Mohsen Abdelmoumen: I read your book "Understanding Adam Smith". Why must we understand the father of liberalism?
Jean-Daniel Boyer: I think it is important to read and understand Adam Smith for three main reasons. The first is that it avoids making him say anything and suggesting, for example, that market mechanisms would be governed by the "invisible hand". This is pure invention. There is no invisible hand of the market in Smith.
On the contrary, Smith is an author who perceives that market relations are marked by power relations. Already in his own time, he perceived some of the excesses of capitalism: the collusion between the state and the merchants, the domination of the world by the big companies of the time, such as the East India Company, or the fact that the state's debt was held by the merchants. Smith was a critical author at the time: he criticized the merchant system as shown in Book IV of the Wealth of Nations dedicated to him. Now, in its logic, the merchant system seems to me to be very close to the capitalist system that we have today.
A second reason why it may be interesting to read Smith is that his economic analysis is rooted in a moral theory. His Theory of Moral Sentiments, published in 1759, was republished until his death. In other words, for him, economic thinking cannot do without a more general reflection that concerns moral questions but also the functioning and future of societies.
A third reason consists, in my opinion, in the fact that Smith was a thinker sensitive to the problems of justice in the economic sphere. Without justice, the economic system falters when it does not collapse.
Can capitalism be reformed?
Precisely, capitalism can be reformed by becoming aware of its excesses, correcting them, and also trying to anticipate them. In order to reform capitalism, we need to know its dimensions. And I think that there is not one capitalism but many capitalisms. The capitalism that we have today is characterized, in my opinion, by two dimensions: on the one hand, by the overexploitation of natural and human resources. On the other hand, we are witnessing the affirmation of a patrimonial capitalism, a capitalism of rentiers.
If we were aware of this, it would be possible to reform it by imagining counter-forces. The capitalism that is contemporary to us is in fact particularly destructive, because it is not, or very little, under control. It is a capitalism of large transnational corporations and finance.
Don't you think we need to find an alternative to capitalism?
That an alternative to contemporary capitalism must be found is a certainty. Otherwise. Capitalism, like Kronos devouring his children, risks destroying us.
More difficult is to find the concrete system that will allow us to overcome it. This requires imagination and reflection.
But I do not have the impression that the imagination and reflection of researchers or politicians are for the moment truly turned towards this search for alternatives. That there is a partial search for alternatives is a fact. On the other hand, there are few who seek to propose more general alternatives; few who seek to reflect on a truly alternative system.
For these reasons, I think that the alternative to capitalism will, in the short term, be another form of capitalism that is undoubtedly more sensitive to ecological issues and the preservation of scarce resources. The question is whether these considerations will be sufficient.
To really overthrow capitalism would require the emergence of a new cultural model that does not make profit, interest, the essential motive for human actions. But this cultural transformation, if it took place, would take, I think, a few years or even a few centuries. It would take at least as long as it took the capitalist cultural model to assert itself against the feudal model and to triumph through the affirmation of a new mode of production and through bourgeois revolutions.
The question that arises is to know on what to base a cultural counter-model that is no longer centered on profit or interest.
Now, in my opinion, no one is really ready to consider leaving the logic of gain, especially in the West, on the one hand because most of its members benefit from it, but above all on the other hand because this logic is deeply rooted in us.
The only thing that would really force us to go beyond capitalism, to get out of the logic of gain, and to think about alternatives is, in my opinion, the multiplication of catastrophes that would lead to a radical awakening.
2020 is perhaps the beginning of this new era that will force us to find alternative models. After all, the logic of gain has asserted itself as an effective response to the circumstances of the late Middle Ages. It has been a response to shortages and scarcity. And it must be said that bourgeois capitalism was particularly effective: it generated an extremely strong growth of wealth by limiting, at least in the West, famines. Today the essential threat is no longer famine. It is something else. It is sanitary and environmental. These two threats destabilize capitalism and the logic of gain, which is certainly effective in a secure framework but proves ineffective in the face of uncertainty. As we have seen in the face of the pandemic, decision making, especially political decision making, could not be taken according to usual procedures. This is why it was disordered.
More generally, in the face of illness, insecurity or death, the pecuniary gain is reconsidered at its true value: it is nothing in itself. It is put in its place. And it is vanity. This is quite disturbing because that is exactly what Smith writes in his Theory of Moral Sentiments.
Isn't there a need to read and understand Marx?
Reading Smith is not antithetical to reading Marx. Quite the contrary. Marx himself was inspired by Smith as evidenced by his 1844 Manuscripts. One must certainly read and reread Marx if only to become aware that the bourgeois capitalized mode of production is a socio-historical construction born of the affirmation of the bourgeoisie and the bourgeois cultural model of gain and interest. I think that one of the great lessons of Marx was to have become aware that capitalism implied a cultural model which, moreover, helped to impose it. Marx described a particular kind of capitalism, which I would describe as industrial, based on exploitation. His analysis of the functioning of markets is, for me, more limited. This is why, in addition to reading Marx and Smith to understand the foundations of our contemporary world, I would advise consulting the works of 18th century British and French commercial science. This science of commerce exposes the strategies of the merchants, the strategies of conquest of markets or territories. It makes economics and market control a geostrategic weapon.
Oxfam's latest Global Inequality Report reveals that 2153 billionaires have more money than 60% of humanity. How do you explain the fact that inequalities have increased between a minority of 1% who concentrate all the world's wealth and a majority who live in total precariousness?
I mentioned it briefly. I think that the capitalism that is contemporary to us is both a capitalism of heritage and a capitalism of large production entities. For these two reasons, it is a capitalism of capture that operates through exploitation but also through the mechanisms of commercial exchange and finance. This capture of wealth is particularly powerful because it combines these three dimensions. Exploitation, capture of value on the commodity markets and capture of financial value are carried out by multinationals that combine these three modes of action.
Wealth thus goes to the poles, to the richest companies and individuals, those who hold wealth and have market power, at the expense of the rest of the world. As I was saying, this type of capitalism by its very nature generates an affirmation of inequalities.
Hasn't globalization led to the degeneration of capitalism?
I would tend to say not yet. On the contrary, I would say that globalization is the pinnacle of capitalism. It is gradually revealing its true face and its contradictions. Awareness of the limits of putting everything and everyone in competition has not yet taken place.
Isn't the Covid crisis a merciless revelation of the weaknesses of neoliberal capitalism?
I don't think we are in a liberal world promoting freedoms. Nor are we in a market economy. We are in a market economy based on competition.
On the other hand, indeed the covid crisis reveals the limits of market capitalism and its logic of least cost and competition generalized to the whole of society. The health crisis leads us to question our search for profit and to consider it less essential.
If the Covid crisis is only a punctual phenomenon, the world after will be similar to the world before. If it lasts or if it is the beginning of a succession of sanitary, economic and environmental crises, it will require a radical transformation of the modes of consumption and production. On the one hand, it will require a real awareness of the situation and will impose the transformation of individual behavior and the transition to a radically different next world.
The situation is unstable and uncertain. The world after may be better than the world before. I sincerely hope so. But it may also be worse.
Interview realized by Mohsen Abdelmoumen
Who is Jean-Daniel Boyer?
He is currently Associate Professor of Economic and Social Sciences and Dean of the Faculty of Social Sciences at the University of Strasbourg.
His research focuses on economic thought in the 18th century and explores the moments of the construction of liberal thought since the science of commerce. French from the 1750s to Adam Smith through the physiocracy. They are articulated around the theoretical and systemic conceptions of the authors as well as their definition of modalities of government action.
A second dimension of my research relates to the food supply of cities, particularly Strasbourg, mixing a historical perspective with studies on its contemporary structuring.