Many mainstream Western medical practices now include acupuncture in their range of treatment. This is partly because of demand for it from patients and partly because there are signs that it does have some effect. There are now more than 10 million adults in the US who have used acupuncture at some time in the past, or are using it currently, according to the National Institute of Health. Scientific studies have shown that it actually works for many ailments. They have not shown why, and many still argue that its effectiveness is mainly a placebo. However, some recent scientific studies have indicated that acupuncture may unblock the twisting and knotting of body fibres that effect mechanotransduction, which is the way body cells convert mechanical stimulus into chemical activity. If that’s true, then it might validate acupuncture but undermine the idea of qi.
The idea of qi is rooted in people’s belief that there is something else to life beyond the material and obvious. Over the centuries, the areas that belief can reside in have been eroded by the advance of science, and rigid logicians already insist there is no place for such ideas in the rational mind. Yet there is a logical problem with writing it off entirely. Science is essentially empirical and inductive, and the idea of qi has the empirical ‘evidence’ of thousands of years of testimony on its side. It is, however, essentially un-testable – or at least, no one’s thought of a way to test it yet – so in that sense it has no scientific basis. It is simply a belief. And yet there are many examples of the extraordinary feats of martial artists, for instance, to suggest that the jury can’t quite leave the building yet. And even if it has no physical reality, it may be a priceless metaphor for a way of looking at the world that has, at least, some wisdom.
[1] The collapse of the western half of the Zhou dynasty in the seventh century BC left the remaining eastern half split between countless warring states. It was a period of constant strife and anxiety. Yet it was a time of intellectual ferment and technical innovation, and four great philosophical ideas emerged out of the turmoil, as thinkers tried to work out just why times were so troubled.
The most famous was Confucianism, named after Confucius, the Roman name given by the Jesuits in the seventeenth century to the man his disciples knew as Kong Fuzi (‘Master Kong’). Confucius’ ideas have come down mainly in the form of sayings compiled by his followers in a tract called the Analects. His central belief was that we should seek to live in a good way, always behaving with humanity and courtesy, work diligently and honour properly our family and our rulers. He thought of himself as a conservative in that he was always emphasising the ‘Way of the Former Kings’ in an earlier Golden Age, but in some ways he was quite revolutionary in that he insisted that status should be earned by moral behaviour, not by heredity. Politically, Confucianism championed a highly ordered society.
The second central philosopher of the age was Mo Zi. Mo Zi felt that Confucius’ emphasis on the family could lead to nepotism and clan feuds. He argued in favour of ‘universal love’ – loving and honouring everyone, and looking after others as you would be looked after yourself. This was not, he felt, an idealistic dream, but the only practical way for society to function without strife.
The third philosophy was Taoism, with its central text, the Tao Te Ching (The Book of the Way). Legend has it that it was written someone called Laozi, but Laozi simply means ‘Old Master’ and it was probably written by several people. Laozi’s solution to the troubles of the world is to do nothing. His belief is that strife arises because people are constantly striving, and so constantly coming up against opposition and obstacles. He didn’t mean literally doing nothing, but going with the flow, like a stream running to the sea. ‘The Way,’ the Tao Te Ching says, ‘never acts yet nothing is left undone.’ Although nowadays people in the West associate the Way with a state of serenity that is totally apolitical, that is not how it was intended. The Tao Te Ching says that rulers should get on with ruling with no regard to their people, leaving them ignorant and treating them ‘like straw dogs’ – which may be one reason why many rulers took up Taoism. It implied no responsibility of care for the populace.
The fourth Zhou period philosophy was in many ways the flipside to this political Taoism. This was the idea of Legalism, which advocated creating such a complete and rigid framework of law that there was no room for anyone to err. But for this to work, of course, those initiating the laws would have to take over all of China. If both Taoism and Legalism came to colour the thinking of Chinese emperors through the ages, maybe it influenced the attitude of the country’s communist rulers, too.
[2] Famously, Reich built extraordinary machines called ‘cloudbusters’. Clouds, he believed, were accumulations of orgone energy, and the cloudbusters fired orgone at the clouds to make them swell and release their energy as rain.
#42 Capitalism
According to an article in July 2007 in the Economist, ‘The fall of the Berlin Wall in 1989 … proved once and for all that capitalism is better than communism.’ That same month, the first warning shocks were rumbling out in capitalism’s worst crisis for almost a century as the banking system threatened to slide into chaos on a collapsing mountain of debt. Of course, swift and desperate intervention by governments around the world to pump money into the failing banks forestalled the crisis – and so the world’s arch-capitalists, some said with grim glee, had been rescued by state intervention. Now those arch-capitalists are apparently having the last laugh as governments across Europe scramble to cut expenditure to avoid a crisis in their credit rating.
Capitalism is, it seems, a survivor. It has been around for a long time. Indeed, while the theory of communism was worked out well before it became a reality, capitalism was practised many centuries before it gained its first theoretical justification in Adam Smith’s seminal The Wealth of Nations (1776).
In some ways, capitalism is as old as history, for there have always been sellers and buyers, markets and traders. But it is the large-scale emergence of merchants from the 1500s on, as the medieval feudal system of barons and serfs broke down, that is commonly identified as the first stirrings of capitalism. National governments such as the British and Dutch encouraged merchants’ efforts in accordance with what became known as the mercantilist doctrine. This argued that the world drew from a limited pot and so the wealth of each nation depended on ensuring a ‘favourable balance of trade’ in which more gold flowed in than out.
Smith believed that this was short-sighted. What mattered is not the wealth of individual nations but the wealth of all nations. Nor is the pot fixed; it can grow over time – but only if there is unrestricted trade between nations. If left free, Smith insisted, the market will always grow to produce the right amount of goods because it is guided by the invisible hand of self-interest. ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner,’ Smith contended, ‘but from their regard to their own self-interest.’ Any artificial restriction on trade such as taxation or regulations would, he believed, interfere with the smooth operation of this market of self-interest.
Over the next century, Smith’s free trade ideas were taken up enthusiastically by British business and characterised as laissez-faire, from the French ‘leave to do’. It became a mantra for governments, reminding them to leave the markets entirely alone to get on with trade without regulations or restraint.[1] Smith’s book also launched a whole new science known as political economy, and eventually just economy. One of its leading lights was David Ricardo (1772–1823) who, more than anyone, brought the term capitalist into popular usage.
The guiding idea of capitalism, articulated not just by Adam Smith but many other political and economic theorists, is that businesses are privately owned and operated for profit in a free market. Private property is central because the desire to own and increase your property is what drives the market. In order to trade in the free market, you must have capital, which means everything that is needed to run a business, from buildings and machinery to money. If you don’
t have capital, you work for wages – but even labour is a commodity to be traded.
Open markets are seen as crucial to capitalism, because they allow the ‘invisible hand’ to operate, determining prices for goods and services through the balance between supply and demand. So capitalists invest time and money in ensuring that governments do not restrain their trade in any way. Indeed, in many capitalist countries, election campaigns are often won by those backed by the most capital, so that even politics operates like the marketplace.
For many supporters of capitalism, the freedom of the market is a freedom more fundamental than simply economic. Only under capitalism, they argue, are people free to choose what they want to do with their lives without interference from the state. In even the best socialist states, your choices are restricted because only the government can run certain operations. Under capitalism, in theory, you can choose to run a bus company or open a flower shop or work as a doctor or follow any career path you choose. In other words, you are free, in classic American parlance, to pursue your dream. You are also free to dispose of your money as you wish, frittering it away on alcohol or saving it for something worthwhile.
This inherent link between capitalism and liberty is, some would argue, its greatest moral strength. The drive for free markets also drives demands for personal and political freedom. Some might even argue that capitalism is liberty’s greatest champion. There is certainly some truth in the view that it was the lack of liberty that led, ultimately, to the downfall of the Soviet regime, not its economic failure, or even its failure to provide adequately for people’s well-being. China at the moment seems to be walking a fine tightrope between free markets and political freedoms.
Not everyone would agree with capitalism’s version of freedom, however. ‘Advocates of capitalism,’ Bertrand Russell lamented sardonically, ‘are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate.’
In the aftermath of the First World War, the faltering world economy in the Depression years caused the great Cambridge economist John Maynard Keynes to question the effectiveness of the ‘invisible hand’ in responding to crises. In particular, he focused on the problem of mass unemployment. The market, he argued, had no way to deal with this problem, at least in the short term. The classical maxim, known as Say’s Law, that supply creates demand, breaks down in times of recession, because people are too worried to spend – thus accelerating the downward spiral.
Keynes argued that the only way to break this vicious circle was for governments to stimulate the economy. First, the central banks need to boost the supply of money by making lending easier and reducing interest rates. Then, if that doesn’t prove enough, they must spend massively on public works to get the cashflow going. After the striking success of Keynes’s ideas in Roosevelt’s New Deal, when massive public works projects seemed to lift America out of the Depression, Keynes’s ideas quickly became the standard for Western governments – so much so that President Nixon declared in 1967: ‘We are all Keynesian now.’
But the oil shortage and economic downturn of the 1970s persuaded some economists to question whether throwing extra money into the economy without the market to back it up simply caused inflation. A new generation of ‘monetarists’ emerged, arguing that the supply and demand for money should be kept in balance. This seemed like plain old good housekeeping, and the idea of keeping a tight rein on the money supply soon became firmly entrenched in central bank policies, especially in the USA under Alan Greenspan, Chairman of the Federal Reserve.
American monetarist Milton Friedman pushed the argument further and argued for a stripped-back capitalism in which all regulation was removed and the market was allowed to let rip without control. Only that way could the invisible hand really work. It might be messy, but ultimately it was for the good of all to let capitalism out of its chains. ‘What kind of society isn’t structured on greed?’ Friedman declared. ‘The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system.’
Friedman’s arguments were persuasive for right-wing governments like Reagan’s in America and Thatcher’s in Britain, which stripped back government spending, initiated a wave of privatisations and let loose the financial markets from regulations. For a while, after a few hiccoughs, it seemed to deliver the globalisation bonanza of Adam Smith’s dreams.
There was a flaw, though. Capitalists had always argued that the inequalities inherent in the system were not a problem, because as overall wealth grew it would always ‘trickle down’ to the less fortunate.[2] But this globalisation bonanza seemed to widen the gap between rich and poor, and while the rich got richer, the poor saw very little improvement in their fortunes. And then, in 2008, it all went horribly wrong, as first the super-rich Lehman Brothers investment bank collapsed and then the whole world banking system threatened to implode. With striking irony, this crisis in capitalism was averted by concerted government support for the banks initiated by UK’s Labour Prime Minister Gordon Brown.
With the banks seemingly on the road to recovery, capitalism has slipped quietly out of the spotlight,[3] and the attention has focused on just how governments are going to deal with the mountain of debts incurred and avoid deep recession. Some argue that Keynesian-style public spending is the right road. The nervous public, though, in countries like the USA, the UK and Germany have been persuaded that belt-tightening is the answer, a response that has Keynesians throwing their arms up in despair, fearing that this may bring a ‘double-dip recession’ as the vicious circle of collapsing demand kicks in.
Capitalism itself, though, has neatly evaded the attacks aimed either at greedy bankers or profligate governments. Indeed, capitalism, despite some shaky times, seems more firmly established than ever, and the body blows aimed at it by Karl Marx 150 years ago, and by the rise of communist countries in the mid-twentieth century, now seem well and truly in the past. It is not a good system. How can any system be said to be good if it leaves so many people around the world dying from lack of food, living grim poverty-filled lives, or simply working in jobs they hate just to get by? It’s a terrible system indeed that creates such inequalities and such suffering. Yet maybe it’s a great idea for it to survive for so long and convince so many people that, for all its manifold shortcomings, it’s the only viable way of running the world.
[1] Some of the hottest debates centred on the Corn Laws, the import tariffs designed to protect British farmers from having their prices for grain undercut by cheap American and Russian imports. The turning point was the Irish potato famine, which persuaded Prime Minister Robert Peel to abolish the Corn Laws in 1846, to give the Irish the chance of cheaper bread. While most European countries kept their import tariffs, Britain and Belgium alone kept their borders duty-free, with the result that British dependence on imported grain rose from 2 per cent in the 1830s to over 65 per cent in the 1880s.
[2] The ever-shrewd Keynes was quick to nail the hypocrisy inherent in this line of argument: ‘Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.’ Noam Chomsky believes that Adam Smith has been misrepresented by contemporary ideologists. Smith, Chomsky claims, supported markets not because they thrived on inequality but because he believed they would lead to equality.
[3] In a recent book, Anatole Kaletsky, an editor at The Times, suggests that the banking crisis will force a revision of the whole basis of capitalism and that in future a new version of capitalism will emerge, which he dubs, in software style, Capitalism 4.0. The previous versions are the classic laissez-faire capitalism of the nineteenth century (Capitalism 1.0), government-heavy Keynesian capitalism of the mid-twentieth century (Capitalism 2.0) and the free-market Friedman-style capitalism of the last 30 years (Capitalism 3.0).
#41 Welfare State
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p; In 1942, as war raged across Europe and much of the world, British MP William Beveridge released a historic report outlining his dramatic proposals for the creation of a welfare state in Britain. The plan was bold and far-reaching, and was received with tremendous excitement. Beveridge’s plan was, many felt, just what the war-torn country needed. Its stirring vision of a nation in which everyone would be looked after, ‘from the cradle to the grave’, was something worth fighting for, ‘a home fit for heroes’.[1]
Beveridge’s aim, he said, was to slay the five evil giants that stalked the land: Want (by which he meant poverty), Disease, Ignorance, Squalor and Idleness (unemployment). Just how cruel these giants could be was still raw in the memory from the terrible years of the Great Depression of the 1930s.
There had been some kind of support for the poor in Britain dating back to the sixteenth century, provided by a hotchpotch of poor laws, friendly societies and charities. Since 1911, there had even been limited state welfare.[2] Indeed, the idea of state welfare goes back to the newly unified Germany of the 1880s, when Chancellor Otto von Bismarck introduced the first old age pension and a national insurance scheme to compensate workers who were unable to work through sickness or accident. Following the German example, Sweden developed a welfare system in the inter-war years.
What was revolutionary about Beveridge’s plan, however, was its universal scope. Beveridge planned to take the responsibility of the public welfare entirely into government hands. The UK was to be a ‘welfare state’ in which everyone was looked after by the state when they were in trouble.
The World's Greatest Idea Page 6
