Many of them fail to understand the nature of free-market capitalism as an economic order that emerges and grows spontaneously. Unlike socialism, it isn’t a school of thought imposed on reality, but largely evolves, growing from the bottom up rather than decreed from above.
Once we’ve grasped this essential difference, the reasons why many intellectuals have a greater affinity for socialism – in whatever form – suddenly become obvious. After all, devising mental constructs and using their linguistic skills to shape and communicate them, is what intellectuals do for a living. Since their own livelihood depends on their ability to think and communicate ideas that are rational and coherent, they feel more in tune with an artificially planned and constructed economic order than with one that allows for unplanned, spontaneous development. The notion that economies work better without active intervention and planning is alien to many intellectuals.
A competition between elites
In order to understand why so many intellectuals hold anti-capitalist views, it is important to realise that they are an elite, or at any rate a community of practice that defines itself as such. Their anti-capitalism is nurtured by their resentment of and opposition to the business elite. In this sense, the rivalry between the two groups is simply that – a competition between different elites vying for status in contemporary society. If a higher level of education doesn’t automatically guarantee higher incomes and more privileged positions, then the markets that allow this imbalance to happen are seen as unfair from the intellectuals’ perspective. Living in a competitive system that consistently awards the top “economic prizes” to others, a system where even the owners of medium-sized businesses achieve higher incomes and wealth than a typical tenured professor, leads intellectuals to adopt a general scepticism towards an economic order based on competition.
The disdain expressed in this assertion compellingly demonstrates the extent to which intellectuals tend to set their own value standards as absolutes. People are to be judged by their level of education and cultural capital. Accordingly, how deeply unfair is it that someone with little formal education and no interest in high culture should amass a great fortune, while well-educated and well-read academics have to make do with comparatively little? It is hardly surprising that the world seems upside down to such intellectuals. After all, they derive their own sense of superiority from being better educated, more knowledgeable and better able to express themselves.
Overstating the value of book knowledge
Understandably, intellectuals tend to equate knowledge acquisition with academic education and book learning. Educational psychology uses the term “explicit knowledge” to refer to this type of knowledge, which is acquired by means of “explicit learning”. However, there is a different kind of knowledge acquired by “implicit learning”, which is far more primordial and often more powerful, although many intellectuals are unaware of its existence. Since this is the route to knowledge acquisition taken by the majority of entrepreneurs, it’s important to understand the differences between the two forms of learning and knowledge.
Hayek, who first introduced the concept of implicit learning, uses the example of small children who are able to apply the rules of grammar and idiomatic language without consciously knowing them: “The child who speaks grammatically without knowing the rules of grammar not only understands all the shades of meaning expressed by others through following the rules of grammar, but may also be able to correct a grammatical mistake in the speech of others”. Similarly, the skills of a craftsperson or athlete – which involve knowing-how rather than knowing-what – are acquired implicitly rather than explicitly: “It is characteristic of these skills that we are usually not able to state explicitly (discursively) the manner of acting which is involved”.
The term “tacit knowledge” was reintroduced by the Hungarian-born British philosopher Michael Polanyi, who coined the much-quoted phrase “we can know more than we can tell” in his book The Tacit Dimension (1966). For Polanyi, this represents a central problem of communication: “Our message had left something behind that we could not tell, and its reception must rely on it that the person addressed will discover that which we have not been able to communicate”. Polanyi clarifies the difference between implicit and explicit knowledge – between skill on the one hand and theoretical knowledge on the other: “The skill of a driver cannot be replaced by a thorough schooling in the theory of the motorcar; the knowledge I have of my own body differs altogether from the knowledge of its physiology; and the rules of rhyming and prosody do not tell me what a poem told me, without any knowledge of its rules”.
In other words, learning is not necessarily the result of the conscious and systematic acquisition of knowledge, but often the result of unconscious processes. In an experiment, test subjects assumed the role of a factory manager in a computer simulation. They were tasked with maintaining a specific volume of sugar production by making adjustments to factory staffing levels. The system’s underlying functional equation was not revealed to the test subjects. During the learning phase, they didn’t know that they would subsequently be required to take a knowledge test. The test showed that the test subjects were able to regulate production in the sugar factor without being able to explain exactly how they did so.
Formal education only plays a secondary role in the development of entrepreneurial skills. Entrepreneurial success is determined by factors other than academic qualifications. Key among these are sales skills, which, although rarely taught at academic institutions, respondents considered an essential prerequisite for their successful careers as entrepreneurs or investors.
Implicit learning differs from explicit learning in that outcomes are difficult or impossible to demonstrate in the form of certificates or academic qualifications. By an intellectual’s standards, an entrepreneur who may not have read a lot of books or shown much promise at college or university has nothing to show for himself that would compare to a doctorate or a list of publications.
Deeply disappointed with the market economy
Intellectuals are unable to understand why a college dropout with an “inferior intellect”, who has only read a fraction of what they’ve read, should end up making a lot more money, living in a much bigger house and driving a far better car. They feel offended in their sense of what is “fair” and thus vindicated in their belief that the market economy has “malfunctioned”, and that this anomaly needs to be “corrected” by means of redistribution on a massive scale. By divesting the rich of some of their “undeserved wealth”, intellectuals console themselves with the fact that, even if they can’t abolish the system altogether, they can at least “correct” it to some extent.
In a 1998 essay, the libertarian philosopher Robert Nozick tackles the question: “why do intellectuals oppose capitalism?” His explanation is based on the assumption that intellectuals feel superior to other members of society. Ever since the days of Plato and Aristotle, intellectuals have been telling us that their contribution to society is more valuable than that of any other group. Where, Nozick asks, does this sense of entitlement come from?
His answer: it starts at school, where intellectual brilliance is rewarded with praise and good grades. By the time “verbally bright children” graduate from formal education, they have been inculcated with a sense of their greater value in comparison to their less intellectually gifted peers, which then leads them to expect society at large to operate according to the same norms. The subsequent realisation that the market economy doesn’t hold their particular skills in the same regard leads to feelings of frustration and resentment that fuel hostility to the capitalist system as such.
I would argue that the seeds of these beliefs are planted even earlier. Intellectuals are more likely to grow up in a middle-class milieu where a lot of emphasis is placed on education, with parents or other relatives who are academics, than in working-class or entrepreneurial families. From early childhood onwards, the message drummed into them is that education, book learning, and social and/or political engagement are far worthier goals than striving for material riches. The education system, which Nozick holds responsible for instilling these values, emphatically reinforces them, confirming what the child has already learned at home: book learning, verbal skills and intellectual brilliance will earn the highest accolades.
In the world they encounter once outside their universities, intellectuals are deeply disappointed to discover that other skills are more highly prized than their exceptional book knowledge and ability to write with an academic flourish. And when the market decides that there is nothing wrong in someone with an incredible university education and extraordinary book knowledge earning far less than a potentially less well-read entrepreneur, intellectuals have all the justification they need to conclude that an economy based on market principles is nothing short of repugnant and “unjust”.