Opinion, World

Sedláček: We are moving towards a global form of organization

Are there alternatives to capitalism? Veronika Pehe interviews economist Tomáš Sedláček.
Tomas Sedlacek

Veronika Pehe: We’ve met at a conference on socialism, capitalism, and the alternatives. Are there, in your opinion, alternatives?

Tomáš Sedláček: In a way, I think that capitalism is an alternative to itself. Capitalism changes constantly, it looked completely different twenty years ago. It alternates with itself, so to speak. For instance, twenty years ago, we had no environmental concerns. This wasn’t really the fault of capitalism, it was the fault of mankind: we simply didn’t know that washing our cars in rivers was not a clever thing to do. Speaking of which, real socialism in Central and Eastern Europe had a much more devastating effect on the environment than capitalism. So all the other alternatives we have had in recent history have proven to not actually deliver the result that we wanted. There’s a beautiful joke by Tim Minchin: you know what’s the name of an alternative medicine that is proven to work? Medicine.

is a Czech economist, historian of economic thought, and university lecturer. His bestselling book, The Economics of Good and Evil: The Quest for Economic Meaning from the Epic of Gilgamesh to Wall Street, was published in Czech in 2009 and in English translation in 2011. He is chief macroeconomic strategist at the Czech National Bank.

And it’s the same thing with capitalism?

Perhaps. I’m a critic of capitalism, but not because I hate it. I’m a critic of capitalism like you can be a critic of literature. A literary critic doesn’t criticize literature because he or she finds it useless or hates it, but because he cares for it. Another way to respond to the question is to look at taxation. In many European countries, it is almost half of the GDP. So in a way, the system we have today could also be interpreted as halfway between socialism and capitalism. If 50% of your income goes to cater not to your individual wishes, but to general societal wishes then this might be a useful way of thinking about it. What I’m saying is that capitalism took and incorporated lots of good points that Marx or the Left had to say, and, in my opinion, it incorporated these points more than, for instance, Cuba. The Japanese system is in a way an alternative to capitalism, or a deviation of capitalism, but nobody in Europe wants that kind of die-hard capitalism.

So we should in fact be talking about varieties of capitalism rather than alternatives?

Yes. That I think is more fruitful. The situation we have today is similar to that of the medieval Catholic church – it was ripe for reformation, pregnant with change, but today we are lacking Luther. Nobody believes in the Catholic interpretation of capitalism, so to say. Nobody really (perhaps except for a couple of economic priests) believes in the divine self-regulation of the markets any more – but since we have nothing better to believe, we stick with it. What has been installed on one level of symbolism has to be uninstalled at the very same level of symbolism. We are in a situation where at a lower level of symbolism – on the level of facts – there is a conflict with what we expected from capitalism, but because we don’t really have a new myth, narrative, ideology, or new system, we willy-nilly believe the old one, not because we like to, but because there really are no intellectual alternatives. Belief is often interpreted as a choice, whereas I think that there are also beliefs that lie outside of the choice mechanism. That is why there are so many prayers for faith even among the believers – meaning I believe, but not as much as I would like to believe. And that also works the other way around, some things we believe without wanting to. And that is what is happening on a pragmatic economic-political level: we are undergoing a change of belief.

You mentioned environmental concerns. Earlier at the conference, Naomi Klein argued that the fight against climate change has to come hand in hand with the fight against inequality and in conjunction with a general progressive project. According to her, these are not single issues that can be dealt with in isolation. Is that an assessment you would agree with?

Yes, but within the realms of capitalism. I don’t think there ever was an economist who said that capitalism is fair. I don’t think this is a claim that anyone ever made. The weather is not fair and neither is the universe. It is at the heart of Christianity that God is not fair. This is the message of the New Testament, that God punished somebody who didn’t deserve it and so the whole idea of salvation is based on the idea of God being fundamentally unfair. Thank God! We have a tendency to read unfairness in a negative way. Let’s say you are walking down the street and you find a thousand pounds lying there. Now, that’s unfair, but because its positively unfair, we don’t think of it as unfair. If you lose a thousand pounds, you will feel that the universe is treating you unfairly. So we must understand that there is also something like positive unfairness. This is the example of the workers on the vineyard in the New Testament: some of them worked the whole day, some of them only worked an hour and they got the same pay  – is it unfair? Yes, but it is positively unfair. Ironically, in this parable, the only workers who complain are the ones who have been treated fairly. They agreed to a wage for a whole day of labor and they got paid fairly.

With this biblical parable, you’re suggesting that unfairness is somehow inherent in the human condition. Is it then pointless to strive for an economic system that is more fair?

Absolutely not. This is our task to be fair. Fair means consistent. It is also, if you notice, the first moral outcry and a mantra of children: “That’s not fair!”. But absolute equality is a) impossible, and b) I would even say it’s not desirable. But in many areas the system is quite equal. But never equal in everything.  If I’m a billionaire, can I get a better iPhone than you? No, it’s all the same.  Can I drink better Coke? No. In this sense, Coke is a perfect communist drink, as Žizek puts it. A luxury made available for all in the words of the great economist Joseph Schumpeter.

The globe is connected by trade and information, our ability to talk, organize, and react globally (which is politics) should follow.

By the way, note that in our societies we only leave the somewhat unessential things to capitalism. Coffee, drinks, iPads, trousers, etc. But when it comes to the essential things in life, such as health, pensions, or safety on the roads, we don’t rely on individuals being directly responsible for their actions. We use a spontaneous free-market based, yet collective social institution: insurance. In these areas we are communitarian. So if I break my leg, the system we have in Europe ensures equal treatment whether you are rich or poor, responsible or a victim. So far this works on the level of states. Previously this solidarity, this pooling of money, only worked on the level of the family. I think that in the future, we will extend this principle to the whole of mankind. If we want to care for mankind, then why does a British or Czech person get solidarity, but not someone else? So this for me is the way forward. Some sort of basic global response to human pain – be it caused by acts of terrorism, natural disasters, or totalitarian rule. And it’s possible. If we want to care for the poor, we should care for the really poor. The globe is connected by trade and information, our ability to talk, organize, and react globally (which is politics) should follow.

One of your theses is that we should learn to be content to be discontent. That’s all very well in the global north where, as you mentioned earlier today, relatively few people are dying of hunger. But there are parts of the world where many more are. Is this imperative not universal then?

My message is to our Western over-fed civilization, to nobody else. By the way, that also shows my point and that’s exactly where the logic of nation states crumbles, because it’s completely inconsistent. You can’t really get very far by arguing that a British citizen should have a right to basic healthcare while an Indian or Chinese person shouldn’t. It’s inconsistent and that’s why it has to disappear.

Are you proposing that to address inequality we need to think on a global scale?

Yes. Though I am less concerned with inequality as such than I am concerned with poverty. This is not a question only of politics; this is a question of extending our sympathy not just to friends, to our family, not even to the nation, but to the whole of mankind. That to me would deal with poverty better than trying to invent a new economic system, which is extremely risky. This system works, it’s got many flaws, but it functions, albeit not always exactly the way we want it to. Nothing that human beings create is perfect, not your iPad, not your car. You drive a car and it breaks down, but you’re not ontologically confused, because of course, cars are fallible – to say it together with Nietzsche: human, all too human. Why don’t we have this about capitalism as well? It’s just human, it’s not divine, it’s not perfect, its ok, sort of, 60-80% of the time. And to a certain extent it’s a disaster. We should work on the negatives, but not destroy the positives.

Going back to my previous example, this society is capitalist, but it is also communitarian: we have pensions, health insurance, car-collision insurance, etc. Insurance means we collectivize the costs. You can also read insurance as communitarianism spontaneously born from capitalism – optional at the beginning and then eventually mandatory.  In an ideal extreme capitalist society, if I drive my car and crash into yours, it’s my fault and I pay. If it’s your fault, you pay. Today, I drive my motorcycle into your golden Mercedes, and you get out of the car, we shake hands, we have coffee, and so on. Why? Because you don’t have to care whether I am rich or poor, we all have mandatory insurance and we are precisely not responsible for our deeds. Unlike the Aristotelian tragedy of the commons, we should also remember that there are very many blessings of the commons. In the essential sectors of society, we don’t allow for private initiative and private responsibility for our own deeds. We are egalitarian and communitarian.

But surely in this global vision of solidarity you mention, we still have the problem that we have to deal with nation states with different levels of communitarian thinking. How do you propose to move forward from that?

Take the Swiss idea of minimum income. If you care for the poor, then care for the poor in general and not exclusively the Swiss poor. If we establish minimum income – though I’m not overly excited about this idea – then introduce it globally at least in some minimal form. Mankind should take care of one other, and we should take care of the weakest and most disadvantaged people. Most of them do not live in Switzerland, they live in India, China, or Africa.

There has been some effort at moving from nation states to a wider framework of Europe, but my goal would be that it doesn’t stop with Europe, that we go beyond that.

The physicist Michio Kaku has a theory that specialization always went hand in hand with the ability to politically coordinate the masses, so in other words, it also went together with technological advances. If you want to cook dinner, you need a family, if you want to build a car, you need a nation of at least 2-3 million people in order to have such a level of specialization that it can afford to send people to construct this personal luxury that we call cars. So we are now able to make cars and jet engines, precisely because specialization is so wide, but also because we are able to coordinate ourselves, which is what we call politics. For now, we can do that at the national level, but not more. The UN is not really functional in that respect. Bu as Michio Kaku says, interestingly, with the unlocking of the nuclear potential, we have reached this unique situation in the history of mankind that our technological ability overtook our ability to coordinate politically. This technology could destroy the whole world, yet politically speaking we are at the level of nation states only. There has been some effort at moving from nation states to a wider framework of Europe, but my goal would be that it doesn’t stop with Europe, that we go beyond that. In other words, if we didn’t think nationally, but if we had a global way of negotiating, organizing, and thinking, nuclear power would not be dangerous at all. Nuclear power is only dangerous because there’s one nation that could potentially use it against another nation. Without that harboring of national hate, we could harvest nuclear power solely for good purposes. So this is something that awaits mankind, it’s just a continuation of the trend of moving from small families, tribes, to villages, nations, and now were trying go beyond this really quite useless  national paradigm. That’s the overarching trend. If we had such a platform, then addressing poverty would be much easier and we’d feel much better about it as mankind, too.

It sounds like you’re more or less an optimist.

When people ask me whether I’m an optimist or a pessimist, I answer that I’m neither opti- nor pessi-mistic,  I remain simply mystic. And hopeful. But let me quote Václav Havel here: Hope is definitely not the same thing as optimism. It is not the conviction that something will turn out well, but the certainty that something makes sense, regardless of how it turns out.


Featured image by Michaela Danelova.


Veronika Pehe
is a historian and contributing editor at A2larm.cz.

1 Comment

  1. Everybody who has vast experience in the 3rd world, should come to the same conclusion. I saw that about half of people had to live on about 1€ a day, a fact which is well know. If we could just double this amount for the poorest 1 billion, it would cost only 365 billion a year, yet add considerably to improved lifes, and also ours by having to deal less with crises like contagious diseases.