Truck and barter

Surviving Capitalism: how we learned to live with the market and remained almost human

Erik Ringma

Erik Ringmar has written a fascinating short book about the different forms of historical resistance to capitalism. Since its earliest appearance, capitalism has called forth social arrangements designed to maintain our humanity in the face of its inhumanity. Its ideal of specialisation alienates people from society and each other. Through the market, more of our lives are "commodified", crowding out non-economic values and understandings. But human beings are social animals, with a strong need for identity, companionship and a sense of worth, so they devise strategies for protecting their human substance against the encroachment of the market. These strategies are based on non-market institutions - the family, friendly associations, the state - which develop functions to cope with newly threatening environments. These strategies will vary according to the "social grammar" of the society in question.

The family is the primary protective agency because it is inherently non-contractual, but it has little power outside itself. Protection outside the family is to be found in "civil society", located between the individual and the market. However, the institutions of civil society serve particular groups. The state is the only force in society potentially stronger than the market, but it has to make concessions to it to finance its activities.

Ringmar goes on to consider the roles of these three protective institutions in different societies, concentrating on western Europe, North America and east Asia. He contrasts the European idea of the family as "a home" to which people can escape from "the market" with the Chinese idea of the extended family as an economic unit. This is the source of the "family-based business logic" characteristic of east Asian capitalism. He compares the European tradition of voluntary association - exemplified in religious sects, guilds and trade unions - to the Chinese guanxi (connections or networks based on pre-existing affinities, whether familial, village or provincial). This, in turn, differs from the Japanese idea of the business corporation as a family.

In Europe, Ringmar traces the stages by which the enlightened despotism of the 17th century gave way to the constitutional or limited state of the 18th century, the nation state of the 19th century and the welfare state of the 20th century. He contrasts these versions of the European state - in America only the second of these really took root - with the paternalist rule characteristic of east Asia. He gives an interesting account of the uniquely Chinese version of laissez-faire, wu wei, which is accurately translated as "active inactivity". ("To rule a large state is like cooking a small fish; stir as little as possible," say the Taoists.) By contrast, the 20th-century Japanese state evolved a "company-centred society" in which the state protects companies from market forces and companies protect individuals by offering lifelong employment.

Good or bad - Ringmar does not disguise the currently unacceptable character of many of them - the protective arrangements thrown up by history are now in a state of advanced decay, undermined (in China's case) by the Communists, and elsewhere by globalisation. He offers no plausible replacements. Though society is sure to outsmart the markets in the end, "things may get a lot worse before they start to get better".

None of this is as dry as it sounds. Running through the somewhat schematic treatment is an endearing partiality to forms of sociability generously lubricated by alcohol. Ringmar uses striking images to put flesh on the bones. Old institutions, he argues, adapt to new functions like the dolphin, a mammal that developed fish-like features to survive in an aquatic habitat. He likens European and east Asian family structures to nests of birds and colonies of termites, and contrasts these with the individualist ideal of the shell, by which snails or oysters deal with the vagaries of nature: "Molluscs reproduce by squirting eggs or sperm into the surrounding water, but apart from this they have no proper interaction with other members of their species . . .What goes on inside their shells we will never know." This is the culmination of consumer capitalism.

The main problem with the book is that Ringmar has stacked the argument against the market by treating it as an ideal type, rather than as a human institution. As Karl Polanyi pointed out years ago, it is not "markets" that are inhuman, but the "market system", or the extension of markets to land, capital and labour. Adam Smith's famed "disposition to truck, barter and exchange" is as social an activity as is family life, for the simple reason that people can't obtain all they want from where they live. To talk of society protecting people from markets is just as absurd as to talk of markets protecting people from society. It is a pity that a careless use of language has weakened an argument that deserves our attention.

Robert Skidelsky is professor of political economy at Warwick University