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Max Cafard
The Dao of Capitalism
Article published on 28 October 2003
last modification on 24 April 2015

by r-c.
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Lao Zi was the mythic “Old Sage” of ancient China.
We’re not sure whether he actually existed but we do know that he founded
Daoist philosophy. His legendary Daodejing, the “Classic of the Way and
its Power,” is a subtle treatise that radically challenges our views of everything
– including ourselves, nature and the world around us. I like to call it
“The Anarchist Prince,” for just as Machiavelli’s Prince is a manual for
rulers who wish to master the art of ruling, Lao Zi’s classic is written
for rulers who want to learn precisely how not to rule.

The Dao means literally the “way” or “path.”
It is at once the origin of all things and the way—the “natural path”—of
the entire universe. It is also the unique way of each being, including
the human kind of beings. So it’s something that each of us must discover
personally, in our own lives. For Lao Zi, the way is not clearly marked,
and finding it must be part of the journey. “The Dao that can be told of
is not the eternal Dao.” (1) We foolish human beings usually assume we know
the way ahead of time. We follow society’s blind prejudices and our own
rigid, self-centered ideas. As a result, we miss the interconnection of
things, the bigger picture and the deeper truths.

As Lao Zi puts it, we overlook the dynamic
balance of yin and yang, the opposites that are really complements, the world’s
underlying unity in difference. He also teaches the importance of fu, return
or recurrence, a concept that challenges civilization’s naive ideas of linear
progress, of conquest and domination, of infinite accumulation. And he speaks
of wuwei, “doing without doing,” which includes “ruling without ruling,”
or anarchic ruling. This means acting through ziran or spontaneity, thus
not forcing the world to fit our expectations; in fact not even forcing ourselves
to conform to our preconceptions of what we ought to be. Lao Zi shocked
his own patriarchal, authoritarian society by taking as his models for the
anarchic sage-ruler the child, who experiences life as play and who acts
spontaneously, and the female, “the ravine of the world,” who nurtures and
cares without dominating or taking possession.

In short, Lao Zi’s Dao is the absolute
antithesis of all forms of domination—including concentrated economic power,
the centralized state, patriarchy and the exploitation of nature. So it
came as a bit of a shock to me when I began to find the world’s first philosophical
anarchist invoked in defense of right-wing ideology and capitalist economics.

Right Wing Yin Yang

Ronald Reagan seems to have started this
trend in his 1988 State of the Union Address. Reagan lumped together such
“great ideas” as individual initiative, free-market economics, and Lao Zi’s
advice to “govern a great nation as you would cook a small fish; do not overdo
it.” While Lao Zi didn’t explain precisely how one should cook a small fish,
Reagan had no difficulty concluding that the Old Sage must obviously have
been advocating laissez-faire capitalism. (2)
James A. Dorn, Vice President of the right-wing
Cato Institute, outdid Reagan, discoursing with a straight face on topics
such as “the Dao of Adam Smith,” and injecting the poor corpse of Lao Zi
with a strong dose of the entrepreneurial spirit. In a speech entitled
“China’s Future: Market Socialism or Market Daoism,” he exhorted the wise
leaders of China to go back to their own Daoist roots and “rediscover the
principle of spontaneous order—the central principle of a true market system.”(3)
Of course, anyone vaguely familiar with
the rulers of China—a gang of corrupt and amoral bureaucrats capable of
brutal repression and even massive genocide—would think it highly unlikely
that they would become converts to Lao Zi’s anarchic path of “spontaneous
order.” However, they just might be open to the idea that capitalism could
offer them (just like the bureaucrats turned capitalists of Eastern Europe)
a new means of plundering their country. And with a good dose of Daoism
thrown in, it would all be so spiritual and happen so spontaneously!
A more ambitious attempt to marry Daoism
and the marketplace is presented in the book Real Power: Business Lessons
from the Daodejing, in which quotations from Stephen Mitchell’s feel-good,
New Agey paraphrase of Lao Zi are coupled with commentary by business writer
and consultant James A. Autry. Autry cites the Daodejing extensively but
very selectively (often cutting off a citation just before Lao Zi gets to
an embarrassingly anarchistic point).
In fact, he cooks up his “Daoism” much
the way Ronald Reagan would cook a small fish—and the result is fishy indeed.

The Way of the Jaguar

To begin with, Autry completely ignores
Lao Zi’s harsh condemnation of the materialistic society. Autry advises
his manager to “go ahead and celebrate the abundance, all the perceived symbols
of success, everything from a luxury car to a condo in some vacation spot.
But don’t get hung up on whether you have this stuff or not, and never lament
what you don’t have.”(4) Sounds very tempting, doesn’t it? “Go ahead, trade
that BMW in for that Jaguar you’ve been looking at. It won’t really mean
anything to you anyway. Hey, you’re a really spiritual kind of guy.” The
question is: who’s talking, Lao Zi or Mephistopheles?
The Old Sage himself sees the accumulation
and concentration of wealth as being, far from any cause for “celebration,”
a fatal snare to be avoided at all costs. He warns that “to have little
is to possess” while “to have plenty is to be perplexed.” (5) And he is positively
scathing in his judgment of the social consequences of luxury and economic
inequality: “Elegant clothes are worn, sharp weapons are carried, foods and
drinks are enjoyed beyond limit, and wealth and treasures are accumulated
in excess. This is robbery and extravagance, this is indeed not Dao.” (6)
Elsewhere he advises: “Abandon skill and discard profit; then will there
be no thieves or robbers” and suggests that we should “have few desires,”
(7) a dictum in absolute contradiction to the society of consumption, which
is hell-bent on inflaming infinite desires for the unattainable. Autry wisely
decides not to touch this chapter at all!

In fact, one of the most pervasive themes
of the Daodejing is the danger of certain desires—and particularly the desire
for material accumulation—out of control. Autry quotes an entire chapter
of the Daodejing with the notable exception of this embarrassing passage:
“Do not value rare treasures, so that the people will not steal. Do not display
objects of desire, so that the people’s hearts shall not be disturbed.” (8)
The market Daoists ignore the fact that the enterprises managed by their
presumably incorruptible and virtuous managers have the goal of arousing
in the consumer just such disturbing, destructive impulses.

The Means Justify The Ends

For Autry’s manager, “the acceptance
of non-control is the only way to manage things.” (9) “Non-control” (a variation
on wuwei) is a concept dear to Lao Zi, the enemy of all conventional ideas
of ruling. His anarchic “ruling-without-ruling” means that we should influence
the world through our way of living and our personal example, rather than
through hierarchical authority and coercion.

But such “non-control” is the antithesis
of the role of today’s corporate manager, who is obviously an authority-figure
in the corporate power structure, and whose job it is to make decisions for
others. Lao Zi’s sage-ruler is one “whose existence is (merely) known by
the people—or perhaps even “not known by the people” (depending on which
ancient manuscript we follow). (10) You can be sure that in any corporation
the employees will know precisely who the bosses are and where they rank
in the corporate hierarchy. And most will be intelligent enough to be very
careful around any manager who claims to practice “non-control”!

Whereas Lao Zi teaches that each must
find his or her own way, Autry’s mellow, New Age manager (a bit like Plato’s
Old Age Philosopher-King) arranges things to “assure that all employees are
assigned [my emphasis] to do what they do best, in the interest of all.”
(11) Is it possible that the bottom line might dictate that some are assigned
to do things they don’t do best? Is it possible that the company needs their
help in producing something that isn’t “in the interest of all”? If Autry’s
Daoist manager actually tried to “assure” anything other than what serves
corporate goals, that perennial optimist would soon be assuring him or herself
that, as Autry puts it, getting fired may sometimes be “one of the greatest
gifts” one can receive. (12)

So let’s face it, Autrey’s managers will
control—by controlling. But ironically, there is a grain of truth in his
idea of the manager who is “not in control.” Enlightened managers should
indeed consider themselves to lack such control, but not primarily because
it discourages obnoxious managerial styles and evokes better compliance,
as Autry says between the lines. It is rather because something else really
is in ultimate control. In the typical business enterprise what ultimately
controls are the structural constraints of operating in a competitive, corporate-dominated
market economy, and the imperious necessity to maximize profit and economic

This points out the biggest problem with
market Daoism: it’s complete failure to confront the issue of means and
ends. It is pervaded by bad faith and self-deception. Unless we want to
lapse into some sort of ideological dream world, we must ask a question that
Autrey and the market Daoists scrupulously avoid: what ends are served by
the “real power” of managers? Let’s be realistic about this: the goal is
to offer to consumers precisely those objects of desire that captivate their
imaginations and win their hearts, to produce those very “rare treasures”
that underlie the social hierarchy, economic status and prestige and which
Lao Zi condemns so scathingly.

This is what the Dao of the Bottom Line

Zen and the Art of Union-Busting

We eagerly await Autry’s forthcoming work
on this topic, but he has already given us some pointers. He optimistically
informs his New Age managerial readers that “[u]nions form not primarily
to increase pay and benefits; they arise in situations where employees feel
denigrated.” (13) It’s an old story: “Workers of the world unite! You
have nothing to lose but your wounded pride!” He suggests that horrifying
disasters such as unionization can be avoided if employees such as “mail
sorters” are not given the outrageously mistaken impression they are mere
“little people” in the corporation, since this would “distort [sic] organizational
hierarchy into a social class system within companies.” (14) Since class
for Autry is all in the mind, the idea that a hierarchy of power, status
and wealth within an organization might actually be a social class system
is entirely incomprehensible to him.

Autry criticizes such dismal corporate
tendencies as “downsizing” and “outsourcing,” and optimistically concludes
that they are not really in the company’s long-term interest. He fails to
consider the not obviously impossible case in which a company manages to
benefit economically from doing both, or the even more troubling instance
in which a company shuts down a plant completely and moves to a location
with cheaper labor, no annoying unions and a conveniently authoritarian state.
His most relevant bit of advice to managers for such an occasion is to express
the enormous, heartfelt respect that the corporation has for the laid-off
employees (perhaps a perverse variation on the ancient tribal custom of expressing
gratitude to an animal before killing and eating it).

For Autry, the role of the “wise leader”
is to assure that the employees “understand how their individual jobs connect
with the greater purpose of the business.” (15) But what such a noble leader
must systematically ignore is how that purpose connects to, or fails to connect
to, the “greater purposes” of the Dao: how it might trample on the way of
each person, devastate the way of the community, and lay waste to the way
of nature.

Will The Real Lao Zi Please Stand Up?

True, Lao Zi says that “the Dao is vague.”
But that doesn’t mean that it’s no more than putty in one’s ideological

The deeply revolutionary message of the
Daodejing is perhaps best expressed in the “three treasures” that Lao Zi
advises us to “guard and keep”: compassion, simplicity and humility. (16)
The Old Sage would never recommend that these treasures be tacked on to a
job description and ignored in the larger picture of our lives, society and
nature. He would be appalled at the idea of managing in an amiable, frugal
and self-effacing way an irresponsible, destructive enterprise that promotes
material accumulation, waste and pollution, social inequality and status-seeking.
Lao Zi remarks in a crucial passage that
“the Way of Heaven reduces whatever is excessive and supplements whatever
is insufficient. The way of man is different. It reduces the insufficient
to offer to the excessive.” (17) This early diagnosis of civilization is
an apt assessment of the social and ecological consequences of the contemporary
globalized market economy.
Elsewhere, Lao Zi states the related harsh
truth that “Heaven and earth are not humane. They regard all things as straw
dogs.” (18) Straw dogs were insignificant objects thrown into the fire in
ritual celebrations. Lao Zi warns us that in the case of reality, we can’t
“have it our way” (the metaphysical Fallacy of the Whopper), though we certainly
should try to find our way. If we continue to follow the distorted, destructive
“way of man” (and “economic man” in particular), we will suffer the inevitable
fate of those who live a life out of balance. We’ll find out what it’s
like to be a straw dog that thinks it’s top dog.

To put it another way, global capitalism
looks increasingly like a very big fish spewing poisonous filth in its small
and delicate pond. Alas, you would-be Managers of Dao. Your fish is cooked!


(1) Wing-Tsit Chan, Tao te Ching in A
Source Book in Chinese Philosophy (Princeton: Princeton University Press,
1963), Ch. 1.

(2) New York Times, 1/26/88. Another amateur
scholar of Eastern thought who shares this view of Lao Zi is Murray Bookchin.
In view of their collective wisdom we might call it the Reagan-Bookchin

(3) The Cato Journal, Vol. 18, No. 1.

(4) James A. Autry and Stephen Mitchell,
Real Power: Business Lessons from the Tao Te Ching (New York: Riverhead Books,
1998), p. 7.

(5) Daodejing, Ch. 22.

(6) Ibid, Ch. 53.

(7) Ibid, Ch. 19.

(8) Ibid, Ch. 3.

(9) Real Power, p. xiii.

(10) Daodejing, Ch. 17.

(11) Real Power, p. 44.

(12) Ibid, p. 109.

(13) Ibid, p. 34.

(14) Ibid, p. 33.

(15) Ibid, p. 4.

(16) Daodejing, Ch. 67.

(17) Ibid, Ch. 77.

(18) Ibid, Ch. 5.

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