The Politics of Magical Capitalism

Courtesy of Double — M, via Flickr

Nick Clegg, forever damned to be known as the wolf-eyed replicant of Sheffield Hallam, proposes an emergency tax on the wealthy.

What is the emergency, one wonders?  Surely not a deficit of funding for public services.  Nick Clegg has been as avid a cutter, both of services and taxes on the rich, as his Tory confederates.  Is it not the emergency of an arrogant, soulless, vain man of little natural political nous, who has belatedly realised that the economic revival isn’t coming to save his party from oblivion before the next election?  All too late, he realises that shredding the bases of his electoral support, and telling the disappointed voters to “grow up,” has permanently closed the window on his pathetic party’s bid to replace Labour.  His Tory colleagues, Liberal yes men, and ovating conference goers, have not told him the truth.  He is finished.  Far from permanently altering British politics in favour of the Liberal Democrats, he has only ensured the dependence of he and his allies on a party, the Conservatives, that wholly despises them.

As predictable as Clegg’s latter day populism is the response of his erstwhile Tory allies.  Bernard Jenkins, a senior Conservative, riposted that such a tax would pander to “the politics of envy,” and do nothing but “drive wealth abroad”:

We’ve seen a lot of hedge funds moving abroad because of the tax system in this country. We’ve got to be very careful we don’t strangle the goose that lays the golden egg.

The “politics of envy” is a cliche of Thatcherite “meritocratic” ideology.  Mrs Thatcher, in a 1975 speech debunking the post-war consensus, attributed a saying to the Mid-West: “Don’t cut down the tall poppies. Let them rather grow tall.”  If this doesn’t sound very much like a Mid-West homily, it is because it is derived from Herodotus.  But the idea that this encompasses a folksy wisdom, a “common sense” if you will, is important to Thatcherite and neoliberal ideology.  It means, don’t cut down those who excel out of envy; encourage them, fertilise them, let them excel all the more.  The idea is that people who succeed in markets deserve their success: their success is “meritocratic.”  In this, she was not innovating: she merely gave fresh expression to an old conservative trope, present in Nietzsche as much as Rand.  But its staying power as a free market fable is acc0unted for by its political uses.

The more sophisticated ideologists of neoliberalism, such as Hayek, recognised the danger in attributing merit to market outcomes: it was a thinly veiled social Darwinism that distorted the real justification for free markets, that being their superior productive capacity.  But reactionaries like Thatcher understood that people do care about social justice, and are not enthralled by GDP figures.  She thus took the logical step of binding the argument for free markets to a mawkish, simplistic morality fable, in which egalitarianism is a conspiracy against excellence.  And to this day, Tory ideologues such as Jenkins, when in need of a quick social justice fix,alight on the old chestnut about the “politics of envy.”

The other justifications for Jenkins’s stance are just as vapid.  The argument that taxing the rich will drive them abroad is not borne out by the evidence.  Capitalists want to invest, and they want to do so where there is an infrastructure and a skilled, healthy workforce, that maximises their profits.  They may detest paying taxes on profits, especially when profits are tight.  Nevertheless, they will put up with it if there is a profit to be made.

But it is Jenkins’s final argument that discloses the real mysticism at the heart of conservative, pro-capitalist ideology.  The “goose that laid the golden egg” is, of course, derived from a fable from Aesop.  The goose in question keeps pooping out miraculous wealth in the form of golden eggs.  The foolish cottagers, thinking there must be a source of gold inside, decide to eviscerate the goose — only to be disappointed when it turns out to be no different to other geese.  They killed the goose.  The warning, then, is that the City is a giant golden-egg laying machine, which can be killed in the zeal to extract its golden goodness.

A question, then: are profits like “golden eggs”?  Does surplus value arise, seemingly ex nihilo, from the mysterious thaumaturgy of the City?  One is constantly exhorted to believe so. Save your money, you are told, or invest it, and it will just magically increase in value. Buy a private pension scheme for a fraction of your weekly earnings, and when you retire you can have a lavish, hedonistic lifestyle that would make Mitt Romney blush with noble envy. Better yet, save enough money to use as start-up capital, become a capitalist and one can, with sufficient nous, acquire enough dough to get the Kardashians’ telephone number. Something very nebulous and mystical about the process of abstaining from immediate consumption, and entering this money into circulation as money-capital, causes it to produce a “surplus value,” above and beyond what was originally invested.  In fact, one isn’t even abstaining from consumption as such.  To become a capitalist is to consume commodoties, qua variable and fixed capital, at a definite rate.  It is actually in the very act of consuming a set of commodities, that one magically makes the profit appear.

Such is the superstition, the magical thinking, that passes for a kind of common sense in capitalist modernity.  And it pays to recall, from time to time, that such irrationality is structural to the dominant ideology — particularly when we are invited to defend the integrity of a resurgent “modernity” against its irrationalist opponents.