More Socialism — Less Capitalism…

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From Jerry Mander
Introduction of The Capitalism Papers
[Excerpts] Updated from original post

Question from the Audience: Jerry, do you mean my grandfather’s furniture store is killing the world? Is he one of those capitalists? It’s a nice shop. He’s been there forty years, giving work to eight employees, and he pays a nice wage. With benefits. It doesn’t seem bad to me.

Jerry: No, stores like that are really not the problem. We need to make distinctions when we talk about capitalism. The word covers too many different things. One distinction is this: Size matters! Small-scale local or family businesses, or community enterprises that make some money, pay salaries, send kids to college, and save a little, are not the problem, and never have been.

But let’s say your granddad had somehow made gigantic profits from his store forty years ago, so he decided to partner with another store owner and invest in big real estate, converting small farms and open lands into shopping malls. And let’s say they started franchising shopping centers around the world, and were borrowing from big banks to do it, and then started buying banks, and buying other companies doing unrelated stuff, like shipping or mining or biotech farming, and then started getting their financing from Goldman Sachs. Then they “went public” and were listed on the New York Stock Exchange as SHOP AMERICA! and they became friends with congressmen, spent 10 percent of their business income lobbying in Washington to overturn zoning, dumping, and other environmental laws that were getting in their way. And they had their eye on export trade subsidies, and maybe some military contracts, and were desperate to keep their stock prices high and to keep their taxes down.

Well, then, you’d have to say your grandfather would be operating in a different world, with different values and drives, than he does now. At the beginning, it was all about furniture for local families and businesses, not the primary needs of nonstop capital expansion, growth, stock values, and distributions. That’s the “capitalism” I worry about. That’s what’s consuming the world, now it’s all about growth, not furniture, not sufficiency, not community welfare. It’s wealth, constantly seeking more wealth, to better seek still more wealth. That local store and those global businesses really shouldn’t share the same name. They are different creatures…

This book anticipates the final failure of the global economic project that we have lived by, accepted, and treated as if it were nearly a law of nature for more than two hundred years. The capitalist system was able to thrive, on and off, during the eighteenth, nineteenth, and twentieth centuries, when we still lived in a world of richly abundant cheap resources, cheap (or slave) labor, myriad colonial interventions, and lots of developing markets. But it’s now obsolete, nonmalleable, and increasingly destructive.

The system has reached a stage in its life span that is very familiar to ecologists and other students of natural evolution: A once thriving, even dominant species, in markedly changed physical circumstances, gives way to other species that are better adapted to current realities. The capitalist system had its day. If we care about the well-being of humans and nature, it’s time to move on.

People behave as if our economic system were a self-contained separate entity residing in its own detached universe, unconnected to realities outside itself, rather than embodied in a much larger system from which it evolved and cannot escape. Nature cannot be left out. It is, in fact, the most important aspect of the entire discussion. Growth is made out of nature, transformed. What we call our economy is rooted largely in the process of transferring and transforming elements of the natural world into the tools and commodities of human activity, and then betting on the rates that we can continue to do it, nonstop, forever. To leave the source of it all entirely out of our concerns is, well, shortsighted.

The crux of the matter: accumulating capital in order to accumulate still more capital… continual and endless. Climate change, Peak oil, Global resource depletion, Global population, and the social, environmental, and geopolitical chaos that goes with all that expresses itself in conflicts and wars over oil, water, and myriad other resources on land and in the sea, increased militarism, rising protests against systemic inequity, and fierce battles over increased cross-border migrations. All of these crises share the same root cause: planet-wide immersion in a uniform economic system that requires continuous rapid growth and constant wealth expansion for its own viability, and in order to sustain the institutions and the people who sit at the top of the process. Such a state of permanent growth in turn requires never-ending expansion of resources, cheap labor, and unlimited waste disposal and absorption capacity. It also requires the universal promoting of a values system that equates perpetual commodity accumulation and personal and institutional wealth expansion with success and happiness. These are all impossible on a planet with finite resources and carrying capacities. The system is bound to fail.

Intrinsic Characteristics:

Amorality. Capitalism’s only purpose and mandate is the expansion of individual and corporate wealth. It has no other job, and no interest in “right or wrong,” or human welfare, or communities, or in the well-being of the natural world, except as resources for itself.

Dependence of Growth. This is the most fundamental problem, though it is the least noticed, and is rarely included in mainstream economic and political discourse: The entire system and its practitioners, like all of modern society itself, have become seriously oblivious to any connection with nature and its limits, or to the realization that human activity is embedded in a larger natural system that has been under deadly assault for centuries.

Propensity to war. This includes buildup to wars, innovations for wars, rebuilding after wars, and forward basing for defense against future wars. It encourages what some now call “permanent war” and is viewed as a highly effective economic strategy, good for both wealth creation and jobs. Where others see destruction, capital sees opportunity.

Intrinsically inequitable. In every fiber of its structure, from its strictly hierarchical structural forms to its practical performance, the system expresses and expands inequity. The central function of capitalism is to help people with wealth to seek more wealth and greater dominance; the separation between rich and nonrich within countries and among them inevitably becomes steadily greater. We have achieved plutocracy.

Undermines democracy. The system has an intrinsic need to dominate and undermine democracy, and also public consciousness, so as to control its rules, benefit more easily, and advance its primary self-interest: expanding growth, profit, and wealth. Governments become subordinate, and democracy is destroyed.

Capitalism does not bring happiness. Societies based on a constant quest for external satisfactions, such as wealth advancement, commodity accumulation, competitive advantage — quests for “prosperity and power” — do not tend to achieve overall well-being; quite the opposite. Happiness and well-being are rooted in other values and behaviors.

There are many international variations on the system. For example, there is considerable diversity of “state capitalist” expressions (in China, Russia, Saudi Arabia, Japan, India, Vietnam, Venezuela, and others) where countries permit capitalist enterprises to operate for private profit and to compete within domestic and international markets. But they permit this only within certain pre-defined spheres of activity, and not others, and with a high degree of central planning, regulation, and control. In most of those cases, the state continues to operate the most crucial industries, such as energy, transportation, banking, education, security, and others. Some of these countries describe themselves as socialist; others don’t.

Another set of variations on the theme are the mixed economies of Europe, especially northern Europe, where capitalism operates freely in most economic domains, but within a context of considerable state regulation, higher taxes, and the extensive provision by governments of free or very low-cost social services — lifetime healthcare, education, transportation, childcare, eldercare, guaranteed incomes, and assured worker benefits like vacations, maternity leave, etc. Europeans call this “social democracy.” Republicans in the United States call it “socialism.”

The idea that large-scale free-market capitalism may eventually be revealed as simply a temporary short-term experiment, appropriate perhaps for relatively brief moments of human history but now out of date, is rarely discussed openly. And the idea that capitalism is ultimately not amenable to reforms, not sustainable, inherently flawed — that it’s the system that’s greedy, not the people — and that it may need to be abandoned in the interests of planetary survival, remains heretical to mainstream worldviews. Such observations bring charges of impracticality, at the least, or “socialist,” or “communist.” It remains okay to critique certain aspects of the system but not the system itself, as if global capitalism occupies a virtually permanent existence, like a religion, a gift of God, infallible.

Small-market local businesses like the furniture store in the opening paragraph have the option to operate in far different ways. Private, small-scale, locally owned and oriented businesses that operate in single markets — especially those that are not listed by stock markets — are usually more directly involved in community life; their customers may also be personal friends or neighbors. Small enterprises will usually continue to seek profits, i.e., the excess of income over expenses. But their smaller-scale and community-embedded ownership allows them at least the possibility to operate from entirely different hierarchies of value than their mega-cousins operating nationally or globally.

Envisioning more democratic, sustainable systems is really the easy part. We all have good ideas on what sustainability, fairness, equity, community, and sufficiency are about, and there are literally hundreds of new ideas increasingly on display. People have begun to see that transformation may not be achievable within the current frameworks. Change is inevitable.

It would surely be useful to prepare ahead for some positive options, if only to forestall a global chaos that might otherwise come. But how do we get from here to there? The chasm is wide. Many of us are trying to see across, but there are no bridges. It may be up to us to build them.
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One Comment

This is the best explanation of the problems with capitalism I’ve ever heard.