In simple terms, capitalism is a society ruled by the profit motive. The wealthy hold disproportionate power within capitalism and use it to preserve their interests, especially the ability to make more money. But in generating these profits, the system causes various forms of social and ecological trauma. Socially, human potential is absorbed by a relentless cycle of work and consumption, while ecologically, nature is torn from its surroundings and packaged as lifeless products to be sold and eventually discarded as waste. Today, capitalism is the dominant social, political and economic system in the world, affecting every corner of the Earth, every government and peoples.
Commodity Production
We are all familiar with commodities (coffee, clothing, gasoline, computers, etc.) and consume them every day, but we don’t usually think about where they come from. Let’s look behind the logo and investigate the back-story. It is a story that reveals not only the origin of our “stuff,” but also the mystery of the inner workings of the world we live in.
Capitalism is a system entirely built around selling commodities – this is how it makes profits. To produce them requires human labor, and energy and material taken from the natural world. For example, a bottled water might be produced by taking water from a spring in Maine and putting a plastic bottle and label around it. The bottle in turn was produced from oil pumped in Saudi Arabia, chemically altered in Louisiana and given shape in China. The bottle is shipped to a store for you to spend $1 on water (which used to be free). Each of these steps creates pollution and waste, much of which will never biodegrade. Likewise, every step of the process uses human labor, from the factory workers to the oil workers to the truck drivers and the supermarket clerks, but none of them feels any connection to the final product or to you, the consumer. It is probably fair to say they would be doing other things if they didn’t need the money. They work dull jobs because they have to. Of your $1, perhaps 10 cents is divided between them. Some money goes into manufacturing, shipping, packaging, and management costs. The majority likely goes towards advertising and profit. Much of the profit will be reinvested to produce more bottles of water so that the company can attain a greater share of the beverage market.
This is a simplistic example but it shows that the true cost of a commodity is not reflected in its price. Ecological and social damage created by the production process is hidden from the consumer, who sees only the commodity, and perhaps an upbeat advertisement.
Greed is built into the system, not merely a trait of individual businessmen/women. Private companies must constantly compete with one another to achieve greater profit, which generally means producing as many commodities as possible at the lowest cost. This is accomplished by increasing the scale of production. Those that fall behind will go bankrupt and likely be swallowed up by their competitors. This ultimatum to grow or perish drives more and more capital (money and productive capacity) into fewer and fewer hands. A mega-industrial scale is reached, and companies remain competitive by producing not hundreds, but millions, of identical commodities – requiring huge factories, global lines of distribution, and enormous quantities of cheap energy. To feed this system, the ecological trauma therefore expands far beyond a sustainable level.
Humans lose the self-sufficiency they once found in their communities and their connection with nature, when they are pushed into the urban workforce. Here to sustain themselves and their families they must sell their time and energy for a wage. Much of their wages are sunk into necessary costs like housing, food, water, clothing, transportation and health care. Millions cannot afford even this and are swept into poverty, hunger and disease. Others afford the necessities easily and new “needs” must be fabricated in order to capture their remaining wages through consumption of luxuries. (How necessary is the Snuggie, really?) Buying things becomes the way humans express themselves and their social standing, and even if they can survive with less, people work longer and longer hours to afford an ever-increasing array of products and services. Working long hours places stress on the family and helps break down the community, causing widespread mental and psychological distress. Surrounded by strangers but rarely feeling human connection, inevitably loneliness and depression emerge, and sometimes lead to worse emotional disorders. Subject to a tidal wave of advertisements and mass media daily, people struggle to avoid becoming hypnotized by the spectacle of consumerism. Human life therefore becomes commodified as well – rented for a wage then sold back through consumption.
As the system grows, more and more of the world and its peoples become commodified. Continents are conquered for agriculture, forests are felled for lumber, animals are caged as livestock, and whole populations spend their lives behind computer and TV screens, desks and steering wheels. Under capitalism, life becomes property. Nature becomes “natural resources.” Humans become “human resources.” They exist to be profited from.
A System in Crisis
As each individual company expands its production to overcome its competitors, so too must the system as a whole grow in order to survive. Whenever there is a slight downturn of profits, elites rush to counter the danger by boosting consumer spending. Remember President George W. Bush’s message after the September 11th attacks, “Go shopping!” Buying things became the patriotic duty of every American. The reason is that declining profits jeopardize the system as much as any terrorist.
Today, at this late stage of global capitalism, the largest owners of productive capacity are inhuman complexes called corporations, which are structurally and legally bound to be concerned only for their short-term stock values at the expense of everything else. In the words of the poet Wendell Berry, “A corporation is essentially a pile of money with the single purpose of becoming a bigger pile of money.” No individual in the corporation would dare challenge this imperative to grow. Even high-level managers will lose their jobs if they do not faithfully serve the demand of the investors that their stocks go up in value, each and every quarter.
The financial markets largely dictate the fortunes of corporations. As mentioned, it is imperative to each company for its stock value to increase, which happens when it receives more investment. If a corporation has a scandal or receives bad press, investors will sell its stock and the value will go down. At the same time, other investors place bets on whether companies will become more or less valuable in a given time. This gambling is called speculation. Although individual investors sometimes lose money on investments or speculation, they only invest their money in something with the expectation of a higher return. In other words, no investments are made with the expectation that they will lose money. This is why confidence is so important. When markets are bad, investments don’t occur, and companies can’t get capital to expand their production. Bankruptcies ensue, values crash, loans default, factories halt, workers lose their jobs, and the media tries to keep a smiling face while delivering the news.
What this reveals is that capitalism is in perpetual crisis. The system is in a never-ending race against time and every year, every week, profits must be larger, faster and cheaper than before. To survive, capitalism must grow. And grow, and grow, at all costs. Where does it end? The system must grow to such an extent that it quite literally exhausts the energies of humanity and the earth in the frantic scramble for profit.
Viewed from space, industrial capitalism appears like a cancer on the Earth.
The State
Life does not submit itself to trauma voluntarily. Humans have a natural tendency towards freedom which makes it difficult for rulers to direct their behavior into desired outcomes, like wage labor and consumerism. Therefore an important strategy of the powerful is to demand more control once the population is already shocked into inactivity by other crises. Naomi Klein defines this strategy The Shock Doctrine, and exposes how capitalist elites have taken advantage of natural disasters, terrorist attacks and other calamities to push through unpopular and exploitative policies, usually backed up by brute force. This strategy has been around at least since capitalism was first initiated in 15th – 17th Century Europe in the wake of the public spectacle of several hundred thousand women and community leaders being burned at the stake as “witches.” The mass violence of the witch burnings helped facilitate land enclosures, which pushed disillusioned and terrified peasants from their lands and left them with no options but to sell their labor for a wage in the cities.
It is imperative for those in power to maintain a monopoly on the use of violence within their territory. This role is filled by the creation of the State, usually known as the government. In our time, the State is an extraordinarily large and complex bureaucratic machine, as opposed to the earliest manifestations of a privileged warrior class. Its goals however are largely unchanged since its invention: to manage and control the population, with force if necessary; to determine how resources and wealth are distributed; and to compete with other states for dominance over foreign resources and markets. An important example illustrating the interconnection of capitalism and State is the growing prison-industrial complex in the US. Now confining over 2 million Americans, the prison industry has become big business as large companies now own and operate many federal and state penitentiaries. These corporations use their profits to lobby for harsher sentencing and drug laws to increase the number of prisoners, so constructing more prisons is needed. Today four times as many Americans are behind bars as in 1984, but many critics, most recently Senator Jim Webb of Virginia, have warned that this prison strategy has not reduced crime. According to Sen. Webb, “We are wasting billions of dollars and diminishing millions of lives.”
Governments and the wealthy have an easier time controlling affairs when the population is divided along real or imaginary differences. For example, in the U.S., racism (or white supremacy) benefits workers with light skin by giving them privileges like higher wages, better education and housing, lower chance of arrest and imprisonment, and also more subtle advantages like thinking of themselves as “attractive.” This comes at the expense of the oppression of people of color – so to keep these privileges whites are made to feel antagonism towards their fellow workers. Racism, which is institutional and not merely a matter of individual prejudices, continues to make it more difficult to unite the public against common dangers, such as reckless wars or rising poverty.
Gender, heterosexuality as “the norm”, citizenship, class and others systems of oppression are similarly constructed to pit segments of the population against one another. The only way to achieve the freedom of all is to dismantle these oppressive systems and unite in common cause. It is also important to recognize that racial and ethnic minorities, women, transgender folks, queer folks, immigrants, workers and the poor each deserve justice and empowerment for their own sake, not only because overturning capitalism requires it.
Imperialism
Capitalism has been the dominant social system in the world for roughly the last 500 years. An early “mercantile” version was spread by the European conquistadors to much of the world. Then the more developed industrial capitalism we are familiar with crystallized in the United States following the genocide of the native indigenous people and enslavement of millions of Africans.
Theoretically founded on the principles of freedom, justice and democracy, the US has yet to fulfill that radical promise. Today the US government stands over the world like a behemoth, imposing economic policies and institutions like the International Monetary Fund (IMF), and World Bank, which facilitate the exploitation of natural resources and cheap labor markets around the world. This US dominance is backed up by military might in the form of over 700 US military bases on foreign soil, while the US spends more money on the military than every other nation in the world – combined.
Together with cultural/language dominance, this global supremacy makes up what many have rightly called an Empire – one that has a much longer history than the aggression against Iraq and Afghanistan. In fact the US has been intervening militarily in hundreds of nations since its founding, including invading and annexing almost half the country of Mexico in 1846, and since then overthrowing dozens of countries’ governments. A relevant example now is the CIA’s involvement in the toppling of Iran’s democratically-elected Prime Minister Mossadegh in 1953, which led to the country’s oil wealth being sold to US corporations at the hands of the pro-US Shah dictatorship.
Although US imperialism appears strongest today, its dominance is in fact teetering alongside the global capitalism that it protects. The hope of the entire world is that the decline of US imperialism will be as swift and peaceful as possible so that people in poorer parts of the world can reclaim their self-determination. In the words of Vandana Shiva, “At this point it so happens America is the empire. But one thing we learned with the British Empire is that empires rise and empires sink.”
[Your feedback on these ideas is very welcome! Please share your thoughts by commenting on the Discussion page.]
Next: Part 3. Why is it Breaking Down?
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