Abstract

In summary, what distinguished liberal or democratic capitalism from other systems was its ability to internalize most opposition. Treating labour as a factor of production whose price is determined by demand and supply in the market place, and regarding trade unions as monopolists, it transformed class struggle into wage negotiations. It allowed labour to oppose inequity but only on the system’s own terms, that is as long as the system itself remained unchallenged. Similarly, liberal capitalism did not crush symbols of discontent. It internalized them by making them into a part of the system. Long hair, protest songs, even “subversive” literature, were not prohibited, but turned into fashions. In economics the discussion of real issues was sidestepped by focusing attention on technicalities. Keynes was not rejected but incorporated into a “neoclassical synthesis” which reduced his ideas into a “special case” within the old paradigm. Opposition which could not be internalized, for example questions about the rationality of the system itself, was placed beyond the pale. It was subjected to the establishment’s powers of “repressive toleration”. No mass arrests or executions; smear campaigns against Churchmen and Berufsverbote against socially committed active people (teachers in particular) were equally effective. Just like its communist counterpart in the eastern bloc, the capitalist oligarchy discovered that compliant and unimaginative people can serve it best. Democracy remained intact, but the mechanisms which make it meaningful gradually wore out.

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