Somewhere between Feudalism and Karl Marx, Adam Smith is spinning in his grave. How much we don't have capitalism and are living, globally, under an oligopoly, replete with robber barons in tech clothes; one can only laugh at.
The amount of misery under "capitalism" says there's got to be a better way.
Meanwhile in my lifetime capitalism has raised hundreds of millions of people out of poverty and into solidly middle class lifestyles globally.
My wife is Chinese so I’ve seen first hand how economic liberalisation has transformed that country. The Chinese brand of capitalism is severely flawed, largely due to an almost nonexistent rule of law, but compared to what they had before its night and day. It’s a shame the CCP seems to be thoroughly mismanaging it at the moment.
The system doesn't have to be adopted by every business or citizen. For instance, 10% of unemployment benefits could be paid out as a demurrage currency with tax acceptance and you would see large scale welfare benefits with almost no burden on the general population. The only burden of this system is juggling two different currencies and an insignificant 5% annual fee on the issued demurrage money supply. If pay out 10% of unemployment benefits or 15 billion dollars it would only cost 750 million dollars in the liquidity fee and that is assuming the money doesn't immediately go back to the government for tax payments at which point the costs keep shrinking and shrinking.
The claim that it's capitalism that has raised hundreds of millions of people out of poverty is a common one, but it's our technology that's advanced. If we were still living under feudalism and the industrial revolution and the Internet happened, hundreds of millions of lives would still have transformed. Thanks to John Deere and Monsanto and the like, billions of lives have been raised up from subsistence farming to where we are today. There's the argument that we wouldn't have this technology without capitalism, and the length of the Egyptian and Roman empires without the Internet lend credence to this possibility, but it's also impossible to deny that we've never and can't test whether a system other than capitalism wouldn't also lift millions out of poverty, given the same advancements in technology.
It turns out that centralized, long-term planning is necessary for certain advancements. Eisenhower's US highway system, for example. Or the Manhattan project. Yes, the market is great for a large number of things. One of my most favorite is the food bank story, where they created their own internal market, with credits, and used that to more efficiently organize actors and allocate resources *.
I'm also just done pretending that USA's brand of capitalism is perfect, or that we have a free market in the first place in places where we don't (eg pharmaceuticals) but still try to run it in a capitalistic way, and then get surprised when someone like Martin Shkreli plays the game according to the rules, buys a company with a monopoly on a product, and then raises prices when that's just the rules we've set up for ourselves. Yes he went to jail, but that wasn't because he raised prices on Daraprim, but because he was also running a ponzi scheme and the attention made that finally catch up to him.
We're not going to get to a better system by upending what's been working well enough, but with smaller, more specific changes to the existing system to make it work better. Framing any changes to the system as a moral upheaval and equivalent to communism is the problem. We can have a better system. Yes, some of it involves sharing with others and caring for your fellow human. Some of those humans don't look like you and you may not like them. That's okay, you don't have to. There are people I don't like either. But what we have that works for some, also isn't working for others. When baby food is locked up because people are stealing it, if we assume it's mostly not being stolen and used for nefarious purposes, like cutting cocaine; if we assume people are stealing baby formula to feed babies, and that's criminal behavior according to the rules of our society; stepping back and looking at that from first principles, that all the rules of society and capitalism are for the benefit of humanity. If we really stop and think about that, something has gone wrong.
* https://theeconreview.com/2018/02/12/how-food-banks-used-mar....
You see it all begins very benign. A farmer has a bad harvest. He needs to bridge over this year until the next harvest. So he borrows money with interest. When the next harvest fails then he becomes unable to pay and is forced to sell his land and perversively, hired to work on his own land. He has functionally become a serf. All it takes is for this to spread to the rest of society and you end up with feudalism.
In other words, feudalism is what happens when proto capitalism is exaggerated to an extreme extent.
If you were to exaggerate modern capitalism I am not sure what would happen. Maybe hyperinflation, maybe world war 3, maybe a reform of the banking system, maybe mass starvation or maybe a revolution or maybe modern feudalism except serfs aren't allowed to own intellectual property or shares in companies.
So no, I don't think the problem is that we don't have capitalism. We clearly have more capitalism than we want or need. Robber barons are an intrinsic part of capitalism.
The answer is a market economy without capitalism. I don't even see why anyone would care about capital obsession in a free market anyway. That sounds inherently autocratic. At some point in the capital accumulation process one person owns the entire economy, how does that not make them a monarch eventually?
It’s all about consolidating power and wealth as quickly as possible. Now we’re in an AI arms race. Sounds terrifying? It is.
America might tear itself apart if it doesn’t slow down a bit. Right now, there’s no one behind the wheel.
I’m sure premium private services will be a thing, but right now the sheer scale of the mass market seems to be a powerful democratising force. Let’s hope it stays that way.
I'm not quite sure why people think that a misery free world ought to be possible and/or the default.
Ever thought that maybe Capitalism is just a small step in human history and that we can definitely do better? I wonder what happened to innovation, is it fine only as long as it doesn't threaten the status quo that keeps you complacent?
I was mainly thinking in terms of critiquing the idea that value is created by labour, since HyperSane mentioned it twice in comments.
It happens that the labour theory of value in central to Marx but it’s not exclusive to him. Adam Smith indulged a lesser form of it in one of his uncharacteristic slip ups in economic theory. However it is in Marx that it achieves its most vertiginous heights of absurdity, and through his disciples that the most damage was done by it.
There is a direct causal line from the LTV and some of the direst economic disasters in human history. The most egregious case, despite some strong rival examples in Soviet Russia, is probably Mao’s Great Leap Forward which among other things fetishised steel production. Production creates value and steel is the most important economic product, so everybody should make steel.
It’s the damage the LTV caused itself that I was talking about. Communism is a political project associated with it but not directly what I had in mind.
As for innovation, I’m all for it. Capitalism maximises individual freedom by putting ownership of capital and rights of self determination of labour directly into the hands of citizens. By maximising individual economic freedom it maximises opportunities for economic innovation. This is why free market capitalist economies are so creative and dynamic.
I still stan (a version of) capitalism, I agree it's better than the other systems, but I do always get a giggle when people act like communism caused the worst disasters in history. They're not great, to be sure, but at least the Communists were mostly killing their own people through incompetence rather instead of killing the entire planet for avarice. It's humans all the way down, doesn't matter what system. Either you have accountability, or you don't and if you don't bad things happen.
I think the suggestion is rather that we are morally compelled as a society, to invest real effort into inventing something new to replace neoliberal capitalism.
States could, for example, be sponsoring experiments to validate new economic models, through e.g. low-barrier-to-entry applications for charter cities and other autonomous zones, as long as the applicant can show that 1. there is a novel economic model at play, and that 2. the zone is being carefully monitored to collect data for analysis by the Economics department of a major academic institution.
One of the major advantages of neoliberal capitalism is it’s not exclusionary of alternative forms of economic organisation. It can exist very well alongside state capitalism, or almost anything else. After all individual freedom to organise as you choose is precisely its core characteristic.
If you want to establish a workers collective, or whatever you like, there really aren’t any barriers to doing so. In fact they do exist, some have been very successful. That’s great, but the fact that they are vanishingly rare I think says a lot more about the inherent problems with such systems than they do about capitalism.
It isn't impossible but who in their right mind would give 10 million dollars in funding to start a bank to end capitalism?
