The Case Against the New American Capitalist Ideology
by Alex Knepper
Although capitalist ideology always seeks to cast criticism of corporate power without restraints as ‘socialist’ — and therefore illegitimate and undesirable — the purpose of this document is not revolutionary, or ‘socialist,’ or anything like that. It will exclusively focus on a critique of actually-existing capitalism in the United States in 2019, as well as the many faces of the ideology that sustains it. Therefore it will deal with questions of material conditions, ethics, and propaganda alike; transparently crude arguments might be discussed right after dealing with claims of academic economists, simply because crude arguments always find their way into popular discourse, always manage to convince a large number of people through sheer force of repetition and reinforcement, and must be dealt with as surely as the professionalized and quantitative claims of academics.
The general moral sense of this document is oriented around ‘the common good,’ which is not, as the utility-maximizers would have us believe, merely the ‘greatest [material] good for the greatest number.’ Intangible and invisible forces that animate human life and assign it its distinctive colors and flavors and character will be considered as surely as material factors. One of the errors capitalism and socialism share is their dogmatic, comprehensive materialism, their indifference to God and true religion — and this document is also written in the spirit of Christian charity and love for man. We will not discard or suppress or bury the fate of the poor in an avalanche of statistical averages, as do the bourgeois economists.
The author, an incoming seminarian, is a convert from radical libertarianism and militant atheism. I have lived and breathed love for idealized capitalism, industry and technology, and have known and felt all of the academic rationalizations for maltreatment of labor. I have studied the thought of Ayn Rand, Milton Friedman, Murray Rothbard, Thomas Sowell, Frederic Bastiat, Ludwig von Mises, and F.A. Hayek. These writers, to varying degrees, represent capitalist ideology in their purest and most convincing forms; it is their arguments, passed down, often in vulgarized form, to everyday voters through a variety of channels, that have won the hearts of today’s capitalists and which have served as the warrant for forty years of economic policy designed without the interests of labor in mind. It is therefore arguments like those I will deal with most thoroughly.
The aim of this document is not to suggest policy solutions. In future articles, I will recommend a variety of policy solutions. But, with allowances made for the fact that staking out certain positions invariably arouses the support of certain groups and the ire of others, this is not a factional document; it is meant to be as useful and inviting in the hands of paleoconservatives and conservative Catholics as it is in the hands of revolutionary socialists. I have tried to cover as many bases and plug as many holes and anticipate as many objections as possible while still keeping the article a digestible length.
The general scheme of the article is to compare the utopian capitalism of the American right against actually-existing American capitalism, in the form of dialogic responses to five common, general capitalist tropes. They are my own summaries of what capitalists believe; I have tried to be as fair as possible — that is: I have tried to construe the capitalist talking points in a way that would enable me to pass an ‘ideological Turing test.’
We shall begin with the most fundamental of questions: What is capitalism?
1. “Capitalism is a system of free and voluntary exchange between individuals in pursuit of mutual gain.”
Capitalism is a system built on the rational, scientific-technological conquest and manipulation of nature and necessity, to unleash, capture, and channel their hidden powers to put at the service of human desire. These powers are harnessed both for immediate use and to store up for use later, most especially in the fungible form of money, which represents that power, and which can be exchanged for any number of goods or services believed by the buyer and seller — typically — to result from power over nature approximately equal to the power represented by the money. (There are other ways to exert power over nature than through the mechanisms of capitalism, of course, but capitalism has so arranged itself to unleash these powers in unprecedented fashion and rationally organizes itself through various devices, including money.)
At the origins of capitalism, near-exclusive control over these powers is held by capitalists proper, i.e., those who own the means of production, who distribute scraps of the fruits of the system to laborers who agree to work long or hard enough to produce profit in significant excess of that with which he is compensated; the excess profit is kept by the capitalist. A long series of crises, agitations, and gathering storms of civic unrest have resulted in a variety of legal concessions and regulations compelling capitalists to surrender increasing amounts of profit — of power over nature — to the masses, often in fixed, dependable forms, such as access to healthcare-related technology and services, or a universal monthly pension.
It is vital to the perpetuation of capitalism that the end-goal of the system remains totally indeterminate; to admit of an end-goal would be to sign capitalism’s death warrant. Capitalism long ago reached a level of development at which the essential needs of all of the people can be effortlessly supplied. It must therefore constantly manufacture new desires to induce people to continue to labor and spend, constantly raise the level of technology to dazzling new heights, and cultivate artificial scarcity, compelling laborers to work needlessly long hours to obtain what in reality ought to be inexpensive goods and services. The endless parade of smartphone upgrades might be the example par excellence in today’s economy: that which was invented just three years ago becomes ancient and obsolete; marginal and frivolous ‘improvements’ are marketed as essential new features; the much-coveted status attached to what was vital only a year ago disintegrates almost as soon as it solidifies. Rather than fine-tuning new devices with substantively new features to be released every five years or so, Apple rushes every minor new feature to market as soon as possible, coupled with an avalanche of hype and propaganda.
Capitalism is full of fakery along these lines.
Capitalists exploit not just nature, but raw human necessity to their material advantage. To begin with, every person must, as a life-and-death matter, eat, drink, and find adequate clothing and shelter. The minimum demands of everyday human existence insist on the fulfillment of these material conditions, and those who cannot secure them are not considered to be full participants in human life, whether socially or individually — for instance, the homeless, who are always considered an underclass, somehow outside of the system rather than a product of a system that discards individuals who are not economically useful. Every individual strives with all his power to provide these basic needs.
Traditionally, one could provide for these things by himself, or with the help of family, or a network of social associations. Although subsistence farming and serfdom is taxing labor, and not glamorous or altogether rewarding, it is psychologically sensible and satisfying, insofar as it satisfies the basic external needs presented to the mind by material conditions; work always serves an immediate practical purpose; moreover, the serf never mistakes himself for a free man and does not expend physical or psychological energy in pursuit of an illusory economic goal. (Yet even in his unfree state he is not subject to the micromanagement and constant arbitrary whims of a factory foreman.)
Capitalism abolishes these simple and unsatisfactory conditions, replacing the primitive agricultural compact with nature with unalloyed scientific-technological domination over nature, supplying formulaic certainty to the production of basic needs — but also requiring participation in industry in order to obtain these goods.
Considered from a bird’s-eye view, this is, on its own, a positive development: the emergence of industrial technology points to the potential for an enormous increase in material standards of living for all people; as knowledge of how to manipulate and control nature is unveiled, that knowledge becomes the general property of man, the common fruit of all; and the material conditions are already in place to provide a higher standard of living to all.
The system of absolute private ownership of the means of production, however, has guaranteed that, rather than arranging the common fruit of all for the common good of all, individuals are powerfully incentivized to use their property to maximize their private gains, both accidentally for the good of others and purposely against the good of others.
As industry expands and totalizes its dominion over economic life, it is no longer possible at all for more than a few individuals to consistently access food and drink, clothing and shelter, or any of everyday life’s other goods, without participating in industry, i.e., by auctioning one’s body, time, and labor to capitalists who will find one useful.
In practical terms, this is what a mafioso calls ‘an offer you can’t refuse’: sell your body, time, and labor at a price amenable to the financial interests of one who owns property — or perish. Because the incentives are approximately the same for all capitalists in a given industry, competition in wages exists only in a narrow range, and there tends to be an ‘industry standard’; only minor variations in wages exist for a job whose material conditions and profitability only exist in a small range. There is only so much profit a capitalist can sacrifice before his business ceases to be viable in the face of other, equally ruthless businesses. Hence wage-workers do not really have the option to ‘vote with their feet’ and work elsewhere if they are dissatisfied with the wages at one company. Every company in an industry is driven by the same set of incentives, and this is increasingly true as industries consolidate.
Far from being a system that allows for pure voluntary choice, capitalism is a system that presents man with a long series of offers he can’t refuse, full of superficial variety that is glorified as freedom and choice — and proceeds to pacify him with bodily comforts without which life becomes unimaginable and unmanageable.
2. “Although in capitalism’s early stages of development, exploitation of labor was common, and perhaps necessary, as material conditions have improved, we have been able to reduce the hours of the work day, grant higher wages and superior benefits to workers, and witness an unprecedented level of material prosperity among the masses. The abuses of the 19th century are lamentable, but capitalism has matured beyond these problems. There is no reason to dwell on the past.”
The work day in early industrial Britain was 16 hours long, and workers were compensated with only enough money — and sometimes not even enough money — that would keep them from starvation and wretched destitution; that is — only enough to keep them from running away. Children of both sexes as young as seven years old were subjected to gulag-like, or concentration camp-like conditions: compelled to work in hazardous, disgusting, and exhausting settings. Sometimes companies would even forgo paying child laborers anything at all, on the premise that the food and shelter provided for the children was enough compensation. Foremen were permitted to physically beat workers, including children, perceived to be slacking; workers were intensely monitored, and injury and death were common and could easily turn a worker or his (or her) family into beggars.
Capitalists fiercely lobbied parliament against the ‘socialist’ 12-hour work day, ‘socialist’ child labor regulations, and ‘socialist’ minimum wage laws. They wanted and preferred their laborers in gulag-like conditions, and any warm body that dropped dead or was irreparably injured could be easily replaced by another warm body. For a few decades, industry operated more-or-less unchecked in this manner, until finally public outrage and increasing class-awareness among labor were able to force such concessions in the law.
These conditions have somehow been fixed in the public imagination as some sort of necessary transitional stage that industry must go through as a matter of course. It cannot be underlined enough that these conditions were in fact not natural, inevitable, or necessary. They were consciously arranged in this manner by capitalists so as to maximize their private profits, without any regard for human life, human well-being, or human suffering.
The tyrannical greed of capitalists was such that, during the famine in Ireland in the 1840s, the country was actually a net exporter of food, because industry found it profitable to sell the food abroad rather than ensure that its neighbors had enough to eat.
Whenever the opportunity exists, capitalists prefer these conditions for workers and will aggressively lobby to be allowed to create and perpetuate them. Nor have these conditions disappeared: they still exist, under the dominion of ostensibly advanced, first-world American corporations, in brutal sweatshops in East Asia, Central America, and elsewhere, paying cents on the hour for products to be sold at a discounted price to first-worlders. Countries outside of the historical settings of capitalism are dragged into the system and compelled to participate by international capitalists, who aggressively lobby the governments of both the United States and the host countries to not obstruct them from appropriating the resources and bodies found there. Workers are paid as little as eight cents an hour and cannot buy the things they make, labor rights simply do not exist and compulsion is commonplace, and physical beatings and control over employees’ bodies (e.g., through forced abortions) are routine. It must be emphasized again that these things are done not out of necessity or because of some objective economic law, but rather consciously and deliberately, in order to maximize the profits of those who own the company.
American capitalists are fully conscious of what is taking place. Infamous lobbyist Jack Abramoff successfully lobbied former House Majority Leader Tom DeLay in the 1990s to protect such conditions even on American land, on the Mariana Islands, where workers imported from Asia were shipped into factories surrounded by barbed wire, were subjected to non-stop work by day, and were prostituted at night. The capitalists who ran the factory knew about it, the House Majority Leader knew about it, and lobbyists knew about it — and they circled the wagons to protect the sweatshop industry: Tom DeLay made sure Congress was never able to vote on legislation aimed at mitigating such abuses.
American consumers are only vaguely aware of what is happening; when they do figure out what’s going on, capitalists invoke a line that has been in circulation since those early days of British industry: before, these workers had nothing; once a dollar has been placed in their hands, they have been lifted out of extreme poverty and they have more than they could have imagined before. In this way they render it categorically impossible to legitimately criticize sweatshops, since the workers are pulled from among those who had no money at all previously; in fact, they were not even participating in historical settings in which money was important. But for the American consumer, the need for money is axiomatic, so it is often enough to pacify critics. Diehard capitalists see nothing wrong with this situation because they think that, despite the capitalist benefiting exponentially more, still the worker benefits relative to his prior station. But by paying the worker not a fair wage, but as little as possible without causing him to run away, the element of exploitation has been added where previously nothing of the sort existed. Far from merely introducing new wealth into the process, a strange and novel innovation has also been introduced, and the exploitation that comes with it. Why are American companies rushing overseas in the first place? It is because they do not want to pay American workers American wages — and American consumers do not want to pay the prices that go along with fair wages for workers here at home, because they have been sold a bill of goods for decades by international capitalists and their flunkies that they can have their cake and eat it, too. But class consciousness is rising, and Americans are increasingly aware that the cost of low prices is also the acceleration and intensification of the hollowing out of lower-middle class communities.
It is crucial to recognize, then, that material gains won by workers over the last two centuries have never been benevolently gifted to them by capitalists, but have been consciously fought for by agitators who have invariably been labeled by industry representatives and their allies in politics as ‘socialist.’ From the early opposition to laws barring the use of children as machine tools, through future POTUS Ronald Reagan cutting an advertisement that warned us that if Medicare were to be implemented, our children would look at America and wonder what this country was like when men were still free — capitalists have denounced every effort to exert even an iota of control over their profits as ‘socialist’, ‘communist’, and ‘leftist.’
People decried as ‘socialist’ gave us the 12-hour, and then the 10-hour, and then the 8-hour work day (and in the 1930s, they almost gave us the 6-hour work day). People decried as ‘socialist’ gave us Social Security and Medicare. People decried as ‘socialist’ made the public aware of sadistic child labor and successfully limited its use, and then criminalized it. People decried as ‘socialist’ are responsible for the existence of worker’s compensation, unemployment benefits, and disability benefits. People decried as ‘socialist’ fought for a minimum wage. People decried as ‘socialist’ won for us the Children’s Health Insurance Program and Medicaid. Capitalist ideologues fought against every one of these gains for workers and everyday people; they fought against every one of these policies, and many are still trying to undo them.
Simply put: the fear of social unrest, extreme and persistent negative publicity, and even violent revolution are the only tools that have ever worked to force concessions from capitalists and render capitalism more humane and livable for the majority of citizens. Without democratic pressure — conscious and frequent — capitalism is liable to function as just another totalizing tyranny. Capitalism can be made livable for most of the people, most of the time — but only if the people are conscious of their prerogatives and are not afraid to exercise them, and to exercise oversight over the government agencies and representatives tasked with regulating capitalism.
Ironically, one of the key reasons laissez-faire ideology has made its otherwise-inexplicable comeback is that so-called ‘socialist’ forces gained a very large number of concessions during the existence of the international socialist entity, the Soviet Union, which was capable of matching the United States technologically and militarily. The number of concessions won during the existence of the Soviet Union was so enormous that millions of Americans were lulled into a false belief that this sort of concession-making was natural, normal, and inevitable. Sometimes it seems as though the only thing Americans are legally allowed to know about the Soviet Union, in fact, is that there were gulags there in the 1930s — but by the 1980s our CIA was claiming it provided its citizens with a superior diet when compared against the processed garbage Americans are taught to love.
Like capitalism, the USSR had brutal beginnings — Stalinism is one of history’s most wicked episodes — that cooled off into something livable for the majority of people over the course of many decades. And during those decades, the international socialist entity perpetually put fear put in the hearts of capitalists, causing them to acquiesce to major concessions to the people, including guaranteed health coverage for seniors and the poor — and wages that paid enough for millions to conspicuously prosper, rather than just get by.
American opposition, of course, eventually cornered the USSR into a position that it had to dissolve.
Most Americans consider this one of the most triumphant moments in American history. Yet here is an ‘objective fact’: since the USSR dissolved, capitalists no longer fear anyone in the world, and not one piece of legislation benefiting labor has passed Congress in the United States in the last 40 years. Instead, capital has aggressively moved to destroy unions, freeze the minimum-wage, loot pensions, restructure a litany of jobs as contract ‘gigs’, slash government spending for the poor and middle class, shove all the costs of skills-training onto individuals, resist universal healthcare, and, most notable of all, replace humane American jobs for the lower-middle class with sweatshop-gulags around the world with astonishing speed and shamelessness.
It could not be clearer: expanding material prosperity under capitalism is the result of the fear instilled in the hearts of capitalists by left-wing agitators decried as ‘socialist’ — not a natural result of History guaranteeing progress in the long-run. Whenever capitalists have free rein, they prefer for labor the most meager possible wages and benefits, the most exhausting possible work quotas, and cost-cutting even at the expense of employee safety and well-being. Only when the people exercise their prerogatives and oversight through government can there be a sense of balance, and only then is capitalism made livable for most of the people, most of the time.
3. “It is astonishing that anyone could speak of Soviet communism in any context other than to place it alongside its real sibling ideology, Nazism/fascism. These twin totalitarianisms are dangerous extremes, and both are anti-capitalist, anti-liberal, and anti-democratic. Capitalism and liberal democracy are by no means perfect, but they have proven themselves vastly superior to their rivals, and the collapse of the USSR was one of the most glorious triumphs of the 20th century.”
It is obviously true to all but the most vulgar ideologues that both Soviet communism under Joseph Stalin and Nazi Germany under Adolf Hitler represented the most dangerous of extremes — and although the crimes of Nazi Germany ultimately surpass in intensity, variety, and sadism those of Soviet communism, Joseph Stalin has rightly earned his place as one of the cruelest tormentors in the history of politics. Revolutionary communism, with its blazing sense of certainty, moralistic zeal, and belief in the inevitability of a dictatorship (of the proletariat, of course) contains the seeds of potential Stalinism as surely as ethno-nationalism contains the seeds of potential for a Nazi-style regime. The Nazis, yes, were worse, as FDR knew, but they are both profoundly wrongheaded, profoundly modern ideologies that produced some of the grisliest episodes of the last millennium.
It is astonishing that what is seen with cold clarity in our enemies is obscured, rationalized, and minimized when parallel events occur in the history of capitalism — especially in the Anglo nations that embraced it most comprehensively. What capitalist ideologues see very clearly in the Stalin regime somehow is very obscure to them when applied to the history of the United States and the United Kingdom.
Before we proceed, let us note that the purpose of this article is not to defend communism, promote communism as an alternative to American capitalism, exonerate the Soviet Union, or anything like that. It is to point out that what seems obvious to us in our enemies is often not so obvious in ourselves; that most of the crimes of which Soviet communism is correctly accused can also be correctly leveled at the United States, so as to arouse recognition that gains for ordinary people must be consciously fought for and will not be delivered through the benevolent mechanisms of History.
Political systems opposed by the United States are doomed to be forever defined by their worst failures, cruelest tyrannies, and most monstrous representatives. The ideology that either gave birth to them or could not stop them is also to be discarded in toto — and owing to such crimes, which are not considered forgivable or forgettable, those systems must not be allowed to learn, reform, and adapt, but must be destroyed completely so as to do away with the possibility of a historical repeat.
The monstrous historical and present-day crimes of capitalism, on the other hand, are never said to define the system, nor the ideology that either gave birth to them or failed to prevent them. Capitalism instead must always be allowed to learn from its mistakes, implement reforms, and be immediately and unconditionally forgiven by all as it moves forward into a brighter, more progressive era — rinse and repeat. Capitalism alone is to be allowed to grow and learn.
Let us recount some of the gulag-like crimes perpetuated or permitted by American capitalism: centuries of kidnapping random people from a distant land, defining them as property under the law, and reducing them to the life of farm animals — followed by another century of racial terrorism, tyranny, and torture; around-the-clock hard labor for children under the constant threat of violent beatings, the reintroduction of slavish sweatshops in remote locations so as to render them invisible to American consumers, the genocide and brutal relocation onto inferior land of the Native American people, and aggressive and merciless wars which almost always begin in hubris and end in tragedy. Beyond this we should note the artificial cultivation of racial tension via the rapid mass importation of third-world laborers willing to work for a fraction of the price of Americans, and the attendant imposition on working-poor Americans of competition with third-world labor. As well, we should note the systematic, conscious, deliberate fleecing of the world economy that culminated in the 2008 financial crisis, which revealed elite financiers to be so utterly sociopathic and reckless that their actions threatened to collapse the entire capitalist system; the weaponization of debt against the third world, the American middle class, and the so-called ‘welfare state’; the soulless rise of forced arbitration clauses for wage-workers, which function in practice as a surrender of one’s labor rights as a condition of employment; the cultivation of conditions under which a tiny minority of companies own the overwhelming majority of popular outlets of information, entertainment, communication, and transportation, and the general homogenizing and leveling of everything it touches.
Without liberal and democratic restraints, which currently are failing badly owing to neglect and overwhelming capitalist resistance, capitalism, we repeat, functions as just another totalizing tyranny, merely another perverse manifestation of the modern rebellion against God and nature. Capitalism acts in perpetual pursuit of the destruction of everything except that which can generate material profit. It has spoiled the university by replacing the age-old quest for truth and knowledge with the quest for a ticket to a middle-class job; it has spoiled religion by cutting off man’s visceral ontological connection to spirit; it has spoiled the family by reducing it to a collection of autonomous individuals; it has spoiled human sexuality by flooding the senses with ubiquitous evocations of sex and the proliferation of increasingly extreme pornography; it has spoiled our relationship with nature by teaching us to view the earth as nothing but raw material for arbitrary technological exploitation.
All modern ideologies are animated by maximalist pursuits of unlimited human power over nature — space and time and beings. All such ideologies exalt human power and will as tools by which we can control fate, all reject communion with God and nature as the center of life, all find the ground and mission of man within man himself; the individual as a completed being in himself — what remains for politics is to fulfill his desires and will, however naked and untutored. From the perspective of Greek antiquity — home of the city-state — and Biblical morality in Hebrew Scripture and the New Testament alike, this was unthinkable, for ‘I’ was unthinkable without ‘us’ and ‘we’. A particularly extreme and absurd pronouncement was made by capitalist ideologue par excellence Margaret Thatcher: “There is no such thing as ‘society’ — only the individual.” But there are ten thousand invisible factors that help determine success or failure in economics. The naked individual, liberated from restraints and custom, might be set free to be an economic dynamo — but he will have sacrificed so much to get there.
Given this atmosphere, it perhaps should be no surprise that American capitalism should finally produce a leader like Donald Trump, a grotesque, clownish, depraved creature who yet embodies all of the wildest promises of capitalism: unlimited money, unlimited fame, maximal power, access to all of the most intense pleasures, including the most beautiful of women. Here we finally have an unmistakable image of the diseased soul of capitalism, of the tyrannical tendencies it contains; the Word of capitalism has truly become Flesh. Only a comprehensively nihilistic, morally ruined society admires and elevates a tyrant like Donald Trump, or wants to make him its leader. Capitalism’s profound emptiness of soul and sacrifice of everything good and beautiful to profiteering whenever the two conflict — becomes apparent in the man of Trump, who in another life would be a tinpot dictator of a third-world basketcase, adorned with fifty thousand medals and given the title of Supreme God-Man King for Life. Behold: the type of man our system rewards most.
Given that Americans are deep enough into the propaganda of capitalism to see a man like Mr. Trump as worth admiring and elevating, it is not a surprise that they are also conditioned to reflexively assume any critic of capitalism is thereby promoting communism. Economic policy is framed as a binary choice between a ‘rollback’, deregulatory agenda — and Venezuela. This is simply silly. The fundamental critique of capitalism offered by this article places it alongside other warped modern ideologies, revealing the similarities between capitalism and communism. Although policies generally considered ‘left-wing’ are generally an appropriate antidote right now, this will not always be the case; moreover, the flight from true religion and the love of God and neighbor have enabled both capitalism and communism to operate in their maniacal excesses. The Book of Deuteronomy warns against those who boast that they built something all by themselves (Chapter 18); the New Testament famously inveighs against wealth at every opportunity; the Book of Acts (Chapter 2) says that the early church was characterized by people owning nothing and sharing everything as part of their common lot. This critique of capitalism is one made in the name of humane virtue, not in the name of leftist or reactionary politics.
What, then, is at stake in bringing the tyrannies of capitalism’s past and present to people’s attention? It is an antidote to complacency. American liberals have been seduced for a long time by the notion that ‘the arc of history bends toward justice’ or that History itself somehow contains a mechanism that will resolve capitalism’s natural tendencies into something beneficial for the common good — whether the people consciously act or not. It is not true. The American people have allowed themselves to fall asleep at the wheel as their middle class has been hollowed out and labor protections have been stripped away, one by one. They must be made to perceive, if only dimly, the true nature of liberal democratic capitalism — that is, if they are to also perceive why they must vigorously and constantly fight for concessions from capital at every level, from the top — organizing to elect a reformer president — to the bottom, with old-fashioned ‘direct action’, fighting to form unions, and not shunning and shaming the needy.
4. “It is grotesquely unfair to blame capitalism for the sins of the state. Slavery was a regime upheld first of all in the law — that is: by government. The capitalist elements of the American system were not responsible for slavery; the capitalist elements, in fact, helped abolish it everywhere but the American South.”
This argument is very common, because if capitalism has to be held responsible for the historical atrocities that it either perpetuated or failed to prevent — just like communism — then the argument that, alone among modern ideologues, capitalism does not contain the seeds of tyranny — falls apart. Considering historical events does reveal capitalism to be a potential enabler of tyranny, just like communism — so capitalist ideologues search frantically for a way to expunge events from the record.
A plethora of contradictions converge here — and the naked reality that capitalist ideologues constantly appeal to have their system judged against a series of abstractions and potentialities, rather than actually-existing conditions, is shown with stark clarity.
As we have seen, in the United States communism is always to be judged by its worst people, times, and events — it is simply impossible to compare capitalism against communism without hearing about Stalin’s gulags. Capitalism, on the other hand, is always to be judged by its most triumphant accomplishments, and its sins are to be unconditionally forgiven, so the system can learn, reform, and evolve.
Communist systems also must present their finished product — their complete society as a whole — at the very commencement of their political project; capitalism, on the other hand, must be allowed 200 years of trial and error to sort the kinks and errors and abuses out. Communist countries whose regimes have/had only existed for 20, 30, 50 years are judged on a one-to-one basis against capitalist countries that have existed for centuries. Never are communist countries allowed to tell their critics to return in a century to witness the glorious progress made after generations of reforms and improvements. This, despite the fact that the United States after one century of existence did not look like a particularly just society.
Communism is to be judged by the actually-existing results of regimes declaring themselves communist; capitalism, on the other hand, is to be judged against the abstract theories of academics and pamphleteers, whether classical liberals whose actual writings tend to be glossed over by capitalists, such as Adam Smith or John Locke; 19th-century ideologues like Frederic Bastiat and John Stuart Mill; or 20th-century writers like Ludwig von Mises, Milton Friedman, and Thomas Sowell. While communism is judged by the actually-existing gulags of the 1930s, American capitalism is somehow never judged by the equally wicked crimes of the Southern (and Northern!) slave regime, or its genocide of the Native Americans, but rather against academic theories whose future actualization serves as the warrant for capitalism’s continued existence and the excusability of today’s litany of abuses. They are selectively invoked, of course; in one breath the capitalist might decry the actually-existing system’s lack of rigorous adherence to the theoretical models, but on the other hand, the actually-existing system is still judged to exist as a kind of approximation or bastardization of the glorified theory.
For instance, we might consider the right-libertarian utopian fantasy of a political economy in which government and business remain completely separate, government never ‘picks winners and losers’ through policy, there is no such problem as regulatory capture, the government has a permanent tendency to play a neutral umpire, and businesses do not give in to the temptation to try to seize government to use as an appendage of their own profiteering.
There is about as much evidence that this political economy might come into being as there is for the viability of the most utopian brand of communism. All of the evidence of two centuries in this republic speaks against it. Even the most strident capitalists acknowledge that the actually-existing system bears no resemblance to the utopian fantasy whatsoever.
Yet almost to a man, some version of this utopian fantasy is held as an ideal by capitalist ideologues, and almost all of them have at some point invoked it as a distraction from actually-existing abuses, or as a warrant for the perpetuation of the actually-existing system against some left-wing alternative, on the basis that only from the foundation of this system can we even begin to think about actualizing the utopian theory. For instance, a capitalist might condemn single-payer health care on the basis that it will fundamentally distort market processes and lead to vast inefficiencies — even though these same capitalists have compartmentalized elsewhere in their minds that our health care non-system is grotesquely distorted and inefficient and does not bear any resemblance to markets, and hence there is no ‘market’ to defend at all. The capitalist will hold both positions simultaneously, but will invoke the argument derived from the utopian ideal in order to silence critics.
A careful look at this situation therefore shows that in actually-existing capitalism, the right-libertarian utopian fantasy of the separation of government and business never gains any traction, and therefore it plays, almost exclusively, the functional role of a blunt instrument perpetuating the actually-existing system. The functional existence of the libertarian-capitalist idea, as opposed to the imaginary one that animates the inner life of its adherents, is thus revealed to be vapors and phantoms that merely distract from actually-existing alternatives.
5. “Regardless of its past sins and historical problems, capitalism today manages to deliver an unprecedented level of material prosperity for the overwhelming majority of its participants. Capitalism is the only system that has routinely lifted people all over the world out of extreme poverty, and our own poor live in luxury that would have been unimaginable to kings centuries ago.”
According to our capitalists, the entire history of the world is merely one long, miserable prelude to modern industry, science, and technology. Americans are now blessed with indoor plumbing, smartphones, air conditioning, flight, vaccines, anesthetics, cars, computers, washing machines, refrigerators, and a million and one other material miracles large and small. It is arguable that many of these breakthroughs are not properly appreciated and celebrated. These technologies — and others — considered on their own have brought material advantages to man too numerous to count. And it is undoubtedly the case that capitalism provided the social and political context for many of these discoveries to be unleashed. Capitalism gives rise to acquisitiveness — of both wants and needs. Sometimes that results in frivolous pursuits, with millions of people devoting time, money, and energy to the creation and collection of plastic crap. But other times it results in profoundly good and useful pursuits, like the research and development of new medicines for age-old maladies, the ability to cleanly dispose of waste, or the ability to manipulate the temperature during uncomfortable weather.
Yet, while all this has made us more comfortable and made life more convenient than ever, it is not clear that all of these advantages have made man obviously happier. The overwhelming majority of human beings ever to have existed never experienced any of these benefits, yet managed to live without them — and untold millions of them lived perfectly happy lives despite lacking them. Expectation is the ground out of which happiness or disappointment grows. Our ancestors did not have indoor plumbing, but they never had any expectation that they would have indoor plumbing, and so did not spend their days lamenting that they did not have indoor plumbing. There are future technologies whose absence in 2019 future generations will look back on and find intolerable: how did the people of the early 2000s survive without such-and-such? Granted, our people certainly are full of the anticipation of continued material progress in the decades to come — a double-edged sword, existentially; the lack of satisfaction spurs us to crave more and create more and superior technologies, but it also cultivates a permanent anxiety and restlessness that is, according to academic psychological studies, essentially unique to the modern world. But man is a remarkably adaptable being, and the human of the 1500s, the 500s, and the B.C. era also had routes to happiness, which included routes we tend to forgo: religious devotion, family devotion, the cultivation of skills for play as well as work.
It is unquestionably true that in recent decades, hundreds of millions of people around the world have achieved a basic sense of material certainty and comfort at levels that were unimaginable a century ago. Naturally, given their respective population sizes, the bulk of these gains have been made by India and especially China, where the gains have been especially diffused to a rising middle class. Most of this has been accomplished by shifting subsistence farmers and peasants to a large, rising ‘working class’ of wage-workers whose labor is bound up in the dynamics of international trade. There should be no doubt that, considered on its own, it is a good thing that these material gains have spread, and will continue to spread, to the masses.
But this is no excuse for the maltreatment of foreign workers by American companies. The fact that a worker began with nothing — began in ‘extreme poverty,’ as capitalism would call it — means that even placing a dollar in his hands means that you have quantitatively improved his lot. Yet it would be possible for American companies to pay their sweatshop wage-slaves more money and ensure superior working conditions while still reducing prices relative to what American factories would incentivize. It is not humane to pay someone only as little as one needs to keep him from running away.
It is worthwhile, then, to ask whether ‘extreme poverty’ is not being defined in a way that the typical sweatshop worker is automatically construed as an unambiguous beneficiary of global techno-capitalism. The fact that someone’s lot has quantitatively improved is not a warrant to abuse him or exploit him. And we should not be so fast to congratulate our capitalists for undertaking totally self-serving pursuits, anyway. Unenlightened self-interest is not impressive. Our capitalists wish to be allowed to treat a former subsistence farmer as miserably and cruelly as possible, so long as that person is now guaranteed a square meal each day where once he was not. This is the exploitation of necessity; it is not a ‘mutually voluntary’ transaction but rather a transaction driven by an ‘offer one can’t refuse.’ It is a sickness of soul that leads people to treat others like objects useful only as a means to an end. That is a truly fundamental moral error of capitalism.
Although capitalism has provided the context in which all this new material luxury can take place, it is an open question how much of the material gains under discussion can be attributed to capitalism per se. It is unquestionably true that China and India have adopted capitalist mechanisms of pricing, distribution, and ‘free trade.’ It is also unquestionably true that it is capitalism that initially unleashes the historical energies that give us the technology that makes it possible to end poverty en masse.
Yet it is the technology itself and the scientific theories that give rise to it that are really the ultimate cause of the eradiction of so much material suffering. Capitalism has distributed the material gains of technological innovation at varying paces to varying peoples and places, and its methods and priorities have been variously just and unjust, efficient and inefficient. China, of course, would claim that it is not capitalism at all that has been responsible for its economic rise, but rather careful, state-managed socialist development of industry. Yet China would merely be committing the same error as the capitalist ideologues, but in reverse, attributing too much to their economic system and too little to the technology and science itself. It is also is worth considering that governments, NGOs, and charities have often been the ones responsible for the distribution of various goods in medicine, communications, food and drink, and other areas — not corporations themselves, who have no way of profiting by simply helping the needy. So it is highly doubtful that we should point first to the profit motive as the cause of the widespread eradication of extreme poverty.
On the other side of the world, poor Americans, most of whom own televisions, refrigerators, microwaves, smartphones, and air conditioners, are often said by capitalist ideologues to be living lives that even kings would not have dared to imagine just a few hundred years ago.
The line is meant to evoke profound gratitude toward capitalism and the fruits of science and industry, but it is actually a sublime example of something that is simply too good to be true. Kings had access to the highest-quality health care, education, child care, and housing of their time. ‘Objectively,’ a poor American in 2019 might have superior access to housing simply insofar as standards of living have raised to the extent that just about everyone is living a better material existence than the old kings. But the point of being the king is having access to the best of what society has to offer. Is a poor American really living like a king when she cannot afford child care for her son, even though she happens to have an air conditioner, which of course a king could never have had? Is a poor American really living like a king when she has to take out $50,000 in loans to earn a college degree of rapidly diminishing returns, even though she happens to have a smartphone, which of course a king could never have had? Is a poor American really living like a king when the landlord comes to collect — and raise — the rent, even if that apartment has a television in it, which of course a king could never have owned?
Poor Americans have it ‘better than kings’ only in a narrow, superficial, strictly material sense. The real perks of being the king include having your practical responsibilities all met by others, personal access to the best society has to offer, and the future of your economic situation for yourself and your children secured. None of this is offered to the American poor, who also are in the midst of a situation in which as many Americans are killing themselves trying to get high every year than died in the entire Vietnam War, which was itself a national trauma; a situation in which families are disintegrating, economic opportunity is shriveling, churches are shuttering, and people are incarcerated en masse. McJobs are more common for high school graduates than genuine opportunities.
In the face of this ongoing crisis of economic opportunity for the lower-middle class and working poor, capitalists have tried to reassure labor with this striking maxim: ‘The real minimum wage is zero.’
Especially since the financial crisis, capitalists have been stealthily and steadily attempting to drastically diminish labor’s expectations over wages and benefits. In what must be the political equivalent of mothers who lecture their picky children on the starving children in Africa, it is a very popular, seductive trope — and an especially malevolent one, too.
This trope is almost always deployed in one of two contexts: either to argue for the general desirability of existing low-wage jobs — on the ground that any wage is better than no wage; $8/hr is better than being unemployed (note the similarity to the defense of sweatshop labor) — or to argue against the desirability of raising the minimum wage, on the ground that supply and demand applies to labor as to all things, and higher labor costs will necessarily cause many employers to eliminate jobs or reduce hours.
The former invocation is rich coming from people who ordinarily call themselves some kind of ‘American exceptionalists,’ or typically tout this country as the land of opportunity. Although capitalists like to pretend menial jobs are only for teenagers, students, and retirees, a solid third of the workforce labors for under $15/hr. The federal minimum wage remains a scandalous $7.50, although thanks to state increases, only 1-2% of workers toil at that wage; a typical retail worker can expect to start at $9-10/hr. Ostensibly, a full-time job is meant to be a ticket out of poverty. But when a third of the workforce is stuck with jobs that do not pay a living wage, government is forced to make up the difference in the form of food stamps, Medicaid, and other individual benefits that serve as back-door subsidies to mega-corporations that can afford to pay their workers while only marginally increasing prices (alternately, government can just let people go without, as it often does in conservative states).
Poverty wages in McJobs are calculated to be just high enough to keep people from running away. Therefore McJobs are not ‘opportunities.’ Astonishingly, although there is a glut of these jobs right now — the economy keeps on cranking them out and employers can’t find enough people to do them — wages for the bottom third continue to stagnate.
The middle class has tolerated this maltreatment of labor because it results in lower prices for them. The American people are slowly discovering that lower prices are not worth the cost of hollowed-out communities, hard-working people artificially shoved onto welfare, and diminished quality of work owing to diminished morale.
Crafting good policy under capitalism is all about trade-offs. When the minimum wage is raised to $15/hr, the capitalists are right that it is certain that hours will be reduced for some workers, and a handful of jobs will be eliminated. But the dynamics of low-wage work ensure that nobody will be out of full-time-equivalent work for longer than a few months. Every time the minimum wage is raised, capitalists promise a holocaust of low-wage jobs and the destruction of opportunity for the poor, but it simply never happens; a glut of menial work always remains with us, somehow; it always ends up needing done by someone. Again, it may be the case that a job seeker will have to search for three or four months to find two part-time jobs — rather than, say, one or two months to find one full-time job with a lower minimum wage. Yet, the turnover rate is very high in low-wage jobs — and it is extremely unlikely that a worker would be unable to find full-time hours after a few months of active job-seeking. And when that person does find the work they are looking for, a semblance of opportunity actually awaits them, rather than just ‘something, anything; anything is better than nothing.’ To reiterate, as well: there is not a dearth of low-wage jobs right now. Wages are ‘supposed’ to be rising ‘naturally’ right now, according to bourgeois economics, in fact, but as has been the case for decades for the bottom third of the economy, it is simply not happening.
Some complain that workers whose wages are currently hovering around $15-20/hr will resent the fact that mere ‘burger flippers’ will then make what they make, and that incentives to fill jobs a step or two up the ladder from ‘burger flipping’ will be reduced. If the latter is the case — which would be pathetic, yet, sadly, probable, given that capitalism functionally keeps the middle classes in line by giving them material lives conspicuously better than those of the poor — then what we can actually expect in the medium-term is rising wages in those jobs, too, in order to keep them competitive. Generally speaking, companies usually have the money to pay their workers a bit more at any given time, but choose not to — whether to boost executive pay, buy back stocks, or save for a rainy day. This is why policy intervention is vital: left to their own devices, capitalists will sit on their money or spend it all for themselves. Only prudent regulation can induce them to surrender more than what is absolutely necessary. The trade-offs described above are worth it.
The real minimum wage is of course not $0, in fact; it is $7.50. And when someone makes only $7.50 an hour, it means she walks home from a full day’s work with a mere $60 in her pocket. Our capitalist would like us to believe that this is still a genuine opportunity ‘relative to nothing at all,’ and would like us to believe that this is somehow a justification for permitting a paltry minimum wage, or even to eliminate it. But these two wage levels are really not our only options. Measured strictly on a quantitative basis, of course something beats nothing, every time. But when we measure the situation of a particular person in a particular country who has to pay particular bills, we quickly discover that even a wage several dollars above the minimum wage is merely the shell of an opportunity; just another ‘offer one can’t refuse.’ One has to work, one has to try and collect as much money as possible toward the bills — and one always must take what one can get. If one cannot get $15/hr, one settles for $10/hr; if one cannot get $10/hr, one settles for $7.50/hr. There is nothing ‘voluntary’ about the need to pay the bills; hence the capitalist exploits natural necessity, rather than counting on ‘voluntary choices.’ Remember the capitalist’s real formula: pay as little as possible that will not induce the employee to run away.
We must again underline the profound irony that the people who use these tropes ordinarily consider themselves proponents of ‘American exceptionalism,’ or believe in some way that America is the greatest country in the world. If America is the land of opportunity in any meaningful sense, then our capitalists should have more to say to a third of the workforce than that ‘the real minimum wage is zero’ and that labor ought to be grateful for any scraps they are thrown by their overlords. Under any fair system, all the people ought to share in the common fruits of discovery, of industry, of productive work. If capitalists will not share those fruits voluntarily, then they must be induced to do so by the force of law.