Capitalism Doesn’t Add Up

(Read the essay, or watch the 8 minute video based on an earlier version of the essay, here in this little box, or on its Youtube page, or full-screen.)

When I retired from teaching college math, I began to apply my reasoning skills to politics and economics. And I was surprised to find that the world around us is entirely different from what we’ve been told. In particular, capitalism is all wrong. If it were a calculus exam, I’d mark a big red “F” across its front page.

The crucial math skill in this instance is not numerical computation, but simply the training to notice when someone makes unwarranted assumptions. The terrible current state of the world economy stems from erroneous assumptions about culture and human nature that mainstream economists and politicians make at the beginning of their reasoning, before they ever get to their numerical computations.

We’ve been misdirected away from the truth by news media that, as Chomsky has said, encourage lively debate within a very narrow range of views. For instance, as I write this, the corporate news is again filled by the perennial argument between deficit hawks and Keynesians:

  • The deficit hawks say the interest on the national debt is growing to a crushing size. They advocate reining in the debt by cutting back on government spending (particularly on social services).
  • The Keynesians advocate increased government spending, to stimulate employment and get us out of recession, after which we can start paying down the debt.

Neither side mentions the broader issues:

First, the debt can never be paid off. It’s like the game of Musical Chairs, in which there are never enough seats for everyone. Our money is created as bank loans that grow with interest, so the paper economy of debt has grown far larger than the “real economy” of goods and services, homes and roads, factories and farms.

And rising unemployment is inevitable under capitalism. Here is why: Under any economic system, people gradually figure out better ways of doing things, and so they produce goods and services using fewer hours of human labor. That would mean reduced hours and increased pay for us all, if we were all valued members of the team. But under capitalism there is no team. As productivity rises, some workers are laid off and the owners of the workplace pocket their salaries. With more unemployed competing for fewer jobs, wages fall. That alone would warrant the failing grade I mentioned earlier, but there are plenty of other failures in this system too.

Our workplaces are not democracies. Consequently most of us are doing work that is not interesting or meaningful to us, nor helpful to society; it is merely profitable to the owners of the workplace. Thus, most of us hate our jobs. That’s not inherent in all work; for instance, the teacher, nurse, and firefighter may feel good about what they accomplish. We need to restructure our economy so that all jobs are as meaningful as theirs. But that won’t happen under capitalism.

And I’m not talking about “unfettered capitalism” or “corporate capitalism” or “predatory capitalism,” as though capitalism itself were fundamentally sound but we’d recently strayed from it. No, capitalism itself is vile in its fundamental principles, in what it is supposed to do.

Private property makes trade necessary, and the market inevitably concentrates wealth and power into ever fewer hands. That’s because any market transaction may profit both traders, but it gives greater profit to the trader in the stronger bargaining position, making him stronger still, increasing inequality. It’s like the board game of Monopoly, which begins with everyone on a pleasant shopping spree; it ends with all the players but one destitute. It may be a “fair” game in the sense that everyone starts with an equal chance to be the one survivor, but it’s a terrible design for the world economy.

Large corporations pay a public relations department to make them look community-minded, but that’s only an appearance. They are compelled, by competition and by their legal charters, to maximize immediate profits by any means available, disregarding or even concealing whatever long-term harm may result. So-called “market solutions” often are worse than the problems they claim to solve.

money in politicsWealth buys government, and erodes its way through any regulations. Winning elections requires expensive advertisements, so our votes merely choose which wealthy candidates will rule over us in their own interest; elections elicit our preferred answers to the wrong questions. The only way to end rule by the wealthy class is to not have a wealthy class.

The market claims to be efficient, but it is only efficient regarding costs that are measured and borne by the buyer or seller. Its unmeasured side effects on everyone else are immensely destructive. And when people lie to start a war, that’s mass murder. War, poverty, ecocide, and other torments will continue as long as we are ruled by profit. The ecosystem is dying, not because of technology, but because of profit-driven technology. We have little time left to change things before the ecosystem collapses completely, killing us all.

And all of that is just the material side of capitalism; its spiritual side is devastating too. We’re often told that any alternative to capitalism would be unrealistic because “human nature is basically greedy and apathetic,” but that’s backward: Capitalism actually causes the greed and apathy all around us, and brings out the worst parts of human nature.

Power seduces and corrupts: Bosses bully workers, guards torture prisoners, police shoot the poor, and the rich start wars. Perhaps it’s because the powerful justify their power to themselves with some invented histories or philosophies, and then come to believe in those inventions.

Some activists blame our troubles on the personal moral failure of a few greedy individuals. And, yes, those few are willing agents of evil. But the root problem is not capitalists — it’s capitalism. It’s our culture of separateness, which is inside all of us, not just the ruling class. It is inherent in the seemingly harmless middle-class life to which most of us have aspired. To exorcise it, first we must understand it:

separate housesPrivate property creates separateness: You keep your stuff in your house, and I keep my stuff in my house. Your loss is not my loss, and might even be my gain. We’re incessantly told competition is good for us, though just the opposite is true. No wonder bullying is widespread, and our society is hooked on antidepressants.

We’ve hoarded for 10,000 years, and it’s hard to imagine any other way of life. But for 100,000 years before that, we shared everything of importance; we can still find our way back. Nothing less will save us from extinction; nothing more is needed to guide us to utopia. When enough people see capitalism for what it really is, it will end. Join the conversation – we’re all needed on the planning committee.

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2018 July 29, version 2.02.