On Capitalism
Thursday, September 2nd, 2010Here’s a post that’s been languishing in my drafts folder for a very long time. I banged out the last couple points I’d been planning to make, and here it is.
One very basic conservative view seems to be that it should not be the responsibility of people with more money to use it to help people with less money. Because, after all, people who have money have earned it, and poor people have not. As far as I can tell, this view is based on a few faulty assumptions about capitalism. Here they are, as I see them. I welcome criticism.
Assumption 1: Capitalism rewards hard work (or merit of any kind). This assumption is not 100% without truth. It certainly is possible, in the right circumstances, to accumulate enough wealth through hard work, determination, ingenuity, etc. to alter one’s “socioeconomic class.” However, this is the exception rather than the rule. Hard work is not what capitalism is structured to primarily reward. In fact, capitalism is structured so that laborers retain as little as possible of the wealth that they help produce. What capitalism is structured to reward most generously is having money to begin with. Or rather, having money and investing it. A corporation is required by law to have as its primary motivation the financial benefit of its stockholders—people who (for the most part) do nothing but contribute money. As much as possible of the wealth created by a company’s economic activities must go to the investors. This means that as little as possible must go to the laborers. The reward for hard work is the smallest amount of money that people will do that work for. Therefore the people who work the hardest are quite often the ones that make the least—the workers who harvest food, extract raw materials, and manufacture consumer goods. By design, capitalism constantly increases the disparity between rich and poor, by creating wealth and distributing that wealth in as uneven a manner as possible.
This disparity is exacerbated further by the fact that capital is allowed great freedom of movement, but labor is not. Most of the people laboring to produce the goods consumed in the US live in other (poorer) countries. So-called free trade policy (as well as centuries of official and unofficial colonialism) has ensured that rich people from rich countries can invest their money in poorer countries where labor is cheaper, and therefore profit margins are greater. Of course, these profits go to the investors in rich countries. This means that a huge portion of the wealth produced in so-called undeveloped or developing nations doesn’t actually stay in those nations. And when the governments of poor countries have tried to to nationalize their industries—to keep the profits within the country—rich countries have supported often very brutal regime changes to ensure that this does not occur. (For one of many examples, see Chile on September 11th, 1973) And while massive state violence is used to safeguard capitalists’ ability to move their capital to the country where they will get the best return on their investment, state violence is also used to prevent laborers from migrating to the countries where they will get the best value for their labor. So not only is capitalism designed to distribute the products of the “free market” overwhelmingly to those who already have money, but violent, coercive means are used to restrict the economic freedom of laborers to maneuver themselves to get the smallest share of a larger pie.
Manual laborers in poor countries aren’t the only ones who get the short end of the stick. Anyone who makes money solely through their own labor is getting less than they could by investing money in someone else’s labor. This includes relatively highly paid professionals—engineers, doctors, lawyers, etc. These professions garner more pay because otherwise people would be unwilling to invest the time and money necessary to be trained for them. But the stockholders of the companies they work for still profit from their labor without having to do anything other than already have money.
Assumption 2: The capitalist economy consists of independent individuals making free decisions about wealth that they rightfully possess. This assumption has two parts. One is that we rightfully possess our wealth. I’ve hinted above at why this is problematic. The wealth that people in capitalist society possess has been acquired through a long history of violent coercion. If you live in the US, the land you live on, the land on which much of your food is grown, the land from which so many resources that you use have been extracted, was acquired through genocide. Colonial policies backed by massive military violence have ensured that wealth is transferred into the hands of people in the privileged classes of certain nations. Much of the wealth and infrastructure that white Americans have inherited was built by slave labor. Examples could continue, but the point is that only if we turn a blind eye to this history can we reasonably claim that people who have money have an absolute right to dispose of their money as they wish, because it’s theirs.
The other part of this assumption is the existence of the independent individual. I find it ironic that the iconic first-world independent middle class (male) individual is in fact in probably the most dependent economic position in history. He depends on a vast chain of laborers for nearly every daily action that he takes. Every item that I use, every meal I consume is the result of the efforts of dozens or hundreds of people, most of whom I’ve never met or even thought about. And if they all stopped doing what they do, I’d be in a pretty sorry state.
The individual’s dependence extends further and deeper than economics. Here I’m venturing into a more philosophical realm that has perhaps a somewhat tenuous connection with the argument I’m attempting to refute, but I think it is relevant to some of the assumptions that underlie capitalism. The individual is dependent on her social environment for her very identity. Who and what each of us thinks she is, the values and inclinations upon which we base our decisions, the concepts and vocabulary that we use to navigate the world, are all created in a matrix of interactions with others. If other people did not exist, I would unravel, thread by thread, until there was nothing left. If I am obliged to others for my very existence, for every (or at least nearly every) aspect of my mind, thought, and will, on a moment-to-moment basis, it seems petty to begrudge those lower on the merciless food chain of capitalism some of “my” money.*
*This existential line of thought seemed central to what I had to say about capitalism when I began this post over a year ago. Now I’m not sure where I stand with it.