Saturday, November 30, 2019

Individualism Is Not Necessary For Capitalism

The German philosopher Max Stirner popularized the modern sense of individualism with his 1844 book The Ego and Its Own which opens with these provocative words, “What is not supposed to be my concern! First and foremost, the Good Cause, then God's cause, the cause of mankind, of truth, of freedom, of humanity, of justice; further, the cause of my people, my prince, my fatherland; finally, even the cause of Mind, and a thousand other causes. Only my cause is never to be my concern. "Shame on the egoist who thinks only of himself!”

Most market economists base their model of capitalism on the notion that the ideal man, the one who makes the capitalist economy run, is an individualist. But this is not true. The successful capitalist economies of the world are highly collectivized.

For instance, the USA saw its highest economic growth in the period between 1865 and 1960—and this was the period when the American society was highly collective. The family system, local communities, and the religious institutions were dominant; people had a strong sense of culture and history, and they saw themselves as a part of their community. After 1960, there was a breakdown in family system, local communities, and religious sentiments in the USA and that has led to a period of economic decline. Japan is another example of a nation where the model of capitalism (developed between 1880 and 1970) does not show individualistic tendencies. The Japanese businesses prefer to rely on interpersonal networks rather than on the culture of contracts, and they have close contact with the political and cultural institutions.

To succeed in a business activity a man has to be rooted in society—unless he understands the society in which he aims to market his products and services, he cannot develop a proper business model. Therefore, every successful businessman must have some collectivist instincts. Individualism has nothing to do with capitalism. The theorists who overhype individualism as a necessary condition for capitalism do so because of their own political opinions.

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