed a similar trajectory. Researchers describe an acute “decoupling”of earnings from growth.

The UK Resolution Foundation, which has produced a series of reports on living standards, worries that a return to growth won’t necessarily mean rising wages. Stagnating earnings also ensure burgeoning inequality (yes, it can get worse).

But there is another larger, elephant in the room, problem. The US experience demonstrates that you can’t, to use the economists’ elegant term, “decouple” growth from earnings forever, without eventually destroying growth as well (in industrialised, western countries at least, the experience of developing, exporting countries like India seems to be different). Earnings are purchasing power, in economics-speak ‘demand’, and growth cannot survive indefinitely without purchasing power.

The economic vista in front of us is that of a tsunami of bank debt inexorably making its way to shore. At the same time, earnings power which could lift countries out of recession, is exhausted. The level of personal borrowing is huge and, as we have seen, earnings stagnated or declined even before the recession.

That last factor cannot be wished away, or undone by governments even if they were inclined to. The reasons for stagnating earnings are analysed by a Resolution Foundation report. Technological change has obviated the need for low-skilled workers, firms have given precedence to share dividends over the pay of ordinary workers, outsourcing has increased, and the bargaining position of workers has been diluted. None of these factors will be reversed given current trends and the balance of power politically and economically.

The globe stops warming

It doesn’t have to be this way, you cry. And you’d be right. The Resolution Foundation report, Painful Separation, finds that in some European countries, namely Finland, Sweden and Denmark, there has been only mild divergence between economic growth and median pay. It is no accident that in Scandinavian countries, they say, “Recession? What recession?”

They haven’t killed the goose that lays the golden egg. They, if it isn’t stretching the metaphor too far, nurture their goose. They have effective countervailing powers like strong trade unions. They haven’t left successful capitalism behind. But there is a catch.

Amid all the deleterious social effects of the great recession – the homelessness, the riots, the suicides, the divorces – there was one undoubtedly progressive, though unintended, result. The sudden drop in economic activity achieved something international protocols and protesters invading airport runways had failed to. The rate of global warming was arrested. For only the fourth time in 50 years, carbon emissions fell.

It is clear that the kind of capitalism that Anglo-Saxon societies have been living through for the past 30 years is an ineffective form of capitalism. Growth rates have been unimpressive, financial crises have become more frequent and earnings have been held down. Too much power has been given to or taken by corporations and the rich. Capitalism has become too successful for its own good.

The South Korean economist, Ha-Joon Chang, in his book 23 Things They Don’t Tell You About Capitalism, argues convincingly that what we call “free market economics” has been shown to fail spectacularly. He puts the case for more assertive government control, different forms of ownership, the outlawing of financial products like derivatives, and the rebalancing of the economy away from finance and into the long-term production of manufactured goods. Capitalism can work if the harnesses are placed back on and it is guided in the public interest.

In other words, a return to successful capitalism, a capitalism that is in rude health. Chang eulogises the “miraculous” performance of South Korea in the ‘80s and ‘90s, which grew at an average of six per cent year. China today, he says, illustrates what can be done if free market prescriptions aren’t followed.

The problem isn’t the economic reasoning. The problem is that the world, ecologically, cannot cope with the replication of the Chinese or South Korean economic success stories. If earnings in the US had continued to track GDP growth, as they had done from 1945 to 1973, the average household would have earned $80,000 a year, not $50,000 as they in fact do. Even accounting for the spike in borrowing, consumption has been suppressed in US as capitalism has become too successful for its own good. It is revealing that Chang mentions the word “environment” just once in his entire book.

Chang, like John Maynard Keynes seventy years ago, wants to save capitalism from itself. 

Post-capitalism

But the truth is that neither successful capitalism, nor capitalism that is too successful for its own good, presents a remotely desirable prospect.

The latter leads, in Ann Pettifor’s words, to “dramatically higher levels of unemployment, the loss of savings, home foreclosures, bankruptcies, emigration, suicides, divorce, social unrest and political upheaval – to name but a few of the consequences.”  The former provides a swifter route to the dystopian future of global warming.

Awareness of the awful consequences of both alternatives leads to the realisation that the only rational option left is some form of post-capitalism. It doesn’t mean, in the caricature of one British government minister, everyone running around in Maoist boiler suits, but it does entail an end to the growth fetish and ensuring a secure standard of living for everyone. What “post-capitalism” is like in detail is what we should be concentrating on now.

You don't have to be a psychopath to work here but it helps. Does Darth Vader run Goldman Sachs?

“Know the power of the dark side” says Darth Vader to Luke Skywalker in The Empire Strikes Back. But we haven’t, it seems, taken Darth’s wise, if husky, counsel to heart. According to management researchers we are naively unaware of the dark’s malign and boundless influence. “Dark leadership” they claim, was the force behind the global financial crisis.

Once great companies were brought to their knees by “impostors” acting as their leaders. Dark, dysfunctional leadership has destroyed firms with historic reputations. Employees have lost their livelihoods, shareholders their investments and, perhaps most troubling of all, capitalism has lost some of its credibility.

Corporate psychopaths, says Clive Boddy, a Professor at Nottingham Trent University, are one type of dark manager. In a paper for the Journal of Business Ethics entitled “The Corporate Psychopaths Theory of the Global Financial Crisis” Boddy says corporate psychopaths “probably” or “largely” caused the global financial meltdown.

Commentators, says Boddy, no longer accept that all managers work selflessly for the benefit of the organisations that employ them. Corporate psychopaths are an example of this selfish, destructive manager.

Psychopaths are the one per cent of people who completely lack a conscience. They are charming but ruthless and entirely out for themselves. As a result, they are a menace to the companies they work for and society as a whole.

These psychopaths rose to senior positions within financial corporations where they were able to influence the moral climate of the organisations that employed them, Boddy claims. They “largely caused the crisis” because their “single-minded pursuit of their own self-enrichment and self-aggrandizement to the exclusion of all other considerations has led to an abandonment of the old-fashioned concept of noblesse oblige, equality, fairness, or of any real notion of corporate social responsibility.”

How did these monsters manage to get so powerful? Well, before the 1980s, companies were more stable and slow to change, Boddy writes. Corporate psychopaths were more noticeable as “undesirable managers” and their “selfish, egotistical personalities” didn’t get them very far. But then the corporate environment became more dynamic and chaotic and corporate psychopaths made their way to the top of organisations which they were able to destroy from within.

Bollocks

There’s one slight flaw in this theory. It’s complete bollocks. Far from these “undesirable managers” rising invisibly through the corporate hierarchy until they reached the corner offices of financial behemoths, they were eminently desirable and desired. Brian Basham, “veteran City PR man, entrepreneur and journalist”, writes approvingly of Boddy’s corporate psychopath theory for the UK Independent newspaper. But mid-way through the article Basham relates a conversation he had with a “senior UK investment banker” about the attributes of successful banksters. The senior investment banker makes a confession:

“At one major investment bank for which I worked, we used psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles.”

“Here was one of the biggest investment banks in the world seeking psychopaths as recruits,” writes Basham.

This major investment bank, for some mad reason, preferred the characteristics of psychopaths to the “old fashioned concept of noblesse oblige” equality or fairness.

Never-ending growth

But when Basham tries to locate the source of the malaise he, too, drifts swiftly into fairy land. He thinks the financial sector’s search for “never-ending growth” is to blame.

I hate to the interrupt the catharsis of hating heartless bankers but the search for never-ending growth is universal in capitalist societies and not restricted to the intangible, abracadabra money-creating world of finance. Every week newspapers fret over whether economic activity in the services or manufacturing sector is above 50 per cent (that means growth hurray!) or below 50 per cent, which means contraction (we’re all doomed!). Governments manically chase the willow the wisp of growth. Without growth, in this society, we’d live in a permanently depressed economy, with the blights of high unemployment, poverty and homelessness for company. Without growth, in technical terms, you’re screwed.

Growth is, to use a word that is coming back into fashion, systemic and the financial sector, like every other sector of the economy, hasn’t stopped pursuing it, even if it has stopped achieving it.

Greggs the Bakers, to take one example, is not a bank - you can’t get much more tangible than a sausage roll - but it, too, has a never-ending search for growth and has been very successful in achieving it. It now has more high street shops in Britain than McDonalds. The way companies, including but not only banks, operate, is to secure and augment market share, destroy the competition, make as much money as they can and achieve as close to monopoly status as possible. In other words, grow.

Rip out their hearts

Basham has seen Dick Fuld, former CEO of Lehman Brothers on video, snarling that he wanted to rip out his competitors’ hearts and eat them before they died. It’s terrifying, he says. But it’s also not unique. I personally can attest to one manager in a non-financial company who wanted to render a competitor so poor they couldn’t even afford shoes. Some people do take the injunction to destroy the competition rather too literally. But they aren’t all psychopaths. They are all senior managers in capitalist firms, however.

Here is Dick Fuld in action (note the applause after he says he wants to rip his competitors’ hearts out)

Basham’s neat separation of good and bad capitalism, like Ed Miliband’s emphasis on predatory capitalism, ignores the allure of finance in the first place. It wasn’t just the likes of Lehman Brothers, Goldman Sachs and Citigroup that were, to use a technical economic term, “at it”. Manufacturing companies like Ford and General Electric diversified massively into finance for the rather prosaic reason that they could make far more money out of lending to people than through their core business of making cars, light bulbs or fridges. “Because its lending division, GE Capital, has provided more than half of the company’s profit in some recent years, many Wall Street analysts view G.E. not as a manufacturer but as an unregulated lender that also makes dishwashers and M.R.I. machines,” says a New York Times article.

 The dominance of finance is not an aberration, but a simple recognition of where the biggest profits can be made.

Basham, in approving of the corporate psychopath theory says that, in unregulated times, the least-principled rise to the top. But how, prey, did the times get so unregulated? Through continuous and expensive lobbying by financial corporations and banks, that’s how. The US Commodity Futures Modernization Act of 2000 which legalized speculation in commodities and derivatives like credit default swaps, didn’t happen all by itself.

Can Basham name a single corporate CEO, psychopathic or non-psychopathic, who lobbies for more regulation? That might as well have been a rhetorical question.

Psychopaths didn’t lobby for financial deregulation anymore than they employed themselves in investment banks.

Functional, all too functional

Deregulation and the ensuing crisis, scandals and bankruptcies did not come about because of bad people or dysfunctional leadership. Leadership was all too functional. In the words of American economist, Richard Wolff: “Capitalism systematically organizes its key institutions of production – the corporations – in such a way that their boards of directors, in properly performing their assigned tasks, produce crises, then undermine anti-crisis reforms, and thereby reproduce those crises.”

It’s all the difference the world. To use an analogy, Manchester United is not a football club because Manchester United Plc employs people who are good at football anymore than Lehman Brothers acted psychopathically because psychopaths wheedled their way into leadership positions at the firm. Manchester United is designed and constituted to be a football club so it seeks to recruit people who can tackle, catch left-wing crosses swinging in the wind, or are lethal from 12 yards. Investment banks seek psychopaths for the same reason that Manchester United seeks young men who can score 30 goals a season.

It isn’t complicated and the fact that intelligent people can’t see it must mean there is a reason for their willful blindness. There is a taboo at work here. As Jack Nicholson once said, “The truth? You can’t handle the truth.”

I don’t want to burst Boddy’s carefully constructed career bubble (actually that’s a lie) but it is quite possible to work selflessly for the benefit of the company that employs you and for that company to behave selfishly, psychopathically even. The aforementioned General Electric has a giant tax department with the sole purpose of avoiding tax. GE actually received a tax benefit in the US of $3.2 billion in 2010. “We have a responsibility to shareholders to legally minimize our costs,” explains a GE spokeswoman (the second, unspoken part of the sentence is “everyone else can get f*****”). That’s an institutional reason for selfishness. No psychopaths needed. Fairness and noblesse oblige are also conspicuous by their absence.

But the expectation that managers should be selfless is, in any case, mystifying. “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest,” said Adam Smith. That sentence has become one of the foundations of market economics. Our own personal selfishness, in other words, leads to an overall benefit to society. Self-aggrandizement and the desire for self-enrichment are expected, desired even, in capitalism. But now, according to Boddy, those same selfish qualities have become the reason for disaster. I must have missed something.

Friedrich Hayek, the free marketeer who had such an influence on Margaret Thatcher, said society would prosper if everyone was motivated by personal gain. Now we are told by capitalist ideologues like Boddy that the problem is too much selfishness. You have to admire the flexibility.

The psychopath theory of the financial crisis needs further development and research, says Boddy. And like investment banks during the boom, there is immense potential for expansion. Why not apply the theory to 9/11 for example? The reason Al-Qaeda flew planes into the World Trade Center was because it was run by psychopaths. What we need is a new Al-Qaeda with leaders committed to fairness and equality. If that sounds ridiculous, that’s because it is.

Surely the role of psychopaths in causing the Second World War has been underplayed? The National Socialist German Workers’ Party must have been honeycombed with psychopaths. Unfortunately for the theory, Reinhard Heydrich, the man who conceived and planned the Final Solution, was partial to the very non-psychopathic activity of playing Beethoven string quartets with friends in his spare time.

The truth is far more disturbing. With all due love and respect to the Occupy Movement, it isn’t the one per cent of psychopaths that you need to worry about, but the other 99 per cent.

The 99 per cent

The Milgram Experiment, which has been examined in this blog, explains why attributing outcomes no-one likes to psychopaths is a monumental cop-out. In the experiment, first conducted 50 years ago, members of the public were instructed to give electric shocks to a “learner” if he got memory testing questions wrong. No real shocks were actually delivered, the “learner” was acting, but the participants thought they were really hurting someone. One or two per cent of people relished giving the shocks – up to 450 volts - and inflicting pain. They were real sadists, maybe psychopaths.

 The vast majority – around 70 per cent of participants – didn’t like what they were doing but went on dutifully giving electric shocks on instruction, even passed the point they thought the learner might be dead. They took no pleasure in delivering the shocks - they shook, sweated, they even laughed hysterically at themselves – but they obeyed, and did it anyway.

The motives of the sadists/psychopaths and the ordinary folk were completely different. But their actions were the same.

As the creator of the experiment, Stanley Milgram, said, subjective feelings were irrelevant. When a person merges their unique personality into an organisation, they become a mere vessel, and are no longer an autonomous person. “It is the essence of obedience that the action carried out does not correspond to the motives of the actor,” he concluded, “but is initiated in the motive system of those higher up in the social hierarchy.”

In case of the investment bank that used psychometric testing to find psychopaths because they were so suited to senior finance roles, non-psychopaths would have had to mimic their behaviour or find somewhere else to work. Their own motives and personalities were irrelevant.

In the 18^th century, the French philosopher Montesquieu said, “First men make institutions but afterwards institutions make men”. It is a simple piece of wisdom. If we want real change we had better change institutions because changing people is a road to nowhere.

On one point, however, Boddy is correct, if for the wrong reasons. He says that if the corporate psychopaths theory of the financial crisis is accurate, “we are now far from the end of the crisis. Indeed, it is only the end of the beginning.” The second part is true.

Here is a more rational view of the corporate psychopath (it's not about individuals)

Is everything my fault? Conservatives, responsibilization and Jean-Paul Sartre

There is a table in Walter Benn Michael’s book, The Trouble with Diversity, at once vindicating and disquieting. The table shows average American SAT, college admission tests, results ranked by family income. It is no shock that students from rich families have much better scores than students from poor ones. What is fascinating, though, is that scores rise smoothly depending on family wealth. Students from quite rich families do well, but not quite as well, as students from very rich families.

The Spirit Level, written by the English epidemiologists Richard Wilkinson and Kate Pickett, uncovers the same trends across a whole range of malaises from obesity to teenage conceptions.

 The percentage of young British women from the second richest quarter of households who become teenage mothers is double that of women from the richest quarter. Mothers from the second from top social class group are more likely to say they have a poor relationship with their children than mothers from the very top social class.

It is not just that extreme differences in circumstances produce different real-world outcomes. But also that small differences in circumstances appear to produce palpably different outcomes.

Even something as personal as mental health is intimately related to kind of economic system you live in, actually the kind of capitalism. Americans, for example, are far more depressed, on average, than Italians. And mental health can change remarkably quickly, apparently in response to changed economic conditions. Oliver James in his book The Selfish Capitalist shows what happened when Australia deregulated consumer credit in the 1990s. Within a few years Australians had three times as many credit cards as Europeans and worked the longest hours in the developed world. During the same period, mental distress spiralled. The number of Australians who were severely distressed, to the point of seeking treatment, rose by two-thirds in four years.

The idea that how you think is basically a product of your social environment is not new. It was Karl Marx who famously said, “It is not the consciousness of men that determines their social being but, on the contrary, their social being that determines their consciousness.”

Before Marx there was the socialist pioneer Robert Owen, who said the problem of his age was the Christian insistence on “individualization”, fixing responsibility for problems on the individual and denying the all-powerful influence of society.

Just as in Owen’s time, there is now a clamour for fixing responsibility for problems on the individual. Growing and convincing evidence for the indisputable influence of society explains why books like The Spirit Level, which meticulously document how social and economic systems influence behaviour, have been attacked by right-wing thinkers. They know it’s on to something.

But there is also something in this line of thought, call it determinism, that people who aren’t right-wing ideologues recoil from. It’s not inevitable that if you are well off, as opposed to very rich, you will have a slightly more fractious relationship with your children. Most people can’t help but rebel against the idea that “their social being determines their consciousness”, no matter how many statistics are around which say that it does. They are not just puppets of circumstance. They still feel free.  

And they are right. Nobody but you decides whether to slump on the sofa for hours watching tv or go out and exercise. Nobody but you decides who to sleep with or who to marry. Whether you like it or not, you are responsible.

This feeling explains the stubborn allure of the right-wing emphasis on personal responsibility, despite its myriad contradictions. You choose your own destiny, say conservatives. Chick lit writer turned British Conservative MP, Louise Mensch encapsulated this perfectly in a Guardian profile last September. “I take the classic Reaganite view that if you want something, you have to do it yourself,” she said. “Life is what you make it, don’t accept your limitations, jump before you’re pushed, leap before you look.”

You can scoff like the author of the profile, and scoff quite justifiably, that nothing will shake Mensch’s opinion that the only difference between her and some jobless loser on a council estate, is a go-getting attitude. Mensch, of course, was privately educated and comes from very wealthy family (something like the great ‘rags to riches’ entrepreneurs Rupert Murdoch and Richard Branson). But when she says nobody else wrote my novels for me and “my achievements, such as they are, are my own”, she is right. Even if you are the privately educated daughter of Catholic gentry, it’s not inevitable that you will write crap novels or get elected as a Tory MP. You have to want those things.

Is there a way out of this conundrum, where the claims of both free will and social determinism appear justified in their own way? “It makes no sense to complain since nothing foreign has decided what we feel, how we live, or what we are,” said Jean-Paul Sartre in 1943. Sartre was the father of existentialism, an unforgiving doctrine of personal responsibility that would make even Louise Mensch blush.

When Gary Cox, author of How to be an Existentialist says “Freedom is not freedom from responsibility, freedom is having to make choices and therefore having to take responsibility,” he sounds like a stern conservative fundamentalist. Sartre was so uncompromising on personal choice that he even wrote, “I can not be crippled without choosing myself as crippled.”

To existentialists, consciousness was all about future possibilities. You always have the freedom to respond to a given situation. Even you are being escorted by prison guards down a strip-lit corridor leading to a lethal injection chamber, Sartre would say you still possess the freedom to respond to that situation in the way you want to.

His major philosophical work, Being and Nothingness, was written against "determinists of all stripes" .

But Sartre was not a conservative. He was a Marxist. He wrote a long book, Critique of Dialectical Reason, trying to reconcile existentialism and Marxism. His brand of Marxism ranged from the flawed to the bizarre. He was a long-standing supporter of the Stalinist French Communist Party and ended up dallying with Maoism and the Baader-Meinhof gang. I’ve no interest in defending these allegiances, but the point remains that Sartre, the most unforgiving and anti-determinist existentialist, was not a conservative or a neoliberal. The reason why I hope will be apparent soon.

Here is a film about Sartre::

Another existentialist, the psychologist Viktor Frankl, wrote a book about his experiences in Nazi concentration camps, including Auschwitz. Even in the worst imaginable circumstances, you can find meaning, find a way to react, he said. He wrote a critique of what he called, pan-determinism.

You cannot be free from conditions, said Frankl, but you are always free to take a stand towards those conditions.

“As a professor in two fields, neurology and psychiatry, I am fully aware of the extent to which man in subject to biological, psychological and sociological conditions,” he wrote. “But in addition to being a professor in two fields I am a survivor of four camps – concentration camps, that is – and as such I also bear witness to the unexpected extent to which man is capable of defying and braving even the worst conditions conceivable.”

You can predict the future only within the framework of a large statistical group, said Frankl. The individual remains essentially unpredictable.

This is Frankl being interviewed:

 There are similarities between the conservative and the existentialist emphasis on responsibility, but only superficial ones. The conservative explanation for the economic crisis is that people in general, an undifferentiated mass of people, were responsible. Conservative MP Jesse Norman blames “humans” for not understanding risk properly and misguided banks who hyped unaffordable mortgages on a credulous public. Companies, he goes on, are formed by human affection (stop laughing). So if companies spring out of human desires, then what they do is the responsibility of all of us. If the economy tanks, we have brought things on ourselves. The “economic system” has no impulses of its own apart from the desires of the people that comprise it, said the free market Institute of Economic Affairs in 1978. Capitalism “does what its users demand of it” says another British right-winger, Tim Montgomerie. “How can we put limits on ourselves?” he asks with perplexity?

But while conservatives say people cause their own problems, it denies their ability to change the underlying economic conditions save the contortions of trying to make themselves fit in. This is real cruelty of contemporary conservativism/neoliberalism. It says it’s all about freedom but really it’s just about adaptation.

Long ago Karl Polanyi noted the “rigid determinism” of free market economics. The market economy is a delicate machine that only works if government gives way to what the markets want. In modern times, while globalization was just something to be celebrated, the American journalist Thomas Friedman talked about the “golden straitjacket”. Countries would only prosper if they privatized state-owned companies, cut corporate taxes, balanced budgets and eliminated restrictions on foreign investment.

The straitjacket isn’t golden anymore, but it has been stretched even tighter. Debt-ridden governments, bankrupted by bailing out banks and recession without end, say they have no choice but apply drastic cuts to public spending to satisfy the same “markets” that lent to them. Prosperity isn’t the aim anymore, just survival.

What Karl Polanyi wrote of the Great Depression is now just as true eighty years later. “Whether wages or social services had to be cut, the consequences of not cutting them were inescapably set by the mechanism of the market.”

American journalist Barbara Ehrenreich has written of the plight of professional Americans who have done everything right – got impressive degrees and gained marketable skills – and still find themselves economically unneeded and jobless. They, in their thousands, turn to career coaches, who immediately locate the problem in them and their attitudes, rather than in an economic system that finds them dispensable. In the 1820s, Robert Owen spoke of individualization, denying the influence of society and blaming the individual for everything that befalls them. Now we have the same malaise. It has been termed responsibilization.

“If it is the individual, not the economic system, that is at fault then it is the individual, not the economic system, that must be reformed,” writes Dan Hind in The Return of the Public … “No matter how hard we try (my italics), the current economic system needs fewer and fewer of us.”

Contemporary conservative and neoliberal ideology are well-refined techniques for inducing depression, and the evidence suggests they do it very well. You are responsible for everything that happens to you but there is nothing you can do to change the situation.

The American economist Richard Wolff says a perfect recipe for unhappiness is trying to solve a social problem through individual action. It’s like trying to unlock a door using the wrong key. It won’t work and it won’t do any good blaming yourself for the door’s failure to creak open. You need to change the circumstances and use the right key. Alternatively you could just kick in the door (actually this metaphor might have legs).

Which is where existentialism comes in. Existentialists said consciousness was never determined. A person could never escape the freedom to choose how they responded to a given situation. But because consciousness is always about possibilities not inevitabilities, they never denied the possibility of responding by changing the situation as well. Conservatism (or neoliberalism) does deny this precisely because it is a philosophy of adapting to what is. It is, as Karl Polanyi realised, rigidly deterministic in its own way.

At the same time there is a brand of left-wing determinism that goes back to Karl Marx and Robert Owen that is equally disabling. Just as the economic system causes depression and obesity and drug use (pick your problem at will) so the system will cause people to rebel and change it. In Capital Marx said that capitalism would produce its own gravediggers. Unfortunately it doesn’t. It seems to produce at best apathy and at worst mass delusions so that even when it is cracking up people think nothing is basically wrong.

It seems glaringly apparent that the trajectory we are on, will lead sooner or later, probably sooner and in some instances now, to economic, social and ecological disaster. But changing that trajectory will be an assertion of genuine choice and freedom. It will be doing something that is unexpected, unwanted and undetermined, a classic Existentialist choice. The Occupy protests are a perfect example, unpredicted and unpredictable. They are unnerving to the powers that be precisely because no-one knows, including the participants, where they will lead.

“Waiting for someone else to do the job for us is a way of rationalizing our inactivity” says the Slovenian Marxist philosopher Slavoj Žižek. It’s not wise to read Žižek unless accompanied by a barrel-load of salt, but in this instance he is right. The direction is history is towards biocide and total passivity. We can’t rely on “objective tendencies” as Žižek calls the crutches of deterministic Marxists, to save us. We must intervene against the grain, like deciding to run down the street naked, in an Existentialist assertion of freedom.

As Louise Mensch says, “Life is what you make it”.