The European: Criticizing capitalism is quite fashionable these days. You have entered the debate with a background in literature. Have economics failed to provide us with sufficient answers?
Vogl: A humanities scholar is a sort of a specialist of generalities. I am interested in approaching this topic historically: how did economic knowledge develop in the 18th century and how did this knowledge turn into hegemony over the past two hundred years? By economic knowledge, I mean the economic practice of interpretation that has become so influential. Economics tries to understand a world which it has itself created. Hermeneutically, this is an interesting arrangement.
The European: And that critique cannot come from within the economic discipline?
Vogl: As a discipline, economics has a rather narrow-minded structure. To be fair, the current crisis has helped to broaden the gaze. Established doctrines are not unanimously followed; certain basic assumptions are disputed, the role of economic theories is scrutinized, and economic facts are recognized to be intertwined with social and political circumstances. Economic crises are a stroke of epistemological luck in this respect.
The European: Let’s broach the topic with another interdisciplinary comparison: capital-based economy and religion. You write that both dwell on the idea that the current world order reflects the world as it should be…
Vogl: The semantics of capital have historically absorbed numinous qualities: spirituality, immateriality, immortality, loftiness. Capital and money are profane gods. But I am interested in something different: In the 17th and 18th century, economic science evolved out of a science of society in general. Up until the early modern times, “oikonomia” simply meant the just, godly governance of the world. The term then began to be used for specific social forms of commerce and economic systems. Three ideas came out of that development: Firstly, older forms of theodicy were inherited by modern economy. Even though there may be break-downs, mishaps and confusion within the system, the whole thing was seen to follow a wise and rational plan. Secondly, social order was thought to be produced by economic activity more so than anything else. The idea was that markets were meant to ensure the balanced and just settlement of interested parties. They seem to be governed by an exterior providence. Thirdly, this means that the economic system comes with a moral and philosophical preference: if individuals were to obey the laws of the market, they would achieve a kind of practical rationality. Adam Smith wrote The Wealth of Nations as a book of moral philosophy.
The European: In your book, you define the concept of „oikodicy “ as an economic equivalent to theodicy. But Smith meant “the invisible hand” of the market as a real, worldly interplay of individuals rather than as an exterior, transcendental force.
Vogl: To begin with, one must understand that Smith’s work is neither a manifesto of capitalism nor an apologia for markets gone out of control. Smith wrote his book as a justification of civil liberties, individualism and free trade; it was a tract against feudal privileges and absolutism. In addition, he maintained that a higher order could no longer govern modern society. There could no longer be a divine, superior vantage point from which to govern. Smith writes about the mechanics of indirect governance. The ‘invisible hand’ is a deus ex machina for our system of governance: it is much easier to control bourgeois society with the interplay of interests rather than by sheer force or the cleverness of politicians.
The European: A very plausible observation.
Vogl: But Smith was not describing real conditions, only potential ones. There was no free market during Smith’s lifetime. His work was a call to organize that kind of market. The Wealth of Nations is a prescriptive, partially even utopian, book. The same holds true today: Economic science is not simply a description of what happens in the market; concepts and models are developed and later embedded into our reality. Markets are not pre-existent, they have to be created.
The European: The great thing about religion is that it provides clarity: there are absolute truths as well as an objective, moral authority. In light of the hysteria and obliviousness to economic risk in recent years, would a little moral objectivity not be recommendable?
Vogl: Let me make a naïve observation. The frequency of crises has increased since the 1980s. Remarkably, not a single one of these crises was predicted by the dominant economic school of thought. According to the probability model on which our finance economy is based, such crises should only happen once in a blue moon. Economists were taken by surprise, and one can only wonder at this surprise.
The European: We base our trust in the doctrines on the assumption that they are essentially correct?
Vogl: More than that. We project all our hopes and expectations of the future onto the economic system — predictable and natural mechanisms are meant to operate in economics more than in any other social realm. The idea is this: Regardless of what politicians, parties and parliaments may be up to, the market will watch over us all. This stalwart of hope is rather remarkable. Liberals such as Alexander Rüstow or Walter Eucken – who helped to institute the system of a social market economy in Germany after World War II – have warned of this “metaphysical value” in classic economic theory. Like a planned economic, liberal economics tried to see order in everything. At the end of the day, the question remains: in which local sectors can something like a free market actually function?
The European: You write about the excesses and distortions of the market. How much of that do you trace back to Smith, and how much comes out of more recent neoliberal trends?
Vogl: Smith could not have foreseen the modern capital economy. Completely new markets only began to appear after the fall of the Bretton Woods system in the 1970s. The stock-exchange became a model for finance economy, the latter in turn became a model for all other types of economies. Simultaneously, production of investment and capital, which is what renders modern capitalism and finance economy so singular, was increasingly implemented as a model for social and cultural production. Competition, the pivotal principle of neoliberalism, was applied to all possible aspects of life: labor, health care, education, retirement. And thus the term “human capital” began its notorious career.
The European: Is capitalism an ideology?
Vogl: No. Capitalism is a rather heterogeneous conglomeration of business strategies, institutions, forms of commerce, behavioral patterns, power dynamics and mentalities. It produces and distributes ideologies the same way it produces and distributes goods. These ideologies, according to orthodox Marxist thought, are necessarily a false consciousness. For example, capitalism functions with subjects who constantly fabricate all sorts of dependencies while simultaneously believing in their individual freedoms. Take the classical and neo-classical theories for instance: they are meant to be objective, down-to-earth and rational, but in actual fact, they are riddled with moral maxims, social visions and utopian hopes.
The European: You describe modern capitalism like a fragile house of cards, make up of self-referential half-truths. And yet the system has existed for centuries. Does capitalism’s endurance not prove its validity?
Vogl: Economic validity is defined in terms of profit. As far as businesses go, your observation is correct: capitalism renders terrific profits, and so it makes sense. The question the jury is still out on is whether this profit is also profitable, that is, sensible on the larger scale of a national economy. In addition, the system has by no means remained the same. The trade capitalism of the Renaissance has little to do with the industrial capitalism of the 19th century, which in turn can hardly be recognized in the current global market system.
The European: In a recent interview, Herman Daly criticized our economic models as being too distanced from reality. Do we need more empiricism?
Vogl: Empiricism simply means the imponderability of historical processes. I would instead say the following: Abstract models can lead to very real practices. Computer transactions on Wall Street are concrete manifestations of theory. This raises the question: how can one measure the realism of economic theories? The idea of time becomes an important indicator for that. Modern finance economy aims to tame time and render the future predictable. But economic theory must be confronted with the demon of the unknown: The future is always uncertain to some degree. If we fail to recognize that, we cloud the structural reasons behind economic crises.
The European: Moritz Rinke wrote in Die ZEIT: “We are experiencing a new form of ‘tyranny of the instant’ that yields opportunism and perpetually befalls us.” Is he right?
Vogl: This particular tyranny is defined by the fact that highly individualized societies have also become more conformist. We are experiencing a hegemony of opinions. Finance markets are a good example of this: they are held together by conformity of beliefs.
The European: Let us talk about the idea of risk. You have previously described indecision as a ‘gesture of questioning’…
Vogl: By indecision, I mean the pause necessary to question an individual’s part in the general course of events. The paradox is that the most individualistic societies also have the most automatized decision-making processes. Just like a traffic system, modern societies allow themselves to be governed only by a great number of automatic processes. On the other hand, individual freedom is also in high demand in these societies. This paradox continually leads to break-downs: the economic crisis is one of these.
The European: Is the problem the economic structure or the interpretation of knowledge?
Vogl: I would avoid differentiating between thoughts and structures. Every mode of thought is based on certain existing structures. Every structural circumstance creates its own intellectual resonance. This means that a critical analysis has to take this interplay between mode of thought and structure into account, in order to find practical and theoretical alternatives. There are always more options than it appears. After decades of searching for a cure to the global economy, its own inherent limitations have become undeniable.
The European: So it’s about the differentiation of markets, rather than their elimination.
Vogl: Exactly. No one challenges the idea that the auto industry functions best with free trade. But whether elementary resources such as water, education, health, etc. should be managed by private markets is an entirely different question.
The European: Your book is entitled „The Spectre of Capital.“ Where do you see yourself departing from Marx and Engels?
Vogl: Of course the title plays with the Communist Manifesto’s opening sentence: “A spectre is haunting Europe—the spectre of Communism.” But let me make another point here: As a genre, spectre stories have existed since the 18th century. A spectre or an apparition is a present reminder that something has gone awry in our past. A debt has remained unpaid, or a wrong has not been righted. The spectre of capital works the other way around, signaling that something in the future will be wrong. It is a future of mounting debt that comes to weigh on the present. The ‘spectre of capital’ does not come out of the past, but rather as a memento out of the future and back into the present.
The European: What lessons should we draw from this memento?
Vogl: I was more interested in drawing up an inventory than in providing concrete solutions: How can one explain our economic system’s functions as well as its dysfunctions? It has become evident that all possible conclusions and lessons are at hand. Unregulated finance markets have proved themselves to be disastrous and must be controlled — all sorts of proposals have been discussed since 2008, but none have been put into effect. Another example: universal competition does not have a unifying effect on our societies, but rather a fragmentary one — despite this, the institutions in question have been re-privatized at a high social and economic cost. Obviously, reliance on the canon of the economic disciplines has not gotten us very far. We can proceed eclectically from here, we should open up to new ideas from the outside.
The European: We have already talked about the etymology of “oikonomia”. Another example: “security" comes from the Latin sine cura – “without care.” Have we become too careless?
Vogl: I believe Western societies are based on a culture of care. To govern here means to provide care: the welfare state, the police, anti-terror legislation all speak to that idea. The notion of care is embedded even in the idea of neoliberalism: the goal is to plan societies, making them secure and predictable. Ironically, the most dangerous financial transaction is called “securitization.” What a confusion of principles!
The European: Yet at the same time we have no qualms to surrender our personal responsibility: We rely on others instead of worrying ourselves. Self-sufficiency rarely goes hand in hand with being carefree.
Vogl: A new form of care has appeared, related to political and economic decision-making power. Where, when and how are decisions actually made about the fate of societies? There is an open conflict between the government of nation-states and the rule of global economic processes. We should therefore be careful about who we trust to make decisions about the future. The systematic outsourcing of responsibility is one of modern society’s structural problems.
The European: You describe market fetishism as the “last metaphysics of modernity”. Is your ultimate aim the demystification of the market?
Vogl: It’s about the secularization of economic sciences and the inclusion of the essential concept of finality into our understanding of society. One could call this endeavor “humanistic” in that it implies a radical preoccupation with the finality of existence. The economic system has exonerated itself in this regard much too lightly and continues to see itself as progressive—consequently serving an unreflective supply of vapid hopes. Finality, limited periods of time, historical time — these become more acute during the so-called crises.
The European: So you call for less utopianism and more realism?
Vogl: How can one call it? There used to be the expression of a “concrete utopia.” One would have to ask: How do we want to be governed? And what kind of lives do we want to lead?
The European: And you answer would be?
Vogl: How can one answer such a question?
The European: What is the good life?
Vogl: The answer is probably related to the participation in the consumption of resources, be they social, political, economic or natural. How can one participate in economic decisions and processes which dictate the fate of our society? How are questions of power asked and answered? This appears to me to be a good starting point for future debates.