ALL forms of capitalism are bad

[dropcap]Liberal and progressive[/dropcap] activists are trying to tweak our economic system with reforms, to make capitalism fair, humane, and sustainable. In their constant battle against “unfettered capitalism” or “predatory capitalism” or “corporate capitalism,” they believe they are struggling toward some other sort of capitalism, a healthy and enlightened capitalism, which surely must be just past the horizon. Their intentions are good, but that’s not enough. Their efforts are wasted, because their maps are wrong; that fabled land of healthy capitalism does not exist. Bourgeois democracy cannot function as advertised, because the ideas in its advertisement actually contradict each other.

NO form of capitalism can be fair, humane, or sustainable, and so we need to endcapitalism. To see that, we need better maps. I’ll have to speak in abstract terms, about some fundamental principles shared by all forms of capitalism. The ideas that I’ll present are few and simple, but nevertheless they may be difficult to understand, because they are entirely contrary to the myths we’ve been taught by the news media.

The problem is broader than capitalism. It is the institution of private property, which began 10,000 years ago. But for 200,000 years before that we shared everything of importance, and that’s still our basic nature. To get back to it, we just need to dispel modern myths about economics.

First, we’ve been told that capitalism is freedom and democracy. But the opposite is true. Privately owned workplaces are little dictatorships, and few of us have any alternative but to work in one of them. In contrast, sharing does not require dictatorship; that has been demonstrated by the Zapatistas, the civil war Catalans, and the early Christians.

We’re told that the market is efficient, but in truth it is extremely inefficient. It can only be efficient concerning costs that are measured. A market price is negotiated by a buyer and a seller, but they do not consult any third party who might also be affected, who might have to bear some of the resulting costs. Those are called externalized costs, or externalities, because they are outside the measurements and computations considered in the negotiation. They are commonplace – – for instance, during the Wall Street crash of 2008, traders often reassured each other with “IBGYBG,” which stood for “I’ll be gone, you’ll be gone,” meaning that some third party would be left holding the bag of shit. Mainstream textbooks on economics gloss over externalities, as though they were something minor, but in fact they are enormous: War, poverty, and ecocide are externalities, and ecocide will cause the extinction of our species if it continues much longer. A whale is worth more money dead than alive; that’s why the whales are dying; that’s why everything is dying.

We’ve been told that capitalism is progress, but the opposite is true. Our basic scientific breakthroughs come from government-sponsored labs in universities or in the military, which are run as though under socialism: Researchers’ pay is based on hours worked, not on how much profit their inventions may bring. We’ve been told that money and competition are good motivators for creativity, but sociological experiments have proven just the opposite to be true; money and competition are extrinsic motivations that displace intrinsic ones and thereby destroy creativity.

Progress improves efficiency; that is true under any economic system. Automation is inevitable, and that would be a good thing if we all shared its benefits. But in our present system, that just brings wealth to the few people who own the workplaces and the robots; for the rest of us it means layoffs, not leisure.

The exploitation of our labor is a special case of a more general phenomenon, the exploitation of all commerce. We’re told that capitalism means opportunity for everyone, but just the opposite is true. Market transactions favor the party who is in the better bargaining position, and so they increase economic inequality. They concentrate wealth and power in the hands of just a few people, who come to control everything – – the government, the workplaces, the news media. They even control the market, and so any “free” market won’t stay that way for long. Economic inequality in the USA today is far, far greater than most people realize. The middle class is shrinking, and homelessness is increasing. This is not due to cheating or “corruption,” but rather due to the basic principles of the system. That is evident when we look at the same forces at work, in simplified form, in the board game Monopoly. That game always ends with all the players but one totally impoverished, even if no one cheats.

The powerful have told us all about noblesse oblige, about how they feel a duty to the less fortunate, but just the opposite is true. We live in a plutocracy, not a democracy. A recent study by some Princeton scholars showed that public policy always reflects the wishes of the very rich; it reflects the wishes of workers only in those cases when they happen to be in agreement with the very rich. One exception was the New Deal, a concession to workers which Franklin Roosevelt passed in order to save capitalism from revolution and avoid much larger concessions; the New Deal was unraveled over the next few decades.

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[Credit: desiderius_papp, flickr]

But our economic system doesn’t just cause psychological damage to the powerful. It damages the rest of us too, though the damage is so commonplace that we don’t notice it. Separate property means separate lives – – you keep your stuff in your house, and I keep my stuff in my house – – and God help the homeless, for no one else will. This teaches us that I don’t need to care about your well being; apathy becomes the norm; our economic system is based on not caring about others. We blame the unfortunate for their bad luck, because that is easier than facing the fact that we might be next, that the world is unfair and that we don’t know how to make it fair. But this means we must harden our hearts toward those who are less fortunate, and we end up applying the same standards to ourselves: We have no value except monetary value, and so none of us is able to feel truly loved or loving. We are medically damaged by the stress we feel over not having control over our lives. To gain some feeling of control, some of us take our frustrations out on others; this is a cause of domestic violence. Meanwhile, modern technology makes weapons ever more readily available; it is no wonder that random public shootings have become commonplace. The only thing that can make us safe is a culture in which everyone cares about everyone else, no one gets left behind, and no one wants to hurt anyone else. But what we have, for now, is apathy.

The ruling class has been driven mad by the market. Perhaps the clearest proof of this was a few years ago, when the Arctic began melting rapidly. That should have been a wake-up call: We need to phase out fossil fuels quickly, before global warming kills us all. But instead the ruling class said, “oh, goody, now it will be so much easier to extract fossil fuels from the Arctic!”

It’s not entirely the fault of the ruling class. They don’t have much choice in this. The market compels them to compete against each other in offering short-term profits to investors, disregarding any consequences. Any big player who disobeys the market quickly loses the competition, and is replaced by some other big player. And if we somehow locked up all the plutocrats, but continued with private property, within a short time we’d have a new batch of plutocrats. What we need to overthrow is not just the big players, but the whole idea of trade. We need to learn to share everything – – admittedly, an enormous change in our way of life, but the alternative soon will be no life at all.

Our greatest dangers are that the revolution will come too late (after the ecosystem has collapsed) or too soon (before people have understood what enormous changes are really needed). So we need to get more people talking about these things, right now. Join the conversation.

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ABOUT THE AUTHOR
ERIC SCHECHTER, a former professor of mathematics with Vanderbilt University, is a senior contributing editor to The Greanville Post and activist for genuine democracy in the Nashville (Tenn.) area. 

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