I read The Mind and the Market: Capitalism in Western Thought by Jerry Z. Muller at the height of the Covid pandemic. I didn't have an economics background at the time -- I ended up dropping out of Econ 101 in college to take what I thought were more 'important' classes (big mistake in retrospect), but I had recently discovered the EconTalk podcast and went through a bit of a econ phase, you could say. My sourdough starter had been dead for several months and I needed something else to rabbit-hole on.

This book is organized in an interesting way: it works through the various ideas regarding capitalism thinker by thinker throughout the centuries. For each one there's some biographical info, leading to greater context around their ideas. It was a good book to read for someone without much background in that it gave a broad overview of various intellectual threads related to capitalism. It's not an economics book in the sense of learning the math behind supply or demand, but more of a political philosophy and history of capitalism.

I can't really give a decent review of this book. However, since I liked it so much, I cleaned up the notes I took while I was reading it. Maybe you will find them useful and you will be inspired to read it too.

Pre-Enlightenment Christianity

• It's immoral to make money from usury (lending with interest)

Voltaire

• The market makes people more tolerant since, when trading, you only care about profit, not the other person's background/religious/etc.

Adam Smith

• The Wealth of Nations main point is about achieving "universal opulence" through the use of the market (division of labor, free trade, self-interest, etc.): vast increase in the standard of living
• The invisible hand: each person acting in their own self-interest without central coordination achieves globally/socially beneficial outcomes

Justus Moser

• Value of "experience" vs. abstract, universal, rational laws in judging institutions (reaction against philosophes philosophizing)
• Values of market economy (esp. self-interest) replacing civic virtues
• Market creates new needs and undermines existing institutions/relations
• Guilds and estates (existing institutions at the time) to provide individuals with "place in society", meaning, etc.

Edmund Burke

• The rise of "public opinion" alongside commercial sources of information.
• Similar defense of institutions as Moser: reverence for institutions built up over time creates submission to their laws
• Society not as a contract but as a binding obligation
• Pushback on philosophes emphasis on rationality and questioning of all institutions; commercial society focused self-interest itself depends on non-commercial institutions (e.g. family, religion) in keeping tamed from pure self-interest. Kind of like a Chesterton's fence for social institutions.
• Book: Reflections on the Revolution in France

Hegel

• Individuals may choose to act however they may wish but still rely on institutions to imbue their actions and life with meaning.
  • “The ordinary man, ” he wrote, “believes he is free when he is permitted to act arbitrarily, but in this very arbitrariness lies the fact that he is unfree.”
• Use institutions to "direct passions"
• People must bend their will to others as they depend on each other through division of labor in the market
• Dynamism of market creates unemployment, resentment

Marx/Engels

• labor theory of value (similar to framing of usury as immoral: only labor creates value, not money)
• Competition would lead to centralization of property with big firms, leading to capitalists vs. proletariat
• Central planning of economy vs. distributed decision-making in market; cooperation and altruism vs. pursuit of self-interest
• alienated labor: doing highly divided, meaningless-seeming work for subsistence, all to enrich capitalists
• individual self-interest breaking down historical identities (heredity, nation, religion)
  • individuals would come to realize status as a "species-being" and that they have one identity, the proletariat

Matthew Arnold

• In capitalism, individuals focus on means rather than ends: accumulation of money without specific ends, freedom for the sake of freedom, etc.
• Intellectuals within society can help alleviate these cultural issues

Max Weber

• Setting: German industrialization, rise of a middle class because of white-collar bureaucratic work
• The economy is in service of the Volk (German people), not individuals
• Capitalism isn't uniquely characterized by greed -- "That desire exists at all times." (p. 240)
• Capitalism is characterized by rationality in computing costs/benefits -- applied not only for profit but in nature/society/etc.
  • This puts means at the forefront, displaying thought about ends
• Capitalism has limits but is effective/productive -- specialization is inevitable, even in socialism, because of technological advance

Simmel

• Competition forces interest in, and discovery of, other people's preferences
• Modern life is based on a plurality of associations (economic, political, social, etc.) that demanded less of each individual, compared to older institutions like guilds
  • Each of these in totality can exert contradictory pulls on the individual
• "The tragedy of culture": division of labor leading to complexity of modern life -- committing to be in one branch of culture excludes others
• "Surplus value" of money -- its nominal value plus the value of having the choice of all the goods it could buy
  • It feels like this could be related to opportunity cost?
• Capitalism was economically productive but led to the "massification" of cultural life

Lukacs

• Alienation of modern life: loose social ties, loss of community
• Work under capitalism engendered reification: inability to see social relations as malleable, rather than inevitable laws to which men had to succumb
• Specialization leads to compartmentalization of knowledge -- and inability to form holistic knowledge (re: of capitlism and negative effects on culture)
• Because of the state of knowledge, the working class had a false consciousness that was anti-revolutionary, and the true consciousness of their own interest was only gleaned by the Communist Party (and/or intellectuals, like Lukacs?)
  • Comment: this is argument seems easier to make with a specialization lens. i.e. due to the complexity of modern life, and our intrinsically limited rationality, we should rely on intellectuals who think about this stuff all day for the "best of breed" notions of how to progress forward. This is more broadly applicable beyond revolution.

Freyer

• Rationalist universalism dissolved cultural connections with a particular past -- instead the individual should embrace their own Volk. Without the the collective's goal, individual choices were arbitrary.
• Capitalism dissolves cultural barriers
• Overcoming pluralism required a total state. Preparing for war was a way to achieve this.

Schumpeter

• socialism will overtake capitalism not for economic reasons, but because of capitalism's creation of social and cultural backlash unto itself
• economic progress was based on unequal contributions from a small pool of talented elite (Schumpeter was especially focused on entrepreneurs)
• This process engenders resentment of entrepreneurs from those negatively affected (the Luddites).
• Socialists should encourage capitalism (sounds like accelerationism)
  • capitalism is more productive -- socialism would slow down productivity
  • socialist desire to stop economic activity as the prime task of life however needs massive amounts of capital, or wealth; so socialists should encourage capitalism to build up capital, then go to socialism and relax
• hostility to elites (cultural and governmental) prevented more investment, which hurt the economy in the Great Depression
• the working class profited from capitalism's productivity (the Wealth of Nations argument)
• capitalism rewards skill and threatens destitution for failure -- "the game is not like roulette, but more like poker"
• application of market modes of thinking (cost/benefit analyses) leak into non-economic contexts, and that's good!
• antipathy to capitalism was spurred by overproduction of educated people, who think they are not adequately rewarded for their education

mid century background

• neoliberalism: market as the engine of production, redistributed by the welfare state.
• convergence of left and right in light of rising post-war prosperity

Herbert Marcuse

• the socialist revolution didn't happen mid-century because of prosperity, and because mass media helped control the masses' minds: focus on production and consumption of commodities (cool toys) instead of realizing they can work less
• post-scarcity economy meant more energy should be channeled into "free play"
• capitalist prosperity and plurality of goods, services, recreation, etc. diffused revolutionary potential of the working class
  • "repressive desublimation" -- instant gratification repressing forward looking vision
• mass culture and cultural pluralism made ideas less subversive: putting opposing ideas next to each other leads to indifference

Friedrich Hayek

• prices and markets give signal about relative supply and demand. without them, economic coordination, in so far as finding the most efficient way to accomplish economic goals, is impossible. markets allow for coordination in a granularly divided economy through the means of prices, which signals information to individuals; profit motive drives the efficient use of resources
  • government should not meddle with market and distort these signals
  • corollary: prices as signals of information derived from the distributed knowledge of individuals is the core idea behind prediction markets
• private ownership induced incentives to innovate, which social ownership did not
• self-interest isn't just for egotistic purposes, but also for altruistic ones (e.g. feeding one's children)
  • "freedom" ~ each can use their knowledge for their purpose
  • "freedom" !~ selfishness
• economic control means control of the means for all of our ends, which determines the ends to be served
• the market makes pluralism possible, but only as long as groups do not use the state to enforce their views/desires