The Pathological Psychology of Western Capitalism

Exploring the psychic distortions that sustain the market system

By Collin Harris
May 31, 2010



The many glaring ills of contemporary Western society have come into sharp focus in the socio-political and philosophical thought of the past two centuries. The cultural pathologies of modern Western society abound, embedded in every dimension of our lives, manifesting themselves in various forms pathological behavior. Within conventional psychological and psychoanalytic frameworks, such matters are often (perhaps mistakenly) treated as essentially individual phenomena. Poor mental health in society is a matter of individual maladjustment. In response to this hopelessly reductionist approach, Erich Fromm proposed the much more radical notion of a fundamental “unadjustment of the culture itself.” Perhaps conceiving of social pathology as an individual deviation from an otherwise healthy and well functioning whole is a false start. It is certainly within the realm of possibility that modern Western society is haunted by what Fromm called a “pathology of normalcy”– – when the “normal” functioning of society is itself a disturbing pattern of collective pathology.

In a culture in which the individual is enmeshed in a myriad of complex social structures, systems, and institutions wielding enormous force and influence over daily life, it is appropriate to at least critically address whether the social order itself is in fact sane. The general theme of the following analysis is that Western society is indeed trapped in this pathology of normalcy, rooted in what are fundamentally anti-human properties of capitalist social relations and economic and cultural institutions. It is both the concrete conditions of these arrangements and the values that underlie them that will shed light on the psychological state of contemporary Western society.

In Sane Society, Fromm highlights two conceptual frameworks, and their guiding assumptions, we should consider in making claims about the collective mental health of a society. Sociological relativism, the doctrine that a given society is “normal” inasmuch as it functions and thus rendering pathology an issue of poor individual adjustment, precludes objective criteria for evaluating the mental health of human beings. The much more bold perspective of normative humanism on the other hand affirms the existence of appropriate universal criteria for evaluating the mental health of all people, irrespective of cultural systems.(Fromm 21) Positing that human beings have natural basic needs and psychic qualities governing their mental and emotional functioning, the satisfaction of which is inherent in any reasonable measure of psychological well-being, normative humanism provides a measure against which we can analyze collective mental health and social pathology. The primary claims put forth above demand such a measure, which lie at the core of Fromm’s humanistic psychoanalysis. It is, as always, a question of human nature.

Humanistic psychoanalysis insists that an accurate conception of human nature can be deduced from the study of the concrete conditions of human beings and their evolutionary and social development.  The human being represents a unique break in the evolution of life, a qualitative leap constituting a life form fundamentally different from all before it. A transition from the passive existence of the purely instinctual creature to the self-directed consciousness of the modern human: a new, transcendent species when “life became aware of itself.” (30) Nature has thus endowed humanity with the unique faculties for creative expression, free spontaneous activity, self-awareness and reflection, constructive engagement with the world, capacities for empathy and cooperation. Human needs are inherently social; our growth and development is not an isolated, individual phenomenon. Biological survival and social development both depend upon our relations to others, and so it is in our relationships with others that we realize our humanity. However, the emergent psychic properties of self-awareness, reason, and imagination—at once liberating and destabilizing–of this new being disrupts the “harmony” of the natural animal world. The transcendent qualities of humanity paradoxically make it the least fit for the realm of nature, in which instinctual response rules. Humanity can not, as other animals do, live by physiological adaptation and genetic determination alone; rather, we must create our existence for ourselves. Fromm notes that “we are never free from two conflicting tendencies: one to emerge from the womb, from the animal form of existence into a more human existence, from bondage to freedom; another, to return to the womb, to nature, to certainty and security.”(33) It is to find a solution to this fundamental contradiction that motivates human existence.

Our evolutionary, biological origins render the range of potential instincts, traits, and behaviors in human nature seemingly endless; the crucial question is which of these instincts are the social order going to maximize (or minimize). A social system is not simply the sum of its parts; over time, complex systems of interacting institutions take on logics of their own, while the whole develops a dynamism not found in its constitutive parts. To determine the mental health of Western society, we must consider the concrete conditions of our modes of production and forms of social-political organization to come up with a generalizable personaility structure. To do so, Fromm develops the concept of the social character: “the nucleus of the character structure which is shared by most members of the same culture.” (Fromm 76) The social character is a kind of conceptual cultural prototype generated by the institutional and structural foundations of society. For any system to survive, it must develop a means of channeling the human energies within society in accordance with the needs of the system, into cognitions and behaviors that ensure the continued functioning of society. If it becomes a matter of conscious choice whether or not to adhere to dominant social patterns, the system could be endangered. In its purest and most effective form, the character structure operates at the unconscious level, ensuring people “want to act as they have to act, and at the same time finding gratification in acting according to the requirements of the culture.”(Fromm 77) As Adorno pointed out, “it is part of the mechanism of domination to forbid recognition of the suffering it produces.” (Schmookler 118)

What is the social character of modern Western capitalist society? It must be deduced from analysis of the socio-economic institutions that govern our lives. All social institutions incentivize certain types of behavior while discouraging others.(Albert 65) What are the defining institutions of Western society? In capitalist society, the economic sphere is defined by three major institutional forces: private ownership, market allocation, and corporate divisions of labor. Embedded in a competitive class structure, these institutions dominate peoples’ lives and shape their values, attitudes, perceptions, and behaviors. Markets are the central institutions in capitalist society, organizing social activity according to their core values and projecting their power onto every dimension of human relationships. Prices and commodities are the language of markets and decisions are determined by a cold logic of material self-interest. Human beings in a market system engage in the social activities of production and consumption as atomized buyers and sellers in competition for scarce income and resources. The drive for profit is the dominant motivational force in market relationships, each actor advancing at the expense of another. Markets systematically subvert collective well-being by externalizing the costs of economic exchange onto others in society and the environment. Market pricing systems “lack concrete qualitative information and the obscuring of social ties and connections in market economies make cooperation difficult, while competitive pressures make cooperation irrational.” (Albert 66).

Private property breeds opposition by dividing society into owners and non-owners, with fundamentally divergent interests. It confers onto owners of capital disproportionate powers of decision making in the collective affairs of society, subordinating others to the interests of private wealth. Inherited wealth and power, disparate access to social resources and means of development, the erosion of cooperative values and common interest are the result of private ownership of productive social assets. Corporate divisions of labor divide the workplace, a central sphere of human activity in capitalist society, into hierarchies of disproportionate empowerment, quality of life, remuneration, and status. Unequal distribution of empowering circumstances, decision-making information, skills, confidence, and well being obstructs the healthy cognitive development of members of a corporate workplace.(Albert 46) The divisions of labor in capitalism fragment the mental and physical development of the human being. Specialization prohibits the worker’s interaction with the fruits of their labor as a whole. Sharp divisions of labor produce “individualism, narrowness of vision, and privatism” and detach people from each other and the public domain. (Benton 112) Holistic cognitive development is stunted by strict adherence to a single productive mode; rote, deadening, obedient work destroys one’s self-esteem and creative faculties. Indeed, the corporation has evolved into the dominant institution in Western capitalist society.

Borrowing from the psychologist Robert Hare, legal scholar Joel Bakan applies a diagnostic checklist of psychological traits to demonstrate, in human terms, the psychopathic nature of the modern corporation. The corporation: is irresponsible by endangering others in its inherently singular pursuit of profit, manipulative towards others in search for greater power and control, shamelessly grandiose in its self-conception, displays antisocial tendencies and a lack of empathy, and is remorseless in its wrongdoing.(Bakan 57) In human, social terms the corporation fails to live up to any reasonable measure of what we would consider to be a psychologically healthy human being. In these contexts, human behavior is molded in accordance with the role requirements (buyer, seller, owner, worker, etc.) of the institutions.

In capitalist society, people are conditioned by the requirements of the system to conceive of themselves and others in terms of economic utility. Production and consumption are heightened as the most natural and essential of human activities. From this develops a proliferation of materialist values; material goods are artificially infused with human dimensions, and life is experienced through the inanimate medium of the commodity. The productivist ideology of capitalism becomes a self-fulfilling prophecy, actually transforming people into the theoretical personality types of laissez-faire, capitalist doctrine. So how do people experience these activities, deceptively elevated to the status of a “natural law” by capitalist ideology (which in itself profoundly impacts our values)? As Michael Albert notes, “hierarchical work leaves different imprints on personalities. For those at the top, it yields an inquisitive, expansive outlook. For those at the bottom [the vast majority of people in capitalist society], it leaves an aggrieved and self-deprecating outlook” and induces hostility and aggression. Production is experienced as an estranged activity of the worker, devoid of any intrinsic value or self-fulfilling properties. For the great majority of society, work becomes a mechanical and mindless activity, and the worker a “perversion of a free being.”  “Labor’s product, confronts it as something alien, as a power independent of the producer…the life which he has conferred on the object confronts him as something hostile and alien.”(Marx 72) Ironically, despite its productivist ideological roots, in capitalist society work is conceived of as an essentially inhuman chore, to be abolished by technological development and automation.

Consumption is not without its alienating effects. In market economies, the well-being (indeed, the survival) of most individuals depends upon economic forces external to the person. Existential angst results from the feelings of not being in control of ones existence. Psychologist Bruce Levine discusses the consequences of a society in which the ultimate form of self-expression and identity formation is consumption of material goods. Such a society represents a “psychological, social, and spiritual assault on the human being” by a culture which systematically: devalues human connectedness by manufacturing the emotional/moral dimensions of human relations in the objectified commodity form, promotes selfishness by demanding total self-absorption and satisfaction, obliterates self-reliance by fostering a psychology of dependency on external forces (people, goods, institutions, technology), alienates people from concrete human emotions and conditions, and arouses false hope through the illusion that material commodities can satisfy the immaterial needs of humanity.(Levine 1) Modern capitalism has entered a consumerist phase, the inevitable mirror of it’s production-oriented origins, where unrestrained material gratification is the prevailing ethos. “The psychology of compulsive work on the productive side was thus joined by a psychology of insatiable appetite on the side of consumption.” (Schmookler 113) Consumption has ceased to be a means to end, and has become an end in itself. In such cultures, happiness, virtue, and the good life are equated with the accumulation of material wealth. Social status and recognition, a crucial determinant of ones self-esteem, is predicated on Veblen’s “conspicuous consumption.” An outward-oriented display of superficial success triumphed over the traditional inward-oriented notion of moral and spiritual growth. Fromm emphasizes that modern consumption in affluent capitalist societies has lost all connection to real human needs; “consuming is essentially the satisfaction of artificially stimulated fantasies, a fantasy performance alienated from our concrete, real selves.” (Fromm 122) An expansion of needs results from this condition. “Every increase of needs tends to increase one’s dependency on outside forces over which one cannot have control, and therefore increases existential fear.” (Schumacher 34)

Relationships between people take on a manipulative and instrumental character in capitalist society. The concrete, living human being is subordinated to the material needs of another or the systemic needs of the economic machine; “capital, the dead past, employs labor, the living vitality and power of the present.”(Fromm 90) The capitalistic hierarchy of values elevates the inert realm of things and objects as superior to, and with dominion over, the vitality of human experience. As Fromm notes, the conflict between labor and capital is not merely a conflict between two classes, but a fundamental conflict between two principles of value: one based on material commodities, the other on human qualities. Marx’s commodity fetishism is an earlier elucidation of this same point, a state of capitalist society in which everything is submerged into the philosophy of commercial exchange (exchange value): “There came a time when everything that people considered as inalienable became an object of exchange…the time when the very things which were once had been communicated, but never exchanged, given, but never sold, acquired, but never bought—virtue, love conviction, knowledge, conscience, etc.—when everything, in short passed into commerce…It has left remaining no other nexus between man and man other than naked self-interest and callous cash payment.” (Albert 65)

The natural world, the source of all human growth and well-being, is experienced as an inanimate repository of raw materials, to be extracted and utilized in service of human needs and desires. The productivist and expansionist character of capitalist ideology distorts our relationship to nature by conceiving of it as something to be dominated and subdued; a cold, hostile alien force indifferent to the needs of people. With the collapse of the pre-modern teleological conception of nature and the growth of market societies in the past few centuries, the empire of human domination over nature has rapidly expanded. Nature is therefore stripped of any intrinsic value independent of economic utility; “with this objectification, a reciprocal relationship gives way to one of unbridled exploitation.”(Schmookler 110) Materialism has no place in a finite web of interdependent life systems, despite the ideological rationalizations offered for the suicidal destruction of humanity’s most sacred connection, the one to the biotic community. The primary goods provided by nature never appear on the market, because they cannot be privately appropriated (yet); air, water, soil, and the natural web of life are but elusive shadows of their real, concrete forms.(Schumacher 54)

What kind of human beings does such a society require in order to sustain itself? What are the dominant psychological modes of being in Western capitalist society? How do these concrete, systematic features of capitalism impact upon our value/preference formation? Some core psychological modes of being under capitalism include alientation, objectification, abstractification, and quantification. The most fundamental psychological phenomenon with which people suffer under capitalism is that of alienation; “a mode of experience in which the person experiences himself as an alien…estranged from himself. He does not experience himself as the center of his world, as the creator of his own acts.”(Fromm 111) Fromm likens Marx’s system of alienation, in which a person’s life-activity becomes an external objectified power over them, to idolatry. In capitalist relations of production, workers invest their energy and creative capacities into an external idol—the commodity—which is experienced by the individual as the alienated form of their own life forces.

Alienation can be thought of as a type of nexus condition, subsumed under which is peoples’ relationship to themselves, each other, and the natural world. It is a process facilitated by the related phenomena of abstractification and quantification, processes which have transcended the economic realm and penetrate other spheres of social life. Fromm recognizes the transformation of the concrete into the abstract as a crucial psychological process endemic to capitalism. All of the concrete realities of people, nature, and society are converted into abstract forms, removed from all contextual properties. As a result, “Western society has lost any concrete, definitive frame of reference. (Fromm 109) And it is into the impersonal language of quantification that the richness of human life is abstracted. As Schumacher noted, “innumerable qualitative distinctions which are of vital importance for man and society are suppressed; they are not allowed to surface. Thus, the reign of quantity celebrates its greatest triumphs” in capitalist institutions.(Schumacher 47) Insofar as quantitative differences are more easily defined, they are endowed with an illusory appearance of scientific precision. The concrete purposefulness and qualitative properties of the fruits of production are converted into mere exchange value; distinctive alternatives are thus forged into a context-free language of universal interchangeability and equivalence. The quantitative nature of economic calculus is dangerously fragmentary in that short-term gain is prioritized at the expense of long-term consideration. Driven by the motive of personal profit and misconceiving of primary goods afforded by nature as free and limitless, economic logic systematically ignores human dependency on the natural world. A cult of growth emerges in capitalist society. “The idea that there could be pathological, unhealthy, disruptive or destructive growth, is to them a perverse idea that must not be allowed to surface.” (Schumacher 51)  Mathematical economic models fail to recognize the limitations inherent in human existence and interaction with the world; people in capitalist society internalize these misperceptions, it becoming the lens through which they see the world.

Authority is a central social force in class-based societies. Ted Benton identifies two predominant character-types that prevail in such a society. “On this corrupt foundation, men become either rapacious, deceitful, and violent, ready to trespass on the rights of others; or servile, mercenary and base, prepared to relinquish their own.” (Benton 116) Neither dominance nor subservience is conducive to a free and healthy society. Fromm points out that as capitalism developed into the twentieth century, the nature of authority was transformed from its traditional overt and coercive forms into a more anonymous and impersonal force. Despite the horrors of traditional overt coercion, it produced a conflict, a rebellion against irrational authority. This struggle facilitated the development of personality and the self, providing a clear identity for people—I rebel, I struggle, I protest. With the emergence of anonymous authority, the clear sense of self dissolves into undifferentiated parts of the impersonal whole. “The laws of anonymous authority are as invisible as the laws of the market, and just as unassailable.” A paralyzing culture of passive complacency and detachment develops; “who can attack the invisible? Who can rebel against Nobody?”(Fromm 138) Conformity is the mechanism by which anonymous authority operates, replacing coercive force as a means of social control. Conformity is transformed into a virtue. The disappearance of personalized identity induces acquiescence to the herd, and deviation from social convention is synonymous with heresy. One institutional manifestation of this anonymous authority is the process of bureaucratization. The economic and political institutions of the social infrastructure are so vast that they require abstractification as the necessary modus operandi of its subjects. Organic connection and spontaneous cooperation is stunted, and people are devalued to the point of indispensability. The fragmentation and degradation inherent in this process are indicative of the alienated nature of existence in contemporary Western culture.

Social systems are rooted in value systems. In capitalist society, with its origins in Western liberal thought, the perspective of the world is individualized. Capitalism produces a psychology of possessive individualism as the dominant characterological orientation. “The individual is understood as essentially the proprietor of his own person or capacities…owing nothing to society for them.” (Schmookler 78) Collective obligations are considered to be assaults on individual autonomy, rather than as integral supportive aspects of living in a community through which people cultivate their mutual nourishment as social beings. Individualism assumes competitive relations, promoting cynicism and anti-sociality. “By setting up a system predicated on human selfishness, we not only recognize but encourage a selfish element in our nature, and thereby fray the moral fabric of society. The capacity for altruistic feelings and actions tends to atrophy under the influence of such a system.”(Schmookler 82)

This is the process by which, Schmookler explains, capitalist institutions subsidize our social atomism by systematically favoring values that concern people as separate individuals and discouraging the fulfillment of needs as an interconnected community. Society is thus deprived of the capacity to determine those aspects of the future we wish to have in common. The social landscape is distorted, molding people into the necessary role requirements. What arises is a “contract society” that enshrines as right the egocentrism that is characteristic of infantile psychology. In referencing Daniel Horowitz, Schmookler identifies a personality type build around ambition, a sense that time is money, and an obsession with progress (defined in material terms). A new worship of success and self-fulfillment through economic competition, positing material wealth as the measure of all value, became integral to capitalism’s cultural code. With the development of capitalist society, traditional religious virtues gave way to the secular forces of initiative, aggressiveness, competitiveness and forcefulness.(Schmookler 146)

So we see the emergence of the modern social character as generated by the institutional forces of capitalism. This system has profound impacts on the psychological development of its subjects. The system’s institutional arrangements promote value systems and personality types that are antithetical to living harmoniously in a cooperative community, offered here as the purest expression of human nature. The standard “state of nature” fallback of capitalist doctrine is merely self-serving ideology. Our state of nature was not solitary, but communal, and we survived primarily by forging a web of mutual compassion and interconnection.(Schmookler 148) Sociological relativism takes the intellectually easy (and morally bankrupt) way out by simply denying a priori the existence of objective standards of healthy human psychological development, which is to implicitly deny the existence of basic human needs, trapping itself in the realm of post-modern absurdity. This notion is a striking illustration of the ideological system supportive of capitalism, and a degree of self-deception in which humanity cannot afford to indulge.

The sicknesses that pervade contemporary Western society cry out for the radically virtuous alternative of normative humanism offered by Erich Fromm. Examination of the concrete conditions of life under capitalist institutions reveals a complex of psychological pathologies, the sum of which engenders an absolutely alienated existence. Community becomes a hollow term denoting a mere aggregation of self-interested individuals, free of mutual responsibility and obligation. Capitalist institutions are premised on cynical assumptions regarding the social capacities of human beings; human nature is debased accordingly. As Indian philosopher Jiddu Krishnamurti once said, “It is no measure of health to be well-adjusted to a profoundy sick society.”

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