The Next Crisis of Capitalism - Hobbes and Minsky
In the last years off his life, Thomas Hobbes engaged in a frenetic and intense intellectual battle on two apparently diametrically opposed fronts – but fronts that in fact for Hobbes were indissolubly connected because, for one, he was seeking to unify the physical universe with the human political and ethical experience called for by his principled materialist mechanicism; and for another because this unity of the physical and the ethical-political spheres was demanded by an underlying rationalism that resembled in all and for all the idealist rationalism of his earlier greatest Continental intellectual opponent, Rene’ Descartes. The dual battle that Hobbes was reluctantly drawn into was itself precipitated by the rapid spread of the Baconian empiricism that he himself had earlier espoused to counter Cartesian rationalism, on one side, and, on the other side, by the bifurcation of scientific research into “social” and “physical” sciences – engendered once again by the retreat of Cartesian rationalism in the face of the devastating attack of artisanal experimentalism brought about by the rampant empiricism of the triumphant industrial and commercial bourgeoisies of both England and Northern Europe.
Despite the fact that Hobbes was then and remains to this day unquestionably the most fundamental philosopher of the capitalist bourgeoisie, his diatribe with the much younger and far more enterprising scientific minds and political ideologues of his day – these last openly aligned to the parliamentary movement in opposition to the clearly monarchical bent of Hobbesian political philosophy – illustrates brilliantly and emphatically how the capitalist bourgeoisie has always preferred empirical pragmatism to ideological intransigence and dogmatism. The rapid and dramatic decline of the study of theoretical economics in universities the world over in favour of the equally rapid and dramatic triumph of business studies serves to evince equally well this heavy reliance of the bourgeoisie on scientific and political pragmatism.
Indeed, it is undeniable that Neoclassical economic theory, the most valiant bourgeois theoretical opponent of left-leaning economic theories – both Classical Political Economy and Marxism –, originated and triumphed at the end of the nineteenth century not as a “rationalist” and “holistic” theoretical response to its more established rivals, but rather as an unashamedly empiricist retort to what it denounced as the “meta-physical” aspects of Classical Political Economy from Smith to Marx. What strikes most and what characterises centrally the entire arc of Neoclassical Economic Theory is precisely its violent opposition to any “totalising” or “holistic” approach to the theorisation of economic reality. Neoclassical Theory is vehemently “micro-economic” in this precise regard, to wit, that it focuses exclusively and intransigently on the microscopic behaviour of economic agents – strictly on “in-dividuals”, on social “a-toms” – as against social groups such as tribes or institutions or city-states or indeed nation-states!
Yet, as we have amply demonstrated in our studies, the heavily empiricist bent of Neoclassical Economics, from General Equilibrium to Game Theory, as an ideological screen for capitalism cannot hide in any measure the fundamentally Hobbesian rationalist and pessimist kernel of its theoretical paradigm that serves as the brutally violent framework for the efficacious functioning of the capitalist economy! Inevitably, bourgeois economic and social theory can never jettison its brutal pessimist Hobbesian foundations. But this is not to say that it does not seek to hide them, or at least to edulcorate them, to sugar-coat them, as it were. And that is precisely why in recent times, in the last twenty years or so, academic faculties of economics have been completely surpassed and supplanted by or substituted with schools of business studies! Again, it is the inevitable tendency of theoretical economics to unearth, expose and then even denounce the contradictions of bourgeois capitalist society that has led to the well-nigh complete replacement on the part of the bourgeoisie of economics faculties with the more empiricist pragmatism of business schools the world over!
Unlike theoretical economics, business schools do not set themselves the task of explaining, to quote Adam Smith, “the nature and causes” of economic wealth and activity. Business schools are solely concerned with the immediate – superficial, if you like – sources of profit! Indeed, profit is the most immediate and superficial numerical measure of the accumulation of capital. Business schools are solely devoted to exploring the ways and means to make profit – but they do not even remotely consider the nature and causes of profit because to do so would engage them in the examination of the fundamental social significance of profit and profit-making activity – which has significant repercussions on the very goals and finality and meaning of social life and, indeed, of human existence itself!
At the present moment, perhaps the clearest and most pernicious effect of this “obliviousness” or willful forgetfulness on the part of the bourgeoisie of the deep meaning of profit – and therefore of the ultimate political meaning and consequences of capitalism – is the complete incomprehension on the part of its ruling elites of the phenomenon of the ever-growing financial debt pyramid whose imminent collapse will bring about possibly the greatest challenge that the global capitalist order has ever encountered. We shall examine this impending crisis in our next intervention in connection with the financial instability hypothesis of Hyman Minsky.