In today’s political climate, objections to what is generally if not very precisely called “capitalism” frequently concern the ever-widening inequalities in income that are the effects of the current forms of late capitalism (especially ever less regulated, “American-style” capitalism), the exploitative use of the power possessed by owners of capital, and the inherent injustice of a competitive system in which very many are severely disadvantaged from the start through no fault of their own. But globalized consumer capitalism is not only a system of production, distribution and wealth creation, it is also a form of life, a social form, the requirements and demands of which affect everything from an educational system, to community norms, to marriage and family life, to psychological well-being. As the Platonic Socrates argued in the Republic, different types of regimes, including economic regimes, need to cultivate different types of souls; souls who will sustain, keep faith with and ultimately defend and sacrifice for their regimes. Hence the first question: What habits of mind and heart does late, globalized, finance capitalism need in order to cultivate and sustain itself? And then the next question, first raised in a modern form by Rousseau: Is life in a system of production generally defined by the division of and the sale of labor to private owners of capital who compete for market dominance a suitable or flourishing way to live for human beings?

Although the nineteenth-century philosopher G. W. F. Hegel is known as a defender of bourgeois society and so of what came to be known after him as capitalism, I think the evidence suggests that his answer to these questions is far more negative than is widely recognized, and this in a distinctive sense that remains relevant today. I want to try to explain this counterintuitive claim. Hegel, of course, writing in Germany in the early nineteenth century, had no idea of the full scope of the industrial capitalism to come, but he certainly saw that a largely agricultural and artisanal/craft/predominantly homebound economy was changing into a wage-labor economy, and his worries about that alone are apposite. What makes him especially worth returning to in our present circumstances, however, is that while material inequalities and the resulting systematic unfairness were important to him, Hegel’s principal focus was on the experiences of ourselves and others inherent in the ordinary life required by such a productive system. These issues are often misleadingly marginalized as “psychological,” but as recent events have shown, they are crucial to the possibility of the social bonds without which no society can survive.

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Hegel’s most important book on these issues, Elements of the Philosophy of Right (1821), is certainly a defense of the rationality of an interconnected web of modern institutions, including private property and wage labor. These institutions had either already appeared by the beginning decades of the nineteenth century—some in Germany, and many in England—or were, as he saw it, inexorably emerging. Two things, at least, are distinctive about his approach to thinking about them. First, by rationality, Hegel does not mean what any suitably informed ideal contractor would choose to commit to, either for strategic or ethical reasons. He has instead a substantive and not a formal theory of rationality. Human beings are essentially historically developing, socially dependent, self-aware, deliberative, free beings, and if they come to live in a way that, as he would put it, does not agree with this concept, then that way is irrational. This means for him, given the enormous significance of his claim about our social dependence, that a human being can only be what it is, a free being, by participating in social institutions, including an economic system. As he put it, a person can only be “fully” free as a citizen in the modern republican state. He did not merely mean that a state indifferent or hostile to the freedom of its citizens is unjust, or that one cannot act as the free agent one is in such an irrational state (although he certainly did want to make both claims), but rather that one is not yet a fully free agent in such an irrational situation. However much the capacity of freedom (as Hegel understands it) is a potentiality characteristic of every member of the human species, the state of being free is an achievement of a distinct sort. That achievement relies on the right sort of social bonds in the family, as fellow workers and as citizens of a representative state. Absent that achievement, freedom is unrealized.

This institutionalism is the ultimate implication of Hegel’s most general account of what freedom consists in. The simplest way to formulate the desideratum of freedom is that it is achieved when one can experience one’s deeds and practices as genuinely “one’s own,” that one “identifies” with one’s actions in the public world. Hegel argues that this can occur only in a state of social harmony he calls “being with oneself in an other,” often otherwise expressed as a unity of subjective and objective freedom. In order to appreciate the unusual character of Hegel’s claim, it is important to remember that, in addition to his institutionalism, Hegel’s prized examples of such actualized freedom are love and friendship. These are certainly examples of substantive human goods, but it is unusual to see them cited as paradigmatic examples of freedom. We would normally think that in order for all and each to be free, a particular subject must sacrifice a full realization of freedom in consideration of the other. That is just what Hegel wants to avoid. He objects to our seeing our profound dependence on others as a hindrance or compromise; we should see it rather as constituting as much a part of my formation as an independent being as are familial and romantic love and friendship. He thinks the right sort of institutions will make it possible to experience—will educate us so that we can experience—other people and institutions as such a full realization of our own freedom rather than its sacrifice. So, I don’t compromise my freedom for the sake of a friend or a child; I see their good as my own; I could not imagine being who I am without them. This can immediately sound utopian, but it sounds that way because of contrary assumptions about a default starting point, one that is conveniently suited to the requirements of a capitalist society.

Perhaps the easiest way to appreciate Hegel’s point is to imagine situations of greatly heightened alienation. I apply for a job to be a telemarketer. However, my role in the job seems to me more like a theatrical performance. I don’t believe any of the people I call should buy the condo timeshare I am supposed to be selling, and it is dispiriting to be hung up on and yelled at so often. In such a case, the actions I undertake are all noncoercively performed by me, but I do not experience them as “mine.” Another form of alienation would be when I find that what I take myself to be doing (say, what I take to be showing hospitality to others, my description of the act I give myself) is shared by none of the others in my new circle, so much so that I begin to doubt I actually understand what I’m doing. Or, even worse, when I am asked why I am doing what I am doing, and I present my reasons, no one understands me, or, if they do, they refuse to believe anyone could have such reasons. This does not mean that a non-alienated situation is one of mass conformism, and therein arises the most controversial point in Hegel: that this relation between individual self-understanding and self-worth and some objective “reflection back” from the social world of such a content is a “dialectical” rather than a disjunctive or reductive one. Meaningful action requires a proper recognition by others, but that condition cannot be directly sought or demanded. An artist whose first goal is to produce what a commercial or critical audience wants would not be genuinely producing “her” work, any more than one with no concern for the intelligibility and impact of her work on others.

The larger point is that this requirement that one’s self-understanding be reflected in the social world—in the way one is seen and treated by others—is not primarily a psychological need (for reassurance, say) but is rather an acknowledgement that the social world is always already implicated in the formation and experience of my deeds as “mine”; deeds I can render intelligible and justifiable both to myself and to others; that is, as freely undertaken. This is the basis of Hegel’s larger worries about a capitalist economy, and of course it has a lot of resonances in what Marx inherited from Hegel, especially the early Marx, for whom the realization of the human species-being and solidarity with fellow workers were so important. (It also underlies a Hegelian principle that is often not well understood: that no one individual can be said to be free unless all are.)

But for Hegel the social world is not only other individuals; it is also our political and legal institutions. Objective freedom depends on institutional components that are all subject to the same standard: arrangements like property, contract, norms that take account of subjective intentions in assigning responsibility (or “morality”), the bourgeois family, a modern market economy regulated by what he calls “the police” and the administration of justice, the harsh effects of which are moderated by group identities in guild and craft groups he calls “corporations,” and a basically republican state. Being free, achieving one’s freedom, requires participation with others in all such institutions.

That understanding of freedom sets the context for how Hegel approaches the problem of the ethical sufficiency of such a way of life. We should note first that Hegel considers modern bourgeois society to be the product of the coordinated and conflicting attempts at the satisfaction of the individual desires of distinct, unique individuals. This is an element of modern social life that Hegel regards as indispensable, and it is largely why Hegel regards the sale of skilled labor power (under the right conditions and constraints) and such things as property ownership, capital formation and investment as indispensable in modernity. It is necessary for the objective realization of one dimension of a free life, concrete individuality and so the vast differences among individuals.

But civil society is also educative, according to Hegel. Here the great influence of the Scottish economists—Smith, Ferguson and Steuart—is the clearest: his reading of them convinced him that modern economic life was not necessarily deracinating and merely contractual. In the attempt by particular subjects to realize their distinctive economic ends they experience a mutual dependence on others, which they come to understand not as limiting but as self-realizing for each, a beginning step in the realization of an aspect of mutual freedom as a good. This can be as simple as the realization that the opportunity costs of iterated exchanges will be much too high if some genuine level of trust is not established or that a peaceful, stable civil bond with others is necessary for any end to be achieved, or that we cannot achieve what is important to us without consideration and respect for what is important to others. And the educative results can grow into a kind of solidarity with others in a social group that comes to count as central to who I take myself to be, to my “identity.” (Nothing in Hegel requires that such an identity be monolithic or exclusive. One can have several and within each there can be wide variations: the key point is the experience and acknowledgment of dependence.) The experience of such dependence among participants amounts to Hegel’s case for the partial and circumscribed rationality of civil society and so the (real but incomplete) ethical significance of the modern economy.

As Hegel puts it, the commonality at issue is “the quality of being recognized … the moment which makes isolated and abstract needs, means, and modes of satisfaction into concrete, i.e. social ones.” We should note again that by recognition in this context, Hegel does not mean merely social validation, but that this experience of dependence on others begins to play a role in the formation and continuity of my own self-understanding. Here Hegel points out that considered apart from political life, the form of economic codependence experienced in capitalism is still a limited conception of the stake we have in each other, and so still, in civil society, more a “commonality” of interests then a genuine “universal.” But, quite surprisingly, he goes well beyond that in his accounts of the negative and potentially unethical aspects of such a life in a modern economy.

He is not sanguine, for example, about the effects of the system of factory labor. In his Lectures on Natural Right and Political Science, he writes about how “factory workers become deadened (stumpf) and tied to their factory and dependent on it, since with this single aptitude they cannot earn a living anywhere else.” The problem is not just that factory workers are not properly compensated or that they do not have enough free time; it is how the experience of factory work degrades their self-worth and dignity. Hegel writes of the “sad picture” of the “deadening (Abstumpfung) of human beings,” evident in the fact that “on Sundays factory workers lose no time in spending and squandering their entire weekly wages.”

Hegel was well aware of the economic incentives for the owners of capital to simplify and mechanize labor in ways that drastically alter the pride one takes in one’s own standing and so one’s honor. Accordingly, it would be a mistake according to Hegel to be concerned exclusively with alleviating material inequality, however important that also is, or to locate the main problem in the ownership of capital. However ownership comes to be configured in a society, however progressive and redistributionist a tax scheme is, institutional arrangements in which participants come to regard their contribution to a common good as the “principle of self-interest rightly understood,” in Tocqueville’s famous phrase, will not produce the social bond and experience of equal standing necessary for a free society. Higher wages alone will remain subject to Marx’s “higher wages for the slave” objection; and equal voting rights alone will call to mind Marcuse’s complaint that the fact that we all elect our masters does not make them any less masters. “On the one hand,” Hegel writes, “as the association of human beings through their needs is universalized, and with it the ways in which means of satisfying these needs are devised and made available, the accumulation of wealth increases … But on the other hand, the specialization and limitation of particular work also increase, as do likewise the dependence and want of the class which is tied to such work; this in turn leads to an inability to feel and enjoy the wider freedoms, and particularly the spiritual advantages, of civil society.”

These aspects of a manufacturing economy, the deadening effects of factory routine and the increasing simplification and de-skilling of the labor process, are obviously serious problems for a systematic account so focused on the social bases of the respect or recognition as essential to the justice of civil society. And these trajectories do not seem to be incidental aspects of a capitalist economy. Competitiveness makes them inevitable, and one begins to worry whether the deprivations and pathologies produced will be so severe that they make completely implausible Hegel’s idea that one’s role in a corporation or as a citizen can do much to “re-establish” that dignity and sense of worth.

Hegel most famously presses this point with regard to the inevitability of poverty, but he also, again mostly in his lectures, has a number of things to say about the inevitable accumulation of great wealth and its effect on the wealthy. The premise for both accounts is that meaningful labor is essential in any society of actualized freedom. This is again part of his schema, that a particular subject must work to liberate himself from natural necessity, master abstract ideas and relations, experience his subjective freedom externalized in an objective product of and so expressive of his distinctive talents and labor, and, especially, come to understand the nature of his dependence on others that the division of labor requires. This educative benefit does not happen through exchange alone, but through work and through the positive, educative experience of a vital dependence on others and their need for one’s skill. The wealthy, however, or many of them, either do not work, or do not need to work and so do not have the same stake in the outcome of their labor; they live off their wealth and for Hegel are severely spiritually impoverished because of this. Often they become mere “consumers,” an activity without ethical standing, which cannot inspire and is not worthy of respect from others.

So for Hegel an economy and social system in which everyone rests their standing on the capacity to consume would obviously count as an ethical catastrophe. Moreover there are social dimensions to the position of the wealthy. They will inevitably tend to “see themselves as no longer obliged to respect the rights of others” because of the obvious inequality in social standing between them and everyone else. He goes so far as to say that “one can also call it a depravity (Verdorbenheit), that the rich person thinks that everything is allowed for him.” Hegel thus anticipates the paradoxical phenomenon of ludicrously wealthy and privileged burghers who still feel constantly aggrieved about state “seizure” of their money in taxes, and who spend a great deal of money corrupting the political process to prevent such seizures, sometimes forming common cause with the equally aggrieved, disenfranchised poor. Finally, he goes so far as to claim, using the term he is famous for using about the poor, a “rabble” (Pöbel), to describe a “rich rabble” (reiche Pöbel), those who have no stake in society and its common good, either because they regard themselves as above it or excluded from it.

Since the accumulation of great wealth is inevitable in a highly competitive market economy, these would appear to be quite serious problems for capitalist economies. Equally serious are the more familiar problems associated with poverty:

When a large mass of people sinks below the level of a certain standard of living—which automatically regulates itself at the level necessary for a member of the society in question—that feeling of right, integrity [Rechtlichkeit], and honor which comes from supporting oneself by one’s own activity and work is lost. This leads to the creation of a rabble, which in turn makes it much easier for disproportionate wealth to be concentrated in a few hands.

And Hegel would never even have imagined a contemporary condition that would have appalled him—the near-feudal power wielded by managers and owners over employees: dictating dress and hair codes, surveilling every keystroke and email exchange, brutal indifference to health care and child-rearing needs, arbitrary termination, unilaterally setting inhumane work conditions.

The issue all of this raises is clear and goes to the heart of what Hegel has to tell us about the intractable and destructive effects of any economy inattentive to this problem of standing and dignity (as with a market economy like American capitalism). We recall that he argues that social and political systems that are regarded as grounded in ahistorical ideals always in fact reflect the level of self-knowledge available at a historical time. In the example of Plato and his Republic that Hegel cites in the preface to his Philosophy of Right, justice was understood as threatened by the demand for acknowledgment by the individual subject for standing and respect as a distinct individual, not merely as a fellow citizen. This was most obvious in the tension between eros, especially the love of one’s own, and justice, defined as dedication to a common good and to the rule of reason in politics. The assertion of the subject as having standing as a distinct individual was regarded as the assertion of mere inner caprice, whim, feeling and so forth, and the task of education was to sublimate such eros in favor of an organic identification with the polis. But we can now see, in Hegelian hindsight, that this demand for subjective recognition was a world-historically significant demand, a demand of reason manifest in historical time. Its emergence as a critical problem in the ancient world was a sign that that world would soon disappear under the pressure of an ever more self-conscious realization of that world’s irrationality, fully manifest finally in Christianity.

Accordingly, the question at this point is whether the diagnosed situation is like the historical situation of Plato or not. Is what Hegel has diagnosed as a form of life confronted by problems of the sort that any finite, imperfect social and political system must confront as best it can, or is it a form threatened by what are really indications of a far deeper irrationality, a threat to the realization of freedom that announces the necessity of a major historical transformation?

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Hegel, although insightfully interpreting some of capitalism’s potential for serious ethical harms (its tendency to produce among wage laborers, the chronically unemployed and even the wealthy a detachment or alienation from the only available social bases of self-respect and recognitive status; that is, the labor process), still argued that capitalism could potentially help educate its citizens in the logical or necessary relation between the independence and dependence among individuals in civil society. The key for Hegel lay in the institutions which mediated one’s standing among one’s fellow burghers. He tries to show that one’s standing in what he calls an estate (an agricultural, labor or administrative class), and, in a more mediated way, in corporations or work associations, can preserve that recognitive status even if one is wealthy or underemployed. Even though, he claims, civil society teaches one that in acting for himself, he is acting for others, this “is not enough; only in the corporation does it become a knowing and thinking part of ethical life.” He places so much faith in the deep solidarity produced by such corporations that he even argues that elections should be organized by corporations, that one should vote qua corporation member.

Beyond “estates” and “corporations,” Hegel thinks that whatever residue of ethical damage done by capitalism’s relentless need to eliminate the bases of societal respect can also be decisively mediated by the political state and one’s experience of others as fellow citizens. It must, though, be the political state, not the administrative state, which regulates civil society with its competing spheres of self-interest. He insists that there must be an arena in which citizens experience their equal standing and their stake in a common good, not just the negotiated trade-offs among individuals and group interests. A typical claim about the state proper: “The end of the corporation, which is limited and finite, has its truth in the end which is universal in and for itself and in the absolute actuality of this end.” That universal is the state.

By now it should be clear that Hegel’s response to the problems he points out within civil society is remarkably weak, remarkable given the seriousness of the problems. That is, the ethical degradations capitalism is prone to do not seem much mitigated by political life alone. Hegel seems to concede this in his descriptions of the problems, especially about poverty, and that suggests a much more radical potential transformation than is apparent on the surface of his writing. As he notes, corporations that are organized around the particular interests of different worker groups cannot be the basis of any true universal equal standing among all. Moreover, it is probable that solidarity even in such a group would be undermined by an inevitable split between those who can and those who cannot find work.

At this point, it is impossible to avoid concluding that on Hegel’s own terms, the situation he describes, despite what he hopes for the political state, is a clear echo of the situation he claims Plato was facing, an emerging irrationality that cannot be mitigated within the social and political forms available. In the case of Plato, the “new principle” emerging was what Hegel called “the right of individuality.” In the case of the basic organizing principles of a market economy, the claim is that a system of production that everywhere assumes a profit motive and the constraints of competition is, if not somehow mitigated rather than merely “compensated” for, inconsistent with what I have been calling an ethical standing that counts as the basis of mutual respect and so the experience of one’s own worth, the key elements of freedom, being who one is. Given how Hegel understands the concept of freedom, there is no way to avoid the conclusion that this form of the actualization of freedom would not “agree with its concept,” the Hegelian mark of irrationality, without a major transformation in the organization of work.

The final question this all raises is obvious. Is any resolution of this incompatibility consistent with preserving the core elements of the current form of capitalism? This would largely depend on what one regards as those core elements, or rather what they have become in the two hundred years since Hegel’s account. And “what they have become” makes Hegel’s account of possible mitigation even more implausible, suggesting the need for a more radical transformation. It is not easy to understand how Hegel could retain what he regarded as the positive socializing and educative effects of a market economy without reformist measures like worker control of the conditions of their labor, or the design of production technology that takes into account the need to ensure the dignity and social standing of workers, not to mention ending the unequal standing objectified in unequal access to health care, or parental leave and childcare. Hegel’s own account invites or even demands such speculation, and we should not hesitate to regard such demands as deeply consistent with his approach to history.

That approach is manifested in a much-quoted passage from Hegel’s Preface, which is nevertheless regularly ignored when Hegel’s book is taught as his “political philosophy”:

This lesson of the concept is necessarily also apparent from history, namely that it is only when actuality has reached maturity that the ideal appears opposite the real and reconstructs this real world, which it has grasped in its substance, in the shape of an intellectual realm. When philosophy paints its grey in grey, a shape of life has grown old, and it cannot be rejuvenated, but only recognized, by the grey in grey of philosophy; the owl of Minerva begins its flight only with the onset of dusk.

Hegel is well known as an apologist for the basic elements of the bourgeois form of life, including the market economy. But how could this passage mean anything other than that the historical world on view in his book has grown old, not mature and fully actualized, but on the verge of a kind of death, that philosophical comprehension is of no use in telling the world how it ought to be because it arrives on the scene too late and can only comprehend what is about to pass away? If the argument presented here is correct, we should expect to find just what we have found: that there is a new principle emerging, an “ideal opposite the real,” a response to a state of unfreedom that will require a transformation as decisive as the end of feudalism.

As noted before, Hegel’s position requires that in any just social and economic system, there must be the widest available social space for the expression of individual talents, psychological traits and so forth; for the possibility of the objective expression and recognition of variegated and contingent individual identities. So what is ending is not, for him, “capitalism.” Even a socialist system will require managers and workers and so could allow many of the indignities that concern Hegel, and replacing a profitability goal with a quota will not help much. Neither will some abstract sense of collective ownership. Unless the problem of mutual standing and the social bases for such respect are addressed, that problem will not be resolved but replicated. What is now not viable in Hegelian terms is a form of capitalism that works actively to suppress and distort what the requirements of labor, production and trade should have taught us: the depth of a mutual dependence that ought to be reflected in institutionalized forms of mutual respect and solidarity. What has outlived its time might well be consumer capitalism or finance capitalism or globalized capitalism, but for Hegel it is a form of capitalism, the chief marker of which is not just immiseration and material inequality, but humiliation.

Finally, as we have seen, Hegel’s approach investigates the social bonds necessary at a time for a society to generate allegiance to a regime and a social order, and so to be able to inspire sacrifices for it when required. I have been concentrating on the potential ethical harms to individuals that worried Hegel even before Fordism and a massive expansion of the productive power of capitalism would greatly exacerbate those dangers. But if Hegel is right about the harm done by inequality in the social bases of self-respect, and so the lack of standing, acknowledgment and recognition that for him are essential to a free and thus worthy life, we should certainly expect that harm to have disastrous consequences for the social bond itself. It could easily promote a culture of grievance, resentment, suspicion, paranoia and various compensatory pathologies, all the way to what are now rightly described as “deaths of despair.”

We have been experiencing for several years now the political consequences of such a culture of grievance driven by an “unleashed” globalized attempt at the maximization of profit. For reasons we have been exploring, it would also be a great mistake to think of all of this as remediable by greater income equality alone (however important that is) or the “return” of supposedly wonderful and fulfilling “factory jobs,” or some supposed liberation from work itself. Without a greatly reformed economic system in which men and women can come to feel respected for meaningful work, we should also expect that it will be hard to persuade anyone of the value of sacrificing much of anything for the sake of a social whole they do not experience themselves as a real part of. Appealing only to self-interest and the interests of loved ones has always been an argument with very little appeal to those who are willing to “take their chances,” and it implicitly concedes there is no basis in our social world for a wider appeal. In that case, we could expect there to be dangerous and widespread noncompliance, and thoughtless impatience from populist political leaders whose rise was fueled by such resentment, should there ever be a need to ask for sacrifices, for example, like lockdowns and quarantines in the case of a global pandemic.

Art credits: Matthew Monahan, “The Moon Ladder,” 2018 (Resin coated polyurethane foam, paint, silk screened paper, glass, powder coated aluminum and stainless steel, 97 x 31 x 38 inches); Matthew Monahan, “Chamber Quartet (Vexation),” 2018 (Resin coated polyurethane foam, paint, silk screened paper, powder coated aluminum and stainless steel, 84 x 45 x 45 inches)