A Critique of Capitalism
Capitalism sucks. But why?
a (video) essay by Charles-Olivier Rivard
The world we currently live in is dominated by a ‘social’ and economic system based on ‘competitive’ markets, private ownership of the means of production, and wage-labor. Capitalism. We keep getting told by its proponents that this system of so-called free markets breeds freedom, innovation, happiness, democracy and efficient allocation of resources, right as we observe incredible surges in wealth inequality and poverty, as well as a seemingly unsolvable and rapidly incoming climate crisis. Some even go as far as to argue that state intervention is the root cause of those problems, and that a laissez-faire, neoliberal economy would be much better for everyone. An ‘invisible hand’ guiding the markets. However, many are the reasons for which Capitalism is a horrible economic system, so let’s take some time to actually critique it.
TABLE OF CONTENTS
POWER AND MARKET DOMINATION 13
UNEMPLOYMENT, INEQUALITY AND CYCLES 14
MONOPOLIES AND PRIVATE PROPERTY 19
QUALITY OF PRODUCTS
The first problem that arises with Capitalism is the poor quality of products related to profit maximization. The main motive of all production is profit. A capitalist produces in order to sell products, making a profit and keeping the difference. Corporations seek to satisfy the demands of the market, all the while minimizing their expenses, neglecting many factors that could improve the quality and lifespan of their products. Take for example the case of planned obsolescence with Apple. A problem arises where they make their product too good, of too high quality for consumers to switch to a new one every year, so they rely on software that hogs older devices, and build them with worse-quality parts to shorten the lifespan of their products.
The same thing happened to the lightbulb industry with the Phoebus cartel. Firms were producing lightbulbs of high quality that lasted way too long, meaning they had to reduce the lifespan of their products to maintain their rate of profit and competition. Producing extremely long lasting light bulbs was completely possible, but multiple firms stepped in and formed a cartel to prevent that from being realized. It’s simple: if a firm started manufacturing high-quality light bulbs with quasi-eternal lifespans, such as Thomas Edison’s eternal light bulb, the consumer base would completely or almost vanish after a few years, leaving no place for any firm in the market.
Reducing expenditure and keeping an incoming flow of consumers does not lay the grounds for satisfying said consumers with high quality, lasting products, except for a few rare occurrences depending on the firm’s business model.
Then, even when product quality isn’t the cause of the issue, in the event of a firm gaining a monopoly, it is quite likely to bring down the quality of their products to the bare minimum necessary to still ‘satisfy’ their consumers, while increasing the price of their products. It is to note that even though the state usually intervenes and regulates monopolies to mitigate their consequences, they still occur quite a lot as they are natural to market competition, and therefore capitalism.
INNOVATION
Furthermore, innovation is not something that is inherent to Capitalism, and even less strived for; A common argument from Capitalists against socialist ideas is that they don’t push for innovation. This is quite hypocritical, considering today’s fear of automation and how under capitalism it’s seen as a threat to employment and the well-being of society as a whole. In a capitalist mode of production, people need jobs in order to survive and fulfill their basic needs. Therefore, automation is detrimental to society, by augmenting unemployment rates. Automation devalues manual labour. In a capitalist society, unemployed people barely get any support from society, so they would necessarily try to hold back change in the labour process for the sake of living and earning a liveable wage.
Giving the ownership of the means of production to the workers would naturally make for more innovation, since the incentive to work would not be purely for profit, rather for actual innovation and social progress.
To think that the only way to progress is to allow people to monetize their ideas through market capitalism is laughable. It's not the case at all. Capitalism only monetizes ideas that seem profitable, and innovates in fields that do not hurt current interests. Even if an idea can be revolutionary and life-saving, it might not gain anything in the capitalist markets if the result is not profit. Any idea that threatens the market share of corporations who are currently profitable is seen as counterproductive and is prevented at any cost.
This means only a small percentage of ideas are developed. Any revolutionary idea that innovates in a field, while threatening a corporation’s monopoly, is seen as hazardous and will automatically be opposed. This is currently observable with cheaper renewable energy, medical treatment and agriculture. Under capitalism, innovation only serves the interest of the ruling class. Capitalism does not breed innovation.
But these criticisms are limited, as competitive markets bring innovation a lot of the time. Even Marx and Engels spoke very favourably of its competitive nature regarding innovation. Regarding that topic, Capitalism and Socialism are not that far apart and stimulate similar amounts of innovation. The difference is in what innovation is made. Is it a government-funded research project that ends up in the discovery of a cure for a lethal disease, or is it another 200 recipes that marginally improve the flavor of pop soda?
Technology, innovation, growth, and capitalism
Stable jobs or iPhones? The Dilemma of Innovation in Socialism (Very great research document on the topic)
EFFICIENCY
This section was partly inspired by videos by Second Thought and Hakim, so make sure to watch them for better comprehension. I definitely like their content, however I feel like their arguments are not detailed enough, weak or not usually supported with a lot of evidence, but this is mainly due to the nature of their channels, needing to make short content that is also entertaining. Aside from that, watching them is probably still helpful, and the link will be in the description down below.
First, the assertion that capitalism is efficient is fundamentally wrong. Let’s look at why. First of all, efficiency is defined as an effective operation as measured by a comparison of production with cost. The capitalist definition is where the original claim completely falls apart. Any basic college economics course defines efficiency as maximizing the use of our productive resources to satisfy part of unlimited consumer demand with limited resources. The smallest possible expenditure for the resources that are used should be used to maximize production and satisfy the demands of consumers. However, there are a few problems with this. First and foremost, the fact that many of those demands are not actual needs, rather wants that the market manufactures for us. Take this example: you walk in a store to buy a phone, and on your way you realize that this phone does not have a headphone jack. You, having wired headphones, you either need to buy a dongle or wireless headphones. This demand for a dongle is not actually real, it was created by a capitalist who, motivated by profit, impeded the quality of his product and offered a more expensive solution; the productive resources that have gone into producing such a dongle were wasted, and it is an evidence that this happens with a ton of other products under a market system. We cannot claim that an economic system is efficient when part of its productive resources - that need to be used to fulfill the needs of the population - are used to create problems and propose a fix to them, knowing well and clearly that this problem doesn’t have to exist in the first place.
Then, let’s talk about what the three principal characteristics of capitalism are. First and foremost, there is a common misconception that capitalism is only defined by markets; that if a system has markets, it's capitalism. That is not the case. It is rather defined by three core components. First, the frequent drive for short term profits over long term stability. Second, the rigid, irreconcilable class antagonisms between the bourgeois and the working class. And third, a devotion to imperialism, perpetual expansion and infinite consumption of resources.
Capitalism relies on the exploitation of workers, both in its home country and abroad. And this working class is entirely at the mercy of its employers. In reality, these workers, which make up quite a large part of the population, are often more excluded from capitalist markets than serfs under feudalism, because the modern worker does not own any of the goods or services they produce. The proceeds of their own labour do not go towards them or the improvement of society, rather to a greedy capitalist that sits on a pile of money, not contributing anything to society beyond tiny donations to charities. While this does not seem like a strong argument, it is important to remember that a lot of societal work is pointless. Workers work more than necessary for the capitalist to make a larger profit, and a ton of jobs are ‘bullshit’, not necessary to society. David Graeber’s book “Bullshit Jobs” illustrates this point very clearly, arguing that over half of societal work is pointless, and becomes psychologically destructive when paired with a work ethic that associates work with self-worth. Graeber describes five types of meaningless jobs, in which workers pretend their role is not as pointless or harmful as they know it to be: flunkies, goons, duct tapers, box tickers, and taskmasters. He argues that the association of labor with virtuous suffering is recent in human history, and proposes universal basic income as a potential solution. He then goes on about how the arrival of automation and constant improvement of productivity should have people working no more than 15 hours per week, as infamous economist John Meynard Keynes predicted in 1930. Unsurprisingly, the amount of bullshit jobs and constant drive for profit make it quite frequent for people to work more than 40 hours a week. It is disheartening to see, and a new system needs to be implemented where:
There is no market that creates artificial scarcity and demand for non-necessary products (or even for essential products);
resources are used efficiently, notably to fulfill the basic needs of the population;
and bullshit jobs no longer have people working themselves out until they burn out.
Now, let’s get back to the workers not having access to productive resources. Why does this matter? Because if the workers are excluded from the market system, that means only a tiny minority of people, the bourgeoisie, has access to the market. But the sale of products on the market is only half the equation. The other half is production. Similar to the sale of products by the bourgeoisie, the production of those products is also controlled by a minority who decide what is produced, how it is produced, and who it is produced for, without input from the workers.
These people who do not perform any of the actual labor dictate the terms to those who do and when the demanded products are finished, they make a profit selling them to consumers. They are more often than not only a board of directors and investors who lack knowledge about the field, only being there because of the financial gains they can pull. In this way, the capitalists have complete control of the market system, from production to sale. Okay, but that's just the creation and sale of the actual products right? Doesn't the free market still determine the final price and dictate how and what companies produce? Doesn’t a market do this more efficiently than a central state with a planned economy?
Behold, ladies and gentlemen, the misguided keyboard warriors, defenders of capitalism and their ‘basic economics’! Arguing that “the market is subject to the law of supply and demand. Companies have to produce what the market demands or they won't make a profit.”
However, this belief in a supposedly economic law is not very accurately reflected in reality, like everything else under capitalism supply and demand is manipulated by those with money and power. Let's look at one recent example where some of the biggest Amazon factories destroy millions of good products each year, to artificially decrease supply and increase demand, keeping up their profit margin. That number amounts to more than 130 thousand items per week, from laptops and smartphones to covid masks that are an essential tool to get through this pandemic.
It makes Amazon more money to dump perfectly good items as opposed to selling it at a loss or donating it to charity. Too much product availability drives prices down and it's more profitable to keep demand high by artificially limiting product availability. When there's no demand for a product on the market, companies destroy their stock to artificially inflate demand. They simply destroy excess stock and dump truckloads of non-biodegradable waste in landfills where it will remain forever, further polluting the planet for the sake of short term profits.
And this doesn’t only apply to consumer goods. Look at the food industry. During the coronavirus pandemic, American dairy farmers dumped 3.7 million gallons of milk per day and potato farmers destroyed 1.5 billion tonnes of their crop. Why? Because it wouldn't be profitable to find ways to give it all away. To their credit. Some potato farmers put out a call to have anyone come and take as many potatoes as they wanted, which is certainly better than nothing. But the fact that we have exactly zero infrastructure in place for the emergency distribution of food products is a damning indictment of the soulless for profit capitalist system. And farmers aren't even close to the worst offenders. It's not uncommon for a single Dunkin donut store to throw away five dozen donuts or more per night. Considering there are more than 9200 locations in the USA alone, the amount of wasted food seems mind bogglingly big.
Then, let's look at grocery stores. They throw away over 43 billion pounds of food every year, a lot of it not even being expired. According to a recent study by TheFood Trust, a full 50% of the discarded food is still perfectly edible when it's thrown away. This is an unconscionable practice when over 23 million Americans are food insecure.
During the pandemic, we saw armed guards blocking people from retrieving food from dumpsters outside grocery stores. Think about that for a minute. People are desperate enough to dig food out of a dumpster during the worst pandemic in our lifetime. And those in power decide not to help distribute food but to defend our corporate waste with the threat of violence. The US is not the only country at fault here. Other capitalist nations act similarly. We produce enough food to feed every human on Earth with plenty of despair, but the inherent traits of capitalism disincentivize a common sense allocation of resources in favor of maximizing profit. While building sustainable infrastructure in exploited countries would cost just over 300 billion dollars, together the huge corporations are making trillions of dollars a year on the backs of their workers.
These tendencies to cut corners generate tons of waste and neglect long term stability, and they exist in virtually every industry. We've recently seen the consequences of supposed capitalist efficiency in Texas during winter. Millions of Texans were left without power or clean drinking water for days or even weeks on end. This was the direct result of the uncalled for privatization of our electrical grid and the lack of caring for infrastructure in the name of profits. The result was catastrophic, and future failures will definitely only get worse as the effects of climate change intensify.
So what are the takeaways here? Capitalism's vision of efficiency is predicated not on ensuring the long term function or sustainability of our systems or the common sense allocation of resources, labor or products, but on minimizing costs and maximizing profits. Making the smallest investment possible in order to get the biggest return.
Plus, free-market Capitalism is based on the idea of the individual making the most rational choice for himself, therefore working towards the common good and creating rational markets. This ‘axiom’ is fundamentally wrong, since individuals are certainly not always rational and tend to make a lot of mistakes. We don’t have a full picture (knowledge) of market prices and we cannot ensure that our exchange is the most rational choice possible. That, combined with the wrong idea that selfish actions work towards the common good, makes for a system that doesn’t seem that rational after all.
Instead, actual efficiency has to take into account the longevity of systems and the sustainability of practices and products. It's not efficient to overproduce and then dump millions of tons of unopened products into landfills. It's tremendously wasteful.
It takes labour power, raw materials and carbon emissions to produce those goods, which are then discarded and add to the ever increasing impact on the environment. It's not efficient to let mountains of food rot in dumpsters when millions of Americans don't have enough to eat. Even if you take a capitalist approach, wouldn't it make more sense to ensure that your workers are properly nourished so that they can work at full performance? What about making accommodations for future pandemics or other crises? It will be much more expensive to come up with emergency distribution methods during a crisis than to plan ahead and implement those systems slowly. Same with infrastructure. It's not efficient to build high rises that will collapse into the sea in 10 years, or to neglect weatherizing electrical grids, roads or bridges. Virtually nothing capitalism does is efficient in any real sense. It's wasteful, short, sighted and inhumane. The capitalist notion of efficiency is a sham. It exists only as an excuse for the adherence to the profit motive. So no, capitalism is not the most efficient system. It doesn't deserve to be called efficient at all. People are slowly coming around to that fact. Let's hope it doesn't take many more recessions, statewide power outages or breadlines to put the final nail in the coffin. I mentioned climate change a number of times in this video. It's a prime example of capitalism's short sightedness and how we fail to take into account enormous consequences even a handful of years in the future.
Government Intervention and Disequilibrium | Boundless Economics
Rational Markets Theory Keeps Running Into Irrational Humans
IMPACTS ON THE ENVIRONMENT
Then, since profit maximization is the biggest motivation for firms, there are always unethical ways in which they try to reduce the cost of prices of their commodities while still maintaining a high-profit margin. This optimization of profits leads to unethical exploitation and mass destruction of the environment, pollution, and exploitation by under-paying workers and preventing unionizing. Outsourcing labour to the global south, at the same time preventing them from developing a strong economy, lobbying the government to pass laws that decrease regulation, dangerous waste that destroys ecosystems, the stealing of natural resources, the list goes on. The unionization argument is quite a sad reality in today's world. As a Canadian, it is easy to see how without a government regulating the markets, firms could easily and legally prevent workers from unionizing. It is evident. Union workers are, on average, paid 33% more than the average worker, which gives them better-living conditions and prevents them from having to rely on a second job to subsist. Corporations strongly oppose that since it hinders their profits and makes the workers more powerful. But then comes lobbying, even with a State to alleviate class antagonisms, as it is the case in the USA, firms bribe the government to pass anti-unionizing laws and do possibly everything mentioned above with no repercussions.
Now, with climate change becoming more and more of an issue every day, it is important to discuss how we should tackle this upcoming environmental crisis. Some people suggest that the world has reached its population limit and therefore cannot contain any more people, and that the unfortunate reality is a situation where we have to be letting people starve to death in order to bring the population down. Maximizing human suffering in order to minimize our ecological impact. This is an ideology known as 'eco-fascism'. However this is really not the ideal solution to this climate crisis that could decimate humanity by the end of the century; we really do not need to suffer to a great extent.
Geologists and climate scientists of all fields are warning us that we are heading towards a new geological epoch. Wildlife, greenery, you name it. Everything is slowly but surely starting to die out. Oceans are polluted, coral reefs are dying, species are rapidly going extinct, and the list goes on. All of this because human production has gotten to a point where we are completely above nature. As a result, the world is becoming more grey, and we are creating metabolic rifts in the Earth's natural processes, which are caused by overfishing, pollution, and CO2 emissions. Tons of issues that come with that are climatic disasters, more and more frequent tropical storms, a constant rise in depression and other mental health issues, etc.
As the world goes from green to grey and we are surrounded by more and more consumerism, where we have become one with the commodity, it contributes to humans being more depressed. All of these factors pave our way to this new epoch. One response to that being eco-fascism is completely unacceptable, so this is where ecosocialism comes in.
In short, Capitalism and the private market sector has almost no ways to stop that from coming and getting worse. This is why we see capitalist ideologues looking towards people such as Elon Musk or Jeff Bezos to head towards another planet instead of saving our environment. They have completely given up on Earth and are looking to colonize Mars instead. This idea of abandoning our planet for another one is completely crazy, as it can still be saved. Our only viable option is eco-socialism.
Because our market systems operate on competition to see which capitalist can generate the most profits, 85% of the economy is powered by fossil fuels, which are the least expensive option for corporations to still make a profit. If we have two capitalists competing against each other, say Capitalist A and B both use fossil fuels, and one capitalist decides to start using green energy instead, he's going to lose competition to the other one solely because his profit margin will be slimmer than his antagonist.
We thus cannot save our environment within capitalism, as huge corporations will always try to maximize their profit margin, on that path destroying the environment. The way to change this is to plan production. Rather than have the market system to determine and allocate production, you have a rational system of production and distribution based on planning by actual scientists, engineers, and people who actually understand their field and can allocate factors of production in such a way that we are less of a nuisance to the Earth
Human production has reached the point where we are starting to create rifts in the earth's natural metabolisms. There are many of them that are essential to the survival of any given species, such as recycling co2, photosynthesis, and the cycle of water. Essential elements are being recycled over and over again, but our production is starting to create rifts in those cycles. These cycles regulate the proportion of elements that are on Earth, making human life sustainable. A perfect example of our production altering those cycles is the quantity of CO2 we are sending in our atmosphere. Plants use photosynthesis, which converts atmospheric carbon dioxide (+a few other inputs) into Oxygen (+sugar and some by product). Animals use Cellular Respiration to convert Oxygen into ATP (usable energy) and output Carbon dioxide. The over production of Carbon dioxide coupled with greying is resulting in carbon ending up elsewhere, such as the ocean; then causing acidification, global warming and a whole host of other problems.
Now rather than the CO2 regulating itself, humans pump it in the air until a rift in the natural process is caused, therefore warming the earth. To solve this issue, we need to centralize production of the big sectors, notably energy production. Having scientists and geologists, a central socialist workers state runs these energy companies instead of capitalist oligarchs competing for a higher market share.
We need to put that energy sector on a planned route. That route being the move from fossil fuels, natural gas and coal to renewable energy. Quickly enough so we can save the planet, but slowly enough so people do not love their jobs. For example in Pennsylvania so many people's jobs are related to fracking that banning it would cause an economic collapse. These people with energy-related jobs should be gradually relocated by the state to the renewable energy industry. By nationalizing these industries, we save the environment, we allow better conditions and less exploitation of workers, who can then easily unionize. As we move to renewable energy, we can move people between the two energy sectors, until the fossil fuel industry completely phases out.
We can only achieve this through planning, because scientists can understand how the natural processes of Earth work, and if they are given a say over the actual production process, they can design it in a way so that it doesn't create metabolic rifts in the Earth's natural processes. We still have production of goods, services and commodities, but in a way that is harmonious with nature, that doesn't become a nuisance to nature. And we can do that with many different industries, such as housing, food production, goods and services, etc.
By nationalizing this housing industry we can create green homes where people can live in community, with an uplifting environment that contributes to the improvement of its residents' mental health, with sidewalks, community gardens, etc. Instead of having individual luxury homes built by capitalists, we could have much better neighbourhoods that would also contribute to drifting away from the nuclear family towards a more community based lifestyle, all while being eco-friendly and sustainable.
Consumerism and the current state of our society has a lot to do with the depression we live in, so eco-socialism could be a great way to fix these issues, all while saving the environment from our demise. In conclusion, Capitalism is not an economic system that should be appraised, and a new one should definitely be strived for, to sustain future generations of humans and liberate the proletariat.
This is just part of a much broader subject called the treadmill of production theory. In short, the theory of the treadmill of production shows how the constant search for economic growth and profit leads to advanced economies being stuck on a sort of treadmill, where the well-being of that society is not improved by economic growth, yet the impacts of this pursuit of growth and perpetual profit causes massive, unsustainable environmental damages. In looking at the specific driving force that keeps the irrational system of the treadmill so powerfully in place, this theory focuses on how those who control the production process, corporations, are the primary agents that drive the treadmill, while also pointing out how the state and workers generally continue to provide support for the treadmill's continued reproduction. In thinking about ways to begin to unwind the treadmill, there is a clear need to explore why workers, who are also consumers and citizens, continue to support the treadmill of production. It identifies the forces that lock individuals into increasing their income and levels of “defensive consumption” merely to maintain their existing levels of social practices and the well-being generated from them, thus further supporting the reproduction of the treadmill of production. I will make a completely separate video on this topic at a later time.
Can eco-socialism save the world? – Canadian Dimension
Marx on The Metabolic Rift: How Capitalism Cuts Us off from Nature. By: Anita Waters
Why It's Eco-Socialism or Collapse | Downstream
How do we Tackle the Climate Crisis? An intro to Ecosocialism
POWER AND MARKET DOMINATION
Another problem is the excessive power firms hold, primarily by dominating markets and developing monopolies. Even when there is competition, large firms can dominate markets solely because of their scale. This enables them to maximize their profits by exploiting suppliers and consumers. This exploitation comes from squeezing suppliers' prices and charging higher prices for products after gaining a monopoly. After all, when a firm has that power on a market with inelastic demand, consumers will reluctantly buy it anyways, no matter the price charged, provided it is not unreasonable to the point of ridiculousness. Yes, monopolies operate under the same rules as any other market, however they tend to go to the maximum extent that their profit zone allows them to, effectively creating higher prices.
A great example of this excessive power problem is Amazon and its unethical practices in the book industry. In the first place, they have dictated and unfair terms to publishers. In the second place, they used their size to sell products at a loss, undermining smaller firms with better quality products but cannot compete because of Amazon's prices. This allowed them to gain a giant monopoly. One of the reasons large enterprises can dominate markets and gain monopolies is due to economies of scale. The large-scale companies with more significant capital and labour resources can beat out smaller companies simply for their size alone, rather than for the quality of their product; if this process continues, they may eventually gain a monopoly over their market. This is not optimal, and having that happen everywhere would essentially be a death sentence for small businesses. We can’t claim a system lays the ground for equality of opportunity when large-scale firms have a clear starting advantage over small businesses, most notably in markets where product offer differs between firms.
UNEMPLOYMENT, INEQUALITY AND CYCLES
Finally, there's the problem of unemployment and inequality. In any society, certain members are not able to work, such as the elderly, children, or other unemployed people, either because of a handicap or just because their skills are not marketable or don't bring enough profit. The economy leaves them behind, at large, and, without any income, to fall into poverty. The result is that inequality takes root: a few people can live in luxury while others cannot pay their medical bills, get enough food, access basic necessities like housing, and so on. Even when there is a nanny state to provide these services, under capitalism the social safety nets are not strong enough to bring the people out of their misery. This is not the only problem when looking at unemployment: Capitalism, being based on markets, has a variable demand for labour. When that demand falls under a certain threshold or companies won’t offer acceptable salaries, there is bound to be unemployment and huge surges in income inequality.
Capitalism has boom and bust cycles, where we see periods of huge growth followed by recessions and periods of misery. It dominates, expands production at a faster and faster pace for cheaper prices. Where there is profit to be made, capitalists are there. This characterizes periods of boom. We see an immense production of commodities, by far exceeding our need. Demand stays stable, but supply increases exponentially. Factories close, unemployment rises and we witness a recession. When these surplus goods are finally destroyed or sold, things get back to normal. This is a perpetual cycle that isn’t very efficient. These crises can happen anywhere from every 4 to 15 years, but they are getting more and more frequent. When they do happen, they are inevitably catastrophic and responsible for a vast amount of suffering.
Finally, we have to look at Marx’s point on the reserve army of labour and permanent unemployment. Under capitalism, a consistent part of the population has to be employed, since labour is the source of production after all. There is still a paradox where a reserve army of labour is needed; a chunk of the population being unemployed in order to facilitate the lowering of wages. People in dying need of work will take any job no matter the wage when it’s necessary for them to survive. Capitalism necessitates an army of workers to replace those who are fired for requesting better working conditions. It really seems we have not gotten through any progress since the industrial revolution.
FALLING RATE OF PROFIT
In markets of monopolistic competition, capitalists wish to increase their profit and gain market share. Each firm usually has a given zone of profit within their production, depending on the cost of labour and raw materials. They will tend to not go at the maximum profit rate, but rather slim their profit margin in order to grab consumers from their competitors. The cost of labour and raw material is an interesting aspect though. Changes in technology and improvements in the labour process decrease a firm’s cost of production allowing a firm to sell a commodity for a lower price than the competition. Temporarily, the firm enjoys higher profits since they pull customers from their competitors. This is not permanent though, as when other firms catch up, we just see a lower rate of profit for every company. This lower rate of profit disincentivizes capitalists to invest in the production process, and as a consequence a period of economic slowdown ensues, followed by a crisis.
Fundamentals of Marx: Falling Profit Rates (LTRPF)
ON EQUALITY OF OPPORTUNITY
Capitalism has no more morals than a serial killer. Its central premise comes from individuals having ambition and competing against each other. When those individuals do that, they tirelessly search out ways of increasing their wealth and profits. Unfortunately, this also means they search for ways by which they and organizations can exploit society's resources and the weak, defenceless people. Free markets don't give people equal opportunities and even less equality amongst the people. For equal opportunities to arise, education and healthcare would have to be provided for free, without a profit motive, and by the state. (This is forgetting restrictions on monopolies as well as price floors so small businesses can prosper too, but that's beside the point.) This would enable people to be indeed able to learn the skills they need to thrive in their field, start a business, and so on. So called libertarians, thinking that removing regulations from a market allows for the greater good, are incredibly naive. It just allows large corporations to gain higher market shares without improving people's material conditions in any way, shape or form.
I'd like to stress that capitalism leads to a “might makes great” society. This is an obvious flaw, as for sure a system like this one does encourage an unhealthy power structure and hierarchy. The Earth is finite, and with a hierarchy, there is not an infinite opportunity for everyone - ever. In capitalism, your only influence on your own life is related to your economic power, which states that economic power is the only thing of importance in our society.
What benefits economic power is the only thing of importance. Only the profit motive is important, and nothing else is considered. That does not mean that everyone is acting purely out of selfishness. But, compared to what might be termed ambiguous goals - repairing and maintaining architecture, the environment, even the areas where law enforcement and social goals overlap - a person desiring, indeed needing, economic power will not support what they consider vague things that are of value to the common people and communities. Aside from the current government’s acts to redirect funds from the people, we have social ills, drug abuse, and insanely decayed social and physical infrastructure to look at as an example of this sad phenomenon. Therefore, controls upon societally-destructive practices are things we should insist upon.
EXPLOITATION
Then comes wage-labour. Since the rise of capitalism, businesses have been committing wage-labour theft, underpaying workers and exploiting them. There has also been a wage gap between men and women, white people and people of colour, because of differences people cannot control. Reading Wage-Labour and Capital by Marx and Engels is pretty helpful for that subject, especially Engels' preface. Yes, companies compete for the highest wages to get workers' attention, but they also collectively compete for the lowest expenditure and highest rate of profit; they still don't pay them according to the worth of their labour. Exploitation is still a thing. Any business that makes a profit from a worker's labour is inherently exploitative, as wage-labour theft. Here we are talking about variable Capital, not constant Capital. Of course there needs to be some kind of surplus value that needs to be taken in order to maintain the machinery, however there is a clear contradiction arising from a worker being paid a fraction of the value they produce; let us take an example from Das Kapital, Volume 1: ‘The capitalist paid to the labourer a value of 3 shillings, and the labourer gave him back an exact equivalent in the value of 3 shillings, added by him to the cotton: he gave him value for value. Our friend, up to this time so purse-proud, suddenly assumes the modest demeanour of his own workman, and exclaims: “Have I myself not worked? Have I not performed the labour of superintendence and of overlooking the spinner? And does not this labour, too, create value?” His overlooker and his manager try to hide their smiles. Meanwhile, after a hearty laugh, here- assumes his usual mien. Though he chanted to us the whole creed of the economists, in reality, he says, he would not give a brass farthing for it. He leaves this and all such like subterfuges and juggling tricks to the professors of Political Economy, who are paid for it. He himself is a practical man; and though he does not always consider what he says outside his business, yet in his business he knows what he is about.’ The Capitalist needs to turn a profit, yes, however the worker is not rewarded with the value they create. This contradiction is so apparent, yet is treated as just another, normal condition for the worker.
"Exploitation exists as a worker legally agrees to work for the company. Hence they agreed to be exploited. And coercion can't exist unless there is a physical force." This argument completely ignores previous points made and shows a very surface-level understanding of how Capitalism works. Workers don't consent to be exploited and have surplus value extrapolated from their labour. Under Capitalism, labour-power is viewed as a commodity, which can be bought or sold like anything else. Anarcho-capitalists argue that workers can sell that labour-power without being subject to force or coercion through a contractual agreement. However, most of the time, it's simply not the case. Even when a worker consents to exchange through a contract, there can still be many ways to exploit them, notably by the buyer reselling the commodity they produced. The agents are not receiving according to their work or needs.
Let's now address how workers do not consent to be exploited. In capitalist theory, the property is a sacred extension of yourself, to be used only according to your personal preference. It pushes an idea of 'natural law,' that man is entitled to 'life, liberty and estate.' From this, we can assume that no one can take another person's life, freedom or property, and that property can only be exchanged if bought or sold consensually. First of all, it doesn't matter if this exploitation is "consensual." It remains exploitation. The effort the worker puts in is greater than the reward they get from their labour. There are many ways in which Capitalism is inherently coercive and uses coercive means to get workers to "consent" to that exploitation. Let's suppose you're a low-income, single mother with a child who gets kidnapped. She doesn't have the power to do anything. Therefore she must submit to the will of the kidnapper. Or even more realistically, a bankrupt worker has to work an exploitative job to subsist to his basic needs. Is this contract illegitimate because "he doesn't like it," or somewhat because he is coerced into consenting to this exploitation?
The worker "consents" to his exploitation but is at the same time coerced into doing so. Just because the coercion is not physical doesn't make it any less immoral. For your consent to have a meaning, you must be able to retract it. Agreeing to this contract also means being able to say no later on. But in a capitalist system, to retract your consent, you need to have private property to sustain yourself. Otherwise, you won't be able to subsist to your basic needs. If you don't retract your consent, it just means the force of circumstance coerces you to agree to this contract. Capitalism's premise is this exploitative reality. Capitalists' very existence depends on the fact that most workers can't say no to a job in fear of not having the ability to feed themselves.
It is essential to recognize that simply because one case of a worker being satisfied with a contract that pays them a ton of money and fulfils them, therefore consenting to exploitation, does not mean the same thing happens for other cases alone the majority of the population.In Capitalism, most relations are exploitative and unjust. It's also clear that laissez-faire capitalism creates massive amounts of inequality. For example, Hong Kong adopted the most libertarian economic policies, and at the same time, has one of the most significant income inequality. This "agreement to exploitation" is pretty much just semantics and finding ways to justify ways in which corporations manufacture consent.
Arguing that “Capitalism is not coercive because you consent to be exploited” is missing the point entirely and shows a surface-level misunderstanding of how Capitalism works. We can't just get along with ‘semi-consensual’ working contracts, that is simply not how humans behave.
MONOPOLIES AND PRIVATE PROPERTY
Let us now look at monopolies. Natural monopolies occur even if there is no government. And once those monopolies arise, there is no more extended competition, and the advantages of a free market evaporate. Private property is tyrannically oppressive to liberty, the limiting of the world to first-come, first-serve opportunists effectively eliminates freedom and opportunity for everyone who shows up late. Multi-generationally, this breeds capricious inequity, especially if children can inherit what they haven't earned. The same is true of wealth accumulation and its power relationship.
Private ownership and its inevitable concentrations of capital ultimately consolidate power and freedom around a select few. The centralization of capital is one of the main characteristics of capitalism. Lenin talked about that in his book ‘Imperialism, the highest stage of Capitalism’. It is not only natural to the system, but necessary to its development. With monopolistic competition inevitably comes the formation of monopolies and oligopolies. Throughout the years we have seen a shift in competition, where there used to be many firms offering services and having a similar market share, we now see immense multinationals owning practically entire markets, having eliminated the competition. We now see the supposed benefits of Capitalism literally eroding, being the possibility of starting a business, having variety in product choices, and the list goes on. A great example of this happening is the 6 companies owning 90% of the media in the US, offering the same pro-status-quo takes. The profit motive has been predictably corrosive to social cohesion and civil society in its amplification of individualist materialism, and a pathological desire for rewards. It's just not a good idea to rely on the profit motive to sustain a civilized society.
“CRONYISM”
Finally, many libertarians argue that the system we have isn't Capitalism, rather cronyism. Leftists have warned about this kind of system for over a hundred years, but it was promptly laughed off as ‘the market could never collaborate against the worker's will and well-being’. This is being disproved by the day, with corporations legally bribing state representatives, hidden under the name of lobbying . Marx, Engels, and Lenin foresaw and dreaded the collaboration between the bourgeoisie and the state. Now, we are dealing with the consequences as capitalists defend their system by pretending as the market itself did not create it. The nature of Capitalism and the bourgeoisie state creates conditions that all of us hate, but only one group seeks to address the actual problem. The elimination of class distinctions and the repressive yet class collaborative nature of the state is the only solution to prevent the crony capitalist system we have. No free market could ever hope of doing something like this. In addition, acknowledging that the system is crony, as a capitalist, is the same thing as conceding to the Marxist theory of the state. “Cronyism” is inevitable, it’s inherent to the nature of capitalism, and a state must come into play to regulate this economy. Without state intervention in the economy, Capitalism would collapse and life would be much less enjoyable. The role of the state is not only to alleviate part of class antagonisms through social programs, but also to make sure the system doesn’t collapse, and that competition is present along with safe working conditions. The bank bailouts of the 2008 recession is a great example as to why state interference is absolutely necessary for the sustenance of such a system. Even though free markets are theoretically optimal, with supply and demand guided by an invisible hand to allocate goods efficiently, they are, in reality, subject to manipulation, artificial inflation of supply or demand depending on the need for short-term profit, misinformation, asymmetries of power & knowledge, and foster extreme wealth inequality. Regulation by the state is aimed at balancing the virtues of free markets against their pitfalls. As economic historian Karl Polanyi pointed out in his well known book The Great Transformation, neoliberalism creates huge social divides that are not sustainable in the long run. Why root for such a system when literally anything else could be better?
Arguing that state intervention in the economy is the reason for these pitfalls is simply is extremely naive, as it is the only thing refraining market forces from destroying local economies and fostering even worse inequalities. For example, in the case of housing there is absolutely a necessary state intervention for the wellbeing of the population. People need housing, and the equilibrium price can be extremely high. Canada has understood that and set a price ceiling on housing rent. This artificially decreases supply, effectively creating a disequilibrium, which they can then fix by either building housing themselves, or offering subventions or tax breaks to landlords for offering low-cost housing. A similar thing goes for price floors, like in the case of Quebec’s dairy market. We have a quite small dairy market compared to the United States, who want to sell us their surplus milk. Obviously this would put thousands of jobs at risk throughout our province, as smaller producers will not be able to compete with huge American multinationals. There state intervention to set a price floor is absolutely necessary, as it protects our local economy, and while it at first creates a surplus, there are two ways in which the government can set a new equilibrium price. Either by buying this surplus from the producers and storing it to then sell to consumers during a shortage, or by establishing production quotas. The same thing goes for taxi drivers, the minimum wage and the beer industry. State intervention is absolutely necessary to negate a few of Capitalism’s flaws. The system itself is broken, and the state is the only thing keeping it from completely falling apart.
Government Intervention and Disequilibrium | Boundless Economics
‘ANARCHO-CAPITALISM’
This is a critique of anarcho-capitalism and Libertarianism as ideologies and ways of organizing societies. How applying them would create a very dysfunctional society, and why I am strongly opposed to them. How it is inherently exploitative and appropriates people’s labour, its coercive nature, and how its proponents have a very poor, surface level comprehension of socio-economic issues. I concede that any ideology has its flaws, however, anarcho-capitalism is simply a contradiction. A free market ‘guided by an invisible hand’ ignores any empirical analysis and would absolutely not be beneficial to the common good.
My first criticism is that the profit motive, which is a key aspect of Capitalism, incentivizes actions that violate the Non-Aggression Principle. With the NAP that most libertarians advocate for and even consider an axiom, firms would be much less incentivized to maximize their profits. It’s a contradictory thought. Then, they’ll say the profit motive motivates private companies to compete against each other and provide the public better products for cheaper, and that market forces will take over, and companies will compete to improve your life and material conditions.
I don't believe this at all. If we had anarcho-capitalism it would be easy to imagine a large corporation enslaving a population of workers to save money on wages, and provide cheaper products as well as undercutting the competition of goods produced more ethically by other firms. The most ruthless businesses win, and those who act more ethically will lose money and fall in the market rankings. Therefore, market forces incentivize more slavery and destruction, not less, to stay competitive. There would be immense amounts of coercion with anarcho-capitalism. It would let corporations rule over your town and use coercive means like a private militia to take over your land and establish a monopoly on everything you need. They say they're all for self-ownership, but corporations are going against that by exploiting their workers and not giving them a say in the production process. It’s an inconsistent, contradictory ideology.
Some time ago I saw a guy named Hampton argue that private court and justice systems would fix these issues. And no, they won't. For private courts to work, they must have a degree of force and a monopoly on coercion to back up their rulings. In a completely voluntary society, what if the business owner doesn't show up to court? After all, you can't force them to as doing so will violate the non-aggression principle, and wouldn't a business this controversial have a well-trained private security force to protect their boss? In other words, you can only punish an individual if they voluntarily go to court, which they won't. Also, the profit motive eradicates the idea of private courts. If I were the CEO of this huge corporation that acts immorally, would I pay more money to make the company ethical, or would I spend less money in order to bribe the largest private courts so they will always rule in my favour? It’s very clear that they will gain from letting me get away with immoral practices, it’s a win-win situation for the oppressors. Private courts would not function well at all. The state exists for a reason, and this is one of them.
“But people won’t buy from unethical companies”! This is another common argument for suggesting that people will suddenly be aware of all their options, and therefore, they will pay more for a product made in ethical conditions. Not only does this not happen today, but it also won't change if the government disappears if we keep the profit motive. More impoverished people have a budget, and to keep in this budget, they will have to purchase cheap goods made in terrible working conditions. Private companies will see it as more profitable to build and maintain roads towards city centres from middle-class areas with much more purchasing power than poor people who can't buy much. This would lead to class segregation even worse than today, and today it is terrible. It’s such a terrible argument, because not only does it not make any sense, it completely ignores reality.
Let's discuss semantics for a bit. Anarcho-capitalism is not an anarchist idea. As Proudhon proposed in the 1800s, anarchism has always meant anti-state and anti-capitalism. The appropriation of this term by libertarians comes from a fundamental misunderstanding of what anarchism is and the ideas for which it stands. Dismantling all necessary hierarchies means all, not just the state apparatus which prevents hierarchical power to oppress people.
In conclusion, anarcho-capitalism is obviously not a viable ideology. Let’s summarize our findings. The first contention being that unregulated capitalism trends towards monopolization of very few firms, and the collapse of the markets. If someone wants to argue that the market regulates itself, they need to take a look at history, where the most laissez-faire periods of capitalist history quickly lead to monopolies and extreme exploitation. Next, Capitalism depends on private property, which is virtually impossible to protect without a state. The Non-Agression principle would not prevent agression, in the same way murder laws do not prevent murder.
Finally, privatizing institutions like police and courts would lead to a situation where entire privatized governments exist, with some people within the same community potentially subscribing to different ones. Corruption, mismanagement, coercion and many, many more problems would arise. It’s to note that anarcho-capitalism would just create local states that operate in a similar, but worse manner than right now. It wouldn’t be anarchy.
The only reason anarcho-capitalism has some sort of following is because of its attractiveness to some people. It’s most prominent in the US, followed by Canada, Brazil and Australia. It barely exists in other countries. Its main trait is simplicity; The state is bad, and Capitalism is good. It doesn’t really dive any deeper into societal issues than making general statements that most people can agree on: ”Taxation sucks, ”Having things stolen from you sucks”, and ”You have the right to defend yourself”. Sure, there’s anarcho-capitalist and libertarian theory that people can dive into to explain these concepts, but generally speaking, what ancaps debate remains quite surface-level, which is where it gets its appeal.
This contrasts a lot with anarchism, a complicated school of thought resting on centuries of theory and analysis of society. Ancaps say ”taxation is theft” because the government is taking money you earned without your consent - anarchists would agree with this statement, however for anarchists that agreement is based on theory of property being theft, and that ownership of property does not justify extraction of wealth from workers; i.e. just because the state owns its territory it does not mean it’s justified in taxing those who use that territory; taxation is theft. If you view taxation as theft, it seems pretty contradictory not to view private property and surplus value as theft too. This simplicity really serves this ideology where it’s the most prominent, the US, as Americans tend to be quite simple in their political thought and stay at a surface level of knowledge, ignoring all of the world’s problems. The average American wants their property safe, their taxes low, and their guns protected. They also do not usually have a great knowledge of the variety of political ideas, having lived in a two-party system where both parties are, for the most part, identical compared to the vast ideological differences found in other “democracies”. They’re also not really taught what other political ideas exist in school. Notably because of the red scare, American schools teach very biased political ideas and a lot of misinformation.
Most ancaps seem to have arrived at ancapism from the starting-position of ”I just want to be left alone”, which is a respectable position, but it’s very simplistic. This contrasts with anarchism, the most common starting-position for anarchists is ”class divisions suck”, which is quite a complicated position, and touches hierarchy, race, gender, institutions, power and exploitation. It’s a much more complicated and deep ideology. It’s just so much easier for an ancap to get their ideas across, and that is attractive to people who want a simple solution. When you dive into ancap theory you find that whilst it stops being surface-level, it remains simplistic. Whereas anarchist writers propose a revolution overthrowing the state followed by years of revolutionary restructurings of society, ancap writers like Larken Rose propose ”If we stop pretending that the government exists, it will cease to exist.” It doesn’t take much reasoning to realize how simplistic this claim is.
While I am an opponent of anarcho-capitalism, I do believe it’s simplicity is to its credit. The complexity of anarchism is it’s greatest issue. It’s hard for anarchists to explain anarchism because it’s a complex idea, and anarcho-capitalists don’t have this issue. It makes for an idea that’s easy to spread amongst people looking for a simple answer, and those people will hold on to that answer. That’s how people work, and it makes this ideology pretty worrying. This entire ideology is a logical fallacy. If you’re unironically an anarcho-capitalist, please reconsider your ideas, you’re not going to achieve anything and your ideas are harmful to society.
Finally, trying to achieve it would more than likely result in the State rolling in with tanks and declaring martial laws, and we’d be back to the starting point. Even when setting a perfect scenario where capitalism has growing support, we have the presence of a worldwide ancap movement leading a global transition, a reset happens, all the infrastructure is inherited from the government and all the military hardware in the world is disabled. Everyone acts rationally and according to their own self-centered interests, and everything is a logical consequence of previous events. Any settlement will just devolve into some sort of Feudalism, when one person inevitably becomes more successful than anyone else, expands his production and takes over the land as an autocratic leader. Libertarians love to whine about the government without realizing their ideal society would have a very similar hierarchy. This is way too simplified so I suggest you take a look at Adam Something’s video on the topic.
MENTAL HEALTH
Ever since the industrial revolution of the 1800s, cases of mental health issues have kept steadily rising, as we currently reach an era of late-stage Capitalism. From the anxiety of the current economic system, to depression, burnouts and constant competition, Capitalism has had huge impacts on the wellbeing of individuals. Let’s look at the effects of individualism, the system’s anxiety and overworking on the mental health conditions of the people, in this world of neoliberal, crony capitalism that incentivizes people to work in such ways that seem to be against their nature.
First and foremost, the development of a capitalist society has seen mental illness to be classified as one of the biggest reasons for distress and misery across individuals. According to the Hampton Institute, ‘One in four people in the UK today have been diagnosed with a mental illness, and four million people take antidepressants every year’. Evidence heavily correlated this ‘epidemic of mental illness’ with social and economic determinants of capitalism and wealth inequality.'
Let’s then observe the alienation of workers from their labour: many people feel alienated from their work; dissociated from it, with the feeling that they do not actually contribute to the improvement of society. The consistent increase in specialization and the separation of labour has caused nearly 87% of global workers to not feel engaged with the work they do. Study after study shows that more pay doesn’t mean a happier life, but it’s your engagement and if you feel you are helping the community that makes a truly happy working experience. capitalism rewards crazed behaviours. This isn’t even some far-lefty conspiracy, nearly 20 percent of all CEOs according to forensic psychologist Nathan Brooks from Bond University found 21 percent of 261 corporate professionals had clinically significant psychopathic traits. This is what capitalism is and rewards. As a species we are better than this. Allowing people to do labour of which they feel engaged with, regardless of economic fears, will create a more productive and happier society.
Evidently, higher wages do not usually mean higher fulfilment and satisfaction; the field, the interest of the worker and the engagement do. Capitalism rewards individuals for entering fields they loathe, simply because the wages are more attractive. Furthermore, people working in factories are completely alienated from the product they are making, only creating part of a final object that will end up consumed by an individual who regards the work behind it with philistinism. Capitalism inserts itself in the existence of people, we start selling our labour-power like commodities, becoming one ourselves, from our early teens until we retire at an age where life is not as enjoyable.
Then, hustle culture pushed by capitalists wrecks individuals, making them think that constantly overworking themselves for the financial benefit of a Capitalist is a good and rewarding thing. We think we’re doing just fine, however as Finn Mungovan put it: ‘Capitalism exploits the inner sadomasochist that dwells in us.’ It is self-evident that capitalism destroys the mental well-being of its victims.
Others feel the disparities in wealth, inequality, and social isolation caused by this crony system. Capitalism, being based on competition between individuals, incentivises people to measure themselves against others, falling victims to greed and the constant need for more. Philosopher Karl Marx proposed that this feeling is not natural; it comes from the economic and social system [capitalism]. Under an egalitarian system, people do not feel this constant anxiety caused by the market forces. When a person works for their own self- centered interest, to receive what little wage the capitalist agrees to pay them, they are not as fulfilled as if they worked, let’s say, for their community in exchange for its other members’ goods and services. The system itself makes it so individuals of the working class see their peers as threats or enemies, rather than comrades, people they can work with. We constantly compare ourselves to the rich and powerful, even though the rate of upwards mobility has kept steadily declining since 1985. Our mere existence is measured by economic success rather than the abilities; the skills we possess.
Furthermore, it is important to note that Capitalism is a system built on a contradiction. To be specific, it is a contradiction of classes, caught in irreconcilable antagonisms that the ‘social-democrat’ state claims to alleviate. The producers, or proletariat, who allow society to function and produce the value of which we consume have no say over their actual production, caught in a system where democracy isn’t extended to their workplace. This system is built upon a distrust of the worker and the idea that they, and their labour can be bought and sold as any commodity. We are fundamentally better than that. Our labour power is an embodiment of our ability, our capacity to create and shape our own needs. This is what separates us from any other animal, thus our ability to produce should be celebrated, not alienated. The increased specialization, overproduction, and automation under Capitalism do not only create economic issues, but they destroy humanity itself. Our ability to produce shouldn’t be exploited simply in favour of a profit.
Following through with this idea, it is quite easy to realise how these feelings breed inequality, which in turn causes massive impacts on the mental wellbeing of the members of society. As the Royal College of Psychologists reports: ‘Inequality is a major determinant of mental illness: the greater the level of inequality, the worse the health outcomes. Children from the poorest households have a three-fold greater risk of mental ill health than children from the richest households. Mental illness is consistently associated with deprivation, low income, unemployment, poor education, poorer physical health and increased health-risk behaviour.’ Capitalism is destructive of the individual. The reality of the individual is based on the reality of his community: a member of a poorer community will most likely end up the same way. This system makes us live ‘wrongly’, with bad incentives, rewarding unhealthy behaviour that goes against our social nature. It is thus clear that the socio-economic system we live under, being capitalism, is responsible for the surge in mental illness we observe today. When the basic needs of people are not met because of the not so ‘free’ markets, mental health is sure to become an issue. Paul Baran and Paul Sweezy pointed out that the consequences of capitalism have huge effects on mental health: ‘The system fails to provide the foundations of a society capable of promoting the healthy and happy development of its members’.
Then, let’s observe commodity fetishism and consumerism. Humans naturally use nature to create products that help them accomplish certain tasks. We attribute a use-value to these items depending on their usefulness, However, with capitalism comes a different mentality. We work simply to acquire products, eventually becoming dissatisfied with them and getting the newer model. It is a perpetual pathologic behaviour that is observed across most individuals. We are alienated from the commodity, and fetishise it because of this contradictory system that works to degrade society.
Finally, the psychopathology of capitalism works not only to destroy the individual, but also presents itself as a great system that incentivises a push for growth and innovation. Political theorist Mark Fisher noted that ‘It is not an exaggeration that being a teenager in a late stage capitalist world is now close to being reclassified as a sickness. By privatising these issues [...], any question of systemic causation of these problems is ruled out’. Capitalism has huge impacts that aren’t even attributed to it, making any change in the system that much harder. Fisher pointed out that ‘even ten minutes is a luxury the day-labourer cannot afford’, we live under conditions that neglect mental health, and give us less time than necessary to plan ahead, establish routines or even surf between the roles that were established for working class people.
“‘Inequality and Mental Health’, by Equality Trust”. Equality Trust, 2009.
New Research Confirms It: Exploitation Makes People Miserable Mentally
Selfish capitalism and mental illness | The Psychologist
Isolation, Stress, and Poverty: Capitalism and Our Declining Mental Health
CAPITALIST REALISM
All those elements are bad, but what's even worse is the mindset we have towards this situation. Let's talk about the concept of capitalist realism. Fisher makes the argument that the war on terror has prepared us for an authoritarian development, where the normalisation of the crisis brings about a situation where repealing measures brought in to deal with emergencies become unimaginable. The following paragraphs were written by neo.gerald when condensing the whole book into a small essay. I then expanded on it.
The idea of Capitalist Realism is the widespread notion and sense that capitalism is the only viable economic system, and that imagining an alternative to it is now impossible. It presents itself as a shield protecting us from danger. This functions to lower our standards because the current state of affairs is totally just a ‘small price to pay to avoid terror and totalitarianism’ -- we disregard the development of authoritarianism in our society.
Fisher points out that we live in an unequal society, in which our existence is evaluated solely by money, by our ability to succeed financially. This is completely against our ‘human nature’, yet it is painted as an ideal. To justify this, conservatives and liberals don’t paint the system as an ideal, magnificent one. Rather they paint any alternative as evil and terrible.
To quote the book: “Sure, they say, we may not live in a condition of perfect goodness. But we’re lucky that we don’t live in a condition of Evil. Our democracy is not perfect. But it’s better than those bloody dictatorships. Capitalism is unjust. But it’s not criminal like Stalinism. We let millions of Africans die of AIDS, but we don’t make racist nationalist declarations like Milosevic. We kill Iraqis with our Airplanes, but we don’t cut their throats with machetes like they do in Rwanda etc.”
In short, it is a sad reality, but there is a widespread notion that the system we live under today, a system of authoritarian capitalism, is the only viable one, and everything else is an evil, bloody dictatorship.
Fisher then expands on capitalist realism. He describes it as a pervasive atmosphere that acts as an invisible barrier restricting thought and action. Fisher asks, if capitalist realism is so prevalent, and if current forms of resistance are so hopeless, where can effective challenges come from? A moral critique of capitalism that argues it always leads to suffering, only reinforces capitalist realism. Poverty, famine, war, inequality, hierarchies, exploitation, and all its other issues can then be presented as an inevitable part of reality. Any hope to end this is painted as ‘naive’ or ‘utopian’.
Psychoanalysis’s idea of the reality principle invites us to be suspicious of any reality that presents itself as natural, Fisher argues. The reality principle (in Freudian psychoanalysis it can be simply defined as “the ability of the mind to assess the reality of the external world, and to act upon it accordingly”) is itself brought about ideologically. It is the highest form of ideology precisely because it presents itself as empirical fact or necessity.
For Lacan, the real is what any ‘reality’ must suppress. ‘The real is an unpresentable X ’, a thing that can only be seen through inconsistencies in our apparent reality. The real is that which is real or true. Reality is what presents itself as real. Fisher uses environmental catastrophe as an example of a real. Although climate change and the threat of resource depletion are not being repressed, they are incorporated into advertising and marketing. Capitalist realism relies on this treatment of environmental catastrophe; the idea that resources are infinite and that any problem can be fixed by the market or ‘innovation’.
The relationship between capitalism and environmental disaster is neither coincidental nor accidental. Due to capital’s constant need to expand its markets and its “growth fetish”, capitalism is, by its very nature, opposed to any notion of sustainability. Yet firms advertise
Let’s then look at the behaviour of different groups facing this neoliberal dystopia. Compared to people in the 1960s and 1970s, British students appear to be politically disengaged. While French students can be seen protesting against neoliberalism, British students seem to have accepted their fate. This is not out of apathy or cynicism but rather reflexive impotence. They know the system works against them, but they also know they can’t do anything about it.
Depression is endemic. It is the condition most dealt with by the NHS and it is afflicting more and more people at increasingly younger ages. Fisher says it is not an exaggeration that being a teenager in late stage Capitalism Britain is now close to being reclassified as a sickness.
By privatizing these issues; treating them like they are caused by factors that have nothing to do with their actual causations, any question of systemic causation of these problems is ruled out. The problem is Capitalism, yet we don’t acknowledge it, for the system is seen as the only viable ideology.
In The Selfish Capitalist, Oliver James points to the significant rises in the rates of mental distress over the last 25 years.-
“Rates of distress almost doubled between people born in 1946 (aged 36 in 1982) and 1970 (aged 30 in 2000). For example, 16% of 36 year old women in 1982 reported having trouble with nerves, feeling low, depressed or sad, whereas 29% of thirty year olds reported this in 2000 (for men it was 8% in 1982, 13% in 2000).”
Oliver James also cites compared levels of psychiatric morbidity of samples from 1977 and 1985. Since the rates of psychiatric morbidity (22% of the 1977 sample increased to 31% of the sample by 1986) were much higher in countries James considers to have implemented ‘selfish capitalism’ compared to other capitalist nations, he hypothesizes that neoliberalism capitalist policies and cultures are to blame.
He argues that selfish capitalism contributes to this ‘entrepreneurial fantasy society’ in which anyone can be Bill Gates or Alan Sugar (despite the fact that the likelihood of this actually occurring has decreased since the 1970s as upward mobility through education has actually decreased since 1958 for example). The thing most poisonous about selfish capitalism and harmful to wellbeing, Fisher argues, is the ‘systematic encouragement’ that material affluence or wealth is the key to fulfillment, that only the rich and affluent are winners and that anyone has access to/can make it to the top as long as they are willing to ‘work hard enough’, regardless of their familial, ethnic, or social background. You are to blame if you do not succeed.
The ruling class ontology (concepts and ideas ) denies any possibility of a social causation of mental illness. The ‘chemico-biologization’ of mental illness is in proportion to its depoliticisation. Considering mental illness as an individual issue with someone's brain chemistry has enormous benefits for capitalism:
First, it reinforces capitalism drive towards Individualisation (you are sick because of your brain chemistry);
Second, it provides a profitable market for multinational pharmaceutical companies.
If it is true that depression is caused by low serotonin levels, what still needs to be explained is why particular individuals have low serotonin. This requires a social and political explanation. If the left wants to challenge capitalist realism we must re-politicize mental illness. Pharmaceutical companies love to provide a ‘fix’ for the issue, and pointing out one of the symptoms, but never the root cause of the problem.
How does neoliberalism, a project that empties the world of meaning, cheapens life, and openly exploits desire, intersect with neoconservatism, which is centered on fixing and enforcing meanings, conserving certain ways of life and repressing and regulating desire?
How does support for governance modelled on the firm and a social fabric based on self interest (neoliberalism) marry support for governance modeled on church authority and a social fabric based on self sacrifice and familial loyalty (neoconservatism)?
Fisher Hypothesizes that what synthesized neoliberalism and neoconservatism was their ‘shared objects of abomination’: the Nanny state and the people who depend on it. Despite pushing an anti-statist rhetoric, neoliberalism in practice is not necessarily opposed to the state (as the bank bailouts in 2008 showed) but rather to particular uses of state funds. Meanwhile, the neoconservatism strong state was confined to military and police functions and defined itself against a welfare state.
The concept of the Nanny State continues to haunt capitalist realism. Fisher argues that governments are often blamed precisely for its Failure to act as a centralising power or authority. To quote:
“Conservative and Labour governments have discovered that when they give powers to private companies, and those private companies screw up , voters blame the government for giving the powers away rather than the companies misusing them”
Fisher argues that the effects of late stage capitalism are fear and cynicism (the belief that people are motivated entirely by self interest). He says this breeds conformity and stunts entrepreneurial leaps. There is minimal variation as companies simply turn out products that closely resemble what has already been successful (so much for innovation).
Despite initial hopes, the 2008 financial crisis did not undermine capitalism. Speculations that capitalism was on the verge of collapse proved to be wrong. Fisher argues that the exact opposite occurred. The bank bailouts were a reassertion of the capitalist realist idea that there is no alternative. Allowing the banking system to fail was deemed unthinkable, and what occurred after was the vast accumulation of public money into private hands.
However, 2008 did show the collapse of the framework (neoliberalism) that provided ideological cover for capitalist accumulation since the 1970s. But neoliberalism assumptions still continue to dominate the political economy. Fisher says the crisis led to the “relaxing of a certain kind of mental paralysis”. A space has been created for a new anti-capitalism to emerge that is not necessarily tied to old language or traditions.
To quote Fisher “The failure of previous forms of anti-capitalist political organisation should not be a cause for despair, but what needs to be left behind is a certain romantic attachment to politics of failure…”
Nothing is inherently political. Politicisation requires political agents to transform what is accepted and taken for granted into something that is ‘up for grabs’. Neoliberalism triumphed by taking on the desires of the post 68 working class. A new left or anti-capitalist movement could begin by building on desires neoliberalism has created but has been unable to satisfy. Fisher suggests we should argue what neoliberalism failed to do: a massive reduction of bureaucracy, worker ownership and autonomy (democracy in the workplace), and the rejection of excessive auditing in workplaces.
“The tiniest event can tear a hole in the grey curtain of reaction which has marked the horizons of possibility under capitalist realism. From a situation in which nothing can happen, suddenly anything is possible again.
It is clear that we live in a dystopia and escaping capital will prove to be a very hard challenge, and I really hope we'll one day get there, for the well being of society and its citizens.
THE ALTERNATIVE
It is now self-evident that an alternative to this system has to be implemented. It’s time for change and we cannot just critique a system without proposing a solution. Let’s take a look at socialism.
First, we must define a few concepts. It is vital to our understanding of these ideas to differentiate Socialism, Communism and Marxism. Socialism stands for a wide range of ideologies involving the workers owning the means of production, either decentrally or centrally, with a worker state that provides free healthcare, schooling, housing, and fulfills the proletariat’s basic necessities. There is also a new idea of a democratic, centrally planned economy based on computers, cybernetics, with a direct-democratic voting system for public goods allocation. More about that later. Think of Socialism as an extension of democracy, where workers get a say in the economy and the system itself. It is usually a transitional period to high-stage communism. Communism is usually late-stage socialism, or its higher stage, when the workers' state withers away and is no longer necessary; when workers observe the development of their society without ‘fear of a tyrannical, bureaucrat state’. Money as we know it is abolished in favour of labour-time accounting using our current NFC technology, or a gift economy and the abolition of classes, including bureaucrats that could have arisen in lower-stage communism (Socialism). Communism is the end goal, a society made up of workers councils without a State, but governed by the people. It is not something that is achievable right away, and no communist thinks that unless they’re an idealist. It would take many, many years before arising, and even more if people feel satisfied with an only socialist status quo. Then, Marxism is a philosophical tool that enables us to analyse and understand the capitalist world around us as well as the development of societies, through a materialist lense. We use historical and dialectical materialism to explain the rise, development and/or fall of certain economic systems.
Let’s now go over the basic premises of Socialism in order to understand this worldview. We first establish a philosophical foundation based around important moral values: equity, freedom and justice. We believe that all members of a society are fundamentally equal to each other, regardless of race, gender or class. Everybody has fundamental and unalienable rights, both material and spiritual. We believe everyone is entitled to: freedom of speech, the right to vote and to be elected - not in a representative democracy, rather a liquid/direct democracy -, the right to food and water, employment and reward, healthcare, education, religious practice, rest and leisure, as well as housing and security.
Then, it is important to differentiate actual socialists from petit bourgeois social-democrats. We believe that Capitalism is based on a contradiction of class antagonisms, that objectively cannot be reconciled. That the state arises only when and insofar as this is the case, the proof being the existence of these antagonisms in the first place. Social-democrats seem to believe that a bourgeois state can ‘solve’ this issue, and reconcile the two classes: bourgeoisie and proletariat. Taxes on the rich and progressive income tax don’t attack the source of the issue, only its effects. We don’t just believe in ‘taxing the rich’, we believe in replacing the system that allows them to exist at the expense of everyone else.
Then, you may ask the question: why should I be a socialist? Well, socialism is to us an ideology based on the belief that humanity must act in a united and organised manner to face the problems of our generation and beyond. We are tired of how greed and wealth run our world, and how a few billionaires have more power to influence the world than all the rest of us combined. We currently are facing a very bad housing crisis, where our generation will probably never be able to afford homes even with relatively high salaries, and alienation is at an all time high. It’s time for change, for a system that benefits everybody.
As Socialism101.com puts it: “Workers are not paid their worth. The value that a worker produces is worth significantly more than the wage he’s given. His boss exploits him and his labour for profit - to make money. In the workplace, the worker lives under the dictatorship of his boss. He does not have freedom of speech (he can be fired for saying the "wrong" thing) and there is no democracy; the CEO and the Board of Directors decide everything - the workers are generally not allowed to make decisions for themselves or for the entire company.” Capitalism is unfair. We need a new system to escape this one.
Let us now talk about property. A lot of people seem to hold the belief that under socialism, there would be no personal property, hence ‘the State could barge into your home and steal your toothbrush’, or an insanity like that. It’s really not the case; we make a difference between private and personal property.
Private property refers to anything used to generate Capital from the exploitation of a worker’s labour. It can be a farm, a corporation, a factory or a supermarket. All of these would be considered private property, and therefore under socialism they would be turned into public property, owned and controlled by the workers either directly or through a democratic workers state based on councils. This does not include small businesses such as mom and pop shops, where no exploitation happens. Socialism greatly benefits small business owners and gives them better opportunities, it does not prevent them from existing. Since under capitalism they usually operate in a pure competitive market where their individual actions do not have any repercussions on the market. On the other hand, personal property refers to everything else that someone may own. Their house, their car, their toothbrush, you name it. These things would still be the personal property of their owners no matter the stage of socialism or communism. That is, except for the empty rent or investing houses belonging to the landlords which hog the market, preventing people from accessing affordable housing. A good example of the housing system is the USSR, where a lot of people owned a house and a vacation home at the same time, making for a very comfortable and relaxing life.
Regarding pay, there are many ways to look at it. We can have a system of command economy where everyone is paid a flat wage, with a worker’s state regulating the production of affordable goods and services, with a labour gradation system, like the one Paul Cockshott proposed in his work Towards a New Socialism. But it is not limited to this: we can still use money under lower-stage communism, people would just be rewarded for their merit; for the labour they put in, not for their sheer luck. In the higher stage, we can have a labour-stamp system that works without exchange, just like movie tickets. A worker works for an hour, gets a certificate from his community awarding him one labour-hour that he can spend on a good or service that has taken an hour of socially necessary labour-time to create. Then, we can have some kind of egoist mutualism, where there is no exchange of currency, rather individuals in a community provide their services in return for the goods and services of the other individuals in the community, with their motivation being either helping sustain the community or the reward they get from doing so. I am currently learning linear algebra to understand cybernetic socialism, and this is definitely something worth looking into. A system that is not exactly a command economy, but that is not based on markets, but rather on computers. Paul Cockshott has great resources on that on his youtube channel.
My personal take on this would be a direct democratic, council and computer based system where workers and consumers have a big say in the way the economy is run, all the while being efficient at allocating the factors of production with minimal shortages and surplus periods. I do not believe a central, undemocratic command economy is our best bet for socialism, considering the vast array of economic systems that exist under this umbrella. I will expand on that during a later time, when I am well-read on that.
Then, some individuals might argue against socialism/communism by saying human nature ‘debunks’ it, how greed and need for power is inherent to human nature in any given social and economic system, as if it’s a static, unchanging thing. A very quick glance at anthropology or even the tiniest bit of research about history shows that it is not an unchanging thing. “Human nature” reflects the historical, cultural and material conditions present in that given society. We have seen many different ways of social organization, with each having a seemingly different pattern of human behaviour.
This human nature argument can be narrowed down to a simple fact: the ideology which rules society is shaped by the basic economic relations. We see it as a very natural thing to work for a monetary incentive, simply because it is what our current economic system pushes us to do. We seem greedy, simply because we need to accumulate money in order to pay for shelter, food, gas, etc. Paying for our basic necessities, which are all commodified under Capitalism, has us behave in a way that can be perceived as greedy. In an egalitarian system where everyone’s basic needs are fulfilled, and there is no longer need to accumulate money for an ‘emergency fund’ in case something happens, people don’t perceive each other as competitors and stop hoarding wealth; they can enjoy the fruits of their labour while not seeming greedy. It is simply a case of our socio-economic system pushing us to do things we otherwise wouldn't, in the simple quest to get by since in order to succeed in Capitalism, you have to be ‘perceived as greedy’.
Then comes the discussion about the incentive to work and how the labour process would look like under socialism. It is pretty straightforward: your incentive to work is enabled by your personal desires, say to help your community, and by the mode of production. We can’t argue that everyone would become a taxi driver or perform easier jobs, since everyone has different motives and would much rather perform more satisfying and fulfilling work rather than feeling alienated, especially when the resources to gain the skills necessary to perform that work are right under their nose, free to use. Under capitalism, the main incentive to work is to sustain yourself, to fulfill your basic needs. Then comes personal fulfillment and mutual aid. Well that depends on the field, I wouldn’t say a businessman has any community aid motive, since profit is the only goal they aim for. Under socialism, the motivation to work would be personal fulfillment, helping your community, sustaining society, without having to worry about losing your job because market forces forced your company to outsource their labour to a developing country or labour markets crashing in your field. People would still be rewarded more for becoming doctors, engineers and other very high skill jobs, just not in the same way as capitalism.
These premises are the foundation of socialism: a society where everyone is rewarded from each according to his ability, to each according to his needs. It is a society based on the interests of a unified working class, and not on a contradiction of class antagonisms, alienation and perpetual expansion for growing profit.
Now, that seems incredible on paper, but how do we achieve it? How about the previous socialist experiments? Well let’s settle down and observe the ways to achieve this society by analyzing Lenin and Luxemburg’s teachings.
First and foremost, the way of achieving Socialism would vary a lot depending on whom you may ask, and which country is in question. The conditions in which it is implemented would make it very different from somewhere else. In the global south, workers are already fed up with their exploitation, and leftist leaders are elected all across that region. Unless there is CIA intervention, it is inevitable that socialism will eventually be reached there. This is just basic historical materialism.
Let us now focus on the west. How do we reach socialism? Well it’s not as simple as a worker’s revolution or reform. We must first form strong communities, practice mutual aid and build strong worker unions. Improving the material conditions of our communities is a key step in reaching our goals. The first stage is organizing our communities and forming strong unions to resist the capitalist machine. Then, electing representatives that are closer to our point of view than typical liberal or bourgeois-democrat politicians to help pass law projects and reforms that give more power to the workers gives us an advantage. Politicians who can afford to spend their time fighting conservative reforms in the house of commons, and propose projects that benefit every working class person. However, we should not only rely on reform, since they can easily get reversed, and bourgeois electoralism alone won’t get us anywhere. It is absolutely inevitable that the neoliberal system itself will collapse because of its inner contradictions. It is therefore our job to ensure that when it does collapse, it is not in fascism, rather in a socialist, worker’s revolution. Make sure to read Rosa Luxemburg’s Reform or Revolution as well as Vladimir Lenin’s State and Revolution.
Democratic Planned Socialism: Feasible Economic Procedures
Computers and economic democracy
Socialism with American Characteristics
A Cooperative Revolution. By: Greg Chung - MIDWESTERN MARX
Bill of Rights Socialism and the Future of the Republic. By: Brad Crowder.
Real Problems of Socialism and Some Answers
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Regulations on wages, working conditions and pollution are necessary, so corporations don't establish a monopoly on a town, destroy the environment or underpay workers. I understand that even without regulation, corporations would usually raise their wages to stay competitive, as the supply and demand model applies to companies and workers too, and they would try to make their worker’s environment at least bearable. However, there needs to be a wage floor that guarantees everyone can survive, pollution regulations to make sure factories aren't dumping detritus all over the place. When pursuing profit, businesses have historically damaged the environment to a great extent, abused labour, violated immigration laws, and scammed consumers out of their hard-earned money. This is why there are officials in charge of regulating this in the first place. In addition, some regulations are absolutely essential for competitive businesses to pop up. In any scenario, we have regulations, institutions and other entities to limit the excesses of a free market. Businesses constantly complain about these rules, while also lobbying to have other rules changed in their favour in order to undermine competing firms.
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