Two Cheers for Capitalism

by Irving Kristol

Preface
1 The enemy of being is having
Corporate capitalism in America
Business & the "new class"
The frustrations of affluence
Ideology & food
The environmentalist crusade
The hidden costs of regulation
Capitalism, socialism & nihilism
2 The corporation & the dinosaur
The corporation & the dinosaur
Ethics & the corporation
Horatio Alger & profits
The corporation as a citizen
On "economic education"
Inflation & the "dismal science"
Some doubts about "deregulation"
The credibility of corporations
The OPEC connection
The Republican future
"The stupid party"
On conservatism & capitalism
On corporate philanthropy
The shareholder constituency
3 What is "social justice"?
Utopianism, ancient & modern
About equality
What is "social justice"?
Taxes, poverty & equality
Of populism & taxes
Social reform: gains & losses
The poverty of redistribution
Reforming the welfare state
Of decadence & tennis flannels
Epilogue: "When virtue loses all her loveliness"-some reflections on capitalism & the "free society"
Index

Genres: Economics, Politics, History, Nonfiction

288 pages, Hardcover

First published March 1, 1978

About the author

American columnist, journalist, and writer who was dubbed the "godfather of neoconservatism".As the founder, editor, and contributor to various magazines, he played an influential role in the intellectual and political culture of the last half-century.
Kristol was affiliated with the Congress for Cultural Freedom; he wrote in Commentary magazine from 1947 to 1952, under the editor Elliot Cohen (not to be confused with Elliot A. Cohen the writer of today's magazine); co-founder (with Stephen Spender) of the British-based Encounter from 1953 to 1958; editor of The Reporter from 1959 to 1960; executive vice-president of the publishing house Basic Books from 1961 to 1969; Henry Luce Professor of Urban Values at New York University from 1969 to 1987; and co-founder and co-editor (first with Daniel Bell and then Nathan Glazer) of The Public Interest from 1965 to 2002. He was the founder and publisher of The National Interest from 1985 to 2002. Following Ramparts' publication of information showing Central Intelligence Agency funding of the Congress, which was widely reported elsewhere, Kristol left in the late 1960s and became affiliated with the American Enterprise Institute.[7]
Kristol was a fellow of the American Academy of Arts and Sciences, a member of the Council on Foreign Relations, and a fellow emeritus at the American Enterprise Institute (having been an associate fellow from 1972, a senior fellow from 1977, and the John M. Olin Distinguished Fellow from 1988 to 1999). As a member of the board of contributors of the Wall Street Journal, he contributed a monthly column from 1972 to 1997. He served on the Council of the National Endowment for the Humanities from 1972 to 1977.
In July 2002, he received from President George W. Bush the Medal of Freedom, the nation's highest civilian honor.
Kristol married historian Gertrude Himmelfarb in 1942. They had two children, Elizabeth Nelson and William Kristol, the editor of The Weekly Standard.

Reviews

[Michael · Rating 5 out of 5]

You're not special just because you disdain capitalism. Nobody likes capitalism! Can you live with cognitive dissonance and support the least worst economic system ever known to mankind? This is the challenge Kristol begins with. I found this book deeply insightful, especially in the spiritual inadequacy of capitlism, the characterization of redistributive rhetoric (nobody is asking to give money to the poor, they are asking to give money and power to the state), the inherent frustration owing to the disconnect between the direction of technological advance and the backward looking desires for "a good life" and the discussion of the hidden costs of regulation. This book echoes Schumpeter's warnings about the frailty of capitalism, Hayek's critique of scientism and serves as the ideological touchstone for Reaganite conservatism. There's a lot to think about here.

One point that is really fascinating to consider is in the section dedicated to wealth inequality. Inequality can be bad, but it is also inevitable if we are to enjoy the rising standards of living that accompany capitalism. But how bad is bad? And how much redistribution can we handle without damaging "the capitalist engine" as Schumpeter called it? Kristol takes pains to demonstrate that actually, inequality is not that bad at all (in the 1970s) and that in fact, it has gotten better since the 1920s. Fast-forward to 2018 and in fact, inequality has gotten much much worse. The glowing GDP gains have been concentrated almost entirely in the far upper percentiles while the actual standard of living of the average American has not appreciably risen for many decades now. The remarkable thing is how this sea change in reality has prompted so little soul-searching on either side. Those who ask for more "redistribution" (aka transfer of power from the wealthy to the bureaucracy) do NOT question their history and wonder what the heck they were thinking when they demanded these things in the 1970s. And Kristol's modern day adherents on the right blithely ignore the way in which inequality has gone from a Leftist boogey man to a plague on the healthy functioning of the American capitalist order. What gives?

[Josiah · Rating 5 out of 5]

A (then) prophetic and now timely message on the evolution of the "new class", the decline of bourgeois capitalism, and the rise of corporatism. Kristol hints at trends that seemed to have later evolved into "woke capitalism", "social licence", and ESG. A lot of insights, but two central themes/questions stood out to me, both revolving around two paradoxes Kristol identifies in capitalism.

Capitalism is a friend of conservatives. But is it destined to evolve into a threat as the seemingly unstoppable tendency of institutions to accumulate and concentrate power, and the changing values they habituate, erode the very foundations of that which is worth conserving? Or, in another sense, does the progression (key word) of capitalism erode the very bourgeois/traditional values upon which it is built? That question is one of the key themes of the book, and it's one Kristol seems to think can only be slowed, not reversed. Interesting to compare to George Grant here.

Another big idea is the one responsible for the book's title. Kriston gives capitalism two cheers for its fairness and effectiveness at building societal prosperity but spares the third cheer for the "bug" of the system: its sheer practicality is uniquely uninspiring. Once people attain a baseline level of economic comfort, they get bored and distract themselves with utopian socio-economic schemes to fulfil their growing existential angst (if the topic of the religionization of politics via utopian ideologies is of interest, check out Eric Voegelin's Science, Politics and Gnosticism). Kristol identifies the "new class" as the dominant driver of these developments in modern times. But these utopian schemes deliver disastrous practical results. The outcome? Prosperity becomes threatened and the working and lower-middle class, feeling their livelihoods threatened, turns back toward practical governance, capitalism and democracy until the cycle restarts. Anyone watching European climate/energy politics? Sidenote: worth comparing to Plato's theory in the Republic on intergenerational, cyclical change in both families and regimes.

An absolutely fantastic read but some chapters are less important than others and a lot of the references and specific issues are dated. Someone should come along and write a "sequel" re-examining these trends and themes in a more contemporary context (if they haven't already!).

[Dave Franklin · Rating 4 out of 5]

Irving Kristol’s “Two Cheers for Capitalism” contains 30 essays that originally appeared as articles and columns published between 1970 and 1977. Much of the content relates to government spending, corporate governance, and the idea that we need to address inequality.

Kristol addresses timeless problems: taxes, corporate governance. the welfare state, and our energy problems. Mr. Kristol is also a keen observer of the cultural evolution of Western democracies and the decline of religiosity in Europe and America.

Kristol also draws a fundamental distinction between thinking economically and thinking politically. The former involves weighing tradeoffs, watching for unintended consequences, and being aware of how changes in policy shift incentives.

Thinking economically is paramount. We need metrics to evaluate competing claims. Ultimately, these decisions force us to authoritatively allocate values. Voters and policy makers must think politically.

Kristol worried that the decline in traditional religious observance would result in decadence and a carnival of self-actualization. The ascendance of nihilistic socialism today, is in part, evidence of this thesis.

Kristol’s insights matter. Like Friederick von Hayek, he is an anti-utopian realist; like Hayek, he exhibits epistemic modesty. In short, Kristol is a strong advocate for a free economy; private property and free minds.