Reading Robert Heilbroner is like listening to the kindly old uncle you never had, the Oxbridge don who wears velvet smoking jackets and has a lisp. He’s thoughtful, reasoned and very polite, but a little musty. His well-crafted, elegant prose builds a seamless narrative of capitalism, only to sputter out into generalities.

This isn't Robert Heilbroner, but it could be

Like most intellectual socialists, Heilbroner founders on the key question of “What must be done”. This, I’d argue, is not an oversight, something he could tack on if he just read the right books. It’s inherent in his argument from the beginning; and, like most academics, his inability to figure out what to do reflects his class position.

Heilbroner gives a concise history of capitalism as a system. Unlike slavery or feudalism, it’s marked by a separation of the political and the economic. The economic dominates the political: the ‘private’ realm of accumulation dictates the shapes government takes. It leads to great achievements: capitalism is a dynamic system, and the profit motive forces economic players to seek out opportunities wherever they exist.

Making the world safe for capitalism - The new Iraqi army doing Halliburton's dirty work

But it also leads to inequality: there’s nothing inherent in capitalism that says the benefits have to accrue to everyone. Heilbroner quotes Adam Smith and Marx to show how markets have structural inequalities built in them – those who own capital will wait till workers have to come to them, cap in hand, for a job. Capitalism, if left unchecked, will create misery and ignorance. The difference is that, while Marx thought capitalism was doomed to crisis, Smith thought social order could be maintained through a combination of policing and welfare.

Heilbroner takes this latter idea and runs with it. He shows how Keynes and Schumpeter, famous 20th century economists, shared this idea of capitalism’s natural tendency to degenerate. They both suggested solutions to save capitalism – Keynes’ state-led investment, Schumpeter’s ‘creative destruction’ of previous organizations by more dynamic ones. But they thought capitalism would destroy itself unless regulated. Heilbroner proposes the same, suggesting a tripartite, corporatist model of business-labour-government to manage the economy, and an aggressive social-spending plan, including a 10-year, $1 trillion infrastructure program in the U.S.

Saving capitalism from itself - New Deal workers in the 1930s

Heilbroner was writing in 1993, before the collapse of the European corporatist model under the onslaught of neo-liberalism. Nevertheless, his warning that economists can’t predict anything rings true – particularly for him. Capitalism is irrational to its core, because of the competing pressures the ‘warring brothers’ of capitalists put on each other. They use the state, international financial institutions and occasionally the army to defeat each other. It’s called imperialism, and it’s not an unfortunate byproduct of some short-sighted capitalist states. It’s a ‘natural’ and necessary consequence of capitalist production itself.

Marxists have developed a rich literature on imperialism. But Heilbroner ignores it entirely, instead rooting capitalism’s irrational drives in Freudian ‘infantile revenge fantasies’. This speaks volumes about how disconnected he is from reality. History isn’t just economic, it’s social, and although Heilbroner laments capitalism’s drive to reduce everything to economics, he can’t get beyond it. All he sees outside the economic is fundamentalism, nationalism and greed. Logically enough, his prescription for the 21st century is a carefully-managed capitalism, bleeding over into some sort of rational, state-managed socialism. He’s not clear how; he just knows that, if capitalism doesn’t manage itself better, the prospects for the next century aren’t very good. God knows you can’t trust people themselves to make their own future.

In his ‘wisdom’ he has forgotten the one thing that makes history: the resistance of the working class. He says “no alternative social order seems within grasp, at least in the century that serves as a metaphor for the reach of our imagination." (161)” Yet the social history of capitalism shows workers contesting the rule of capital, particularly in the numerous revolutionary movements of the 20th century. This goes way back to the English enclosures – which Heilbroner portrays as simple acts of brutality, unmet by any resistance, whereas they took centuries precisely because people fought back.

Look what happens when you let them loose! - Hungarian Revolution, 1956

He speculates that people might not see the difference between socialism and capitalism. Yet this is impossible, because for socialism to exist in the first place, it has to be made by the vast majority i.e. the working class. Class struggle grows over into control of capitalist production, ‘despotic inroads on the rights of private property’ and revolution. This is Marx’s Manifesto, Lenin’s State & Revolution, Trotsky’s Combined and Uneven Development – a tradition Heilbroner is wholly unaware of. Heilbroner says that a democratic, planned economy has never existed: I’d point him towards the numerous experiments in Soviets and worker management in the early USSR, in Spain, and possibly (with a huge qualification for my ignorance) in modern-day Venezuela.

Heilbroner can’t see them, because he doesn’t understand that socialism is democratic, or it’s not socialism at all. He’s left with socialism from above: an elitist, command-based, management system virtually identical to corporate capitalism. Which is why, in the end, he’s not really anti-capitalist:

"... although the market mechanism is responsible for mammoth misdirection of effort, it has also performed prodigies of social coordination. That general capability still seems usable for a considerable period, if its domain of authority is suitably narrowed. In much the same manner, the dual [political and economic] realms of capitalism seem as well qualified as any institutional - not merely constitutional - arrangement to protect individual liberty in the next stage of capitalism, as in the last.

Prodigies of social coordination, indeed - workers enjoying the individuality that capitalism offers

13 years on, and the capitalist system has produced American bombing in Sudan and the Balkans, and 120 U.S. military bases around the world; a bitter response from Al-Qaeda; and the bloodbath that is occupied Iraq. ‘Individual liberty’ is regulated out of existence at home via ‘anti-terror’ legislation, and simply shot out with bullets abroad. I can think of many “institutional arrangements” that would work better. Why not work for a rational, democratic system in which social wealth is shared by everyone?

Heilbroner falls into the precise trap he sets for capitalism: believing that economics is everything, rather than an ideology of private property. He doesn’t see what lies beyond it: people in motion, resisting capitalism and building alternatives. We leave Heilbroner sunk into his armchair, reading glasses dangling from his ears, mumbling dark prophecies to himself, the blinds drawn tightly to shut out the sunlight.