01/03/2011 09:57 am ET | Updated May 25, 2011

The 20th Century, Now in Reruns

From what I can tell, the last few centuries of history have gone like this: first, capitalism showed up and changed everything, in both good ways and bad. The good ways were very good (undermining kings and state religions, encouraging the development of new technologies, genuine new wealth) and the bad ways were very bad (massive exploitation and deprivation, genocide in European and U.S. colonies... and more!).

Lots of people looked at this and wondered: can we keep the good parts and get rid of the bad parts? They were communists, or socialists, or Georgists, or whatever. What they weren't were people who were thrilled by the idea of enslaving humanity under the rule of Joseph Stalin. They were simply willing to perceive the reality that capitalism has a lot of downside.

Meanwhile, capitalism seemed to have an extremely difficult time reforming itself in any meaningful way. When anyone suggested that maybe six-year-old workers shouldn't be forced to actually stand in the vat of benzene, the robber barons should have said: "That's a great idea! Any money I'll lose on the vat thing I'll more than make back by not having to constantly train new six-year-olds after the previous ones drop dead!" But they didn't. Instead, they took the person who made the suggestion out behind the factory and shot them.

You can argue how much capitalism had to do with the outbreak of World War I, particularly how conscious the upper crust was about stimulating insane nationalism to avoid dealing with class conflict. But when the war came they thought it was exactly what they needed. A British politician famously said England was "at war quite irrespective of party or class." The German Kaiser was just as happy: "I see no parties anymore, I see only Germans."

Things went so well that they ended up creating exactly what they feared most: a Bolshevik revolution. Hooray!

At this point the capitalists and the remnants of the old aristocracy could have learned their lesson and started to compromise and heal the giant societal wounds caused by capitalism. Instead, they were so resistant to sharing money and power that -- especially during the Depression -- they preferred supporting fascism to doing anything that would take the wind out of the sails of their most radical opponents.

The result, World War II, was so catastrophic that it penetrated even the thick titanium skulls of the world's economic royalty. For about thirty years they seemed to have accepted that (particularly with communism as an actually existing alternative in the Soviet Union) they had to give a little ground.

Averell Harriman is an interesting example of this evolution. Born in 1891, he was the son of railroad tycoon Edward Henry Harriman and, after graduating from Stutts, inherited the largest fortune in America. In other words, he was just the kind of vicious scumbag who would get into business with the Nazis, and that's exactly what he did via Brown Brothers Harriman.

However, the greatest bloodshed in human history made an impression on Harriman, and he became part of the liberal elite that figured out that allowing the teeming millions to eat every now and then was actually good for business. By 1970 he even had good things to say about social democracy (in a book called America and Russia in a Changing World):

Our social and economic system is working perhaps toward Swedish socialist concepts but not toward Soviet Communism. The government in Sweden has overcome poverty, achieved decent housing and medical services for all, but Sweden has in no way compromised the principle of representative government and concern for civil liberties.

Capitalism had even less to fear by this point from its equal-and-opposite-reaction, communism, since communism had proven itself to be just as capable as capitalism of committing genocide and oppressing huge swaths of humanity. (This suggests to me at least that the real villain in both cases is industrialization, and that it can't happen under any system without gigantic bloodshed.)

Then communism collapsed, taking with it 40 years of intense nuclear terror.

If America had an intelligent upper class, they would have looked at all this and thought: Holy crap we're lucky we got out of the 20th Century alive. We must at all costs avoid making those mistakes again.

Instead, the actual American upper class -- with no more Harrimans with a living memory of the Depression and World War II -- looked at it and thought: Let's make EVERY SINGLE MISTAKE AGAIN.

That's what's happening right now. Rather than understanding that the problem of the 20th Century was the refusal of capitalism to compromise with human beings, they think the problem of the 20th Century was the few compromises capitalism did make. In fact, even the European upper classes seem to have now forgotten what their grandparents learned via the most direct experience possible.

So they're getting rid of the compromises as quickly as they can. Their goal is apparently to rewind the clock to 1900 and see if history turns out differently this time.

This is so monstrously cruel and stupid it seems beyond the ability of even David and Charles Koch. So why is it happening? I have no intention of ever reading anything written by Karl Marx, but here's how Robert Heilbroner, in The Worldly Philosophers, describes Marx's perspective:

Marx recognized that the economic difficulties of the system were not insuperable. Although anti-monopoly legislation or anti-business-cycle policies were unknown in Marx's day, such activities were not inconceivable: there was nothing inevitable in the physical sense about Marx's vision. The Marxist prediction of decay was founded on a conception of capitalism in which it was politically impossible for a government to set the system's wrongs aright; ideologically, even emotionally impossible...

It is just this lack of social flexibility, this bondage to shortsighted interest, that weakened European capitalism -- at least until World War II...It is frightening to look back at the grim determination with which so many nations steadfastly hewed to the very course that he insisted would lead to their undoing. It was as if their governments were unconsciously vindicating Marx's prophecy by obstinately doing exactly what he said they would.

But since Heilbroner was writing in 1980 instead of now, he goes on to say this:

Yet out of the American milieu came a certain pragmatism in dealing with power, private as well as public; and a general subscription to the ideals of democracy which steered the body politic safely past the rocks on which it foundered in so many nations abroad.

It is in these capacities for change that the answer to the Marxian analysis lies. Indeed, the more we examine the history of capitalism, especially in recent decades, the more we learn both to respect the penetration of Marx's thought and to recognize its limitations.

If Heilbroner were still around (he died in 2005), I'm pretty sure he'd be suggesting that Marx may be getting the last laugh. Capitalism looks more and more as though it truly does have a self-destruct mechanism built in. Last time around it took a genocidal war and the threat of nuclear obliteration to get capitalism to submit to a few measures to save it from itself. This time around I think we can be pretty sure that we won't survive whatever would be necessary for capitalism to come to its senses.

Happy New Year!

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