“The basic weakness of the capitalist system, the problem of how to prevent management and powerful interest groups more generally from enriching themselves at everyone else’s expense, has escalated to the point where the capitalist system itself is now in a major legitimation crisis . . . These interest groups have also taken over the state itself to a very significant extent, in the process turning modern capitalism into an ugly and corrupt system of crony capitalism that cannot be defended”
– Kevin Dowd, Martin Hutchinson (Alchemists of Loss)
Not to spoil the ending, but no capitalism will not survive this century. The threat of Bernie Sanders winning the Democrat nomination has the Townhall and New Republic crowd clutching their pearls and gasping. I see eager defenses of capitalism, from boomers and whatever minimum-wage interns Bill Kristol and Win McCormack get to ghost write for them. Get into a discussion with anyone about capitalism and it instantly devolves into a litany of excuses about this mythical ‘real capitalism’ and using the fig leaf of the free market to obfuscate the results of this failed economic system. If you manage to keep your bile down long enough, the inevitable coup de grace is the false dichotomy made that the only choices which exist are that between Moscow circa 1920 and some Utopia achieved only through capitalism. So why is capitalism slowly dying?
First of all capitalism has a facile and effete view of mankind. Capitalism is not amoral. Its snake-oil salesman will make much that it is an economic system only, able to be neatly separated from government and social life. However, capitalism’s view of man is that of a sociopath. The single guiding light of the ideology is the accumulation of wealth, regardless of the human, environmental, political and social cost. The real danger of this is not that it turns men into sociopaths, but that it self-selects them to the most influential positions of power. Men without a moral compass have always existed and will continue, but capitalism neatly places them in the levers of power. Men are not economic units. Men are not solely driven by the accumulation of green paper portraits of dead presidents. The underlying structure of a civilization and culture are not how many trinkets you can buy. Capitalism grossly misunderstands all but the worst of humanity.
Another issue with capitalism is that it is transitory in nature2. The ridiculous position that we somehow need to travel back in time to some era 50, 100 or 200 years ago and three industrial revolutions ago is absurd. One may as well be talking about stopping time or keeping a child forever so. I deal in observable facts, not some Peter Pan fantasy about economic Neverland. Strangely, the defenders of capitalism never address Marx’s lengthy discussion about it in Das Kapital. If you cannot cogently articulate his positions, and at the very least have a working understanding of Keynes, Hayek and Smith (meaning you have read them), then you have no opinion on capitalism or any other economic theory. You have bumper sticker slogans and regurgitated propaganda, not opinions. Marx clearly states, as does Stalin, and Engels that whether revolutionary communism or Fabian socialism, capitalism is a necessary state to usher in socialism1. Capitalism has an expiration date because at its maturity so many contradictions in the market and disparities in wealth exist that they make revolution inevitable. Industry 4.0 will make large swaths of the population superfluous, while psychopaths like of Zuckerberg, Brin, Walton and Bezos have operating budgets that rival first world countries. This is the natural end of capitalism, monopolies in nearly every industry, controlling the market through limiting access to capital, expertise, infrastructure and technology. It is a farce that capital flows by some magic hand unimpeded, independent of everything but the wants of the consumer. To seriously suggests that makes one either entirely unfamiliar with capitalism, the mutterings of an hourly wage earner on the rumored minutes of the boardroom, or a propagandist. Capitalism is anything but free and the consumer is but one of a plethora of considerations in the marketplace. I know this personally. Economic and possibly physical revolution is inevitable because people will tire of the economic slavery imposed on them for a billionaire to increase share prices 1.4% or the Q3 earnings by .89%.
Another oft-misunderstood facet of capitalism is that it is utterly at odds with free trade. Free trade is the exchange of goods between individuals and deals with the movement of tangible or intellectual property in the marketplace. Capitalism was the response of the landed gentry in the UK to the dying of mercantilism through division of labor. Capitalism is concerned with the accumulation, preservation and control of capital. To be sure the advent of capitalism led to a fall of peerage in its traditional sense of birthright and land, yet it gave rise to an identical class of people with no sense of fiduciary duty to family, country and their subordinates. Capitalism is a jealous god that demands allegiance to what made you part of the noveau riche ruling class, capital. Thus capitalism has little to do with free trade and everything to do with disrupting and controlling the marketplace to maintain and increase the inflow of capital to the…capitalist.
The brilliance of Wealth of Nations is that Smith spends the entire book describing man as a homo economus3, completely self-interested with utterly no regard for anyone other than himself, and never discusses the most obvious conclusion from that. What happens when homo economus congeals into a class with identity and now wield access to the market and power with fewer constraints than the House of Lords or Senate every had? What happens when homo economus bends the law to his will through the weight of capital? America exacerbated this issue, the successful revolution of the minor land barons against George III provided a chance for there to be a cultural tabula rasa in the colonies. The rise of the capitalist’s took deep root in the Northeast, but a second war was necessary to crush the informal nobility of the antebellum South. There is a reason why the industrial hellholes during the era of Carnegie and Rockefeller were not in Atlanta or Richmond. Rather than class being determined entirely by wealth, it was more hereditary, agricultural and land-based, making the class structure more stable. Even after the Reconstruction the unique zeitgeist of the southern states and lack of disruptive immigration resulted in a large part of their culture being retained.
Lastly, capitalism is utterly incompatible with Western values and exerts a corrosive effect on any representative form of government. While I disagree vehemently with republicanism, and view democracy as unfettered evil, I still smirk when the defenders of capitalism view it as inextricably intertwined with either of them. Capitalism is a cancer that eventually unseats whatever government it is allowed to flourish in, particularly rapid within a form of government wherein votes can be purchased. The existence of K street illustrates the fact that capitalism not only admires and encourages, but rewards those capable of maintaining a market advantage through legal and legislative corruption. Who went to jail in 2008 for misuse of company funds? Where were the trials for those leveraging money 100:1 on tranches with inaccurate data that cost you trillions of dollars and nearly wrecked the world economy? There was one, a junior-level exec as a peace offering. Why did both the Republicans and Democrats choose an avowed enemy to subjugate out entire manufacturing base to? China is on the verge of turning your country into economic chaos because of a guy who ate a bat. Employers you voted for and companies you work for and buy from did that. Not Bernie Sanders, men and women you know. One decision at a time…one quarterly earnings report at a time. People have been evicted from their homes and their lives turned upside down because of a profit margin. Now people are going to die. Why? Because of some damn money and a few more dollars for someone who could live 50 lifetimes and not run out of money. Defend capitalism if you want, but be honest about what it is and what it has cost us. The current iteration is the end state of capitalism, the distillation of it to its purest form, not crony, or phony or whatever word du jure is in vogue. It is the facts you, and I are experiencing.
Is money really a reason for living? That is the pinnacle of civilization? Do you seriously want to live like this? The resounding answer from the Millennials and Gen X is thankfully no. While Communism is making a return, one can hope the right can actually make a cogent argument for a complete sea change rather than wishful thinking about bygone eras. The right must address the future and stop fetishizing the past. One of the ways that can be done is addressing the economic tyranny happening in the US, and not making excuses for it. Bernie Sanders is a symptom of capitalism and the bumper sticker slogans by economic illiterates, on the right. The 21st century will not belong to the Martin Shkreli’s or the Bernie Sanders’.
- “…in the structure of capitalist society in the past hundred years – the development of democracy and the development of the welfare state- were largely due to the growing strength of organised labour. These developments are not a product of the flexibility of capitalism or the autonomy of the state nor are they merely products of the new needs of capitalism associated with the development of the monopoly stage of capitalism. They are pro- ducts of working-class struggle to transform capitalism and as such they represent steps towards socialism.” – John D. Stephens, Marx’s Theory of the Transition from Capitalism to Socialism 2 (1st 1979).
- “Capitalist distribution differs from those forms of distribution which arise from other modes of production, and every form of distribution disappears with the specific form of production from which it is descended and to which it corresponds. The view which regards only distribution relations as historical, but not production relations, is, on the one hand, solely the view of the initial, but still handicapped, criticism of bourgeois economy. On the other hand, it rests on the confusion and identification of the process of social production with the simple labour-process, such as might even be performed by an abnormally isolated human being without any social assistance. To the extent that the labour-process is solely a process between man and Nature, its simple elements remain common to all social forms of development. But each specific historical form of this process further develops its material foundations and social forms. Whenever a certain stage of maturity has been reached, the specific historical form is discarded and makes way for a higher one. The moment of arrival of such a crisis is disclosed by the depth and breadth attained by the contradictions and antagonisms between the distribution relations, and thus the specific historical form of their corresponding production relations, on the one hand, and the productive forces, the production powers and the development of their agencies, on the other hand. A conflict then ensues between the material development of production and its social form.” – Karl Marx et al. Das Kapital (631-32 1st 1894).
- “the imaginary perfectly self-interested human being,” whose “sole purpose in life is to maximize utility. He never stops calculating costs and benefits . . . The results dictate his next choice in life. This patter repeats itself every day from maturity until death, and in every aspect of life.” – Father Robert A. Sirico. Defending the Free Market: The Moral Case for a Free Economy (1st 2012).