- Capitalism and Alternatives -

'First, what is capitalism?...'

Posted by: bill ( Oz ) on September 02, 1999 at 11:33:20:

Failing in ability to post a reply to my own messege (from what now probably appears below) - I'll post the following nice description of capitalism from Treaty7 contained in a paper on higher education.


First, what is capitalism? About this there is little dispute, although much disinformation. My own dictionary misdefines it as an economic system under private ownership where prices, production, and distribution are determined by "free market" forces. While this description might have been adequate in 1776 (when Adam Smith wrote The Wealth of Nations ), 9 even Smith recognized that over time there would be a tendency for capitalism to create monopolies, fix prices at inflated rates, and operate to the benefit of society's "haves" versus the "have-nots." A more apt characterization of capitalism is as a philosophical system that sees the world as objects, objects that are turned into commodities, commodities that are bought, sold, traded, and discarded as needed so as to maximize profit . Capital, itself, is not money ; it is the difference between what it costs to produce a commodity and what price the commodity will bring. 10 A capitalist is someone who owns the means of production (factories, equipment, infrastructure, etc.) and profits from the labor of others by paying his/her workers as little as possible and vending his/her commodity at as high a level as possible.

My characterization of capitalism as an idea rather than as anything else is to emphasize its ideological aspect. A prominent part the contemporary blather about capitalism is its supposed status as a "Law of Nature," as in clichés like "the survival of the fittest" or "nature red in tooth and claw." In reality, however, there is nothing natural or inevitable about capitalism; it is just the way a large number of insane non-Indian North Americans and Europeans have chosen to interpret the world, and, unfortunately, they seem to have sufficient carrots and sticks to sell it. 11 Capitalism has the feature, then, of propagandistically presenting itself as the only viable economic system.

The tendency of capitalism to see the world as commodities extends to its view of people as well. The newly-minted buzz-word "human capital" is a phrase that is meant to dispose all of us into seeing
ourselves and others as commodities in a capitalist economy. Our abilities, experiences, and education, in short our very lives, become commodities or "skills" which "determine our value" on the open market of employment, and with which we bargain with potential employers. Our humanity is reduced to the image of our being empty objects within which other objects ("skills") reside; our lack of skills, their diminution over time (with age or infirmity), or their lack of utility in the task of capital accumulation (having the "wrong skills") becomes the rational grounds (in capitalist thinking) for our dismissal, marginalization, and eventual removal (when we become a "drain on resources"). 12

Capitalism has an inherent top-down structure in its distinction between productive labor (people who do the work) and those who live off the avails of productive labor (capitalists or owners, who
don't have to work). Class distinctions (as reflected in status differences between "blue collar" vs. "white collar" jobs, in not having vs. having to work for a living, and in the supposed "mental
capacities" of workers vs. rulers) are means of justifying the privileges and benefits that accrue from controlling the means of production. The hierarchical structure serves to distance workers from
owners, workers from other workers, and everyone from the fact that owners do nothing that would justify their elevated lifestyles.

Capitalism is also ultimately self-contradictory. The "best" of all capitalist worlds is one in which workers are paid nothing, production materials are free, and prices are high. But in such a world, the
only people who could buy anything would be other capitalists, a class that must progressively diminish in number as companies grow larger and more all-encompassing. Capitalism fails when there are no new buyers for products. Thus, capitalism is constantly seeking new markets (as Nixon did when he went to China during the 1970's); however, in a finite world, this search must come to an end.

The cycle of boom and bust (periods of prosperity followed by recessions or even depressions) is an extension of this self-contradictory nature of capitalism. As Parenti ( Land of Idols: Political Mythology in America . St. Martin's Press, 1994, p. 80) has noted:

"Since workers are not paid enough to buy back the goods and services they produce, there is always the problem of insufficient demand and declining markets. If owners see no opportunity for the realization of surplus value, they reduce their work force and cut back on production and invest- ment. The ensuing layoffs lead to a further decline in demand and to business recessions that inflict the greatest pain on those with the least assets".

A further contradiction is the fact that resources ("production materials") also must come to an end. To reduce production costs, capitalists have every incentive to use what is free or cheap (the air,
water, timber, etc.), but no incentive to clean up after themselves. Thus we see a familiar scenario: the profits (gained by exploiting public lands and resources) are private, but the costs (cleaning up
the air and water, removing pollutants or radioactive hazards, etc.) are born by the public. This move is institutionalized in Canadian and American law, and in the free trade agreements, where corporations are accorded all the rights and privileges of persons but none of the responsibilities. If you created pollution you'd find yourself legally responsible for it; a corporation so identified merely has to define itself out of existence 13 to avoid criminal or financial liability for its excesses.

Finally, capitalism is ultimately totalitarian . The need to keep costs associated with production as low as possible means (in the logic of capitalism) that anything that lowers wages is good. Unions are broken or smeared, 14 alternative economic systems ignored, and operational principles other than profit maximization (more accurately, "greed") are given no currency. Dissent is stifled, 15 or if it
occasionally breaks out, is presented by media in a depoliticized, unfavorable fashion. 16 As well, the power of democratic reform of capital excesses ("trust busting;" fair bargaining laws; injunctions
against price fixing; etc.) is progressively weakened, as under NAFTA (the North American Free Trade Agreement) and GATT (the General Agreement on Tariffs and Trade). Businesses, after all, are not democracies (even though stockholders sometimes vote, the more stock you have the more votes you have, so you can legally buy influence ), and the nuisance of having your henchmen removed from public office (as recently happened to the Progressive Conservatives) can be avoided
by making "democratic" institutions powerless. Thus, GATT and NAFTA rulings are made by unknown, unelected, unaccountable review boards, boards that have no requirement to explain why they have reached any specific decision. 17 As well, since these agreements are treaties, by
international law they supersede the constitutions, case law, and legal practices of the signatory countries. Canadian governments can therefore claim they are bound by international law to obey the rulings of GATT and NAFTA, regardless of how repressive they might be to the general citizenry.

The fundamentally totalitarian nature of capitalism, however, is best revealed in the way capitalist society has gained control over basic human and societal needs, and warped them to maintain the great mass of human beings in subservient positions. 18 Food, clothing, health, and shelter (to be equally shared in times of plenty or in times of hardship in traditional worldviews) are turned into commodities in the capitalist world: bought, sold, and negotiated, and even denied to those who will not play by the rules of capitalism or who do not play the game well enough. Our connections with our families and with our communities are exploited to maintain compliance, e.g.: (1) while losing one's job for exposing corruption ("whistleblowing") might be bearable by a single person living alone, in today's world all potential whistleblowers realize that their actions will not bear solely on themselves; their husbands or wives, their children, their parents, their financial and community standing, etc., will all suffer the consequences of taking a principled stand; 19 (2) when job, wage,
and health security (under attack in Canada and already shattered in the United States) are eliminated, human beings are reduced to their lowest common denominator, the struggle for survival; 20 that which makes us human (family; community; sharing; pursuit of the spiritual and intellectual; etc.) is subverted:

" The problem with capitalism is that it best rewards the worst part of us; the ruthless, competitive, conniving, opportunistic, acquisitive drives, giving little reward and often much punishment--or at least much handicap--to honesty, compassion, fair play, many forms of hard work, love of justice, and a concern for those in need ". 21

Even Parenti's assessment might be too generous; capitalism does not merely reward the worst part of us: nowadays it demands it."

Neat huh?


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