The Great Gatsby, written by the novelist F. Scott Fitzgerald in 1925 might be quintessential American individualism. It describes a handsome, American capitalist exercising free will in the competitive market. Fitzgerald’s novel depicts an excessive accumulation of wealth and consumption, surrounded by people and everything else imaginable. One may argue that the novel enumerates the capitalist’s consciousness of class distinction. Fitzgerald’s novel locates us in the appropriate context of class emulation and excessive consumption during the Roaring Twenties as we contemplate success and failure in free-market capitalism.
In this essay, we locate free-market competition in an imaginary criticism of capitalism juxtaposed with the centralized authority of market planning socialism and ask, why do wealthy individuals effectively coordinate direct control over a free market economy?
If we assume that Fitzgerald’s depiction of capitalism is relevant, then we may also consider the heightened relevance of two great authors and social philosophers to answer this question. Critiquing capitalism and socialism in their respective literary works, The Leisure Class and The Road to Serfdom, Thorstein Veblen and Frederick Hayek theoretically position my argument that accumulated wealth in free market capitalism acts like a central planning authority resulting in despotism that serves an elite class of family wealth advisors.
My argument begins with the following assumptions and theories:
1.) Hayek’s theories surrounding individual actions in the market preserve freedom and under a capitalist system, are essential for free market competition to function efficiently.
2.) Relative to the differences between socialism and capitalism, the dichotomy of conscious and subconscious market behavior.
3.) Veblen’s behavioral theories of conspicuous consumption/production and vicarious leisure, distinguishable from the leisure class proper (43) as well as the invidious distinction between classes and employment (10).
My main point is that Hayek believes central planning may only occur under a socialist economic system suggesting that free-market individualism is the best antecedent to absolute control. In the Road to Serfdom, he writes that only in socialism is an entrepreneur replaced by government. Believing that the free spirit of individualism is necessary for free-market competition to increase economic activity, Hayek condemns all decisions made by a central authority. This leads me to believe that only in capitalism is government central planning replaced by the entrepreneur.
If Hayek condemns the conscious planning of market activity in a socialist economy, then he must be suggesting that subconscious market behavior is essential for a capitalist economy.
As we consider Veblen’s theory of conspicuous consumption, we see that Hayek’s notions of consciousness are counter intuitive to my argument which is that subconscious market behavior under capitalism leads to central planning. According to Hayek, free market competition loses its autonomy when it begins to plan for other spheres of market behavior(60). Consider how conspicuous consumption triggers vicarious as it subconsciously directs and controls market behavior of the outlying market participants. In fact, conspicuous consumption can dominate over the outlying market by means of human character and invidious comparison(27). Veblen’s theorizations help us understand the spontaneity of wanting something and why emulating wealthy individuals demonstrates their power over those who cannot win wealth in the competitive marketplace.
My argument, therefore, proves that central planning may occur under a capitalist economic system when accumulated wealth directs power over other spheres in market. Hayek’s idea of free-market competition is not freedom. Instead, it is a long road to socialized capitalism. My argument explains how wealthy capitalists can become socialized by means of membership with a particular group of capitalists i.e., a centralized group of winners. This matters because free markets in capitalist systems operate without mechanisms that regulate subconscious behavior. When wealth accumulation gets out of control and social-economic behaviors serve as an impetus for market failure, then a free competitive market is not working.
As we return to the earliest half of the 20th century, we see Fitzgerald’s The Great Gatsby’s conspicuous consumption as free market central planning under capitalism. We understand how conspicuous consumption diverts resources away from consumption that would otherwise serve a greater purpose for society. And so, if we consider that leisure consumption as the exploitation of resources, with ownership that has no use except to its owner, we may wish to ask, “How can we prevent a capitalist society from following a road to despotism?”
