Capitalism Doesn’t Add Up
When I retired from teaching college math, I began to apply my reasoning skills to politics and economics. And I’ve found 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 human nature that mainstream economists make at the beginning of their reasoning, before they ever get to their numerical computations. And many other people in our society are also unaware of their own assumptions about economics, politics, and human nature.
We’ve been misdirected away from the truth by a culture that, as Chomsky has said, encourages a lively debate within a narrow spectrum 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.
- 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 debt economy of numbers on paper 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 with fewer hours of human labor. That would mean shorter hours for us all with no reduction in pay, if we were all valued members of the team. But under capitalism, there is no team; the workplace is not a democracy. As productivity rises, the owners of the workplace lay off some workers and pocket their salaries. With more unemployed competing for fewer jobs, wages fall. That alone would warrant the failing grade I mentioned earlier.
And the lack of democracy in the workplace also means many people hate their jobs. That’s not inherent in all work — 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, even in its fundamental principles, even when it is doing what it is supposed to do, even when it is honest, and it can’t be kept honest. The only recent development is that the terrible symptoms are becoming more apparent. I’m trying to explain the underlying disease.
Private property makes markets necessary, and the market inevitably concentrates wealth and power into ever fewer hands. 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. That’s because the wealthy collect rent on private property, interest on debts, and profits from workplaces. In general, the rich choose only those deals that make them richer. The poor don’t have so many choices. Who would choose to be a migrant farmworker?
Large corporations may pay a public relations department to make them look community-minded, but they really can’t afford to put the community ahead of the bottom line. 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. That’s why their so-called “market solutions” often turn out to be worse than the problems they claim to solve.
Wealth 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. The only way to avoid rule by the wealthy class is to not have a wealthy class.
Capitalism is 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 those bring profit to a few people. I want to emphasize that the ecosystem is dying, not because of technology, but because of profit-driven technology – that is, technology implemented for private gain, without regard for its effects on the rest of the world. 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 equally devastating. 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 suppresses our better angels, and brings out the worst parts of human nature; it actually causes the greed and apathy all around us.
Power seduces and corrupts. This is demonstrated by the Stanford Prison Experiment and numerous other sociological studies. 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:
Private 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 fall. Join the conversation – we’re all needed on the planning committee.
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31 March 2013. This web page is also accessible via the URL http://CapitalismDoesntAddUp.org.