Corporate Socialism and the Capitalist Underclass

 

Politics now – witness Keir Starmer’s neo-Blairite recapturing of the UK Labour party – seems to inhabit a mental universe of its own creation rather than trying to deal with the inconvenience of reality. And occasionally the dissonance reaches comical heights of absurdity.

Boris Johnson, for example, when asked recently to justify the ending of the £20 uplift for Universal Credit recipients in October – which the government’s own internal modelling concedes will have a “catastrophic” effect – replied that it was his “strong preference” that people saw their wages rise “though their efforts” rather than through the taxation of other people.

Effort you say. Leaving aside that most people on Universal Credit are actually in work – and thus already are making an effort – the preferences of conservatives don’t seem to stretch to the most glaring welfare dependence affecting society today – the mammoth no strings giveaways to corporations and the immensely wealthy. Which curiously aren’t ending next month and necessitate about as much effort as turning a computer on.

Austerity in reverse

In the aftermath of the Great Financial Crisis of 2008, the world’s central banks (state banks like the Bank of England or the US Federal Reserve) literally created $10 trillion. In response to the Covid-19 pandemic, they created a further $9 trillion. For the past 18 months, central banks have generated $834 million an hour. This goes by the innocent sounding name of Quantitative Easing (QE for short).

QE is initiated by the central bank bringing into being a batch of new money (often called ‘fiat money’ i.e. money without the backing of gold – from the Latin meaning ‘let there be money’. Don’t picture a Fiat 500, that doesn’t capture its size). This is used to buy assets, usually government but also occasionally corporate bonds (debt), from banks, insurance companies or pension funds.

This has two main effects. One is to force interest rates down to very low levels, thus enabling heavily indebted institutions to survive. And the second is to create – by the buying of the assets – a huge mass of money ($13.9 million each minute) seeking investment opportunities and which is incentivised by the low interest on government bonds to go into other assets such as shares, property or commodities. As a result of this influx, their price increases.

QE is invariably presented as “pumping” money into the economy. In reality it involves pumping huge amounts of money into the financial system. Banks are not inclined to lend to the ‘real’ economy, which is the official story behind QE, if returns from buying and selling other assets (such as company shares) are higher. Corporations are not motivated to invest in plant or equipment if they can make more money from buying back their own shares, whose value is guaranteed by QE. Mergers and acquisitions – buying a company, asset-stripping it and selling it on – are also fuelled by the vast funds created by QE.

In theory, QE can be an emergency measure, helping the economy through a rough patch, and then being reversed so that ultimately no new money is created. But this is not how it turns out in practice. The Bank of Japan is still engaging in QE 20 years after it pioneered the policy. In 2018, the Federal Reserve started ‘quantitative tightening’ – the selling or retiring of assets on its balance sheet – but had to call a halt to the process less than a year later because of a negative reaction from markets. This was, it should be stressed, before the pandemic.

Rich bono

Unsurprisingly given how it works, QE has a hugely regressive effect on inequality. It’s not rocket science to understand that if the value of shares goes up, the prime beneficiaries are rich people because they are most likely to own shares. Additionally, banks and corporations benefit because they own shares in each other. “Owners of property have made out like bandits,” said hedge fund owner Paul Marshall in 2015. “In fact, anyone with assets has grown much richer. All of us who work in financial markets owe a huge debt to QE”.

The latest, Covid-inspired, rush to QE has massively exacerbated this inequality. Five million more millionaires were created during the pandemic, while the number of people worth more than $50 million increased by a quarter. Stock markets have hit record highs despite precipitous drops in GDP. In Britain, contrary to all previous recessions, property prices have continued their upwards trajectory. “The world is awash with central bank money,” says economist Grace Blakeley, “and it’s all flowing up rather than trickling down”.

Take from the poor and give to the rich

The QE reflex exposes just how right-wing – across the political ‘divide’ – our politics is, notwithstanding ephemeral lapses like Jeremy Corbyn’s Labour party. In 2019 the China-based economist Michael Pettis mused over two different ways to stimulate an economy – “giving to the rich” and “giving to the poor”. Giving to the rich involves tax cuts for business and the wealthy and policies such as QE “which tend to cause a rise in the prices of assets, most of which are owned by the rich.” Giving to the poor, in Pettis’s description, entails cutting taxes on the not wealthy, funding social safety nets, creating jobs or “setting minimum basic income policies”.

It’s revealing that the response of the British government – and other western governments – to the financial crisis and the Covid pandemic has almost exclusively centred on the first option. In addition to endless QE, corporation tax has fallen from 28% to 19% (it is slated to rise to 25% in 2023 but whether that will happen is a moot point). The top rate of income tax was also cut by George Osborne in 2012 and, if that wasn’t enough, capital gains tax (the tax you pay when you sell shares) was slashed by the soon-to-be newspaper editor in 2016.

As for the second option, it is not a question of giving to the poor but rather of taking from them. Taxes which affect poor people the most, such as VAT and now National Insurance, have been hiked. Social safety nets, by contrast, have been cut – witness the benefit freeze, sanctions, and the £30 cut in weekly payments to disabled people. Creating jobs has been left to the tender mercies of the private sector, and as for basic income policies, I think there’s been a pilot project in Finland. In Britain, destitution and food banks are the preferred course of action.

Boris Johnson’s “strong preference” for people to see their incomes rise “through their efforts” strangely only applies to folk without share portfolios. “The imbalance is unbelievable,” says Robert Reich, former labour secretary under Bill Clinton in the US, “Socialism for the rich, corporate socialism, but the harshest form of capitalism for most working people and the poor.”

The whimper of capitalism

 Of course, the notable feature of “corporate socialism” – apart from its colossal unfairness – is that it’s not capitalism anymore. QE is a massive distortion of the fêted free market. The theory of capitalism is that asset values are based on economic fundamentals – if stock prices rise that is because people believe, maybe mistakenly but genuinely, that the companies in question will generate profits in the future. Under the QE regime, they are rising because the state, in the guise of ‘independent’ central banks, is injecting huge amounts of money into markets.

Former Greek finance minister Yanis Varoufakis sees this as a momentous change. Pre-financial crisis capitalism (before 2008) may have been based on “daylight robbery” – the extraction of rent from a market controlled by Coca-Cola or General Electric – but it was still rooted in some kind of market and driven by private profits. That is no longer the case:

Then, after 2008, everything changed. Ever since the G7’s central banks coalesced in April 2009 to use their money printing capacity to re-float global finance, a deep discontinuity emerged. Today, the global economy is powered by the constant generation of central bank money, not by private profit.

To be more precise, the pursuit of private profit is still at the heart of the system – we haven’t socialised hedge funds – but the profit urge does not ‘make the world go round’. Central banks do.

 Market society, not economy

The supreme irony is that while the economic summit of society is changing into something that is not capitalist, capitalist values are penetrating ever more deeply into the texture of life. Economic and monetary values dominate politics and morality and we seem unable to value non-economic realms without assigning them a financial status, such as “natural capital”.  Individual endeavours, such as learning, physical fitness, volunteering, or nurturing ‘mindfulness’ are frequently seen in terms of their effect on our employability and careers, and undertaken for that reason.

In the 1980s, the social ecologist Murray Bookchin pioneered the idea that we don’t just live in a market economy, but also a market society. By the middle of the 20^th century, he said, “large-scale market operations had colonised every aspect of social and personal life.” The prognosis in the second decade of the 21^st century is that we seem to live in a market society without the concomitant market economy. Or possibly an irredeemably rigged market economy.

How long will it last?

The ultimate question is whether this regime of corporate socialism is sustainable. Japan, “the petri-dish” of Quantitative Easing, been following the policy since 2001 – several years before the rest of the advanced capitalist world followed in its wake. Indeed, it has deepened the practice considerably, coming to own around half the company shares quoted on the Tokyo stock exchange. “If this trend continues it is evident that the Japanese state will become the de facto owner of the bulk of what has been the hitherto privately owned enterprise sector,” wrote economist Harry Shutt in 2019.

However, from the point of view of the powerful and wealthy in Japan, the discernible effects don’t appear catastrophic. Profit has continued to be extracted, well-known corporate forms have endured and, if there has been a quiet revolution in ownership under the surface, it hasn’t resulted in a shift in power. In fact, inequality, low growth, ferocious competition for jobs and little prospect of pay rises, have, far from inculcating a spirit of rebellion, fuelled a culture of conservatism among Japanese youth.

The rulers of our society don’t have, despite the propaganda, a fervent ideological commitment to the free market, but merely a belief in private property. If that endures, they are satisfied.

The lingering question is, if Japan has indulged the QE fixation for two decades without presaging economic Armageddon, are western economies free to follow its example and practice QE for years, decades even, and emerge basically unscathed? Or are we preparing the ground for a financial collapse of mammoth proportions?

I want to address this question in the second part.

 

 

 

 

 

 

 

 

 

 

The Banality of Obedience

 

In trying to understand the Milgram obedience experiments, the most important thing, in my opinion, is not to be dazzled by what they purport to show. The surface narrative – still loyally recounted in popular renditions every time the name Stanley Milgram is uttered – is that ordinary people can effortlessly be transformed into heartless torturers, that beneath our civilised veneers lurk potential concentration camp guards. In the next breath there are, invariably, earnest warnings about the Nazis and the Holocaust.

In fact, the truth is simultaneously more mundane and more disturbing.

What Milgram actually said was that we easily allow ourselves to be turned into agents for those above us in hierarchical organisations, doing what they want rather than what we ourselves would do. “Relationship,” as he put it, “overwhelms content”. That content can involve inflicting pain and death but – and this is rarely remarked upon – it can also involve content that is neutral, even benevolent or merely one link in a chain whose ultimate purpose is destructive or damaging. The specific action might appear innocuous but when placed together with other innocent looking parts of the whole, the ‘end product’ might be immensely harmful.

The crucial element is the relationship. Clearly the Milgram experiment (s) would not have achieved lasting fame had he asked volunteers if they wouldn’t mind passing a stapler (‘Psychology professor reveals we are all stapler-passers under the surface!’). Though it would have been interesting to know if anyone would have refused.

Commonplace obedience

This little noticed element in obedience to authority in fact produced the highest obedience rates. When Milgram’s subjects were merely asked to read out the word-pairs while a confederate of the experimenter actually pressed the buzzer supposedly inflicting electric shocks (the experiment was presented as a test of the effect of punishment on memory), obedience levels went through the roof. They registered 92.5%, the highest in the entire series of experiments.

Most replications of Milgram in the 1960s and ‘70s produced broadly similar results. One study didn’t however. That was by Wesley Kilham and Leon Mann in Australia in 1974. They reported obedience as low as 40% (and 16% for female subjects). This was the “notable exception” alluded to in Part One. However, when Kilham’s and Mann’s subjects became mere ‘runners’ – transmitting the experimenter’s instructions to a person playing the role of the teacher/shocker – disobedience was transformed into obedience. It hit 68% for men and 40% for women.

This is how contemporary obedience researchers, Dariusz Doliński and Tomasz Grzyb, describe this variation of the Kilham and Mann study:

As it turned out, people whose task was simply to transmit successive instructions to press the generator’s switches were even more pliant than those who – as in Milgram’s original experiment – were supposed to be the direct (physical) culprits responsible for causing physical pain to another person. This demonstrates that the role of being a cog in the bureaucratic machine facilitates the sense that one is neither the instigator of anything evil, nor directly causing any harm. As can be seen, in this particular type of situation, it is particularly easy to generate submissiveness and obedience. (From The Social Psychology of Obedience Towards Authority, pp 39-40)

The “particular type of situation” which lends itself so effortlessly to kindling submissiveness and obedience, is as emblematic of the corporation – which is in essence a private bureaucracy – as it is of the state machine. This is difficult to see in part because of the vehement ideology of freedom that accompanies corporate capitalism. But it is also obscured by the image, assiduously developed over the last 40 years or so, of the individual as a self-interested aggrandizer, always on the look-out for the best online deals, demanding faultless service, perpetually seeking fitness and attractiveness, constantly honing their CV. We may be irredeemably selfish but under a ‘free market’ system, we answer only to ourselves and our own desires.

However this was never true and still isn’t. As noted by the mid-20^th century economic historian Karl Polanyi, if we were purely self-interested negotiators always seeking the highest price for selling the commodity of our own labour, as theoretically we should do under the ‘laws’ of the market economy, we would be “almost continually on strike”. This obviously isn’t the case and is not solely due to coercion and the power of the law and the police. The added ingredient is the power of obedience.

The vast majority of us willingly enter – or we think we do – Milgram’s agentic state, where we temporarily become instruments for the wishes of people above us in the hierarchy (as they are instruments for people above them). The crucial element, as Milgram observed, is the sense of voluntary choice. This creates a sense of obligation, allied to a feeling of being absolved of any real responsibility, which is a powerful and dangerous brew.

The element of our economy which is always stressed by the media and the powerful is our freedom as consumers. But this, as the book elaborates, is at best half the story. We also spend much of our lives within – or bound to – hierarchical organisations which operate under the expectation of unquestioning obedience.  

As above, so below

It would be a mistake to think this cast of mind is restricted to the lower half of the economy, though it may be more explicit there. Most of us are agents for others. Since the 1970s, for example, ‘the agency theory of the firm’ has grown in popularity. This asserts that a company’s senior managers (chief exec, head of finance etc., often on salaries which place them in the 0.01%) are mere ‘agents’ of its ‘principals’, the shareholders, and should be expected to do their bidding. Whether these managers are in fact genuine agents for the company’s owners is open to question. At the higher echelons of the economy, people often have the power and wealth to pursue their own interests. But what is interesting is that they’re expected to be٭.

If anything obedience has grown in intensity since Milgram’s time, though not in the way that might be first thought. It occupies an unrecognised, though essential, space in the economy. Thanks to burgeoning information technology, ‘scientific management’ can control and keep tabs on employees’ behaviour in ways never dreamed of by its 20^th century pioneers. In efforts to increase productivity and minimize ‘loafing’, workers are regularly spied on and tracked by their own smartphones, with data compiled about their activities. Online wanderings are subject to screen capture and keystroke monitoring.  In some cases, a worker’s every action is planned out by headsets or hand-held devices, with punishment for deviation.

As one writer observes, this is not just about maximising profitability but “a vision of obedience and acquiescence”.

Gratefully oppressed

What makes these developments especially sinister is that they are accompanied by a powerful feeling that, beyond extreme infractions, this is the way things should be. In a market economy, where we freely choose which little dictatorship to rent ourselves out to, it is only natural that we obey the instructions of superiors.

In The Social Psychology of Obedience Towards Authority, Doliński and Grzyb give numerous examples of employees, or people assuming the role of employees in psychological experiments, obeying the instructions of superiors to carry out ethically dubious actions. For instance, racially selecting new employees or marketing an unsafe drug. Interestingly, the crucial factor does not seem to be an inherent desire to maximise profits, but fulfilling the wishes of senior figures in the organization of which these ‘employees’ are a part.

In my opinion, this is a form of obedience unique to the corporate capitalism societies we inhabit. There is an often fervent identification with the interests and aims of employers but one that can be seamlessly transferred to a competitor. This is serial obedience – in contrast to older types of obedience, around a nation or a religion for example, which tend to be quite fixed.

This feeling of habitual obedience is stiffened by a pervasive aura of disposability – the fear that if we don’t live up to expectations there is always someone else, maybe a robot, who can replace us. In this mindset, there is nothing wrong with obedience. Quite the opposite, it is questioning obedience that is pathological.

Evolution’s children

The natural objection to this thesis is that obedience is not imposed on us, but evident throughout history – so much so that it might be thought of as part of human nature.  In The Disobedient Society I refute Milgram’s contention (which echoes historical giants like Darwin) that obedience is an “evolutionary adaptation”. Actually, the evidence suggests that early humanity was able to knowingly flit between hierarchical and egalitarian social relations. Features such elite rule, social ranking or territoriality might be put into effect at certain times of the year and then dissolved. This indicates an element of choice in obedience which debars it from being a genetic flaw, or depending on your view, an innate advantage.

I refer also to Murray Bookchin’s distinction between first and second nature. Evolution, in the form of first nature, endows humans with the capacity to develop extra-biological tools and to consciously intervene in the natural world through a sophisticated collective organisation. However, the nature of this collective organisation is not determined by first nature. It lies in the realm of second nature – the domain of experimentation which can take many forms and is not governed by the ‘laws’ of natural selection.

The belief that obedience is immovable really relies on a different contention, however. That with the fragmentation of tasks within the complex organisations of the modern world, a degree of obedience is essential. We can never return to the simple freedom of earlier stages of human development, where a person might undertake an action and see it through to completion without the input of others. In short, if we want civilisation, we have to have obedience.

I don’t believe, however, that obedience is synonymous with the division of labour. Rather it is a kind of reflex, an unthinking giving away of authority and ethical responsibility to others. Obedience has a habitual character – it is a form of behaviour it is easy to slip into without noticing.

But the habit can be broken, just as a person who is lightly dozing can be jolted into wakefulness. Despite its tenacious hold, the origins of obedience are not evolutionary. And disobedience, does not, in spite of its reputation, repudiate complex organisation and discipline. Murray Bookchin coined the phrase “episodic sovereignty” – in reference to the Indian Crow societies of North America – to indicate how the yielding of individual initiative can be temporary and limited to rational and well-defined ends. Permanent institutions based on the expectation of command and obedience are not inevitable.

Basic disobedience

Not inevitable, but certainly well-entrenched, however.  I would suggest that if the grip of obedience is to be loosened, radical steps need to be taken. One is a basic income set at a level that a person can live well on without the need to become an “agent” for the hierarchical organisations that pepper and essentially control society. This would instil a sense of confidence and security, a willingness to breach conformist norms and the self-assurance to resist the demands of ‘the economy’. The cowed and malleable workforce of today would be transcended and more genuine forms of democracy might follow.

Secondly the perpetual motion machine of capitalism needs to be halted. At its molecular level capitalism entails the re-investment of profits which leads (usually) to more profits which have to be reinvested again, and so on ad infinitum. This leads to an irresistible imperative to meet existing consumer demand, and create new needs to satisfy this ever-growing “wall of money”. Thus the signature institutions of capitalist society embody obedience – hierarchical organisation with employees obeying precise instructions from above – as simply the most efficient means to achieve the task in hand. If society is ever to advance beyond command and obedience, this background fixation needs to change.

I am not suggesting that obedience did not exist before capitalism or that it may not infuse the kind of society that will exist after capitalism. But Milgram’s insistence on the essentially voluntary nature of obedience makes him, sixty years after his original obedience experiments, presciently relevant.

 

٭ The problem of a corporation’s executives not actually being genuine agents for its owners was thought to have been circumvented by paying them partly in stock options. This, it was believed, would align their interests with those of the shareholders, in that both would want a high share price. However this ‘solution’ also managed to subvert a core principle of the market economy. Theoretically, a company share price should reflect whether investors think it will make healthy profits – and thus pay healthy dividends – in the future.  However, paying executives partly in stock options encouraged the practice of share buy backs, whereby a company buys its own shares to jack up the overall price. This practice was legalised in Britain in 1981 and in the US the following year. Share buys backs are now a huge ‘industry’, ironically diverting funds which may have gone into actual industry.

Despite what Jordan Peterson says, the world is not your lobster*

I’ve been enticed back into reading about Jordan Peterson and his exemplary lobster. For the uninitiated, Peterson – ‘classical liberal’ and self-help guru – believes we should be inspired by the not so humble lobster, willing to fight all-comers (well other lobsters) for the best places to live. The lobster (and also the merciless wren, the chicken, the chimpanzee etc.) is an example of nature’s dominance hierarchy which is a “near-eternal aspect of the environment”. Older than trees in fact.

Humans, according to Peterson, are just as subject to the unforgiving laws of this dominance hierarchy. Despite our cultural pretensions and elaborate societies it still operates under the surface. “It’s inevitable,” avers Peterson, “that there will be continuity in the way animals and human beings organise their structures”. Thus, brutal economic inequality – the fact that 85 ultra-wealthy people at the top of society have as much as three and half billion at the bottom – is given a biological justification.

Read the memo: it’s inevitable, get used to it and don’t – the ultimate Peterson sin – start getting resentful.

The immediate temptation, to which many have succumbed, is to say Peterson’s examination of the natural world is hopelessly partial. Why choose to focus on the lobster or the status-obsessed chimpanzee and pass over the egalitarian, sharing bonobo or the unaggressive, vegetarian gibbon? An argument that can be traced back to Kropotkin’s highlighting of mutual aid among animals, in contrast to the simplification of the survival of the fittest.

Civilised hierarchies

However, this argument rather misses the point, or to be more precise, it concedes too much before it gets to the bone of contention. Because human hierarchies – that is actually existing hierarchies that have dominated the history of human civilisation before reformers, revolutionaries and utopians messed with them – are radically and qualitatively different to animal dominance hierarchies. In fact the latter don’t merit the appellation ‘hierarchy’ at all, the word originally applying to the rule of the high priest in ancient Greece, a uniquely human dispensation.

Only in early hunter-gatherer societies, can human arrangements be said to resemble dominance ‘hierarchies’ among animals in the sense that charismatic and talented individuals might acquire power. And even then, the evidence suggests tribal members were aware of the dangers of power becoming entrenched and embodied in certain individuals and took steps to ensure that, uniquely in the natural world, economic relations, family structure and political life were regularly shuffled.

The history of civilisation in all parts of the world, by contrast, and despite its undoubted benefits, is the history of dynasties, aristocracies, land-owners and empires on the one side and serfs, slaves, indentured labourers, and workers on the other. Slavery was an unmissable feature of ‘civilised’ society for thousands of years. It’s not a Western invention or imposition; it was only abolished in China in 1908.

In such societies, the facts of birth and inheritance were all-important. Intelligence, cunning, physical strength, charisma – or whatever other attributes Peterson thinks differentiates winners from losers – would at best have enabled the lucky incumbent to progress within their caste or class. Only very rarely would they have permitted them to rise within the hierarchy itself. Hannah Arendt’s description of the “caste conceit” of the British aristocracy in the 19^th century – “the pride in privilege without individual effort and merit, simply by virtue of birth” – could be applied to ruling castes and classes throughout history the world over.

‘God hath placed them there’

Such hierarchies were, in Murray Bookchin’s description, were “clothed in ideologies” because they were anything but natural. They were, however, intended to endure and such longevity was not merely secured by immense military power but also because most people, especially those oppressed by such hierarchies, were assiduously convinced of their, often divinely-ordained, legitimacy. Something animals obviously can’t be. Lobsters don’t bequeath their hiding places to their offspring nor insist to other lobsters left with stringy pieces of seaweed as camouflage that it’s blasphemy to object to such inequality because it’s been prescribed by the great lobster god.

Hence belief systems like the medieval ‘Great Chain of Being’ in which everyone – serfs, vagabonds, yeomen, lords etc. – had a recognised position because ‘God hath placed them there’.  In 17^th century England, parish priests issued weekly instructions for servants to obey their masters and behave “lowly and reverently” towards their betters.

In such societies, the personal attributes and characters of rulers might be a source of regret or rejoicing, but they were irrelevant for determining the power they wielded. As Bookchin noted about now infamous European monarchs:

Figures like Louis XVI of France and Nicholas II of Russia, for example did not become autocrats because they had genetically programmed strong personalities and physiques, much less keen minds. They were inept, awkward, psychologically weak, and conspicuously stupid men (even according to royalist accounts of their reigns) who lived in times of revolutionary social upheaval. Yet their power was virtually absolute until it was curtailed by revolution.

But, but ...  I’m guessing Peterson would instantly interject were he to be – unlikely I know – reading this: what you’re saying might be true for human hierarchies deeply ensconced in tradition and time-encrusted practices, but since the advent of liberal-democracy and capitalism and the demise of ancien regimes it has been possible for people born in difficult circumstances to, through their own native ability and self-discipline, rise in society and transform their lives.

“… the most valid personality trait predictors of long-term success in Western countries,” says Peterson “are intelligence … and conscientiousness.”

As a precursor, “success” needs to be defined. Because so much intelligence, conscientiousness and talent that doesn’t fit into money-making purposes and interest those organizations that hire people to do their bidding (and into which democracy is not permitted to intrude) simply withers or is actively suppressed.

Yea, even unto the Middle Ages

However, the other side of the coin is that liberal capitalism’s reputation for social mobility – progressing up the income scale during your lifetime – has been greatly exaggerated even on its own terms. So many of our current political leaders have emerged from privileged backgrounds and wealth amassed before y’know everyone had a crack at it. David Cameron is descended from King William VI and was brought up in a stately home, Boris Johnson’s full name is Alexander Boris de Pfeffel Johnson and Donald Trump inherited his fortune from his property tycoon dad.

Social mobility’s heyday under capitalism was actually in its post-war social-democratic incarnation when the rich were heavily taxed and finance forced into productive investment. Since the 1980s, after capitalism became more purely capitalistic, it’s gone down. A 2017 report found that in the US after the ‘inflection point’ of 1980, inequality skyrocketed and social mobility started “declining sharply”. The British Social Mobility Commission reported last year that inequality is now “entrenched from birth to work” and according to the UN Development Programme a “great new divergence” is taking place around the world, leaving educated young people stuck in low wage, dead-end jobs:

“What people perhaps 30, 40 years ago were led to believe and often saw around them," an UNDP administrator says, “was that if you worked hard, you could escape poverty.” Yet in many countries today, he says, upward social mobility is “simply not occurring” anymore.

This is modern-day capitalism, where intelligence and conscientiousness aren’t, after all, enough to help you lead a better life. And by the way, this conclusion is not impaired by Peterson’s revelation that human and lobsters share “basic neuro-chemistry” so you can administer an anti-depressant to a lobster and it will fight “harder and longer”. Anti-depressants have been administered to millions of human beings since the late 1980s, making evidently no difference to rates of social mobility.

Entrepreneurs and capitalists

Why, you might ask, does it have to be this way? Because capitalism is at heart a system where great wealth is extracted by people who do nothing to earn it. It isn’t, despite the advertising, a justice dispensing machine where, notwithstanding the rough edges, diligent and creative entrepreneurs are rewarded for the improvements they bring to people’s lives.

As author David Schweickart has astutely shown, the entrepreneur is capitalism’s “white knight”, routinely unveiled to justify ‘returns to capital’ that have nothing to do with inventions or improving methods of production. Vast fortunes are made and replenished daily simply by virtue of the ownership of real or financial assets:

In a capitalist society, enormous sums are paid to people who do not engage in any entrepreneurial activity or take on any significant risk with their capital. Trillions flows to shareholders who make an entirely passive contribution to production.

In fact, despite the enormous changes wrought by the economic system known as capitalism, the capitalist bears an uncanny resemblance to the landowners and landlords of past centuries who commandeered immense wealth and power without doing anything to deserve it. Indeed, capitalism has frequently coexisted with small coteries of landowners in most parts of the world. Which is why land reform was such a seminal political issue for numerous countries in the 20^th century – something you might be aware of if you manage to get over a fixation with capitalist white hats and communist black hats.

Don’t complain

The awkward problem is that wanting human society to replicate the daily fights for survival, nourishment and safety evident in the animal world requires not a laissez-faire approach, but massive government intervention in society. It demands severe taxation of the rich and punitive restrictions on inheritance. It compels instituting downwards as well as upwards social mobility, which means abolishing private education that works, in effect, to over-promote a small section of the population and lavish resources on them. And even then, the result would be a pale imitation of animal ‘hierarchies’.

But western societies are intent on the diametrically opposite policy. Every time in recent history – for example the 2008 financial crisis or the current Covid-19 crisis – the wealth of the moneyed and propertied has been threatened, governments stepped in to artificially protect it and institute bogus stock market booms.

Isolated conservatives and ‘classical liberals’ may have objected to this massive transfer of wealth from poor to rich but the vast majority – Peterson included – raised not a whimper of protest.

The grain of truth in Peterson is the emphasis on personal responsibility and the insistence that, whatever your circumstances, no-one, apart from yourself, determines how you react. But others before have expressed this anti-determinism better. “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, trickily also a Marxist, in 1943.

But ignoring the structures of society that are not amenable to individual efforts to change them but can, nonetheless, still be changed collectively, is not only wrong but is liable to lead to depression and resentment, the very things Peterson says he wants to alleviate.

* my son