This blog is based on a paper entitled: Critiques of Capitalism. It is the conclusion of a series that takes a long, hard look at the economic system we have in modern America. [Part 1 is available HERE]. The purpose of the bold-face type is that it represents my main arguments.
Whether it goes by the descriptor free-market capitalism, laissez-faire capitalism, neoliberalism, classical liberalism, libertarian economic philosophy, or its illegitimate children – crony capitalism, supply-side economics, or trickle-down economics – the economic theory that America is based on has a long, significant, storied past. There are, however, many critiques of capitalism, based both on theory and on actual results. This blog is the second in a series of five entitled Critiques of Capitalism, and represents my first argument against a wholesale reliance on free-market capitalism as the ideal economic system.
I think the three critiques of capitalism (comprising Part 2, Part 3, and Part 4) are withering criticisms. Perhaps there is a purer strain of libertarian-inspired economic theory which, if put to an unadulterated use in the real world would slough off all of the parasitic and mutational amendments, additions, alterations, and adaptations that have so changed the nature of Smith’s, Locke’s, and Ricardo’s conceptualizations.
I have a libertarian friend who often laments that pure libertarian capitalism has been transmuted into modern American-style crony capitalism. He feels it’s not a fair test, as it were. I, however, would maintain that it is in the very nature of laissez-faire capitalism to allow mutation, much as a monarch who is too passive or ambiguous invites usurpation and intrigue. Thus, there may be a pure version of capitalism which would be fairer, more just, more transparent, and more righteous – one that would wisely and naturally separate the hard-working and the inventive from the lazy and the inept. The baker may bake because of their own self-interest, but they didn’t have to contend with Walmart back in 17th century England. Indeed, Molly Moorhead informs us that: “…in 2007, the wealth held by the six Waltons [heirs to Sam Walton’s fortune, the Walmart founder] was equal to that of the bottom 30.5 percent of families in the U.S. In 2010, the Waltons’ share equaled the entire bottom 41.5 percent of families.” We’re talking about $102,000,000,000 in one family.
Now, I don’t know that much about probability, but I am imagining that is no coincidence or reflection of merit. She continues: “’That 41.5 percent represents nearly 49 million families,’ notes Josh Bivens at the left-leaning Economic Policy Institute. ‘While median family wealth fell by 38.8 percent,’ Bivens wrote, ‘the wealth of the Walton family members rose from $73.3 billion in 2007 to $89.5 billion in 2010, or about 22 percent growth.’” Claiming capitalism in modern America is unfair, arbitrary, amoral (even immoral), and unjust is just one small logical step from facts such as these.
If I had to choose an argument that is the strongest criticism of capitalism, I would select #1. It is almost easy, when one reads the right information, to point to the flaws in the theory because of its practical results. That is essentially scientific. What I mean is, science assesses the degree to which a theory can predict behavior. Capitalism does not have a great record in predictive validity. It also measures real-world effects; the nuclear bomb would have shown the theory Einstein, Oppenheimer, and others came up with to be false if they couldn’t produce the predicted reaction. In the real world, capitalism and its stepchild, globalization, have mixed results at best. It might be “the least-worst of all the other models,” but that is not a free pass.
As well, I find Marxism and radical egalitarianism to be the weakest criticisms. Clearly, a theory that claims to do nothing less than predict the evolution of economic/political systems of human culture as a whole is likely to encounter fatal criticism. Indeed, Marx might have had some ideas about either capitalism or Socialism correct, but his predictions were largely unfounded, and, in the case of Stalin, Mao, and others, was an accomplice to millions of murders and much enslavement. If capitalism fails in practice because of human nature, then so does statist egalitarianism.
Here is an interesting look at human nature:
Pythagoras, who gave us the word philosophy (literally love of wisdom), identified three distinct lifestyles: the acquisitive, the competitive, and the contemplative. He argued that contemplation, awareness, or, in the Eastern idiom, awakening, is by far the best lifestyle. This so alienated the populace of Croton, where he lived, that his citizens burned his house down, massacred many of his fellow Pythagoreans, and forced the inventor of philosophy to flee for his life in an early foreshadowing of the Socratic tragedy… (Stephen S. Hall).
Criticism is one thing, but, as Marx indicated, the real juice lies not in theorizing, but action. It causes me to reflect, dimly, on the likelihood of change – that is, the ability of America to make wise laws, make mental adjustments, overcome disinformation and distraction, and bridge ideological divides sufficiently to really rein in the profiteers and their lackey politicians. Roosevelt made some progress, but here we are again, in great need of a modern “trust-buster.” Sanders was cheated out of the presidency. The Koch brothers have billions to spend in their characteristically disingenuous and unscrupulous way. I’m afraid the story about Pythagoras indicates that changes to “the system” will need to come slowly, because although the contemplative citizens may easily get on board, the acquisitive and competitive Americans will be less swayed and, defending the 1 percent (either because they are a part of it or because of subterfuge), might prefer to remain oligarchic or even engender a despotism.
This blog was entitled Critiques of Capitalism (Part 5).
To hear a blog about economics – essentially one that shares many of these critiques of capitalism, but which culminates in a compelling way forward – “The Pluralist Commonwealth” – CLICK HERE (look for “America Beyond Capitalism”)