TRC contributor, Tesha Miller

Is Capitalism Failing Us?

Capitalism is endorsed as an economic system which promotes democracy and prosperity.  These assertions are vehemently defended by capitalists and concepts such as supply and demand are even referred to as laws.  Such notions are branded into the minds of Americans from birth and make it nearly impossible to critically discuss some of its flawed features.  The very idea that this economic system might need to be altered or even ended, to fit the demands of a changing world, seems radical; for some, downright un-American. Nevertheless, without serious analysis into some of the extreme failures recently brought about due to population increases, mechanization and globalized trading trends, the basic needs of billions of people will not be met.  Other complications, which are responsible for the current destruction of our planet and its life sustaining resources, have presented us with an ethical dilemma of monstrous proportions which can no longer be casually brushed aside or saved for a more convenient time.

The entire purpose of capitalism is to produce a good or service based upon a demand and continued growth of that business is expected to happen until the demand is met or subsides.  Those that are most successful in a market will grow larger and larger and hire more and more workers and will require more and more natural resources to do so.  In other words, growth is the truest measure of success under this system (and of course, excess capital will be gained for the effort by the capitalist).

This sounds really great if you don’t take into account several mounting problems which are quickly complicating this simplistic view of supply and demand capitalism.  Firstly, our planet is finite and this literally means that we only have so much available landmass and water.  That is fixed and can’t be changed.  Technology may be able to change an environment to give us greater usage of the landmass but the actual area can’t be changed and this is already starting to present us with some real problems. Urban sprawl, for example, has swallowed up land that might be used for other purposes such as farming, or as a source for renewable resources, or might be used to maintain biodiversity.

As populations continue to increase, energy demands also rise which results in serious complications, including warfare.  In order to meet these challenges and sustain a continued growth rate, energy providers will frequently encourage military intervention of their respective governments in order to secure deposits of rare earth minerals, gas and oil reserves.  Other increasingly dangerous industry practices are frequently used, such as offshore drilling, which can have serious impacts upon the health of our oceans aquatic life and even disrupt the food chain.  The recent catastrophic BP Gulf oil spill is a poster child for the severity of environmental damage that can occur from a single botched incident of industry that is legally bound to maximize profits.

Bigger corporations not only require more natural resources for continued growth but also can threaten the democratic will of the people and this inevitability is directly related to how capital organizes labor; as Einstein astutely noted…

Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones.  The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society.  This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature.

The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population.  Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education).  It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.

Concentrated wealth has always conflicted with the democratic will of the people because it accrues more political influence as it becomes bigger.  The larger and more monopolistic a corporation becomes the more predatory it becomes to its own market and innovation in similar markets gets suppressed, which limits the choice of the consumer.  Important markets to national security, such as energy, become intertwined with  government and start to rely upon taxpayers money, such as subsidizes or tax cuts, in order to remain dominate.  Alternative solutions and markets never see the light of day under such conditions and eventually corporatism results.  All legislative and judicial measures start to morph into functions for corporate interests and corporate personhood is nothing short of the declaration by corporations of their newfound powers over we the people.

Mechanization must also be seriously considered as we think about economics and more specifically the functions of capitalism in today’s world.  During the US industrial revolution populations were smaller and resources were plentiful.  Capitalists made quick work of staking claims on natural resources and production monopolies soon developed which would  later be trust-busted by the enactment of antitrust laws.  As Senator John Sherman remarked…

“If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life.”

Mechanization started to mean greater production of goods, which was fine, given the populations of the time and energy consumption needed to fulfill early industrial requirements.  The notion of sustainability wasn’t important to early Americans as they tried to carve out a higher standard of living for themselves.  Workers started to organize and fight for a greater say in how their working lives would be managed.  Economic democracy wasn’t realized, but basic labor laws were achieved.  The culmination of these events created a fledging middle class.

Tying it all together in modern times

In modern times, mechanization is a becoming a more complex issue. Firstly, it means the replacement of workers with machines which consume huge amounts of energy.  As developing nations move into their own industrial age, such as India, the rate of needed resources climbs upward which encourages increasingly reckless practices of energy producers.  It causes warfare, as more natural resources are needed by nations, because they have growing populations which consume more. To further complicate matters, other renewable energy sources developmental plans are undermined by oil and fossil fuel corporations which control governmental energy policy.

Globalized trade is proving itself to be a huge energy consumer as ships, planes, trains and trucks move goods across hundreds of miles.  Simultaneously, it is responsible for driving down the living standards of workers who  live in developed nations, as they try to match their developing nation counterparts’ poor labor standards and substandard environmental regulatory laws.  As capitalism moves across the globe, under various governmental forms, it still has only one primary purpose and that is to create  profit, profit and profit.  The globalized picture is one of exploitation of resources and people alike.

Is this a sane way to manage our lives?

Millions of people across the globe are starting to recognize that something has gone horribly wrong with the way the modern world works.  They understand that profits are being made off of the misery of others and that our Earth is being carved up by economic vultures.  They realize that a proper economic system must provide for the needs of people first and take care of the Earth, which sustains all life.  Such people are fighting for resource sustainability, not because they are irrational or aren’t sympathetic to those in need of work, but because they realize that we can’t keep consuming more and more on a finite planet.  They are advancing the notion of a return to community ethics and local cooperatives which strengthen direct democracy and economic democracy.  The time is upon us to finally realize what we have wanted all along, the ability to contribute the unique skillsets that each of us have to offer for the betterment of ourselves and our communities, to manage our own lives without unjust interference from others and to make sure that there will be enough left over for our children to do the same.  We can do better.

He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery. ~ Harold Wilson