Don’t miss the latest developments in business and finance.

Deepak Lal: Victorian virtues, modern values

'CAPITALISM WITH A HUMAN FACE' - III

Image
Deepak Lal New Delhi
Last Updated : Jun 14 2013 | 3:39 PM IST
 
From David Hume, through Adam Smith, to Charles Darwin, Samuel Smiles and J S Mill, there was a recognition that capitalism required a shared morality in maintaining the social cement of society.
 
It was this shared morality which put a lid on the socially disruptive self-seeking and novelty-seeking, which were an essential attribute of capitalists, as discussed in my last column.
 
This morality as Hume argued, is primarily dependent on a society's traditions and forms of socialisation, based on utilising the moral emotions of shame and guilt.
 
Neither God nor Reason needs to be evoked to justify these conditioned and necessary habits. This was the basis of the morality of that bourgeois capitalist society par excellence""Victorian England.
 
For, as Adam Smith, that votary of commercial society, had argued in his Theory of Moral Sentiments: "The man of the most perfect virtue, the man whom we naturally love and revere the most, is he who joins, to the most perfect command of his own original and selfish feelings, the most exquisite sensibility both to the original and sympathetic feelings of others".
 
Healthy ambition and individual desire were to be combined with an empathetic conscience to promote social stability and order.
 
These Victorian virtues of work, discipline, thrift, self-help, self-discipline, Gertrude Himmelfarb notes (in The De-moralization of Society) "were the standards against which behaviour could and should be measured ... And when conduct fell short of those standards, it was judged in moral terms, as bad, wrong, or evil""not, as ... today, as misguided, undesirable, ... or inappropriate".
 
These Victorian virtues are today to be found most often among the burghers of Bombay and Shanghai than those of Wall Street or Hollywood.
 
The English gentleman embodied these Victorian virtues. His was a distinction of character, rather than class. As James I is reputed to have said, "I can make a lord" when his old nurse begged him to make her son a gentleman, "but only God Almighty can make a gentleman".
 
The gentleman was defined by his virtues of "integrity, honesty, generosity, courage, graciousness, politeness, consideration for others". Anyone, even a working class man who embodied these virtues, could aspire to be a gentleman.
 
It was Nietzsche who transmuted "virtues" as the basis for morality to "values". "His 'transvaluation of values' was to be the final, ultimate revolution, a revolution against both the classical virtues and the Judaeo-Christian ones.
 
The 'death of God' would mean the death of morality and the death of truth""above all the truth of any morality. There would be no good and evil, no virtue and vice. There would be only 'values'." Thus began the demoralisation of much of Western society.
 
Keynes in his Economic Consequences of the Peace recognised that the 19th century LIEO, which had brought prosperity around the world, "depended on a shared morality, which emphasized above all the virtues of abstinence, prudence, calculation and foresight""the basis for the accumulation of capital.
 
The world's economic organization ultimately rested on the Victorian virtues". But, it was his generation of Cambridge Apostles who did more than most to undermine these Victorian virtues.
 
Lytton Strachey's satirising of the repression and hypocrisy of the Victorians in his Eminent Victorians began that process whereby subsequent generations came to associate the Victorians with all that was fuddy duddy, arcane, and reactionary.
 
This started that path to amorality which was completed by the 1960s' cultural revolution. The traditional constraints on self-seeking, which Hume and Smith saw as a necessary means to create a good society, were removed.
 
Non-judgmental amorality became the characteristic of a society ruled by a set of subjective and relative values. But the resulting ills of contemporary Western society, with it Slouching Towards Gomorrah (the title of the book by Robert Bork), are less to do with capitalism as many of its cultural critics claim but to the West's demoralisation.
 
This also applies to the burgeoning "happiness economics". Based on cross-country and cross-cultural data provided by the World Values Survey, it finds that on its measures of subjective happiness, there is a moderate positive correlation with per capita income (in PPP $), which is strongest with countries with a per capita GNP up to $10,000 (in 1995).
 
Frey and Stutzer state: "There are no rich countries where people's happiness, on average, is low. But, for the rich countries, it does not seem that higher per capita income has any marked effect on happiness".
 
This is hardly surprising because real income is likely to be only one element in a person's happiness, and as economic theory postulates diminishing marginal utility from increased income (consumption) we would expect rich countries to have reached what the Cambridge economists Frank Ramsey and John Maynard Keynes postulated as the "bliss" level of utility.
 
More worrying are the policy implications which have been drawn. Fred Hirsch in his "Social Limits to Growth" argued that the fight for social status and so-called "positional goods" in an individualist market economy would only lead to subjective unhappiness, as unlike other consumer goods the supply of "positional goods" was by definition limited.
 
So, socially wasteful competition for status should be deterred by taxing the winners in these high status races more heavily. Others have argued that as one source of unhappiness in capitalist economies is that people work too hard, work should be taxed more heavily so that people substitute leisure for work at the margin!
 
The trouble with all these critiques of the psychologically dysfunctional effects of capitalism is that they confuse two aspects of any society: questions of how best to make a living (its material beliefs) with those concerning in Plato's words "how one should live" (its cosmological beliefs).
 
Capitalism provides a new and highly productive way of making a living. That is why, despite the century-old prediction of its imminent collapse, it has not only survived but despite many false starts is spreading globally. But how best the ensuing prosperity can be used to lead a good life will depend upon a society's cosmological beliefs.
 
This would not have come as a surprise to the sages of Scottish Enlightenment. In his Theory of Moral Sentiments, Adam Smith wrote: "Happiness consists in tranquility and enjoyment. Without tranquility, there can be no enjoyment; and where there is perfect tranquility there is scarce any thing that is not capable of amusing."
 
The Scottish sages never believed that material prosperity is the route to happiness. This is a truth recognised by various Eurasian religions, for whom their respective codes of conduct and the virtues they propagated were the way to happiness.
 
Hence my conclusion that the various complaints about the inhumanity of capitalism are better addressed to the causes of the West's demoralisation than the instruments of its prosperity""capitalism.

 
 

Also Read

Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

First Published: Dec 21 2004 | 12:00 AM IST

Next Story