Muller Capitalism (4)

Jerry Z Muller explains the tension between dynamism and security that is produced by capitalism.

For most of history, the prime source of human insecurity was nature. In such societies, as Marx noted, the economy system was orientated toward stability-and stagnancy. Capitalist societies, by contrast, have been oriented towards innovation and dynamism, to the creation of new knowledge, new products, and new modes of productions and distribution. All of this has shifted the locus of insecurity from nature to the economy.

Hegel observed in the 1820s that for men in a commercial society based on the breadwinner-homemaker model, one’s sense of self-worth and recognition by others was tied to have a job. This posed a problem, because in a dynamic capitalist market, unemployment was a disctint possibility. The division of labour created by the market meant that many workers had skills that were highly specialised and suited for only a narrow range of jobs.

The market created shifting wants, and increased demand for new products meant decreased demand for older one. Men who lives had been devoted to their role in the production of the old products were left without a job and without the training that would allow them to find new work. And the mechanisation of production also led to a loss of jobs. From its very beginning, in other words, the creativity and innovation of industrial capitalism were shadowed by insecurity for members of the work force.....

The dynamism and insecurity created by nineteenth-century capitalism led to the creation of new institutions for the reduction of insecurity, including the limited liability corporation, to reduce investor risks; labour unions to further protect worker interests; and mutual aid societies to provide loans and burial security.