Assessing capitalism, or, a modest argument for socialism

It is perhaps the most enduring of ideological mainstays that capitalism is a good thing. What happens if we suspend this belief? Could it be that capitalism’s strengths are actually as worrisome as they are reassuring?

‘Capitalism’ is a tricky term. It is such a totalising thing that we all use the term for all sorts of reasons and attached to all sorts of arguments. Rather than going through some or all of those meanings, I want to offer a pretty simple definition of capitalism, derived from a Marxist theoretical tradition which has, if nothing else, the merit of being clear and very useful in understanding vital aspects of our social life.

Capitalism is a social relation, that is, a general relationship between people underpinned by rules, institutions, and the distribution of wealth and property. Capital is property or assets that generate profit. The key feature of capitalist social relation is that most people have no capital and work for those who own capital in return for wages. Capital is owned by capitalists who manage their assets – including workers – in order to maximise profits and compete effectively with other capitalists. All of this takes place within a context of state regulation in which governments ensure general rules in competition, wage labour and all sorts of other things. The division of responsibility between capitalists and governments is varied but underpinned by the construction of the notion of a ‘private’ economy or ‘market economy’ which supposedly operates by separate and distinct rules of competition and growth. This system – at once about property, labour, governance and its limits – is what we can call capitalism. Private property, wage labour, competition, profit and the different political underpinnings and responses to this kind of general way of living.

Let’s start by rounding up the main ways in which capitalism is perceived as a good thing.

Capitalism is often portrayed as a natural state of affairs, or as a system that best fits with the essential nature of people. Some have argued that capitalism offers solutions to all of human history’s major problems, an end of history. Many economists treat the capitalist economy as a timeless almost metaphysical entity, as if the laws of supply and demand have always existed. It can seem like capitalism has always been with us. In this view, all of the socially damaging things within a capitalist society appear to us as part of life, luck, the order of things. To the extent that we see capitalism as a timeless or natural way of life, it seems rather fruitless to seek alternatives: as Margaret Thatcher apocryphally stated: there is no alternative.

Moving on, there are more actively positive ways of seeing capitalism as a good thing. Perhaps the main way is to associate capitalism with freedom. Free competition, freedom of choice, free to seek employment where you please. And also, an association of citizenship freedoms with capitalism because private companies ‘check and balance’ state power, because the competition in the marketplace is reflected in the competition of parties for power. For some, capitalism creates democracy.

Thirdly, capitalism is the engine of growth and all things economically healthy. Capitalism coordinates massive amounts of choice in complex societies in ways that government planners never could. Competition compels all capitalists to make the most efficient use of their resources. The need to expand market share and to deal with pressures by workers for higher wages forces capitalists to innovate constantly in the way labour is organised, the way technologies are used. In a capitalist society all things rest on constant economic growth. In a very direct way, for most of us in the developed capitalist world, we can get access to a remarkable number of remarkably cheap commodities even to saturation.

In sum, capitalism’s pervasive dominance and (to a lesser degree) legitimacy is a result of three things: the sense that it is a natural order of human society, that it is inextricably intertwined with the high-priority values many of us have about rights and freedom; and that it is identified as a uniquely productive and dynamic economic system. If these are the bastions of capitalism’s ideological strength as well as its obvious material strength, then we need to test each of these to see to what extent we should feel comfortable with the notion of capitalism as a good thing.

‘Capitalism is the natural way for humans to live.’

It is quite easy to show how capitalism is, historically speaking, not especially significant. Many other imperial systems, global systems of trade, forms of production, and ways of living have lasted longer than capitalism’s brief two and a half centuries. Big picture history tells us convincingly and simply that human society is very varied and always changing. In light of this, the argument that capitalism is here to stay or that it resolves all of the instability and change in human relations is, to put it nicely, an ideological statement.

But, the next line of defence/attack in favour of capitalism is more tricky: this is the question of alternatives. It has long been a question launched at socialists: what is the alternative? And, this question might be accompanied by references to the failure of socialism during the twentieth century. There are no perfect answers to this challenge, but there are certainly some ways of responding. Namely:

  • Most disastrous examples of socialism in the twentieth century might have deployed lots of socialist discourse, but they were hardly clear examples of socialism – or at least there are lots of ways of thinking about socialism very differently to the kinds of totalitarianism of Soviet-style socialism.
  • There might not be a single ‘official opposition’ to capitalism, but there are certainly huge numbers of examples of political mobilisation against actually existing capitalism around the world, and many of these use socialist ideas in one way or another. These mobilisations operate with limited success, in adverse circumstances, and at various levels, from a village to transnational coalitions. One doesn’t need to recognise an incipient global revolution in these movements to agree that there is (and always has been) a vibrant resistance to capitalism underpinned by social imaginations based in alternative ways of living.
  • There are some aspects of capitalism, pretty much hardwired into its logics that will always generate possibilities of alternative ways of life. Most prominently: capitalism’s growth obsession and the difficulties of reconciling this with environmental impact; the tendency to replace workers with machines; the desire to work people extremely hard for as little money possible; the indifference to the well-being of the unemployed or underemployed; the systemic prioritising of private property and profit over public well-being.

As I said, these are responses, not rebuttals, far less a bullet-proof advocacy of a Socialist Alternative. Whatever one’s beliefs about capitalism, what we should recognise that there is good evidence to substantiate these points and that, as a result, it is simply not good enough to assert that ‘capitalism is the only game in town’ and therefore – and rather dourly – we should hunker down and concern ourselves solely with the politics of its management.

‘Capitalism, freedom, and democracy go together.’

The second main defence is that capitalism is the best way to ensure our rights and freedoms. This seems to me an increasingly fanciful argument. Most obviously, capitalism is based in a tyranny of labour. The vast majority of people in capitalist societies suffer varying degrees of compulsion in their work. Ultimately, whatever job one does – from the most relentlessly soul destroying to the ‘creative’ skilled service industries – we are subjected to the authority and discipline of capital. And let’s bear in mind that, globally, the vast majority of workers are working in the former not the latter category. Of course, one has the freedom to seek employment with another capitalist and be subjected to lighter conditions of dominance. Or one has the right to suffer the property-less penury of life outside capitalist employment. But, it remains a pretty convincing fact that a very important part of our lives – that of productive work – is in no real sense ‘free’ by any definition of that term. The best one can hope for is enlightened paternalism from your employer.

But, one might suppose, we still have our civic and democratic freedoms: rights of expression, rights to vote, freedom to religious beliefs, freedoms from discrimination. These freedoms, one might argue are tied up with the idea of a ‘free market society’. This is so because private business provides a counter-balance to the state; consumers and workers have their own spheres of political and social authority; markets ‘clear’ or process lots of individual acts of movement, consumption, employment and so on without the need of grand state plans. In the classic Hayekian vision, a free market society is a libertarian one and notions of social democracy and socialism, whilst well meaning – are doomed to lead us on the path to serfdom.

This idea needs some reconciliation with the realities of capitalism through time and space. If capitalism has a tendency to generate individual freedoms and democracy then at best this is one of a range of tendencies. Capitalism has taken varied political forms including fascism, military dictatorship, and single party-states. Furthermore, one can see how these states have used their willingness to deny people rights to endow all sorts of ‘rights’ for capital, so it is not simply the case that capitalism tolerates ‘unfree’ regimes – it can work and benefit from authoritarian state action.

I would go further. Consider the rights and freedoms that those in the developed capitalist world have. The concentration of power in the hands of capitalist elites severely constrains the content of politics up for democratic deliberation, and systems of government accountability are also heavily distorted by the ‘oligarchic’ power of the extremely wealthy. The high levels of poverty, inequality, and unemployment in many capitalist societies means that any sensitive evaluation of the meaning and content of rights and freedom needs to address the lack of actual choice, opportunity, and reasonable aspiration that the impoverished and marginalised have.

The control of our worklives by capital, the global history of authoritarian capitalisms in most nations, and the distortion of democracy and hollowing out of freedom in highly unequal capitalism societies provide more than enough contrasting evidence to argue that capitalism’s association with freedom is more aspiration than fact.

‘Capitalism creates healthy economies.’

And, finally, the capacity for capitalism to generate economic growth, technological advances, more commodities for more people, to lift people out of poverty. This is certainly true. Capitalism can be seen as a tenacious, dynamic, and expansive way of organising production and its history is one of ‘progress’ in that sense. A balanced view of this progress would recognise the associated costs: the dispossession of small farmers, the destruction of natural environments, the generation of slums, the imperialism, the sweated labour.

But, beyond this, there is a major concern with growth and its relation to the planet’s resources. Environmentalists have tended to underestimate the ability of capitalism to adapt to resource scarcity and to over-estimate the immediate coming of environmental disaster, but there is an insistent question about the association of economic health with economic growth which is at the heart of capitalism. This is most obviously so in regards to climate change: relentless growth is environmentally unsustainable.

It is also at the heart of capitalism to see the world’s environments in terms of their potential to be made into commodities. Forests are timber, seas are fisheries, soils are commercial farms, the subsoils are minerals, animals are meat. As a result, all of these facets of the natural world have been in many cases depleted and polluted as capital has extracted what it needs to generate commodities with little care for the damage it does. It is only when political mobilisation and/or insistent state regulation intervenes that capital begrudgingly behaves ‘responsibly’ in its purloining of the resources form the natural world.

Even after taking into account capitalism (and people’s) ability to adapt and development new technologies, it seems reasonable to expect that there will come a time (who knows when) in which the continuation of global capitalism poses directly questions about scarcity, pollution, and depletion that cannot be resolved through technical means. When that happens it would be important to be armed with some ideas about other ways of living, working, and producing that have within them more just, humane, sustainable, and equitable possibilities. Socialism still offers us the best language to do this.

2 thoughts on “Assessing capitalism, or, a modest argument for socialism

  1. I really enjoyed this Graham. You’ve put me in an unexpectedly anarchic mood for a Sunday morning. I’d love a part 2 which discusses the role of the state worker (teacher/social worker/doctor) within this and how capitalism shapes those practices too. Mainly because I’m not as clear about those relationships as I think I would be if you were to write a similarly clear and cogent blog on them! The interesting space occupied by the university employee bartering in the exchange of their intellectual labours would also be read-worthy. Thanks again. Is it ok if I post this on Twitter?

    Liked by 1 person

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