Assholes (19 page)

Certain styles of capitalism are inherently prone to decline or, more specifically, to
degrade
, due to the proliferation of assholes.
Asshole capitalism
, as we hereby define the term, is the name of this kind of unstable social system.

Every kind of society requires a reliable asshole-dampening system—that is, a set of social institutions, such as the family, religion, public education, or the rule of law—that keeps the asshole population from getting out of hand. For if the proportion of assholes in the population becomes too large (i.e., the non-asshole to asshole ratio takes a dive), cooperative people will become increasingly unable or unwilling or just too few in number to uphold the practices and institutions needed for a society to stave off decline. If this is possible in any kind of society, asshole capitalism, as we will understand it, is
especially
prone to undoing itself in this way.

This is not necessarily to say that there is something about the very nature of capitalism that encourages people to be, become, or act like assholes.
¹
That may well be true, and it
does seem telling that quintessential capitalists such as John D. Rockefeller or Gordon Gekko are assholes.
²
But there are certainly assholes in totalitarian or socialist societies as well, such as Napoleon or any of the ruling pigs in Orwell’s
Animal Farm
(recall the final commandment that “All animals are equal; but some animals are more equal than others”). Our argument in this chapter applies narrowly: it is addressed to capitalism in a particular, increasingly prevalent
entitlement-oriented style
. We will consider several ways a capitalist society might avoid this particular kind of entitlement culture and so avoid the asshole capitalism road to decline.

The asshole, as we defined him in
chapter 1
, feels entitled to special advantages of cooperative life to which he in fact has no moral claim. The culture of an asshole capitalist system, as we will understand it, sends just this kind of
strong entitlement message
. Roughly, the message is that you can rightly get something for nothing or get rich without having to worry about the costs to others. This message creates powerful incentives for asshole-style reasoning and action, not just among those who are already assholes but among many who would otherwise be content to cooperate as equals in society. The result is a profusion of assholery throughout social and economic life that overwhelms the dampening systems that might otherwise keep the asshole population from exploding out of control. As assholes grow in numbers, or are simply
perceived
to grow in numbers, cooperative people gradually withdraw from upholding the
practices and institutions needed for capitalism to function
by its own standards of value
. The capitalist system thus degrades: it becomes increasingly unable to fulfill its own promises of freedom, opportunity, and general prosperity, the very reasons cooperative people were supposed to want capitalism over other forms of society in the first place. In a word, asshole capitalism defeats capitalism’s main point.

That is the main idea. To be more specific, asshole capitalism has three essential features:

A helpful way to think about how this works is to start by imagining a capitalist society that more or less fulfills capitalism’s social promises.
³
This means that cooperative people are, despite the usual assholes, mostly upholding the various
practices and institutions needed for almost everyone to have things like real freedom, real opportunity, and a goodly share in general prosperity. But now suppose the society switches to an entitlement system (perhaps as the Entitlement Party rises to power). The system is now sending a powerful entitlement message, for instance, that having ever more is one’s moral right, even when it comes at a cost to others. As asshole thinking and culture spread and take hold, the asshole-dampening systems that used to keep assholery in check become overwhelmed. Parents start preparing their kids for an asshole economy, the law is increasingly compromised, the political system is increasingly captured, and so on. As some switch sides while others mainly withdraw, cooperative people find it more difficult to uphold the practices and institutions needed for capitalism to do right by its own values. Although the society won’t necessarily collapse—even assholes won’t prosper if they take it that far—the practices and institutions that fulfilled capitalism’s promises increasingly break down. The capitalist system, as we are putting it, degrades.

Asshole capitalism, so described, is merely a disquieting possibility. It is a further question whether any real-world capitalist society, such as Japan, Italy, or the United States, should worry about the rise of asshole capitalism and its own decline. As we will elaborate later in this chapter, asshole capitalism is what social scientists call a “model,” which will approximate reality only as a matter of degree. It is all-important not to mistake models for reality—however often professional economists do just that. Yet the important practical question is not whether we can be
sure
that the model is perfectly realistic but how confident
we are that we are
not
already or soon to be on the road to decline the model describes. Our main task in this chapter will be to describe how a capitalist society may be undone. Our larger suggestion, however, is that we should be genuinely concerned about the capitalist societies we actually have. We should worry about whether our societies are already or might soon become asshole capitalist systems set on a potentially irreversible path of degradation and decline.

These things are difficult to estimate, but here is my own sense of the score, as of the early twenty-first century. Japan has little reason to worry, because its “collectivist” culture keeps people on a cooperative footing. Italy is already an asshole capitalist system and is contemplating routes of escape (the overdue ouster of Berlusconi being a start). The United States stands at the precipice: chances are fair to good that it has already reached a tipping point into asshole capitalism and perhaps irreversible decline. It could in theory return to its non-asshole capitalist glory days. But the shrewd gambler would not take that bet. Americans are therefore right to feel dread.

According to Karl Marx, capitalism is unstable but inevitably gives way to something better. The proliferation of assholes suggests that Marx was wrong: capitalism is unstable but can give way to something worse. Thomas Hobbes, that great student of the human condition, has a better nose for the asshole in human life. Hobbes argued that society was so inherently unstable that only an absolute monarch (such as the English king) could keep it from devolving into a “war of all against all,” a hellish state in which, as Hobbes famously put it, “the life of man [is] solitary, poore, nasty, brutish, and short.”
⁴
Hobbes
turned out to be wrong about the need for an absolute sovereign; the stable success of constitutional democracies with divided governmental powers, such as the United States and France, have proven as much. Yet the social dynamics of assholes may confirm his gloomy view of the risks. Cooperation is fragile. The prospects for any society depend to a large extent on circumstance and fate. And so cooperative people must remain vigilant if decent society is to last. Cooperative vigilance is the
only
bulwark against decline,
especially
in capitalist societies.

Social arrangements can come apart in various ways. Considering several of them will help to clarify the particular type of decline we mean to focus on.

Collapse
. The now barren Easter Island once had a significant forest that sustained a vibrant society. The forest was gradually cut down, because each individual profited from cutting trees down but lacked assurance that if he or she didn’t, others would likewise refrain. Largely as a result of this one “tragedy of the commons,” the society died out.
⁵
Likewise, there’s a fair chance that global warming will spell our collective doom (if not for all of humanity, then for vast numbers of people).

Deterioration
. In other cases, we see degradation of something valuable without complete collapse. In one study of day care centers in Haifa, for example, fines were imposed upon parents who picked up their children late. As a result, tardy
pickups
doubled
(as compared with control groups). Moreover, they never returned to before-fine levels even after the fines were removed.
⁶
It seems the fine put people in a self-interested frame of mind (people were willing to pay for the extra time) that replaced a general sense of the obligations of cooperative child care. Or consider Richard Titmuss’s famous study of blood donations. When people were paid to donate blood, overall donations declined. People were more strongly motivated to donate blood by charitable impulse than the profit motive. Here, too, market incentives displaced preexisting ethical commitment.
⁷

There are also larger ways virtue can be “crowded out” by vice. The “crowding-out” effect in day care or blood donations can combine with the tendency for “markets to economize on virtue.” The less markets depend on centralized decisions (about the allocation of resources, for instance), the less they depend on virtuous governors to make them. As Hayek puts it, the liberal market economy “is a system in which bad men can do least harm.”
⁸
Taken together, the two tendencies can induce a mutually reinforcing downward spiral of market expansion and decreased reliance on virtue. As Samuel Bowles explains:

We thus see a downward shift from a virtue-infused society to a more “virtue-efficient” end point.

Many have argued that this tendency is characteristic of capitalism and liberal institutions per se. Markets animated by self-interest, it is said,
depend for their very existence
on traditional familial or religious culture that encourages the personal and civic virtue needed for market-based society to work. And yet those same market relations
endanger
that very culture by displacing rooted ethical commitment with market values of self-interest. This, as the point is sometimes put, is the “cultural contradiction” of capitalism.
¹⁰

Crisis
. If these are cases in which something of value deteriorates, one could argue that the loss of value is nevertheless justified by gains for some greater value. Crises tend to be different in this regard: many crises do sweeping, irreparable, and largely unnecessary harm. Examples include a classic bank run or the global liquidity crisis of 2008. In both cases the destructive
outcome results mainly from
uncertainty
about whether loans will be repaid. Most parties were fine lending as long as enough other parties were lending as well. Without assurances that enough others are doing likewise, however, each faced an increased risk of default and so had a powerful reason not to lend or to recall debts. If there had been greater “confidence” that they would have been repaid, the crises could have been avoided, with little or no damage done.

Systemic Dysfunction
. It is possible for a whole system to work in a way that repeatedly causes unnecessary destruction. The untoward outcomes are not simply a “forty-year flood” or “black swan event” but rather a predictable result of the way a system is set up and could be but isn’t adjusted or reformed over time (if you like, a “white swan event”). Economist Hyman Minsky argued that capital markets are inherently prone to debt crises.
¹¹
The tendency, however, is potentially manageable, and the development of central banking, for example, in fact dramatically reduced the crises that continuously befell unregulated private banks in an earlier era. Each era requires its own precautionary adaptations. In recent decades, however, we have mainly refused to take serious action. On a global scale, the Bretton Woods institutions adopted after World War II successfully limited and managed systemic risk for more than two decades; there were very few financial crises, not even a handful, before the system was abandoned in the early 1970s. But as capital became increasingly mobile across borders, as banking and investment were desegregated, and as confidence in laissez-faire rose (which allowed firms to make imprudent bets and shift risks off their balance sheets and so on), crises have
increased dramatically in number and severity, culminating in the global crisis of 2008–9, the ensuing Great Recession, and crises in the euro zone.