Myths of Capitalism



The rich get that way by being smarter than most of us; we should accept everything they say as great wisdom.

The rich got that way by being the grandchildren of thieves, and they stay that way through selfishness. Everything they say is a lie.

The market rewards the industrious and punishes the lazy.

The market rewards the few who control the market, and screws everyone else.

Capitalism is the source of all innovation and progress, including flush toilets and cellphones.

Science and technology are the source of all progress. Capitalism tries to claim credit. Nearly all innovation comes from university labs and government labs, where the workers are paid in a socialist fashion, not by how much profit they bring in.

Capitalism has lifted millions of people out of poverty and hunger.

The world now has the resources for ending poverty and hunger altogether, but it’s not happening because it wouldn’t be “profitable” to the Powers That Be.

Most poor people in the USA are wealthier than ancient kings.

It’s true that absolute poverty has diminished, but relative poverty still means someone else controls your life. What good is a Rolex if you’re in a prison cell? And even the rich worry about becoming not-rich. The stress from competition harms us all, even the rich.

Capitalism is democracy.

small wealthy classFew people in our society get to vote on how their workplaces are run; that’s why we all hate Mondays. And the 2014 research by Gilens and Page showed quantitatively that government follows the preferences of the rich, not those of the general public.

Voluntary trade happens only when both parties benefit.

The migrant farmworker “voluntarily chooses” long hours at hard work for low pay, rather than starvation. The “volunteer army” is recruited by the poverty draft. Their lack of alternatives is built into the capitalist system.

Voluntary trade is making the world a better place.

better bargaining positionEven if both parties benefit from a trade, generally one benefits more. Generally it’s the one who was already in the stronger bargaining position, and so the trade makes him stronger still. Thus trade — even “free trade” — increases inequality, and ultimately creates a small wealthy class that controls everything —  homes, workplaces, government, banks, debts, and even the market itself. Thus, if there ever were a “free” market, it wouldn’t stay that way for long.

This process is not a result of “corruption,” but happens even when trade is working “properly” — just like the board game Monopoly normally ends with all the players but one totally impoverished.

The market is efficient and wise.

oily birdThe market cannot be efficient or wise regarding costs it ignores — i.e., externalized costs, which are not paid by the buyer or seller. These include war, poverty, and ecocide.

Moreover, the market forces CEOs to compete against each other in offering short-term profits to investors, without regard for the future. On what world will you spend your ill-gotten gains, when this planet is destroyed?

“Caveat emptor” works fine. Just boycott the bad companies.

Few people have time to live like Ralph Nader, investigating every company, becoming an expert on every product or service we buy. We might hire people to become experts for us; that’s the job of the Environmental Protection Agency, the Food and Drug Administration, and several other government agencies. That’s the “government intervention” so often complained about. Unfortunately, those agencies get underfunded, understaffed, and bought off by the bad companies. The only way to really end corruption is to end its incentive, the pursuit of private advantage.

Capitalism makes “the American dream” possible.

The so-called “American dream” is a nightmare: You keep your stuff in your house, I keep my stuff in my house, I don’t need to care about you, I can’t afford to care about you, and the guy who gets left behind may start shooting. Let’s end the separateness.

Under capitalism, anyone who works hard can succeed, and even become rich.

every-woman-in-africaIf that were true, every woman in Africa would be a millionaire.

If people would just work harder, and get themselves educated, they would be able to get jobs.

charlie_chaplin02Education has been priced out of the reach of most people. And there are far more unemployed people than job openings right now, regardless of education. And that trend will continue, because productivity keeps increasing, as employers get better information and better materials and better equipment, and recently, robots. The benefits of increased productivity are not shared with the workers, but are pocketed by the owners of the workplace, so for most people progress means layoffs, not leisure.

Automation is increasing far faster than most people realize. If we continue to give all earnings to a handful of owners of robots, soon most of the human race will be starving. This system cannot continue much longer.

Corporate executives deserve their enormous salaries, because they are smarter than everyone else and they do very important and difficult work.

In the few instances where workers have kicked out the executives and taken over the business, generally profits and productivity have increased greatly.

And it might be possible for someone to be twice as smart or twice as hard-working as you, but not 1000 times as smart or as hardworking — that’s just biologically impossible, so it can’t justify a salary 1000 times as large. The real reason your boss is drinking more from the money stream is because he is standing between you and the stream.

The problem is not capitalism itself, but “unregulated capitalism” or “corporate capitalism.” Capitalism would be fine if we just reform it a little. Its fundamental principles are sound, but we have strayed from them into corruption; we just need to clean things up a bit.

biz_devilEvidently you haven’t understood what the principles of capitalism really are. You’re suggesting that we can safely harness greed. You’re suggesting that we can draw up a contract with the Devil, and do it so cleverly that even his army of lawyers will not find a loophole by which he will put us in the harness. The wealthy buy the legislators who you are hoping will protect us from the wealthy.

Competition brings out the best in us.

Anything that can be done with competition, can be done better with cooperation. But Alfie Kohn has explained this better than I can; listen to his lecture about it.

Capitalism is the only system that will work, because people are basically selfish. They will only work for money, for private gain.

Sociologists have found that money is a good motivator for mechanical, menial, uncreative tasks, the kind of work that capitalism excels at creating. But sociologists have found that people prefer the intrinsic rewards of creative, meaningful work. For instance, nurses and firefighters don’t get big paychecks, but they feel good about being useful to other people. We should restructure our economic system so that all people have meaningful work.

Hollywood tells us that, in the event of disaster, people turn into savage beasts and fight each other for scraps of food. That makes an interesting story, but it’s not true. Rebecca Solnit’s book A Paradise Built In Hell shows that in actual disasters, when day-to-day habits are swept aside, people band together to help each other; later they speak about how wonderful it felt to be part of a community.

Culture can change. It sometimes does accidentally. But we’re intelligent enough that we don’t have to wait for an accident; we can consciously choose to change our lives. The first step is to get more people talking about it.

“Property rights.”

Though laws are always enforced selectively, the law says that when you buy stolen property, it doesn’t become yours — legally it still belongs to the people from whom it was stolen. But if you trace things back a bit, you’ll find that they bought it from someone who bought it from someone who stole it.

hunter-gatherersIf you trace it all the way back, you’ll find that originally all the land, and all the good things produced from the land, were shared by the whole community. Sharing comes naturally to hunter-gatherers, because everyone is dependent on everyone else. That all changed with the invention of agriculture, 10,000 years ago. The first thief was the first guy who put up a fence and said “this portion is mine.”

Admittedly, sharing is hard to imagine, because we’ve departed so far from it. But we’d better relearn it soon, because the ecosystem can’t survive much longer in privatized little bits. Species are rapidly going extinct all around us, and we’ll soon join them if we don’t change our ways.

How do you intend to implement a fairer system? Through a violent revolution? Or do you think you can just sweet-talk the rich and powerful into voluntarily giving up their wealth and power?

I’m hoping that we can spread understanding to all of the 99%, including the police and military. If we all just walk away from the rich, and refuse to honor their pieces of paper, they no longer will be rich.

police in riot gearHowever, it probably won’t be that easy. First, we may never get to 99%. Probably most of the police and military will not join us, because they’ve been selected for their authoritarian inclinations and trained to strengthen those inclinations. And the powerful, corrupted by their power, will not easily be converted; most of them will resist violently. You can see that already, in police beating up protesters. (You don’t see protesters beating up police.)

I hope we can avoid violence, since nonviolent revolutions generally produce better outcomes. But if it does come to violence, at least I feel that ethics is on our side. Systemic violence, structural violence, is already quite widespread. What are poverty and hunger, but slow violence? Mark Twain said this really well, in describing the French Revolution:

guillotine“There were two ‘Reigns of Terror,’ if we could but remember and consider it; the one wrought murder in hot passions, the other in heartless cold blood; the one lasted mere months, the other had lasted a thousand years; the one inflicted death upon a thousand persons, the other upon a hundred million; but our shudders are all for the ‘horrors’ of the minor Terror, the momentary Terror, so to speak; whereas, what is the horror of swift death by the axe compared with lifelong death from hunger, cold, insult, cruelty and heartbreak? A city cemetery could contain the coffins filled by that brief terror that we have all been so diligently taught to shiver at and mourn over; but all France could hardly contain the coffins filled by that older and real Terror – that unspeakable bitter and awful Terror which none of us has been taught to see in its vastness or pity as it deserves.”

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2016 Dec 24, version 1.08