New York: Norton, 1976, pp. 127.
As has been the case with most large, loaded terms in our political vocabulary, "capitalism" has eluded tidy definition. In Business Civilization in Decline Robert Heilbroner offered as a minimum the existence of private ownership of economic assets; the use of market competition as the primary method of income distribution; and the "structure of privilege" that permits widely differing gains at the top.1
Robert Heilbroner expected that in the half century after the time at which he was writing (the mid-1970s), that system, and the "business civilization" founded upon it, would come to an end. This was not, however, a Cold War-era prediction of Soviet triumph in the realm of power politics such as some anticipated at the time. Nor was it a Marxist-style prediction about the radicalization of the working class. (Heilbroner contended instead that as workers increasingly became white collar, they also became bourgeois in attitude, even when they lacked bourgeois privileges.)
Rather his position was that efforts to save capitalism from its vulnerabilities, rather than destroy or replace it, would bring about its end. Three such vulnerabilities seemed crucial to him, namely the capitalist system's tendency toward developing generalized disorders (like depression and inflation); the threat to the system as a whole from localized disorders, such as the failure of a large bank (increasing as the "economic mechanism became more tightly knit"); and the looming collision between the expansionary tendency of capitalism, and ecological constraints.2
All of this would make the sustenance of economic growth not only more difficult, but put an end to growth itself. This would, he argued, eliminate a crucial safety valve for the social tensions capitalism generated. Heilbroner pointed, too, to the "hollowness" of commercial culture, in the attitudes it fosters toward such matters as work and consumption, and the cynicism-inducing character of advertising, which he linked with the problem of continuing dissatisfaction in a world of rising affluence, and which make business civilization that much more vulnerable to challenge. At the same time, "social fatalism" - the traditional passive acceptance of misery - was becoming a thing of the past, a change "characterized by the assertion of political mastery," while political institutions and imperatives were gaining ascendancy over private economic interests, the long-running trend an extension of "public responsibility for the working of the system."3
Heilbroner predicted that these stresses would be exacerbated in the "middle range" of twenty-five to fifty years by still other problems, like the increasing difficulty of procuring labor for certain tasks ("jobs people just won't do") in conditions of rising affluence; the struggle between the owners of capital and the "technostructures" controlling the dominant firms, and the problem of private bureaucratization more broadly; and the regulatory challenges emerging out of new developments in science and technology (like genetic engineering and new possibilities of behavioral control).
All of these things taken individually, and certainly taken together, suggested increasing public planning of the economy, which he predicted would extend beyond prices and wages to incomes and profits, though he also predicted broader and deeper cultural changes. He specifically anticipated a more "statist" culture, more "religious" in the sense of its "elevation of the collective and communal destiny of man to the forefront of public consciousness, and the absolute subordination of private interests to public requirements." Heilbroner also thought it plausible that the private prerogatives regarding property and enterprise would come to "appear as archaic as the claims of royalty or nobility in the face of a democratic revolution," and that business would thus be transformed into "the civil service of the nation-state."4
This was, of course, a bold prediction at the time, and today it seems downright astonishing that such a noted economist could possibly have made it within the last half-century. This was, after all, exactly the moment at which economic thought and practice started a dramatic rightward shift - with private profit and the claims of property and privilege ascendant over claims about the public good, and government's hands increasingly perceived as tied by footloose business.
How did Heilbroner get things so wrong? One reason, it seems, is that he overestimated the extent to which government acted independently of business's influence, and the extent to which it would maintain its credibility to do so. Certainly he did not anticipate the extent to which the Keynesian consensus of the middle part of the century would be displaced by conservative ideas, despite their failure to establish a new consensus (a situation Heilbroner himself analyzed in his later The Crisis of Vision in Modern Economic Thought). Nor did he anticipate other events that reinforced the process, like the collapse of the Soviet Union, the stagnation of Japan, and the disappointing economic performance of major European states like France and Germany in the 1990s and 2000s, which appeared to discredit statist economic approaches. He also underestimated the intensity of neoliberal globalization.5
Nonetheless, as the combination of recession/depression, ecologically-driven shocks to the prices of food and energy, and financial instability seen in the last several years demonstrates, there has been little progress toward ameliorating the problems central to his thesis, which continue to plague us today. The response Heilbroner anticipated from society to those problems may be far from ideal, or even unattractive (Heilbroner himself was ambivalent about it, worrying about the fate of individual freedom in such a world), but the sort of boldness and imagination he brought to these issues is a reminder of just how much poorer this dialogue has become since his time.
1. This definition, notably, does not require the kind of business environment seen in the "classical" capitalism of the early nineteenth century, in which the prevalent form of organization was the small, owner-managed firm powerless over the larger market; and certainly does not exclude a substantial role for government inside a capitalist economy, which as he points out has historically been substantial in even the United States, from the country's earliest beginnings.
2. Heilbroner was writing in the wake of the publication of The Limits to Growth, which is discussed here.
3. In the earliest phase of U.S. history, government acted as a stimulus to growth (as with Federal investments in infrastructure, like canal-building); to regulating markets in the Progressive Era (when anti-trust action appeared on the agenda); to the use of Federal powers to achieve acceptable levels of growth, employment and welfare (as happened with the New Deal). Moreover, Heilbroner is quite clear on the point that this expansion of government's role was motivated by the support of business, rather than social reform, citing Gabriel Kolko's The Triumph of Conservatism (discussed here) - though he does take the position that government has functioned as an independent force rather than the mere servant of business.
4. Of course, the increasing profile and power of multinational corporations was a hot topic at the time, raising concerns that found pop cultural expression in films like Rollerball and novels like The Matarese Circle. However, Heilbroner pointedly dismissed this as an "ancient condition" unlikely to change the essential direction. Heilbroner was equally unpersuaded by claims that a "post-industrial" outlook would present obstacles to this vision. Given its connection with that "end of social fatalism," he thought it might actually be a contributing factor to the transformation he described.
5. Heilbroner did, however, expect that many of the changes he described would pose problems for Soviet-style socialist states, these being issues of industrial society rather than just capitalist society (as with ecological "limits to growth"). He also suggested that Western capitalist and Eastern socialist states would bring different combinations of strength and weakness to those challenges, with the West having the benefit of greater economic development, and the socialist states already further along the road to that "assertion of political mastery" over economic life.