Sunday, May 13, 2012

The Root of All Evil

The root of capitalism is the principle that the possession of property entitles you to a claim on the fruits of someone else's labor.  There is no moral justification for this.  It is on a par with "might makes right" or "the Devil take the hindmost."  Capitalism is thus corrupt at its very core, whatever social benefits it might be deemed to have in any specific time and place.

The logic of capitalism only makes sense if there is an unequal distribution of wealth.  If everybody had equal wealth, there would be no sense in property employing labor; rather, we would tend to evolve a system where men and women collectively used their property and their labor in order to socially produce things (since social production is more efficient than individual production).  Equal distribution of wealth would tend toward a cooperative society, rather than a capitalistic one.

So capitalism arises only in an unequal society; its essential logic guarantees that.  The logic of the working-out of capitalism increases the initial inequality.  If you have only a small amount of property, it is very difficult to make it grow.  Generally, only your constant labor can keep it from shrinking.  If you have a large amount of property, however, it is very difficult to PREVENT it from growing.  The process of being paid for the use of your property returns the borrowed property plus a dividend, over and over again.  The more property you possess, the larger the dividend.  If the amount of property you possess is very large, it becomes virtually impossible to spend the dividend.  Even if your wealth is a bit smaller, only a modest amount of self-restraint is necessary for savings.  So the wealth of rich people grows and grows.  Yes, it is possible for a wealthy person to "go bust" because of bad investments.  But it doesn't happen very often.  And even a wealthy person who, with great fanfare, has  "gone bust",  generally has more residual wealth than a person who wasn't rich to begin with.  Squalor turns out to be relative.

Capitalism is inherently incompatible with democracy, because capitalism concentrates concentrations wealth, and wealth is inevitably power. There is no way to decouple the relationship of wealth and power.  Regulatory tinkering, such as campaign finance rules, can only act as an impediment, an inconvenience to the wealthy when they act to assert their money-power.  Capitalist countries, then, even with republican governmental forms, tend to devolve into de facto oligarchies.  This process can be resisted only by constant vigilance, to limit accumulation of wealth, to restrain the free political exercise of wealth, to balance people power against money power (unions and voter empowerment campaigns).  This vigilance is a lot of work.  When we have won some improvements, "we the people" tend to slack off.  The capitalists never do.  The differential rewards for them - the incentives - are just too immediate and great.  Thus, when times got somewhat better in the postwar period - at least in Europe, the U.S. and Canada - the people became complacent, and in the mid-1970s the capitalists, with their neoliberal/Reaganite/Thatcherite agenda, counter attacked.  And so, here we are today, with economic inequality and poverty at record levels, with a stagnant economy, but with many capitalists declaring "recovery" despite the fact that so many remain unemployed, many, many more underemployed, and almost all of us economically insecure.

So it turns out that not money, but private capital is the root of all evil, arising only in conditions of inequality, sustaining and promoting inequality, and undermining democracy.  Ultimately, if we want secure and just economies, we need to decouple property and income, by recognizing that all capital is socially constructed, and must be socially owned. 

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