From John Kay on Why 19thC & 21stC “Capitalism” are Completely Different to Language, the Euro and Personal Crises

I like these broad ranging connections πŸ™‚ A kind of linked in, “6 degrees of separation” for concepts πŸ™‚

One of the interesting things from studying, and more importantly experiencing and integrating Asian traditions – predominantly Indian and Chinese worldviews – is a distrust of language. Or rather a clear feeling (as opposed to exam-level-regurgitation-knowledge type factoid) of the severe limitations of language. This is in the western mindset to an extent but that work is less well-known. If we can sound bite it, then Chinese Philosophy is existential and about experiencing a phenomenal perspective – it’s just “not” conceptual (which is where much academic analysis of it goes off track). 50 readers of the Tao de Ching, 50 different understandings – no concept (as no central authority in Taoism) of “this is the correct understanding”. The Indians with a more similar Indo-Aryan mentality to ours have a greater philosophical overlap. However the mystical side (by definition “beyond words”) has generally been uppermost in Indian consciousness and going back at least as far as Nagarjuna (~200CE) an understanding of the emptiness of language was central. This wasn’t so clearly expounded in mainstream western thinking perhaps until we get to Wittgenstein:

Wittgenstein

…who (to quote wikipedia) “rejected the idea that language has a direct connection to reality and argued that concepts do not need to be so clearly defined to be meaningful”. The intellectuals amongst you might like to check out this excellent essay by David Loy on the two.

Anyway back to capitalism. It’s a word and the simple executive summary of the above paragraph is that words are less useful than we think. Words (and the concepts they denote) are like an old river which meanders this way and that and never more so than capitalism. Most curiously both the detractors and proponents of capitalism rarely note this. I guess its a bit like the proponents and opponents of “God” – it never seems to stop the flow of books proving the existence or non-existence of “God” that they never define it in the first place πŸ˜‰

This article by John Kay is an excellent piece which points out how the concept has flowed this way and that. The key point is that the original “capitalists” were what we would today call entrepreneurs operating in a family or partnership context – very different from the incumbent management of modern global enterprises with zillions of workers and shareholders…

John Kay

Karl Marx never used the word capitalism. But after the publication of Das Kapital, the term came to describe the system of business organisation which had made the industrial revolution possible. By the mid-19th century that system was central to the economic landscape … As individuals or with a small group of active partners, they built and owned both the factories and plants in which the new working class was employed, and the machinery inside them.

…The political and economic environment in which Marx wrote was a brief interlude in economic history. Yet the terminology devised by 19th-century critics of business continues to be used by both supporters and opponents of the market economy, although the industrial scene has been transformed. Legislation passed in Marx’s time permitted the establishment of the limited liability company, which made it possible to build businesses with widely dispersed share ownership. This form of organisation did not become popular until the end of the 19th century, but then expanded rapidly. By the 1930s, Berle and Means would write of the divorce of ownership and control.

…So the business leaders of today are not capitalists in the sense in which Arkwright and Rockefeller were capitalists. Modern titans derive their authority and influence from their position in a hierarchy, not their ownership of capital. They have obtained these positions through their skills in organisational politics, in the traditional ways bishops and generals acquired positions in an ecclesiastical or military hierarchy.

…While control over the means of production and exchange matters a great deal to the organisation of business and the power structures of society, ownership of the means of production and exchange matters very little.

It’s fascinating how early the recognition of the divorce of ownership and control was, and how it has taken so long to become a key issue. A sociology lecturer I know makes the excellent point that due to our legalistic focus we miss the fact that all systems operate with a social compact – an implicit set of rules about “how one should behave”. In my working career in the City this has gone from the owner-family-partnership/”good chap”/”my word is my bond”/”get well-off slowly” to the more American “limitless greed”/”get rich quick” model. Just as with fractals, one can keep zooming in and see the same pattern repeated. John Kay writes about how capitalism differs 19thC to 21stC but we can write as long an article on how (and why) it differs from 1982 to 2012 and newspapers are (implicitly) full of how it is changing day to day.

I often reflect on what would have happened if Heraclitus:

Heraclitus

…had occupied the place in the Western thought that Plato does. Plato – and his fixed Platonic essences – influenced for millennia European thought towards “the right answer” – and for sure that’s alive and kicking in education today. But if we “zoom in” to these essences, these concepts, these shadows on the cave then we see what Heraclitus said – everything is in flux – it’s always changing. We all know that everything is changing but we act as if it’s possible to stabilise the change – this applies all the way from our personal lives right up to the politics of the Euro. The forces of change are resisted by a kind of homeostasis which pushes back against change and does everything it can to build bigger buttresses against it.

But whether personally or currency-wise or everything in-between, the tectonic pressures cannot be indefinitely resisted. The longer and the more we have resisted “the way things are”, the more solidly we have built a fixed personality structure, way of life, or European currency – then the bigger and more catastrophic the break-up.

Ending where we started with language, in English the word “crisis” is a bad thing, an anomaly, something that “shouldn’t happen” – “who is to blame?”. However, whether personal or macroeconomic, the real nature of crisis is something different … rather like an indefinitely postponed trip to the dentist, the longer it’s been building the greater the appointment with destiny!

So who is to blame for crises? Well maybe I can pin it on Plato πŸ™‚ … the Euro crisis is his fault πŸ™‚

Plato

Well at least that is probably the first time even the internet has heard that one πŸ™‚ However Platonic thinking did lead not just to our philosophical traditions (which continue to represent nothing more than an apparent search for a “correct” sequence of words) but also our religious thinking – hitting it off nicely with the monotheistic mentality and centralised power structures of Christianity. It’s the “There Is A True, Right Answer” mentality (and thats a lethal one from millennia of religious wars through to Marxism).

Built into, in a world of non-stop flux, this whole “right answer” mentality is a stored-up crisis.

Finishing with an Eastern quote, the Zen one is cool – “no fixed position”. Life is like surfing a wave. If in quiet seas we don’t need to shift much, in choppy seas we maintain fixed positions at our peril. Equally we need some stances, some temporary positions. And I guess there is the rub – balancing form and flexibility, form and emptiness, rigidity and flow. And as we might expect politicians and bureaucrats will always err on the side of rigidity … too much personal investment in historic positions. And hence political demise is generally likely to end in crisis .. even the fleetest of foot cant dance on that surfboard for too long until they get stuck with some fixed position and the wave ditches them into the drink.

So as Capitalism so you. You (and I) are like these meandering concepts, words seemingly pointing at “the same thing”, performances on the surf board trying to stay upright as best we can in unpredictable seas. Resolve that conundrum and you can go toe-to-toe with any of the worlds mystics or philosophers πŸ˜‰

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One Response to From John Kay on Why 19thC & 21stC “Capitalism” are Completely Different to Language, the Euro and Personal Crises

  1. mike says:

    I received an interesting comment by email from a friend with Indian business interests who has had the usual “challenges” of getting things done over there.

    it may explain why doing business in India is so difficult – what you hear, and what is meant are two different things

    Back to Wittgenstein – the quote from wiki above was relating to his Language Game idea. In a sense – and this is rather like the implicit social compact behind business laws – the use or the way the “language game” is played varies from country to country (it’s a part of what we label as “culture”). I haven’t done business in India but I have done a lot in Japan. It took me to realise that “Hai!” – which in the dictionary “means” “Yes” – is often used when the responder means yes or means no! There the game is not “complete accuracy” (and how often are English speakers ever completely honest) but more of “don’t cause offence/loss of face”. Of course with time one learns that the “no”-ness of the “hai” is communicated just not via language.

    Another cross link – “no fixed answer” – literally but also metaphorically in terms of no one way to play the language game.

    The other point is on the rigid-flowing axis. Countries like Germany, Switzerland, Singapore are very much at the rigid, “accurate” end of the spectrum – it’s why engineering is so good in such places. Of the larger nations India is perhaps most at the flowing end of the axis – organic, opaque. I was about to say “ironically” but maybe its “consequently” the former countries “work” much better but there is always a concern that the kind of marrow of life has been squeezed out, life can become too robotic. Vice versa India is perhaps the par excellence example of a place teeming with vitality, life, and energy.

    I also liked my chum’s comment as it highlights a very key point behind my inclusion of Wisdom Traditions on this business-leaning website. It is very practical … understanding is something that underpins all aspects of life.

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