By Michael Matheson Miller

One of the most enduring critiques of capitalism is that it is morally and culturally corrosive. Even if we grant that capitalism is more efficient than planned economies, the question remains: are the economic gains worth the cultural cost? Now if the critique came only from a handful of Marxist academics who long for the good ol’ days of the Soviet Union, it might tempting to ignore it. But since the cultural critique comes from political observers at almost every point on the political spectrum, and since the bureaucratic-capitalist economies of the world really are cultures in crisis, the criticism is worth attending to seriously.

If we are going to analyze the cultural effects of market economies then I think the one of the first things we need to do is distinguish between those things Peter Berger called “intrinsic” to capitalism and those “extrinsic” to it. We need to distinguish among at least three things:

the cultural effects caused by capitalism, effects aided and abetted by capitalism, and those things that exist alongside capitalism and are often conflated with capitalism, but that are distinct from it.

I will say from the outset that I support open, competitive economies that allow for free exchange, but I would not call myself a “capitalist.” Capitalism is generally a Marxist term that implies a mechanistic view of the economy and a false dichotomy between “capital” and “labor.” Capitalism also comes in a variety of forms and can mean many things. There is corporate capitalism, oligarchic capitalism, crony capitalism, and managerial-bureaucratic capitalism, such as we have in the United States. However, cultural critics of capitalism usually don’t make those distinctions and, even if they did, many would still be critical of an authentically free market.

So without trying to tease apart all of these strands at the outset and so risk never getting anywhere let me use the term “capitalism” and ask and answer the question with the broadest of brushstrokes. Does capitalism corrode culture? I think the answer is yes and no.

Creative Destruction

Perhaps the first cultural critique of capitalism is that it destroys traditional culture and ways of living. Much of the answer depends upon what we mean by traditional culture, but generally the answer is clearly yes. Competitive global market economies undoubtedly transform traditional cultures, and this is not limited to far off places in Africa, Latin America, or the Polynesian Islands. In the history of Western Europe and the United States, market economies played a vital role in transforming traditions and radically altering social interaction.

One of the main ways the market does this is through innovation. As new technologies, industries, and goods and services emerge, they make older ones obsolete; old industries are shut down and new ones emerge. New forms of management and technology and division of labor transform traditional work and social relations, and new technologies alter traditional roles of women and men in the house. These sweeping changes can also destroy traditional work and social relationships that play an essential cultural and economic role in the lives of a community or nation. At the same time it is important not to understate the real positive social benefits that come from economic growth and the reduction of extreme poverty. This is what Joseph Schumpeter called “creative destruction,” and it would be naïve to deny that creative destruction doesn’t come with serious trade-offs.

Some traditional and artisanal trades are lost forever and this can be a cultural impoverishment. At the same time, because we associate global capitalism with modernization we assume it only has negative effects on traditional culture. Yet there are cases when the opening of markets has actually enhanced local cultural production. As Tyler Cowen notes in Creative Destruction, global trade and new imports have stimulated the local music industry in Ghana where local musicians now control about 70 percent of the Ghanaian market. Global markets have also provided producers of traditional goods and music a bigger market to sell their wares and take advantages of economies of scale.

When I was in Rwanda I interviewed Janet Nkbana, a entrepreneur who produces traditional baskets and sells them not only locally but at Macy’s in the United States. As more people travel and live abroad and tastes become more eclectic, Janet has potential consumers she would never have if her market were limited to Rwanda. Her business success has also brought with it positive social benefits to her community. Though basket making is a traditionally female industry, her company’s success has attracted Rwandan men to seek employment, and this has not only raised family incomes, but also reduced the incidents of alcoholism and violence against women and children. This is an example of cultural transformation afforded by global capitalism, and it is clearly a positive one.

Homogenizing Homo Sapiens

Related to the critique that capitalism destroys traditional culture is the argument that global capitalism is a leveling force that is making the whole world homogenous and Westernized. There is partial truth to this and any visit to an American suburb each with its own Home Depot, Lowe’s, and Walmart bears this out. But there are other things going on too. We see the rise of specialty stores, plenty of different restaurants with cuisine from all over the world and a variety of choices that did not exist fifty years ago.

It is a mistake to conflate modernization and broad use of technology with Westernization. A young Asian eating McDonald’s while listening to an iPod likely knows little if anything about the culture, traditions, and religion that shaped Western civilization and set the ground for technological developments that he enjoys. There are traditional Muslims and Buddhists who work in technology sectors, but have absorbed little or nothing of Western culture. The use of modern technology does not make one a Westerner any more than the use of Japanese technology educates one about Zen, tataemae, senpai-kohai, obon, or Shintoism. The world may be less flat than we imagine.

One of the most passionate critiques of capitalism is really aimed at something else: industrialization. Capitalism and industrialization are related, of course, but they are not the same thing. The rise of capitalism predates the industrial revolution by centuries. As Rodney Stark and Raymond de Roover have noted, international banking and a capitalist economy emerged in Northern Italy as early as the 8th century, and among the Dutch and English and other parts of Europe by the high Middle Ages. Even more obviously, industrialization has taken place in non-capitalist societies like the Soviet Union and communist China, and at times with with a soul-crushing aridity that makes an American mall seem aesthetically pleasing by comparison. The reality is, many of the critiques of modern capitalism, especially aesthetic and cultural critiques, are more precisely critiques of industrialism than of capitalism or the free market per se.

Cultural Imperialism

Finally, while capitalism does indeed transform, and even destroy, aspects of traditional cultural life, I would argue that the most destructive global forces of cultural transformation especially in the developing world come less from market economies than from the Western, secular, organizations like the United Nations, the World Bank, the NGO industry, and the U.S. and European governments. These powerful institutions wield “soft” and “hard” power to foist a reductionist vision of life upon millions of the world’s poor. People criticize McDonald’s and Walmart for cultural imperialism, but no one is forced to eat a Big Mac. Contrast this to activities of groups like the UN, UNICEF and Planned Parenthood, who impose secular ideas of family, motherhood, sexuality, abortion, contraception, and forced sterilization on the world’s poor. It is bad enough when a country like China does this to their own people, but when bureaucrats in Washington or Paris are manipulating poor families in the developing world, and tying aid packages to so called reproductive rights it is a naked act of cultural imperialism.

There now exists what the New York Times has called a “daughter deficit” and what The Economist has labeled “gendercide.” Millions of baby girls are being aborted in the developing world as people are encouraged by international agencies and NGOs to have small families. For a variety of cultural reasons, when forced to choose, many of the families choose to have baby boys and abort their unborn daughters. The consequences of the loss of all these human lives is of course incalculable, but that isn’t the extent of it. The birth ratio of boys to girls is now so skewed that this will have devastating social and political consequences.

This is not the result of free markets. It is a product of selfish consumerism, bad anthropology and faulty economics—an outgrowth decades of educational policy and top-down social and economic planning that grows out of the zero-sum-game fallacy, which in turn fosters an anti-natalist ideology that dominates development insiders. Not surprisingly, these insiders are rarely proponents of the free market, and if they do give the market a nod it is a kind of techno-bureaucratic capitalism ruled by elites who haunt Davos each year.

Solipsistic Individualism and Consumerism

Critics also charge capitalism with promoting radical concepts of autonomy, such as the type of entrepreneurs untethered from moral absolutes portrayed in The Social Network. This type was evident among some bankers during the financial crisis and still is among techno-utopian entrepreneurs who believe they can re-engineer the human soul and even escape death itself through technology. While the market does enable people to indulge in a lifestyle marked by the illusion of radical autonomy, the main sources of such thinking and behavior are not market economics, but a number of harder to diagnose intellectual and spiritual crises that plague the west. These include things like reductionist rationalism that makes all questions of truth, beauty, and the good life a matter of personal predilection; a nominalist conception of human freedom where freedom is merely the exercise of the will separated from truth and reason; the radical individualism of Hobbes, Locke, and Rousseau; and radical skepticism (see David Hume) which makes reason a slave to the passions.

A market economy can help spread these ideas, but it is not their source. I am not arguing that a market is neutral. Markets have clear positive and negative effects, but exacerbating a problem is not the same thing as causing it and it is simplistic to attribute to capitalism alone the effects of a host of intertwined forces of social change. Perhaps the most powerful critique of capitalism is its relationship to consumerism. The consumerist ethic, with its hyper-sexuality and advertising to young children is especially troubling. In Born to Buy, Boston University Professor Juliet Schor details the marketing and advertising that bypasses parents and tries to market directly to children as young as three and four years old. Companies spend millions in marketing research and advertising to every age category from toddler to a new category called “tween” to the seemingly ubiquitous marketing aimed at teenagers in mega-malls. Benjamin Barber in his book Consumed, reports that “businesses spend over $11 billion per year advertising to children, teens, and young adults.” Barber also discusses the troubling trend of individuals defining themselves by the brands they use. Brands, he argues, have replaced families, religion, and communities as a source of identity. He writes, “The boundary separating the person from what she buys starts to vanish—and she starts to become the products she buys—a Calvin Klein torrid teen, a politically conscious Benetton rebel.” These are serious problems.

But the question again is whether this is the result of the free market per se? There is undoubtedly a relationship between the two, yet consumerism exists in socialist societies as well. There have also been capitalist societies that have not been consumerist and have encouraged high levels of savings and investment. As several commentators including William Leach in Land of Desire have noted, America has seen a cultural shift from productive capitalism with focus on saving and investment to a consumerist mentality where we consume on borrowed money. The reasons for this are a complex interaction of cultural shifts, education, increased individualism and centralization, much of it incentivized by public and monetary policy (Keynsianism) which have encouraged consumerism and borrowing. Consumerism is a toxic malady and will undermine a free society. Wilhelm Röpke, the Swiss economist who was instrumental in rebuilding German after World War II and an ardent free marketer, once asked if there was “any more certain way of desiccating the soul of man than the habit of constantly thinking about money and what it can buy? Is there a more potent poison than our economic system’s all pervasive commercialism?”

A market economy with an abundance of goods can encourage consumerism, and while policies that limit vulgarity and abuse in advertising can help, consumerism is ultimately a spiritual disease that cannot be remedied by economic changes alone.

Does the Economy Control the Culture?

The relationship between capitalism and culture is complex. Competitive free market economies have helped secure liberty and have lifted more people out of poverty than any alternative. With that progress has come great volatility and accelerated social change that is undeniable. However, blaming capitalism is much easier than addressing the actual, but harder-to-diagnose sources of cultural breakdown. Capitalism becomes an easy scapegoat for several reasons.

First, there remains a tendency toward economic determinism influenced by Marxian analysis which views the economy as the source of social organization. This is not limited to the left. Distributists for example, who are quite traditional and religious, tend to appropriate the Marxian view of the economy as the driving force of culture and thereby see structural economic change as the source of cultural renewal. Second, capitalism often becomes a proxy for a critique of problems that lie deep within modern liberal society such as the effects of nominalism, rationalism, radical concepts of autonomy and the like. It is much easier to blame inanimate market forces than to attempt to dissect the effects of nominalism and Enlightenment rationalism on culture and social relations. Finally, capitalism also acts as a proxy for other issues which would be politically incorrect or at least politically imprudent to address directly. Criticizing capitalism is easier and more politically acceptable than it would be to critique democracy, egalitarianism, or the welfare state. Alexis de Tocqueville, for example, worried about the negatives effects of equality and individualism on culture and the human soul and that equality led to a love of comfort. Can you imagine a contemporary politician in the United States or Europe standing up today and talking about the dangers of too much equality or democracy? What would happen if a politician blamed consumerism on equality instead of corporate greed?

Capitalism has profound effects on culture and it is a mistake to think that that the market economy is neutral or that markets left to their own devices will work everything out for the best. It is also a mistake to blame capitalism as the cause of cultural destruction. Market economies come with trade-offs and cultural dysfunction and cultural renewal are complex and cannot be explained by economic analysis alone. As Christopher Dawson reminds us, it is not economics, but cultus, religion, that is the driving force of culture. It is also a mistake to think that secularism is neutral. Modern secular progressivism has become the cultus of Western life and this plays a much more potent role in shaping culture than economics.

Capitalism is not perfect. Like democracy, it needs vibrant mediating institutions, rich civil society and a strong religious culture to control its negative effects. But we wouldn’t trade democracy for dictatorship. Nor should we trade the market for some bureaucratic utopia. For all their fallen, human faults, free and competitive economies have enabled millions of people to lead lives of human dignity and pursue human flourishing, and funded the creation of beautiful architecture, music, and cultural products of all sorts. If we are going to take cultural decay seriously then simply blaming capitalism will not get us very far.

There are much bigger fish to fry.

Michael Matheson Miller is Research Fellow and Director of Acton Media at the Acton Institute.

Image by Wally Gobetz via Flickr.