This post grew out of a Facebook conversation with a friend who posted this PBS article. After a few exchanges, he asked if I could address four concepts (listed at the bottom of this post). I have attempted to discuss my feelings about global capitalism and welcome any comments. You can post comments at the very bottom.
To begin, I am going to disagree with the idea that capitalism, in theory, is not such a bad guy. I think the foundation of capitalism is inherently one that fosters greed and exploitation. A key element within capitalism is the idea of wage labor: an economic system that places the profits of production into the hands of a person (the employer, or boss) that does not produce those goods and in turn, this boss will then pay what they see as fair for the work that the employee has done. This is regarded by many anti-capitalists as wage slavery because a worker is essentially forced to work for a wage that will in turn pay for the goods that they are making. Workers stuck in the wage system are also unable to voice their opinions on what should be done with the profits that they have created. If you try and remove yourself from this hegemonic environment of capitalism, I would argue that it does not make logical sense to utilize this economic system (unless, of course, you are at the top of this hierarchical, top-down model). After all, why would you spend your day toiling on a good or service and then just leave that labor behind at the end of the day so that someone else can sell your hard work for more than they paid you to perform that said labor? Logically, this is ludicrous.
Furthermore, there are many arguments comparing chattel slavery with wage slavery, and indeed there are many similarities. In fact, there is some scholarship that argues that wage slavery creates conditions that are actually worse than chattel slavery but it is hard for me to agree with that statement as I only have experience with the former. However, the conceptual paths of wage labor and slavery intersect frequently throughout history. For example, the earliest wage labor contracts on record are actually concerned with the rental of chattel slaves. So, with this in mind, is it really surprising that this is the genesis of our current global economy? Some anthropologists, such as Jonathan Friedman, argue that slavery in ancient Egypt was a system of proto-capitalism, but I tend to agree with David Graeber’s assessment that modern capitalism is just the newest form of slavery. As he says: “Instead of people selling us or renting us out we rent ourselves. But it’s basically the same sort of arrangement.”
Now, many may say sentiments along the lines of: “well, not every capitalist is a bad guy. Look at Bill Gates! He gives so much to charity.” While donations to charitable causes is certainly a noble act, the money that is being given to charity was earned on the backs of workers who may not need charity if wealth was distributed laterally. If we go back to Marx and Capital, he argues that the motivations of the capitalist does not matter because the system is, as I have said previously, inherently driven by greed. A talk by David Graeber (yes, I know I utilize him a lot as a source) drives this point home: “You could be the nicest person in the world. You could have the best intentions possible [and] you could love your workers more than yourself. It doesn’t matter. If you are in a competitive marketplace structured in a certain way, there are constraints.” And those constraints are due to the ultimate goal of capitalism: to always accumulate more capital. Eventually, within a capitalist system, you have to exploit your workers or you will go out of business. The success of exploitative companies like Wal-Mart, McDonald’s, and Nike are all good examples of this concept.
This leads to the global aspect of capitalism and the widening divide of wealth. Last year, Oxfam released a report citing the staggering epidemic of global wealth inequality: their study showed that the richest 85 people in the world share a combined wealth of over one trillion dollars ($1,000,000,000,000) which is equal to the wealth of the poorest 3.5 billion people on the planet. More staggering is the fact that half of the world’s wealth is now owned by one percent of the global population and that one percent amounts to $110 trillion, 65 times the total wealth of the bottom half of the world’s population. These numbers make it pretty hard to refute that the welfare of people is not considered when working within a capitalist framework.
The deepening of the wealth gap is not a phenomena that is reserved for the third-world. The United States is falling victim to this unbalanced distribution of wealth as well. For example, the wealthiest 1% of Americans captured 95% of post-financial crisis growth since 2009, while the bottom 90% became poorer. This is due predominantly to several factors: the moving of skilled labor overseas and the US government bailing out privately held Asset Backed Securities insurance.
Since the 1970s, worker productivity has increased dramatically but wages have not risen to meet that productivity. Economist Richard Wolff has attributed this to several factors: the computer (fewer workers needed to do menial tasks), profits taking over American politics (fewer Americans participating in politics due to loss of free time because they had to work longer hours and more jobs to meet an acceptable standard of living), the exciting of the stock market (internet companies bubbled the stock market with possibilities rather than profits leading to the bursting of the dot-com bubble), and most importantly, corporations decided to move production out of the US. Workers in other parts of the world were much cheaper and computers also allowed for meetings to take place virtually. According to Wolff, 60% of goods that come into this country are subsidiaries from US companies; that is, Chinese workers being paid by American corporations. In turn, this lead to increased profits which, instead of increasing wages, were used to lend money to the working class, which generated more profit for the corporations by way of interest. Corporations saw these increased profits being due to “good managerial skills” and this led to higher and higher bonuses and salary increases for the employers, rather than the workers.
The second factor that has led to the deepening wealth gap has been the bailing out of privately held Asset Backed Securities (ABS) insurance. Also starting in the 1970s, the practice of buying ABS of mortgages, car loans, student loans, etc became commonplace. However, many were worried what would happen if people were not able to pay the securities so many banks created insurance policies for ABS. If people stopped paying the security, the insurance company would pay what was owed. AIG, for example, wrote trillions of dollars worth of ABS insurance policies. In 2007, many American families began to default on their securities due to the financial collapse and ABS holders went to cash in on their insurance policies. AIG essentially said: “Sorry, we don’t have the money. Have a good day!” Thousands of pension funds depended on those securities. As many remember, the American government then moved in to bail out those insurance companies in order to keep from complete financial collapse. This led to something remarkable, the top 10-15 banks in this country are no longer private banks; they are owned by the United States government. Despite all of this, the government, and many of its citizens, still refuse to see the fact that capitalism is a broken system.
This example shows the fallacy of the right’s championing of the “free market” and laissez-faire economics because if it were not for “big government,” the Great Satan of the Tea Party, we would most certainly be in worse shape than we are in now. However, I should also clarify that this is not a defense of government because I believe that the elimination of the state as a whole, by way of anarcho-syndicalist revolution, would solve a host of problems including those being discussed in this paper. But getting into that can of worms will have to wait for another time...
“Capitalism Hits The Fan - Richard Wolff,” YouTube video, 1:45:08. Posted by “PHubb,” December 3, 2009. https://youtu.be/TZU3wfjtIJY
Carsel, Wilfred. “The Slaveholders’ Indictment of Northern Wage Slavery,” The Journal of Southern History 6 (1940): 504-520.
Graeber, David. Fragments of an Anarchist Anthropology. Chicago: Prickly Paradigm Press, 2004.
“Is Capitalism Part of the Answer?” YouTube video, 10:44. Posted by “Occupy London TV,” November 3, 2014. https://youtu.be/9f9H1dm5qMQ
Oxfam, “Working For The Few: Political Capture and Economic Inequality.” Accessed March 13, 2015. https://www.oxfam.org/sites/www.oxfam.org/files/bp-working-for-few-political-capture-economic-inequality-200114-summ-en.pdf
 Wilfred Carsel. “The Slaveholders’ Indictment of Northern Wage Slavery,” The Journal of Southern History 6 (1940): 516.
 David Graeber, Fragments of an Anarchist Anthropology (Chicago: Prickly Paradigm Press, 2004), 71.
 Oxfam, “Working For The Few: Political capture and economic inequality.” Accessed March 13, 2015. https://www.oxfam.org/sites/www.oxfam.org/files/bp-working-for-few-political-capture-economic-inequality-200114-summ-en.pdf
ORIGINAL TOPICS TO ADDRESS:
A) Capitalism, not such a bad guy, but our implementation of it being an issue, especially trying to continue it in a globalised economy and not understanding why (or even the nature of) "our" wealth being moved en masse over seas.
B) The reverence for the free market, and/or thinking we have one, or basically the common use of it as a buzzword without recognizing the fundamental principal behind it (everyone acting logically) is a flawed, unobtainable utopian ideal.
C) Corporations bring considered by law to have the rights of people, and how a noble idea that solved problems, is creating new ones because corporations aren't people and shouldn't operate thus, especially because they by nature do not have to deal with things like physical survival or empathy.
D) Mandating by law that publicly traded companies must put their shareholders above all else (which seems logical), but which puts an overemphasis on profits over anything else, which leads to a whole host of problems, much like the one outlined in the article I linked, where giving stock options as "payment" to the higher-ups and then allowing artificial bolstering of stock price funnels wealth into the hands of those that already have it and stifles a corporations desire/need to bolster their stock price by actually making their company better/more valuable.
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