The blind spot in Marx's notion of capitalism

The most fascinating aspect of the current debate about capitalism is the general lack of ideas about any alternative. I have previously in this blog talked about why this may be the case. However, one interesting detail of the debate has so far escaped my attention. It is the view that, as Tristam Hunt pointed out in a Newsnight debate, 'capitalism can never be moral'. 

There is no doubt that this a widespread view amongst socialists. Capitalism, they maintain, is all about the generation of profit. Whether this happens within a tightly regulated environment and whether or not tax revenue from profits are used to alleviate some of the ills of capitalism, does not alter the fundamentally amoral quality of the capitalist market system, so the story goes. 

Although we often speak of the failure of the vision of Marxism, the paradox is that this opinion, that capitalism is fundamentally amoral, echoes Marx' view. In a sense then, even those who defend capitalism yet concur that capitalism is amoral express nothing less than a Marxian view. 

The curious result is that the debate about capitalism is actually fought on a premise that is profoundly Marxist, and, so I would say, profoundly false. 

How did Marx arrive at the thesis that capitalism is amoral? Famously, he turned Hegel upside down, or, as he said himself, 'turned Hegel's view from standing on its head back to its feet again'. What did he do? 

Marx argued that there is a clear distinction between the economic sphere (the substructure of society) and its social and political dimensions (the superstructure). The former, so he maintained, determined the nature of the latter. He endorsed nothing short of economic determinism. The separation between these two spheres allowed him to extricate the questions of morality and ethics from the actual moral constitution of societies. In essence, he superimposed on his economic and political analysis a simplistic moral framework that rested on the notions of exploitation (immoral) and equality (moral). How did this represent a change to Hegel's notion of society? 

Hegel's notion of society offered a far more complex and sophisticated account than Marx's. For Hegel, morality was an aspect of human interaction which manifested itself in the development of human freedom. One critical aspect of personal freedom, according to Hegel, was to engage in economic exchanges, or what he called 'civil society'. 

So, in contrast to Marx, entering an economic relationship with somebody to exchange goods represents a fundamental aspect of being free. Today we would say, the market therefore presents people with the opportunity to realise their personal freedom in society. Capitalism hence is an essential expression of personal freedom. As we engage with others in economic activities, we not only manifest the extent of our personal freedom, but also establish the ethical quality of society. Capitalism is moral, as long as it permits us to engage freely in economic exchanges. 

This demonstrates how much we have accepted an arguably skewed picture of capitalism that originates in Marx's analysis, rather than in Hegel's liberalism. We should always bear in mind, that Marx never accepted the economy as an arena of personal freedom. How wrong he was.