When we consider the evident benefits of capitalism in its capacity to generate wealth and lift people out of poverty, and contrast this with the failure of attempts to implement socialism, we might ask ourselves why Marxist thought continues to exercise such influence. This is the question with which Tibor Rutar (Assistant Professor at the University of Maribor) opens Capitalism for Realists. His answer is that the appeal of Marxism appears to lie in its theoretically grounded criticisms of capitalism – criticisms that might very well ring true for those who do not directly feel its benefits. Nevertheless, the author points out, the more poignant criticisms of capitalism are not unique to Marxism and might just as easily be reached from other theoretical positions. Accordingly, the aim of this book is not to offer an ideologically driven attack on capitalism – or necessarily to defend it – but to provide a balanced reckoning based on the available (quantitative) evidence. What follows is a fairly involved and detailed examination of the statistical information relating to the debates that surround capitalism in connection with issues such as wealth and poverty, inequality, exploitation, morality and politics.

The first chapter considers the origins of capitalism and in place of cultural explanations such as Weber’s ‘Protestant Ethic’ thesis, offers a materialist account that attributes the emergence of capitalism in England to the massive population decline caused by the Black Death, a situation that gave rise to a market for land leases and labour as land became vacant and landowners sought to retain peasants on their demesnes in order to mitigate economic losses. Thus, whatever the role of ‘ideational’ changes such as the Protestant Reformation, it was English material conditions that ‘set the scene’ for the transition to capitalism. The argument in this chapter is compelling and interesting to follow, but I was left wondering what capitalism is taken to be in the author’s view. As a very broad term, it can often encompass vastly different phenomena – a point that the author himself makes about ‘neoliberalism’ – and it would have been useful from the outset to have a definition of what the author was seeking to analyse throughout the book.

Subsequent chapters consider the criticisms commonly levelled at capitalism. In the chapter on poverty, inequality and exploitation, the author points out that capitalism has reduced extreme poverty but does not distribute the wealth that it creates equally. While the picture painted by the data is not uniform, Rutar’s analysis suggests that over longer periods of time, inequalities in wealth within countries are increasing. However, he is quick to highlight the fact that the growing wealth of the rich does not mean that the poor are getting poorer, though he does urge us to remember that rising inequalities can and do result in various societal problems which should not be ignored. While rejecting the classical Marxist position on exploitation, the author’s suggestion is that some (wage) exploitation is likely to exist in any economic system and in capitalist economies cannot be eliminated by market competition for labour alone. However, a difficulty with the treatment of this subject is that it is not quite clear what Rutar intends by ‘exploitation’: whether the mere fact of companies paying employees less than the full value of their labour when estimated as a financial contribution to the company, or the more sinister, deliberate attempt to suppress wages in order to maximise profits. The former is open to question as a definition of exploitation, since it is unclear whether the financial contribution of workers can be calculated with any accuracy; the latter more obviously runs counter to our ideas of a just wage.

The following chapter considers ‘neoliberalism’, a term that is often used pejoratively but, as the author rightly states, lacks any clear definition. In view of this, his focus is on those generally accepted features of neoliberalism that lend themselves to empirical investigation, such as support for free markets and modest welfare states. The analysis leads to the view that as the world has become more neoliberal over the last forty years, poverty has been reduced and material prosperity increased, with no apparent fall in overall government spending, no destruction of welfare provision and broad stability (or increases) in tax revenues. Moreover, capitalist societies appear to be conducive to the emergence and development of democratic orders. Thus, contrary to the charges levelled at it by its critics, neoliberalism has surely been an economic success.

I was particularly interested in the chapter on morality, which the author begins by contrasting the ‘classical’ view that commerce leads to gentler manners, greater co-operation and trust, with the anti-capitalist position that capitalism, as a system based on competition and profit, surely appeals to our most selfish tendencies, eroding trust and leading us to see others as mere means. From surveying the existing evidence, Rutar concludes that capitalist societies are certainly not inimical to the emergence of more moral conduct and in fact show greater levels of trust, whilst exposure to market competition appears to boost co-operation and fairness. At the state level, the data suggests an incompatibility between economic liberalisation and human rights abuses, and that wealthier states with complex economies characteristic of capitalism are less likely to suffer political coups.

It is clear, given his focus on measurable, quantifiable phenomena, that what the author is (understandably) concerned with in this chapter is not morality understood as personal virtue or vice, but what we might call pro-social attitudes and behaviours. Indeed, the book does not take up questions of value, except insofar as it is implied that capitalist economics can be said to embody a set of values, such as a belief in property rights and economic liberty, and a conviction that material prosperity is a ‘good thing’ for all. However, if capitalism appears consistent with – if not an actual cause of – pro-social, tolerant, moral conduct, we might wonder where this leaves its critics. Given the nature of their criticisms, it would be foolish to assume that they do not also value pro-social behaviours, co-operation, trust and prosperity. We are left to conclude, therefore, that they believe either that such things are only realised in spite of capitalist systems (contrary to the evidence presented in this book), or, since capitalism increases overall material prosperity but does not close the wealth gap, that they are not realised to the degree or in the manner desired.

The short concluding chapter discusses the environment and rejects the idea that there is something inherent in capitalism that results in environmental degradation, such that protecting the environment necessitates a shift to some form of socialism. At the same time, the data analysed does not suggest that market solutions alone will do enough to deal with the environmental problems that we face, resulting in Rutar’s recommendation that at this stage, greater regulation is required.

What ultimately emerges from Capitalism for Realists is that, when one considers the available data, capitalism’s critics are often wide of the mark. Indeed, it would appear that in some cases, capitalism is often correlated with (and is perhaps the cause of) the very opposite of the faults of which it is accused. The writing is accessible in the main, though the numerous typographical errors can be distracting and are indicative of poor copy-editing on the part of the publisher. Some of the more detailed statistical discussions can be hard to follow, but this evidence is fundamental to the book’s very project of offering a realistic rather than an ideological assessment. Overall, this is a fairly specialist work which offers a nuanced, balanced, evidence-based analysis of how the modern economy works and what its effects might be.

‘Capitalism for Realists: Virtues and Vices for the Modern Economy’ by Tibor Rutar, was published in 2022 by Routledge (ISBN: 978-1-32-30592-9). 178pp.

Neil Jordan is Senior Editor at the Centre for Enterprise, Markets and Ethics. For more information about Neil please click here.