From New International, Vol.4 No.2, February 1938, p.62.
Transcribed & marked up by Einde O’Callaghan for ETOL.
The Folklore Of Capitalism
by Thurman Arnold
400 pp. New Haven. Yale University Press. $3.00.
Here is an anthropological analysis, admirable for its scholarly objectivity, of a strange and interesting tribe inhabiting the central portion of the North American continent. Professor Arnold is more interested in the cultural myth which this tribe has evolved to justify its activities than he is in the actual techniques which it has invented in order to feed and clothe itself; he is inclined to assume that his readers will already be reasonably familiar with the latter. Both because things have changed since it was invented as an idealized description of an actual society, and because all tribes have an incurable itch to improve their folklore artistically, this cultural myth is at once seriously inconsistent with the facts, and a beautiful thing in itself. Professor Arnold is above all interested in the tragi-comic consequences of this inconsistency between an artistically elaborate myth and the actual society which it is supposed to describe.
In the world of this myth a group of cultural heroes, called sound businessmen, move about, curiously intent on satisfying their personal desires by their own unaided efforts. By the introduction of a daring and beautiful paradox, the myth shows this to be the only moral means for fulfilling the complex needs of the community as a whole. These gods occasionally, of course, misbehave and become minor devils. But the main devils of this mythology are the politicians or government officials and hell is conceived to be a place where the needs of the community are fulfilled by governmental enterprises directed by them.
Actually, of course, the society’s needs are fulfilled by large impersonal enterprises which function in much the same way whether they are manned by gods or devils. But by a fiction which develops quite logically within the myth, such enterprises when manned by business men are thought about and treated as god-like individuals, and under these circumstances they are called corporations. It is only when these corporations refuse to pretend to be competing individuals or when they grow so large that no one can any longer think of them as such, that they, like the gods who misbehave, become wicked; they are then known as monopolies. When such enterprises are manned by government officials, however, the fiction that they are individuals does not apply. They are not then corporations which are thought of as competing in an active and godly fashion and therefore doing the community good; these enterprises are branches of the state which are thought of as great impersonal units suffering – since such units cannot compete like individuals – from blemishes unknown to corporations, such as graft (the wages of management, bonuses, etc.) and bureaucratism (service company charges, etc.). They are cases of government in business, and no matter what their actual results, no pious member of this tribe can ever believe that the consequences of government in business are anything but immoral.
Professor Arnold’s description of his tribe is high comedy of the finest sort. For here is a community caught between the necessity of keeping in operation the system of enterprises which constitutes its industrial organization and the necessity of serving an almost completely irrelevant folklore. We are shown the ludicrous and pathetic spectacle of a people striving, on the one hand, to create the huge industrial units demanded by highly developed technology, and, on the other, to pay their ceremonial respects – through anti-trust laws and similar rituals – to such ancient and divine edicts as the one which holds that only good can come of competition and only bad of monopoly. We see them struggling manfully to avoid governmental enterprises when they can, and to conceal them when they cannot. For as Professor Arnold explains,
“Private waste of funds would take care of itself, since the profit motive prevented business men from wasting. Government had no profit motive and therefore was bound to waste more because of the extravagant theories habitually entertained by those who do not work for profit. And then, anyway, private funds, when wasted, only affect the individual who wastes them (and corporations were individuals) ...”
Worse still, governmental enterprises mean taxes, and this tribe is most terrified by death and taxes; whereas corporate enterprises lead only to prices, which one is free to avoid altogether by the simple process of refusing to purchase food or whatever the commodity may be. Thus these people can be comfortable only if the government pretends to be improving the navigable waterways when it is actually in the business of providing electricity, or if it pretends not to be government at all but a corporation (and corporations are of course individuals). Furthermore, it is only by allowing individuals to do as they please that the welfare of the community can be served, so that to interfere with these corporate individuals is to court disaster.
For sheer drama, at once tragic and funny, this spectacle would be difficult to equal, and Professor Arnold’s talents are such that he is able to do full justice to it. It seems to this reviewer unfortunate, therefore, that he seems also to have felt it necessary to sprinkle his account with hints toward a theory of how things got this way. It is not that Professor Arnold has not a right to his own folklore – no one can get along without one – but that it seems out of place in this book. Furthermore, Professor Arnold appears to have little talent for, and, you gather, less interest in, the special kind of scholarship necessary for this task. The result is that he produces a theory which lacks the aesthetic charms of learning and abstract argumentation; and aesthetic charm is, as no one knows better than Professor Arnold, the only justification for “a theory of history”, for it is only by this means that such a theory can attract the emotional loyalties of men and thus become a living folklore. The talents for historical research and eloquent exposition which go to make an Adam Smith or a Karl Marx are necessary for such work. Professor Arnold does not possess these talents, and it is quite possibly an ironic proof of the power generated by the folklore of scholarship that even so independent a mind as his needed to salve its conscience by going rather awkwardly through a little scholarly ritual of theorizing about the historical causes of observable facts.
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