Following the collapse of socialist systems around the world at the end of the 1980s, the superiority of the market economy was clear to many. Nevertheless, latent or overt anti-capitalist animosities have persisted, and, since the outbreak of the financial crisis in 2008, have even gained considerable support. In particular among intellectuals, anti-capitalism is once again popular — as demonstrated, for example, by the widespread approval of Thomas Piketty’s Capital in the Twenty-First Century. But anti-capitalism among intellectuals has a long tradition.
Many intellectuals fail to understand the nature of capitalism as an economic order that emerges and grows spontaneously. Unlike socialism, capitalism isn’t a school of thought imposed on reality, free-market capitalism largely evolves spontaneously, growing from the bottom up rather than decreed from above. Capitalism has grown historically, in much the same way as languages have developed over time as the result of spontaneous and uncontrolled processes. Esperanto, invented in 1887 as a planned language, has now been around for over 130 years without gaining anything like the global acceptance its inventors were hoping for. Socialism shares some of the characteristics of a planned language in that it is a system devised by intellectuals.
Once we’ve grasped this essential difference between capitalism, as a spontaneously evolving order, and socialism, as a theoretical construct, the reasons why many intellectuals have a greater affinity for socialism (in whatever form) suddenly become obvious. Since their own livelihood depends on their ability to think and communicate ideas, they feel more in tune with an artificially planned and constructed economic order than to one that allows for unplanned, spontaneous development. The notion that economies work better without active intervention and planning is alien to many intellectuals.
In order to understand why so many intellectuals hold anti-capitalist views, it is important to realize that they are an elite, or at any rate a community of practice that defines itself as such. Their anti-capitalism is nurtured by their resentment of and opposition to the business elite. In this sense, the rivalry between the two groups is simply that — a competition between different elites vying for status in contemporary society. If a higher level of education doesn’t automatically guarantee higher incomes and more privileged positions, then the markets that allow this imbalance to happen are seen as unfair from the intellectuals’ perspective. Living in a competitive system that consistently awards the top (economic) prizes to others, a system where even the owners of medium-sized businesses achieve higher incomes and wealth than a tenured professor of philosophy, leads intellectuals to adopt a general skepticism against an economic order based on competition.
Understandably, intellectuals tend to equate knowledge acquisition with academic education and book learning. Psychology uses the term “explicit knowledge” to refer to this type of knowledge, which is acquired by means of “explicit learning.” However, there is a different kind of knowledge, “implicit knowledge,” which is acquired through “implicit learning.” This is far more primordial and often more powerful, although many intellectuals are unaware of its existence. Entrepreneurial research has shown that this is the route to knowledge acquisition taken by the majority of entrepreneurs.
The Hungarian-born British philosopher Michael Polanyi formulated the concept of “tacit knowledge” when he famously wrote that “we can know more than we can tell” in his book The Tacit Dimension (1966). In other words, learning is not necessarily the result of the conscious and systematic acquisition of knowledge, but often the result of unconscious, implicit learning processes. This is a point that had previously been emphasized by the economist and Nobel laureate Friedrich August von Hayek. Implicit learning differs from explicit learning in that outcomes are difficult or impossible to demonstrate in the form of certificates or academic qualifications. By an intellectual’s standards, an entrepreneur who may not have read a lot of books or shown much promise at college or university has nothing to show for himself that would compare to a doctorate or a list of publications.
Intellectuals cannot understand why someone with an “inferior intellect,” someone who might not even have an undergraduate degree, should end up making a lot more money and living in a much bigger house. They feel offended in their sense of what is “fair” and thus vindicated in their belief in a malfunction of capitalism or the market, which needs to be “corrected” by means of redistribution on a massive scale. By divesting the rich of some of their “undeserved wealth,” intellectuals console themselves with the fact that, even if they can’t abolish the brutal capitalist system altogether, they can at least “correct” it to some extent.
Intellectual anti-capitalism has become as powerful as it has only because the business elite has so far been unable to muster an intellectually adequate response. Pro-capitalist intellectuals (economists such as Ludwig von Mises, Hayek and Milton Friedman, as well as writers such as Ayn Rand) have tried to take up the battle that the business elite itself is unwilling or unable to fight, whether out of lack of courage or intellectual wherewithal and verbal agility. However, such supporters of capitalism have always been outsiders among their fellow intellectuals.
Rainer Zitelmann holds doctorates in History and Sociology. He is the author of 23 books. This article is based on his book, The Power of Capitalism.