Lane Kenworthy, The Good Society
February 2023

An economic system first and foremost affects our living standards and our experience of work and leisure. But it also can influence the way we think about other people and interact with them. A variety of observers have concluded that capitalism is bad for tolerance, inclusion, trust, social connections, social support, unselfishness, and cooperation¹:

“All human beings … feel insecure, lonely, and deprived of the naive, simple, and unsophisticated enjoyment of life. Man can find meaning in life, short and perilous as it is, only through devoting himself to society. The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil. We see before us a huge community of producers the members of which are unceasingly striving to deprive each other of the fruits of their collective labor — not by force, but on the whole in faithful compliance with legally established rules.” -Albert Einstein, 1949

“Capitalism undermines a sense of solidarity among people…. The forms of competition and conflict built into capitalism drive economic activities primarily on the basis of greed and fear. Instead of social interaction in economic life being normatively organized around the principle of helping others, it is organized primarily around taking advantage of the weakness of others for one’s own gain. This underwrites a culture of selfish individualism and atomism.” -Erik Olin Wright, 2017

Are they correct?

Skip to:

• Tolerance and inclusion
• Trust
• Social connections
• Social support
• Unselfishness
• Summary

TOLERANCE AND INCLUSION

On one view, capitalism fosters tolerance and inclusion. As an economic system in which actors engage in voluntary transactions in pursuit of financial gain, capitalism encourages people to hire, work for, sell to, and buy from whoever will improve their well-being. In the long run, this should tend to discourage discriminatory behavior and prejudiced beliefs.²

Another perspective holds that a capitalist economy encourages employers to look for ways to divide workers. Easily observable differences such as sex, race, and language are obvious targets, so capitalism, according to this view, will tend to promote and perpetuate sexism, racism, and nativism.³

There are plenty of historical instances of firms in rich democratic nations attempting to sow divisions among workers by pitting a mainly male, white, native-born workforce against women, racial and ethnic minority groups, and immigrants. And no nation has fully succeeded in stamping out intolerance and prejudice.

Yet developments over the past half century are encouraging.

Employment rates among prime-working-age women have been rising steadily in recent decades, while those for men have been falling. We are not yet at parity, and perhaps, given differing female and male preferences for spending time with young children, we’ll never get there. But the gap has been shrinking, and that’s also true for the gap in pay. Partly as a consequence of these changes and partly as a cause of them, attitudes toward gender roles have been shifting. For instance, there’s been a large increase over the past century in the share of people who approve of a married woman earning money in business or industry if she has a husband capable of supporting her.⁴

While the United States is the rich democratic nation with the deepest and most longstanding racial divisiveness, we observe considerable progress on some indicators of education and economic well-being. Attitudes, too, have shifted in a favorable direction in recent decades.⁵

Hostility toward immigrants has contributed to the rise in vote share for anti-immigrant “populist” candidates and political parties in the affluent democratic countries.⁶ Yet immigration into these nations has been rising in recent decades, not falling. A growing share of Americans say they believe immigrants strengthen the country because of their hard work and talent, and the share of Americans who favor a reduction in immigration has been decreasing.⁷

The same story holds for sexual orientation. Until relatively recently, many Americans viewed homosexuality as wrong, but public opinion has shifted dramatically since around 1990. A steadily rising share of Americans say they think that homosexuality should be accepted by society, homosexuals should have equal job opportunity rights, gay and lesbian sex should be legal, same-sex marriage should be legal, and gay and lesbian couples should be allowed to adopt children.⁸

The driving force behind this rise in attitudes of tolerance and inclusion is material prosperity. As people get richer, they tend to want more fairness in their society. Drawing on several decades of public opinion survey data from multiple countries, Ronald Inglehart and Christian Welzel have found that once people can be confident of survival and a decent standard of living, they tend to shift away from a worldview that emphasizes traditional sources of authority and traditional social roles. This is replaced by a “postmaterialist” or “emancipative” orientation, a key element of which is universalistic humanism, which deems all persons, including members of “outgroups,” as equally worthy of rights, opportunities, and respect.⁹

TRUST

Public opinion surveys often ask respondents whether “most people can be trusted” or “you need to be very careful in dealing with people.” The share who choose the first option is treated by social scientists as a measure of the degree of generalized interpersonal trust in a society.

In the United States, the level of interpersonal trust is comparatively low, and it has decreased sharply since the middle of the twentieth century. There was a sharp drop in trust between the mid-1960s and the early 1980s, with a continued but smaller decline since then. By the 2010s only a third of Americans said they felt most people can be trusted.¹⁰

The degree of interpersonal trust in the United States tracks very closely with the degree of trust in government. There is good reason to suspect this correlation is causal. Government is one of our most important institutions, and over time it has played a growing, and increasingly visible, role in the lives of citizens. The degree to which people have trust or confidence in their government may therefore influence the degree to which they trust other individuals. Americans’ trust in their government was high through the 1950s. But it dropped sharply in the 1960s and 1970s due to the Vietnam War and the Watergate scandal, and since then it has decreased a bit more. The over-time pattern for generalized interpersonal trust is very similar. The association across countries also is quite strong. Nations where confidence in government is greater tend to have higher levels of interpersonal trust.¹¹

The relatively low level of trust in the US isn’t representative. In a number of the rich democratic countries, more than 50% of the population think most people can be trusted, and in some it is closer to 75%.¹²

Moreover, in most of these countries there has been relatively little change in the degree of interpersonal trust over the past four decades. In this era of neoliberal, “greed is good” capitalism, people in some of the rich longstanding-democratic countries have become a little less trusting, but in most the level of trust has remained constant or even risen.¹³

SOCIAL CONNECTIONS

Isolation and loneliness can be harmful. For evolutionary reasons, they may produce a subconscious search for threat, which can increase anxiety and depression, worsen physical health, and shorten lives.¹⁴

For at least 150 years, analysts and pundits have worried that modernity — or specifically capitalist modernity — would reduce social connections and ties. Better transportation, greater access to college, and the concentration of jobs in cities increases the incentive for people to move away from family and childhood friends. Cities are crowded, which can make it more difficult to develop lasting bonds. Technological advance provides more sources of distraction and access to individualized entertainment, reducing the time available for friends or family. As more women move into paid work, they have less time to socialize. And as government public insurance programs cushion more of the risks and hardships we face, voluntary organizations, a key source of interaction and community, may diminish in prevalence.

In the late 1800s and early 1900s, Fernand Tonnies, Max Weber, and Emile Durkheim described the shift from the “gemeinschaft” society of small villages, which emphasizes personal relationships and family, to the individualistic, atomistic “gesellschaft” society common in large cities. Since the middle of the twentieth century, a steady stream of analysts and commentators has concluded that the United States is in the midst of a loneliness epidemic. David Riesman’s The Lonely Crowd in 1950, Vance Packard’s A Nation of Strangers in the 1970s, Robert Putnam’s Bowling Alone in 2000 and The Upswing in 2020, and David Brooks’s New York Times op-eds in the 2000s and 2010s are among the many contributions suggesting that personal connections and social supports have weakened.¹⁵

The United States may be a useful test case. We know that Americans’ participation in civic organizations has declined since the mid- 1960s. In addition, attendance at religious services, and religiosity more generally, have fallen during this period (they decreased earlier in most other affluent democratic nations). America’s version of capitalism has tended to be a relatively individualistic one, especially in the period since 1980.¹⁶ If there were a country and era in which we might expect to observe a rise in isolation and loneliness, this is it.

However, the best available data suggest that the conventional picture is wrong. In his 2011 book Still Connected, the most comprehensive and detailed examination of evidence on social connections and ties, Claude Fischer concluded as follows¹⁷:

“The question that this book has posed is whether and how Americans’ relationships with family and friends changed between 1970 and 2010. The short answer, based on a canvass of published research and available survey data, is: not much. Some of the ways in which Americans engaged with people in their immediate circles changed, but the intimacy and support of close family and friendship ties stayed about the same. Few Americans were socially isolated, and the percentage of those who were did not increase. The number of family and friends with whom people reported being close stayed about the same. Americans got together with one another in set-aside home activities like dinner parties less often, but they communicated with one another electronically more often. Americans expected to get about as much help from family and friends as they had earlier. And American feelings about their social relationships stayed about the same or became more upbeat.”

A look at the available evidence since 2010 suggests no reason to revise Fischer’s conclusion.¹⁸

SOCIAL SUPPORT

Since the mid-2000s the Gallup World Poll has regularly asked, “If you were in trouble, do you have relatives or friends you can count on to help you whenever you need them, or not?” As Figure 1 indicates, more than 85% of respondents in every rich democratic nation apart from South Korea say they do have relatives or friends they can count on for help. While the share has decreased in some nations since the mid-2000s, that owes mainly to the 2008-09 Great Recession.

UNSELFISHNESS

Part of the genius of capitalism is that it takes selfish behavior and channels it into activities that end up benefiting everyone.¹⁹ But in doing so capitalism doesn’t just allow for selfishness; it encourages it. In the view of some, we can do better.

Generalized altruism

Altruism consists of individuals putting the well-being of others ahead of their self-interest. People do this, but typically in specific and limited instances rather than as a general behavior. A person may donate to a charity, let someone cut ahead of them in a checkout line at a store, and even fight in a war at considerable risk of getting killed. But most of us aren’t guided by altruistic motives in our regular, ongoing actions.

In one conception of community, we would be. Andrew Levine suggests that “When the whole people rule, they are not motivated … by self-interest. Their votes do not register preferences for alternative outcomes in contention, but opinions as to what is best for the collective entity they freely constitute. In other words … individuals view themselves as indivisible parts of collective entities, and they make the interests of these collectivities their own.”²⁰

This seems unlikely to be a realistic goal for the not-too-distant future. And it might not be a good thing even if it were feasible. One finding from research on subjective well-being is that people tend to be happier in societies with “individualist” rather than “collectivist” value orientations. That is, they are happier in a context of cultural norms that encourage people to think of themselves as autonomous individuals as opposed to norms that encourage conformity.²¹

Communal reciprocity

G.A. Cohen has suggested that socialism, by minimizing inequality of opportunity and limiting inequality of income and wealth, will facilitate a better way of interacting with our fellow humans: cooperation for its own sake. Cohen calls this “communal reciprocity.”²²

“Communal reciprocity is the antimarket principle according to which I serve you not because of what I can get in return by doing so but because you need or want my service, and you, for the same reason, serve me. Communal reciprocity is not the same thing as market reciprocity, since the market motivates productive contribution not on the basis of commitment to one’s fellow human beings and a desire to serve them while being served by them, but on the basis of cash reward. The immediate motive to productive activity in a market society is (not always but) typically some mixture of greed and fear, in proportions that vary with the details of a person’s market position and personal character. It is true that people can engage in market activity under other inspirations, but the motives of greed and fear are what the market brings to prominence, and that includes greed on behalf of, and fear for the safety of, one’s family. Even when one’s concerns are thus wider than those of one’s mere self, the market posture is greedy and fearful in that one’s opposite-number marketeers are predominantly seen as possible sources of enrichment, and as threats to one’s success. These are horrible ways of seeing other people…. Within communal reciprocity, I produce in a spirit of commitment to my fellow human beings: I desire to serve them while being served by them, and I get satisfaction from each side of that equation.”

Cohen notes that communal reciprocity is the way people typically interact when on a camping trip. Equipment is shared. Tasks — setting up tents, preparing food, cleaning — are shared. No one gets too much more than anyone else. We tend to like this way of interacting.

The question is whether this mode of interaction and the pleasure it evokes is generalizable. I’m skeptical. We have no particular reason to think that cooperation for its own sake would work well for most types of economic interaction, nor to presume that, if it did, this would make us happy.²³ The spirit of the camping trip is probably best considered a special case, much like parenting. Parenting is heavily infused with altruism but also extremely hierarchical. We wouldn’t want to extend this to most other realms of life.

SUMMARY

Modern capitalism might discourage tolerance, inclusion, trust, personal interconnections, and social support. But the available evidence for the rich longstanding-democratic capitalist nations suggests that some of these elements of community have been getting better, and in some countries they are quite strong.

Some critics of capitalism want more. They would like most of our behavior to be unselfish, not just some of it. I’m not sure this is feasible, and I have doubts about whether it is desirable.