This Life

by Martin Hägglund

  Hence, it is a grave mistake to think that the tendency toward crises heralds the end of capitalism. Crises are essential to cycles of capitalist accumulation and necessary for the continued production of capital wealth. For the rate of profit to rise again, the ratio of living labor time must increase relative to nonliving production time, which requires the devaluation or destruction of productive capital. Far from being a threat to capitalism, such crises are a condition of possibility for capitalism as a system to reproduce itself. Individual capitalists (and entire capitalist societies) can of course be vanquished in a crisis, but all that is needed for capitalism as a system to be maintained is that a new cycle of growth can begin again.

  Nevertheless, many avowed Marxists continue to hinge their critique of capitalism on the prediction of a “terminal crisis.” Such a critique of capitalism is deeply misguided. The problem with capitalism is not that it will collapse, but that it can sustain itself only through a self-contradictory dynamic that has pernicious social consequences. Given the capitalist measure of social wealth, the free time we gain thanks to technological efficiency cannot be recognized as a value in itself. Increased technological productivity could give everyone more free time to lead their lives, if we pursued technological innovation for the sake of emancipation rather than for the sake of profit. As long as we produce for the sake of profit, however, the reduction of socially necessary labor time through technological innovation is caught in a vicious contradiction. We cannot pursue the reduction of socially necessary labor time as an end in itself, but only as a means for extracting surplus value from workers, which leads to unemployment, exploitation, and crises rather than emancipation.

  A rigorous critique of capitalism should not prophesy an apocalyptic end of the system. Rather, a rigorous critique should articulate why the measure of value under capitalism is self-contradictory and requires a collective revaluation of value. The revaluation of value can be achieved only through a political transformation of the economy, which would allow us to recognize socially available free time as an end in itself. Such a transformation of the economy is at the center of what I am calling democratic socialism.

  IV

  To elaborate the stakes of democratic socialism, it is helpful to engage the most powerful and philosophically sophisticated critic of socialism: the Austrian economist and philosopher Friedrich Hayek. Hayek received the Nobel Memorial Prize in Economic Sciences in 1974 and he was the leading figure in the formation of the so-called Chicago School, which has strongly shaped the reigning neoliberal ideas of the virtues of “the free market.”

  Hayek’s critique of socialism hinges on the assumption that all forms of socialism require a form of central planning that is structured in a top-down, undemocratic fashion. As Hayek points out, “most planners who have seriously considered the practical aspects of their task have little doubt that a directed economy must be run on more or less dictatorial lines,” since “the complex system of interrelated activities, if it is to be consciously directed at all, must be directed by a single staff of experts,” where “ultimate responsibility and power must rest in the hands of a commander-in-chief whose actions must not be fettered by democratic procedure.”33 Socialism would then require a separation between political democracy and economic life. A central planning authority would dictate the form of our economic life, whereas we would be free to lead our lives in other respects. “Such assurances,” Hayek writes, “are usually accompanied by the suggestion that, by giving up freedom in what are, or ought to be, the less important aspects of our lives, we shall obtain greater freedom in the pursuit of higher values. On this ground people who abhor the idea of a political dictatorship often clamor for a dictator in the economic field.”34

  In contrast, Hayek pursues an important argument regarding the inseparability of economic, political, and existential freedom. As Hayek rightly emphasizes, it is a mistake to believe that “there are purely economic ends separate from the other ends of life.”35 Rather, there is a constitutive “economic problem” at the heart of freedom, since “all our ends compete for the same means”36 and we have to decide which ends to prioritize in light of our limited means. This is why the question of who controls the economy is of such vital importance. “Economic control is not merely control of a section of human life which can be separated from the rest; it is the control of the means for all our ends.”37 Accordingly, “whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower—in short, what men should believe and strive for.”38

  Hayek here comes close to seeing the intrinsic link between economic life and spiritual freedom, which I have developed in depth through my reading of Marx. Nevertheless, Hayek falls short of his own potential insight, since he still conceives of economic organization in strictly instrumental terms—as a mere means for the pursuit of individual ends. Questions of economic organization, however, are not reducible to the means with which we pursue our ends. Rather, how we organize the economy of our lives is itself an expression of how we posit the relation between means and ends. Economical questions are at the heart of any form of spiritual life, since they concern our order of priorities. How we organize the economy of our lives is ultimately a matter of how we understand the value of different activities and what we take to be worth doing with our time. Our economical self-organization shapes not only our means but also our ends.

  The way we organize and plan our economy is thus formative for all aspects of our lives. As Hayek himself recognizes, economic planning is constitutive of any economy. Hayek defines economic planning as “the complex interrelated decisions about the allocation of our available resources”39 and he emphasizes that “all economic activity is in this sense planning.”40 There has to be some form of planning for any economy to be operative, so the question is not if there will be planning but rather who is to do the planning. “This is not a dispute about whether planning is to be done or not,” Hayek maintains, “it is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals.”41

  The crucial question for any form of economic planning is the relation between part and whole. Central planning misconstrues the relation between whole and part as a top-down relation, since it seeks to impose a “direction of the whole economic system according to one unified plan.”42 Thereby, central planning is bound to be out of sync with the needs and demands of individual parts of the economy. What is required is rather a form of economic planning that allows for “the utilization of knowledge which is not given to anyone in its totality.”43 All the variables of economic planning can never be given either to an individual agent or a central planning authority, since the economy essentially depends on forms of practical activity that cannot be predicted in advance. Economic planning must be receptive to a form of practical knowledge that is not reducible to a set of general rules or given statistical data—namely, “the knowledge of the particular circumstances of time and place.”44 As Hayek puts it, every individual possesses “unique information of which beneficial use might be made only if the decisions depending on it are left to him or are made with his active cooperation.”45

  Hayek thus conceives of the relation between part and whole as a technical problem of coordinating individual needs and desires (the demand of buyers) with the available resources (the supply of sellers). He locates the solution to the problem in the price system, since the price of a commodity reflects the relation between supply and demand. In a free market, the price of a commodity supposedly communicates the level of scarcity (to the buyer) and the level of demand (to the seller). The price system would then hold the key to “a rational economic order,” since it would allow for the right form of practical knowledge and relevant information to be transmitted among the different members of the economy, in a reciprocal determination betw
een supply and demand. For Hayek, the ideal relation between part and whole is achieved by “the spontaneously formed order of the market,”46 which gives rise to a “more efficient allocation of resources than any design could achieve.”47

  The problem with Hayek’s analysis, however, is that he never asks himself how value is produced in a capitalist market economy. Like other liberal thinkers, he treats the capitalist market economy as the optimal instrument for the distribution of wealth, rather than as a unique social form for the production of wealth. Hayek is certainly right that one of the central issues for a rational economic order should be “how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know.”48 Hayek fails to see, however, that a capitalist market economy cannot be a rational economic order. As an individual capitalist, I am not concerned with the best use of available resources but with the most efficient way to make a profit. Moreover, as a capitalist society, we are not collectively committed to producing for the sake of consumption. Rather, we are committed to producing for the sake of extracting surplus value that can be converted into the growth of capital.

  For the same reason, the capitalist price system cannot function as a neutral medium for relaying information regarding actual relations of scarcity and need, supply and demand. The “marvel” of the price system, according to Hayek, is that it provides “a mechanism for communicating information”49 in a way that “will make the individuals do the desirable things without anyone having to tell them what to do.”50 In Hayek’s account, the price system enables real relations of scarcity and need to be communicated across society, so that “without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly.”51 Yet it is precisely these features of the price system that make it such an effective tool for manipulating both supply and demand under capitalism. As a capitalist, I do not price my commodities in an attempt to “communicate” how efficiently I actually can produce the commodity in question. If it is more profitable to restrain my production capacities and create an artificial scarcity, I will do that instead. Likewise, as a capitalist, I am not trying to obtain the right kind of “information” about the actual needs of the population, so that my supply can meet the relevant demands. My aim is rather to manipulate both supply and demand for the sake of maximal gain, regardless of the social consequences.

  The manipulation of supply and demand for the sake of profit is not a moral failure of individual capitalists, but an effect of the principle of production to which we are collectively committed in sustaining capitalism. To be committed to capitalism is to hold that the purpose of production ought to be profit rather than consumption. Hence, it is no accident that supply and demand come apart under capitalism—both through the overproduction of commodities we do not need or cannot afford and the underproduction of goods we do need but cannot purchase. These divergences follow from a principle of production that privileges the accumulation of profit over the satisfaction of needs and the provision of resources for spiritual development.

  The critique that Hayek levels against central planning can thus also be leveled against the capitalist free market that he himself defends. “The control of the production of wealth,” Hayek maintains, “is the control of human life itself.”52 This is why Hayek takes issue with any form of undemocratic central planning, which would deprive us of our economic freedom to decide “what is more, and what is less, important for us.”53 Such economic freedom cannot be separated from our political and existential freedom. As Hayek rightly emphasizes, it is a mistake to think that something which “affects only our economic interests cannot seriously interfere with the more basic values of life.”54 On the contrary, the loss of our economic freedom “would not affect merely those of our marginal needs that we have in mind when we speak contemptuously about the merely economic. It would, in effect, mean that we as individuals should no longer be allowed to decide what we regard as marginal.”55

  Nevertheless, Hayek ignores the undemocratic control of the production of wealth under capitalism. Far from safeguarding our economic freedom, capitalism deprives us of the ability to decide our economic priorities and democratically deliberate on the form of our economic life. The priority of our economy is already determined for us—to labor for the sake of profit—since it is built into the capitalist definition of social wealth.

  Hayek cannot see the problem in question, since he reduces freedom to liberty.56 As long as we are not directly coerced to act in one way rather than another—i.e., as long as we have formal liberty—we are free in the relevant sense for Hayek. For the same reason, Hayek in effect reduces decision to choice. As long as we can make a choice without anyone forcing us or telling us what to do, we are free.

  Such a formal conception of freedom, however, is utterly impoverished. To lead a free life it is not sufficient that we are exempt from direct coercion and allowed to make choices. To lead a free life we must be able to recognize ourselves in what we do, to see our practical activities as expressions of our own commitments. This requires that we are able to engage not only in choices but also in fundamental decisions regarding the purposes that determine our range of choices and for the sake of which we lead our lives. Freedom requires the ability to participate in decisions regarding the form of life we are leading and not just the liberty to make choices. Moreover, since all forms of choices and decisions are social, we must be able to recognize the commitment to our freedom in the institutional forms of life in which we participate. This is why capitalism is an inherently alienating social institution. To lead our lives for the sake of profit is self-contradictory and alienating, since the purpose of profit treats our lives as means rather than as ends in themselves.

  Under capitalism we are all in practice committed to a purpose in which we cannot recognize ourselves, which inevitably leads to alienated forms of social life. The actual needs and abilities we have are secondary; what matters first of all is whether capitalists can profit from our needs and exploit our abilities in wage labor. The market decides which abilities we should harness, while our needs are transformed in view of what we can buy. Many of the abilities that we could develop—if we had the time to lead our lives—are discarded because they are not deemed to be profitable, and many needs are engineered to make us purchase more commodities rather than to provide satisfaction.

  To be clear, my point is not that we have a pristine set of needs and abilities that should be sheltered from social transformation. On the contrary, who we are—i.e., what we do and what we value—is from the beginning a matter of our social praxis and any form of progress requires that we change our practices for the better. The point, however, is that the sustenance or transformation of our practices should be determined by our democratic participation rather than be dictated to us by the dynamic of capital. We should be the subjects of what we do and what we value, rather than being subjected to what we supposedly need to do and what we supposedly value. How such a revolution of our lives is possible—and what it requires of us—is specified by the principles of democratic socialism that I will articulate.

  The challenge of democratic socialism is to develop forms of participating in and contributing to our shared economic life, without relying on either undemocratic central planning or the capitalist purpose of profit. To grasp the status of the principles involved, it is important to distinguish the general from the abstract and the concrete from the particular. The principles of democratic socialism do not appeal to an abstract utopia that will resolve our economic questions once and for all. Rather, they specify the general principles in light of which any democracy must form and maintain itself in order to be democratic. Likewise, the principles do not impose a particular blueprint for how to organize
our economy. Rather, they specify the concrete transformations of the economy that must be enabled rather than disabled by any democratic state and any democratic institution.

  The general and concrete principles of democratic socialism cannot be posited as an ideal that is external to our historical form of life, since in that case they would have no claim on us. The principles must be internally derived from the Idea of freedom through which we already seek to justify liberal democracy and capitalism. As I have emphasized throughout, the critique of liberalism and capitalism must be an immanent critique, which locates the resources for emancipation within the commitments we already avow. The assumed justification of liberal democracy is that it should allow each one of us to lead a free life, and the assumed justification of capitalism is that it should progressively increase our social wealth. The capitalist measure of value, however, contradicts and betrays these promises of emancipation. To make it possible for us to lead actual free lives and progressively increase our actual social wealth, we must pursue a practical revaluation of the measure of value that shapes our economy and our material production. The principles of such revaluation are the principles of democratic socialism.

  V

  The first principle of democratic socialism is that we measure our wealth—both individual and collective—in terms of socially available free time. Our free time depends on social and institutional forms because it does not concern a mere quantity of time. Rather, our quantity of free time is inseparable from the quality of our free time, which requires institutions that allow us to shape, cultivate, and transform the commitments in light of which we lead our lives. For the same reason, free time is not necessarily leisure time but any time we devote to activities that for us count as ends in themselves. For example, the time I devote to writing this book counts as free time, since having time to think through and articulate fundamental philosophical ideas is an end in itself for me. To pursue philosophical ideas and write books is not something I can do on my own, however, since the activity requires institutional forms that render intelligible what I am doing (both to myself and to others). The realm of freedom—our socially available free time—thus depends on our institutional forms of life and on how we maintain or change those institutions. Our social institutions are not necessarily explicit but always implicit in what we do and in all forms of practical identities (e.g., being a philosopher or being a parent). All the activities we regard as essential parts of a practical identity—as essential parts of a vocation with which we identify—belong to the realm of freedom, and the time we devote to them counts as free time. Even activities that may seem to be means rather than ends—e.g., going through a demanding education—belong to the realm of freedom insofar as the education is an essential part of what it means to be committed to the vocation. Likewise, many tasks that may seem to be mere practical necessities—e.g., changing diapers on our children—belong to the realm of freedom insofar as such childcare is recognized as an essential part of the practical identity of being a parent.