XIV. Socialism in the Behavioral Sciences
America's Unknown Enemy: Beyond Conspiracy
Editorial Staff of the
American Institute for Economic Research
In economics, 1986 could be described as the year that marked the
rediscovery of the obvious. The Nobel prize in economics was awarded
for scholarship that, boiled down, suggested that politicians often
act in their own interests rather than for the public good. And, with
the appearance that year of Professor Peter L. Berger's The
Capitalist Revolution, it was openly asserted that capitalist
societies tend to "work" better than socialist ones.
Among the conjectures offered by Professor Berger were propositions
that "Industrial capitalism has generated the greatest productive
power in human history"; that "it continues to generate ...
the highest material standard of living for large masses of people in
human history"; that "If capitalist development is
successful in generating economic growth from which a sizable
proportion of the population benefits, pressures toward democracy are
likely to appear"; that "Capitalist development is more
likely than socialist development to improve the material standard of
life of people in the contemporary Third World, including the poorest
groups"; and that "There is an affinity between socialism
and the totalitarian project for modern society."
These, and many other conjectures contained in this wide-ranging
volume, are scarcely new -- and many of them, such as the ones above
-- seem to be fairly indisputable. What does give novelty to The
Capitalist Revolution, however, is Professor Berger's insistence
that a useful approach to the debate between capitalists and
socialists must rely on scientific procedures of inquiry that are
grounded in empirical evidence. Although his analysis sometimes falls
short of meeting the requirements of such scientific analysis, it has
generated interest among behavioral-science academics who say it could
open the door to more useful inquiry. This, of course, remains to be
Perhaps most provocative from a social-science perspective are
Professor Berger's conjectures as to why socialism seems to retain
appeal in Western intellectual circles in spite of its failures. As he
says, the vast majority of intellectuals in communist-bloc countries
have long since declined to take it seriously. Of equal consequence is
the opposite question of why capitalism has largely failed to gain an
intellectual following given its obvious successes. This two-sided
problem seems of considerable consequence, since the Western
intelligentsia continue to exert influence in circles of power despite
their often anticapitalist animus.
The Persistent Lure of Socialism
In brief, Professor Berger - accepting some elements of Marxist
notions of "class" -- identifies a "knowledge class"
that has a primary "interest in having privilege based on
educational credentials, in which this class has an obvious advantage."
He asserts that "This interest could well underlie a general
antagonism against privilege based on 'raw' achievement in economic
terms and thus against the capitalist market system that, in
principle, is open to anyone regardless of education or other
extra-economic certification." Beyond this is the fact that "a
large proportion of this knowledge class depends for its livelihood on
government payrolls or subsidies. Put differently, the knowledge class
has an interest in the distributive machinery of government, as
against the production system, and this naturally pushes it to the
left in the context of Western politics." Why Professor Berger
adopts this notion of "class" to describe academic special
interests is not clear. In any event, his analysis is a reminder of
the extent to which Western behavioral scientists have depended on
governments for their livelihoods.
However, central to Professor Berger's analysis of the intellectuals'
flirtation with socialism is the notion of "legitimation" --
that is, the idea "that an enduring human community requires a
belief in its essential rightness." According to this line of
thought, the strongest "intellectual" lure of socialism
derives from its "myth-generating potency," which capitalism
generally lacks: "Capitalism, as an institutional arrangement,
has been singularly devoid of plausible myths; by contrast, socialism,
its major alternative under modern conditions, has been singularly
blessed with myth-generating potency."
Professor Berger observes with some irony (in view of the supposed
Marxist antipathy toward religious belief of any kind) the appeal that
may derive from a number of broad similarities between Marxist
doctrine and biblical eschatology - and which currently may help to
propel the efforts of the so-called liberation theologians. (He
observes: "The final irony here might be that those who would
marry Marxism and religion, along the lines of 'liberation theology,'
might yet produce the sort of ultimate legitimation of the
totalitarian project that will make the latter perdure for centuries.")
But regardless of whether its expression is overtly "religious,"
Professor Berger suggests "It is possible that the root cause for
the mythic superiority is the fact that ... its realization never
takes place. ...Thus there is the unending quest for the first case of
'true socialism,' always just out of reach, the quest taken up again
after each disappointment. There is no capitalist equivalent of this
(profoundly mythological, indeed religious) quest."
The Quest for Certainty
The foregoing analysis may sound vaguely familiar to long-time
readers of AIER publications. Put in slightly different context, it
describes what the philosopher John Dewey named the "quest for
certainty." He observed this quest in a wide variety of human
situations throughout the course of history and viewed it as a major
obstacle to solving the problems of humans in society. As Dewey
observed, this quest ignores the disproportions and uncertainties of
the actual world in preference for some technical construction that
postulates the existence of absolutes and perfections (in this case,
the perfect socialist society).
We often have stated our view that such quests serve no useful
purpose, and that a more constructive approach to human progress may
be realized by applying the results of scientific procedures of
inquiry to human problems. In the past, we have cited numerous
failures related to attempts to impose visions of a "better world"
that defy human behavior -- as well as the bundle of new problems that
they usually create. We also have observed, as does Professor Berger,
that such failures almost never have been taken as evidence that the
quest is futile. Rather, the failures often have generated new and
bigger plans involving ever4arger visions of the "better world."
The book also provides occasion for an assessment of the difficulties
that the promotion and preservation of capitalism are apt to face so
long as humans continue to be prone to the "quest for certainty."
Given what Professor Berger calls capitalism's "mythic
deprivation," one might reasonably question how capitalist
societies will fare should conditions change much. He asserts that
capitalist societies generally have received only indirect
legitimation -- and even that only when they are working reasonably
smoothly. He further notes that some (procapitalist) scholars --
notably Joseph Schumpeter -- have "believed that the very success
of capitalism as an economic system undermines the cultural
foundations on which it rests." This idea has "led to the
notion that contemporary capitalism is undergoing a crisis of
legitimacy. The notion then translated into a prediction that,
divested of its legitimacy, capitalism is headed for its demise."
Professor Berger suggests that "This interpretation should be
taken with a grain of salt." First, "there is nothing new
about the incapacity of capitalism to legitimate itself directly (let
alone to generate myths about itself). It was characterized by such an
incapacity from the beginning." "Second, legitimations are
most needed when a society or a social institution is in trouble....
[W]hen a society is working reasonably well, most people will look
upon it as 'natural."' Western societies are "working"
today -- at least far better than socialist societies -- and there
would thus seem to be little empirical basis for believing that
capitalism will imminently face a "legitimacy crisis."
Accordingly, Professor Berger says there is no need to "invent"
a countervailing capitalist mythology. For example, Adam Smith,
capitalism's "theoretical father," believed that the
economic system he was describing (of course he did not use the later
term 'capitalism') was, quite simply, the natural ordering of society;
that which is natural, almost by definition, does not require
legitimation, mythic or otherwise (who would think of legitimating the
law of gravity, or of concocting myths so that people will be inspired
to act in accordance with it?)." He suggests that recent attempts
"to put together something that one might call a capitalist myth"
will be "irrelevant unless they acquire plausibility among groups
of living human beings." In his view, this is not apt to happen:
capitalism simply is not inspiring, and "Legitimation is as
The Lure of Capitalism
There is much that one might dispute about Professor Berger's
assertions respecting the barrenness of capitalism as ground for human
inspiration. One need only reflect on the behavior since World War II
of the many individuals who have tried (some successfully many at the
cost of their lives) to escape from Iron Curtain countries so that
they might have a chance to become "capitalists" to see that
something involved with capitalism has a potent lure of its own.
Surely it belies the assertion that "'capitalism' is not
plausible as a motive for self-sacrificing heroism."
Indeed, capitalism - not as a narrowly confined and culturally
burdened intellectual construct but as a name that conveys the
totality of human transactions involved with meeting the requirements
of production and consumption in free markets -- deserves far better
than it has received even from Professor Berger. His analysis seems to
depend on a notion of capitalism as a separate and confined entity --
a something apart -- that humans may interact with but which finally
is divorced from "the total human experience." It also seems
to depend, contrary to his own call for a closer relation between
conjecture and observation, on the careful separation of "theory"
from "results." This predisposition is fairly captured in
his curious statement (given his procapitalist propositions) that
capitalism is "an economic system and nothing else" whereas "socialism
is a comprehensive view of human society." It is implied that "economic
systems," especially capitalist ones, involve somehow-restricted,
less-comprehensive, and therefore less-fulfilling types of human
behavior than the grand sch('mes of socialist or other visionaries.
Nothing could be further from the actual; indeed, the opposite seems
to be the case. Economic endeavor under a competitive capitalist
system embraces the whole of human aspirations. Success in such a
system requires adjustment to virtually the entire span of human
activity. By contrast, "legitimate" economic activities in
dirigiste regimes, far from being "comprehensive,"
are narrowly prescribed by those in power.
The Social Implications of Free-Market Behavior
Some years ago, E. C. Harwood, AIER's founder, suggested a behavioral
approach toward understanding the complex transactions involved in
market economies that suggested the extent to which economic processes
under competitive market systems usually have been misrepresented. He
offered an analysis that described characteristics of free-market
behavior that are overlooked by capitalism's critics but that have
highiy favorable social implications. In reference to the phrase "free
competition," he wrote: "Many writers who use this phrase
'free competition' fail to realize that competition implies action in
accordance with certain rules of procedure. Free competition,
therefore, does not carry any implication of a 'free for all' fight,
with gouging, biting, kicking, and scratching all permitted.
"Evidently, the rules and regulations governing or affecting
competition may tend to create a fair field with no favor; or they
may, on the other hand, through the award of special privileges of one
kind or another, give advantages to some that are denied to their
fellows. The phrase 'free competition' implies the former condition.
'Free competition,' therefore, implies that each individual concerned
must of course comply with the rules, but that the rules, including
all the customs, institutions, and laws of the social group, are such
as to ensure a fair field with no favor. ...In short, where there is
free competition the competitors are striving to perform those
economic functions that are most desirable from the viewpoint of the
consumer, and of course nearly all of the consumers are likewise
"If now we enlarge our viewpoint, so that instead of considering
only a few individuals, we regard the social group in its entirety,
free competition is seen to be that situation in which men are
voluntarily cooperating. All of the group, by purchasing what they
prefer, encourage those best qualified to provide the desired economic
things including services. Each of the group who is offering things in
the markets voluntarily seeks to cooperate by performing in the
economic role where he can most effectively serve his fellows and
thereby maximize his own reward in the marketplace. ...Thus,
'competition' and 'cooperation' become, under such conditions, merely
different labels for the same highly efficient economic behavior."
E. C. Harwood qualified his analysis with the remark -- equally
applicable today that "there is no implication that free
competition has ever actually existed or does now exist in any
locality. It may have existed in the past, may exist somewhere at
present, and conceivably may exist in the future at some time or
place, but the fact that it does not now exist in the United States,
for example, docs not lessen the usefulness of the notion for the
purpose of this discussion." He also cautioned repeatedly over
the years that any expectations that there could be any ''quick fix''
to human woes -- whether from socialists or capitalists -- were bound
to be disappointed. In his view, progress in human civilization, if it
is attainable at all, comes very slowly.
As Professor Berger says, capitalism is not "on its last legs."
But neither may be socialism. The lure of the better world promised by
socialists often has proved strong even in the face of the better
world delivered by (relatively) free-market endeavors. This could be
problematic if down-turns in economic activity or political
disruptions become severe. Today, popular tolerance even for minor
reversals or perceived threats to economic "security" seems
extraordinarily slight compared with that of previous generations.
Today many adjustments that from an economic perspective ought
properly to be viewed as usual market developments are portrayed as
crises of major proportions. A severe recession or depression could
foster greater intolerance of markets and enhance the appeal of
socialist visions and policies. In short, the lure of socialist "solutions"
to human problems may persist, no matter how great the genuine
advances made via capitalism. Despite its shortcomings, Professor
Berger's book underscores the need to persist against that lure. In
our view, the most useful way to do so is to continue to educate the
public about the results of empirical inquiry into human affairs and
to foster conditions that permit markets to function more freely and
so allow them to continue to create the social and economic "facts"
that justify them in the public mind.
- Peter L. Berger, The
Capitalist Revolution; Fifty Propositions About Prosperity,
Equality~ & Liberty, New York, 1986, Basic Books. Dr.
Berger is University Professor and Director of the Institute for
the Study of Economic Culture at Boston University.
- See the Economic Education
Bulletin, "Free Competition Is Voluntary Cooperation"